Markets

London - The FTSE 100 rallied 141.19 points to 5,366.41, its biggest gain in almost two months, following the upbeat US and Chinese manufacturing data. Rio Tinto Plc and Antofagasta Plc gained more than 6% as copper climbed to four-month high while Fresnillo Plc surged 2.7% as gold gained. In deal news, Cable & Wireless Worldwide surged 7.7%, the biggest gain since March, as investors speculated that AT&T or one its competitors may bid for the British company. AT&T spokesman Niall Hickey said the company doesn’t comment on market speculation while Cable & Wireless spokespeople couldn’t immediately be reached for comment. Furthermore, TUI Travel soared 9.2%, the largest gain in more than five months, after Financial Times Deutschland reported that majority owner TUI AG is deciding whether to acquire the shares that it doesn’t already own.

New York - US stocks charged out of the blocks yesterday, starting September with gains of almost 3% on both the Nasdaq and the S&P 500. Investors were already buoyed by a rebound in Chinese manufacturing that had lifted markets worldwide. But the rally kicked into a higher gear following an unexpectedly strong read on US manufacturing. The Institute for Supply Management said its index of manufacturing activity rose to 56.3 in August. Analysts had forecast a drop to 51.5, although a read below 50 had not been ruled out.

Gains were broad based, with more than six shares rising for every one that fell on the New York Stock Exchange. The Dow Jones jumped 254.75 points to 10,269.47, the S&P 500 rallied 30.96 points to 1,080.29 and the Nasdaq surged 62.81 points higher to 2,176.84.

In corporate news, Burger King Holdings jumped 14.7% after putting itself up for sale. The fast food chain has already had talks with potential buyers. Apple gained almost 3% after introducing a new version of Apple TV and a new iPod line-up. Elsewhere General Motors, Ford Motor and Toyota all reported disappointing sales, kicking off what is expected to be the worst August for industry wide auto sales in 27 years.

Tokyo - Asian markets are higher this morning following the manufacturing data from the US. The Nikkei climbed 135.82 points to 9,062.84.

Hong Kong – The Hang Seng is currently 247.40 points higher at 20,871.23. Higher oil and metal prices lift commodity related stocks, including Inpex Corp, Japan’s No. 1 oil and gas explorer, which rose 3%.

Economics

US Initial jobless claims (wk 28 Aug) 13:30 BST/08:30 EDT

Last week’s initial claims reading fell to 473,000 from 504,000, breaking a string of three consecutive weekly increases. This may be a sign that claims are stabilising. Analysts look for 480,000 this week. However, the total number of people receiving benefits has climbed back above 10m and is pointing to an increase in the unemployment rate.

US Non-farm productivity (Q2, final) 13:30 BST/08:30 EDT

This revision to Q2 productivity will depend on the second estimate of Q2 GDP, which was not available at the time of this writing. Based on our estimate of this revision to output, analysts expect Q2 productivity to be revised to show an annualised decline of 2.0%. Annualised growth in unit labour costs could be raised, up to 1.3%.

US Factory orders (Jul) 15:00 BST/10:00 EDT

July durable goods orders were sharply disappointing, rising only 0.3% despite a large increase in aircraft orders. Analysts expect total factory orders to rise 0.4%.

US Pending home sales (Jul) 15:00 BST/10:00 EDT

Pending home sales have fallen by a combined 32% over the past two months. The steep declines partly reflect that home purchases initiated prior to the end of the homebuyer tax credit in April were being completed. A bounce in the extremely low level of pending sales appears likely, even though mortgage purchase applications continued to reflect subdued new demand. Analysts look for July pending home sales to have risen by 4%.

Corporate

Hays PLC, the U.K.’s largest recruitment company, Thursday said the outlook across 90% of its markets, including the U.K. private sector, continued to improve as it returned to growth in its fiscal second half, but full-year profit fell. “In the fourth quarter, 20 countries across the group delivered net fee growth of over 10% as we added headcount to capitalise on the upturn," said Chief Executive Alistair Cox in a statement. The company, which was hit in the recession as weak consumer confidence discouraged workers from changing jobs, saw its business boosted by permanent recruitment and by its international operations. "The agility and flexibility of our business, combined with the investments we have made during the downturn, ideally position us to capitalize on the significant growth opportunities that are increasingly present across our markets," it said. But while Hays returned to growth in the second half, full-year net fees fell 17% to GBP557.7 million, or 21% on an organic basis at constant currency. Pre-tax profit in the year to June 30 fell 80% to GBP29.7 million. Still, Hays reported sequential net fee growth of 8% for the second half and 23% growth in operating profit. It left its dividend unchanged at 5.80p per share.     

Posted: September 2nd, 2010 under Asset Management.
Comments: none

Markets

London - The FTSE 100 added 23.66 points to close at 5,225.22 yesterday led by miners and ARM Holdings. Fresnillo Plc and Randgold Resources Ltd. jumped more than 2% after the greater than forecast US consumer confidence boosted the sector. ARM Holdings soared 8.6%, the highest close since January 2002 after Intel, the world’s largest chipmaker, agreed to buy Infineon’s wireless unit for about $1.4 billion, gaining a foothold in the mobile-phone business. Analysts at RBS said this news was “neutral to positive” for ARM – a designer of semiconductors used in Apple Inc.’s iPhone. RBS cited Intel’s intention to “support ARM-based platforms” and plans to add Wireless 3G to its core notebook PC platform.

New York - US indices finished almost unchanged bringing an end to a disappointing August for the markets. Upbeat economic data had pushed stocks higher early in the session, but the release of the minutes from the latest Federal Reserve meeting sent indices back to their opening level. The Dow Jones rose 4.99 points to 10,014.72, the S&P 500 added 0.41 points to 1,049.33 and the Nasdaq slipped 5.94 points to 2,114.03. In economic news, consumer confidence rose to a reading of 53.5 in August, from 51 in July, and against expectations of a small decline. Another report showed that house prices jumped 3.6% in the past year, against expectations of a 3.1% gain, furthermore, the S&P/Case-Shiller Home Price Index also showed that prices climbed 4.4% in the second quarter, compared with a 2.8% plunge in the first quarter. On a slight downside, the Chicago PMI, a regional reading on manufacturing activity, fell to 56.7 in August. That’s down from 62.3 in July and slightly weaker than expected. Analysts were looking for 57 in August, but this didn’t keep stocks from moving higher. It wasn’t until the minutes from the Fed meeting were released that stocks went lower. The minutes raised concerns that the US economy is going to have to deteriorate significantly before it receives fresh support from the central bank.

Tokyo - Asian markets are higher this morning following faster than expected growth in Chinese manufacturing and Australia’s economy. The Nikkei rose 102.96 points to 8,927.02 while the Hang Seng is currently 28.59 points higher at 20,565.08. China’s purchasing managers’ index rose to 51.7 in August from a 17 month low of 51.2 in July, exceeding forecasts, a government-backed report showed. In Australia, gross domestic product climbed 1.2% from the first quarter, when it rose a revised 0.7%, the statistics bureau said today. Analysts had expected a 0.9% rise.

Economics

UK PMI manufacturing (Aug) 09:30 BST

The UK manufacturing PMI has edged down only slightly after peaking in May, but details of the recent surveys suggest that a larger decline is in store for the coming months. The July release showed backlogs of work started falling again, export orders barely increased, and growth in raw material purchases eased sharply to an eight month low. Analysts expect the headline index to fall by more than a point in August, to 55.9 from 57.3 in July.

US ADP employment (Aug) 13:15 BST/08:15 EDT

Analysts look for August ADP employment to fall by 20,000. This would be the first outright decline since January.

US ISM manufacturing (Aug) 15:00 BST/10:00 EDT

Both the Empire and Philadelphia Fed surveys have showed pronounced signs of weakness, with new orders and shipments falling into negative territory. Other surveys, such as the Richmond Fed series, are still in expansionary territory. The latest durable goods report also reflected sharply lower orders in a number of categories. Analysts expect August ISM manufacturing to fall to 51.5, but a possible drop below the break-even level of 50 cannot be ruled out.

US Construction spending (Jul) 15:00 BST/10:00 EDT

The level of overall construction spending is roughly unchanged since the beginning of the year. Given the recent drop in housing starts, analysts expect July spending to fall by 0.7%.

Corporate
BP PLC said it agreed to sell its equity stakes in two Malaysian petrochemical businesses to Malaysia’s Petroliam Nasional Bhd. for $363 million in cash plus a dividend payment. BP has agreed to sell a 15% stake in Ethylene Malaysia Sdn Bhd (EMSB) and a 60% stake in Polyethylene Malaysia Sdn Bhd, both of which are operated by Petronas and are located at Kertih, on the east coast of Malaysia. The sale does not affect BP’s other businesses in Malaysia. BP has been divesting non-core assets to raise money to pay for litigation and cleanup costs related to the massive oil spill in the U.S. Gulf of Mexico. In July, BP sold $7 billion in assets in the U.S. and Egypt to U.S. independent Apache Corp. The company has also discussed selling assets in Pakistan and Vietnam. In all, BP has discussed selling some $30 billion in assets to address the spill, which has been called one of the worst environmental disasters in history. BP expects the Malaysia deal to close by the end of the year, subject to certain conditions. The price tag includes a balance sheet adjustment of $13 million and the repayment of a $53 million shareholder loan. BP will also receive an EMSB dividend payment of $48 million, subject to EMSB’s board approval.

The above details are provided for information only and are not intended to be construed as solicitation for the sale or purchase of any particular investment nor as specific investment advice.

Posted: September 1st, 2010 under Asset Management.
Comments: none

Markets

London - The FTSE 100 rose 45.72 points to 5,201.56 on Friday. Cable & Wireless gained 5.7% to 66.2p, Vodafone Group Plc advanced 2.8% to 153.6p and BT Group Plc rose 2.8% to 134.2p as telecommunication stocks rallied across Europe. A gauge of the industry climbed 2%. BP Plc retreated 1.5% to 379.7p, paring yesterday’s gain. Company executives told U.S. investigators they didn’t know who was in charge of the Deepwater Horizon rig in the Gulf of Mexico or who made key decisions before the vessel exploded in April, killing 11 workers, sinking and spewing millions of barrels of crude oil into the sea.

New York - All three major US indices fell more than 1% yesterday on the quietest trading day of the year as investors turned their attention to a number of big economic reports due this week. Stocks opened lower, with selling gaining momentum later in the session as worries about the pace of the economic recovery heightened. Reports due this week include readings on consumer confidence, home sales and manufacturing. But mostly, investors are gearing up for the government’s monthly jobs report, due before the opening bell Friday. The Dow Jones lost 140.92 points to 10,009.73, the S&P 500 fell 15.67 points to 1,048.92 and the Nasdaq dropped 33.66 points to 2,119.97. In corporate news a number of deals failed to keep stocks in positive territory. Intel Corp bid $1.4 billion to buy the wireless unit of German chipmaker Infineon Technologies. Intel fell 1.6% as a result, while the PHLX semiconductor index dropped 2.5%. 3M fell 1.6% after announcing that it will buy Cogent for $943 million – an 18% premium. On the upside, Genzyme Inc gained 3.4% after rejecting an $18.5 billion buyout offer from French drug maker Sanofi-Aventis SA.

Tokyo - The Nikkei tumbled 325.20 points to 8,824.06 this morning after the Bank of Japan’s emergency moves the day before failed to curb the yen’s strength. Disappointment set in after the central bank expanded its fund supply tool, widely seen as an ineffective move, while the government’s promise to use reserve funds for jobs and deregulation also failed to impress.

Hong Kong - The Hang Seng is currently 277.76 points lower at 20,459.46. Developers lead stocks lower ahead of a government land auction, where it is widely expected that price paid per buildable square foot will reach an all time high.

Economics

UK Gfk consumer confidence (Aug) 00:01 BST

The overall index fell from -19 to -22 in July, largely due to weaker readings on the components relating to personal finances and the broader economic outlook over the next 12 months. Improvements are unlikely to have occurred in these areas during August, while the major purchases index may have edged down after rising by eight points in July. Overall, consumer confidence appears to be in retreat, and analysts expect the headline number to fall further to -25 in August.

UK Mortgage approvals (Jul) 09:30 BST

Slight declines in mortgage approvals were reported in July on both the Bank of England major lender and British Bankers Association series, and analysts expect this weakness to be reflected in the overall approval figures for the month. Analysts expect a reading of 46,200 in July from 47,600 in June. Analysts forecast a GBP0.1bn decline in consumer credit for July, which, if confirmed, would be the third decline in the past six months. Although the headline retail sales figure proved stronger than expected in July, this was the result of unusually large gains in two minor components of the series, predominantly concerning smaller businesses, while the areas relating to consumer durables reported falling sales.

US S&P/Case-Shiller home price index (Jun/Q2) 14:00 BST/09:00 EDT

Measures of US house prices could be set to soften as the data begin to capture more of the transactions that occurred after the homebuyer tax credit expired at the end of April. The FHFA house price index fell 0.3% in June, after increasing in each of the three previous months. The Case-Shiller series are based on three-month moving averages and may be a bit slower to adjust. Analysts look for the 20-city index to be unchanged in June.

US Chicago PMI (Aug) 14:45 BST/09:45 EDT

The Chicago PMI has held up better than many of the other regional manufacturing surveys. Given that both the Empire and Philadelphia Fed surveys were disappointing in August, the risk is that the Chicago PMI also turns lower. Analysts look for a decline to 55.

US Consumer confidence (Aug) 15:00 BST/10:00 EDT

The University of Michigan measure of consumer confidence edged higher in August, following a steep decline in July. Analysts look for this month’s Conference Board index to rise slightly to 51.0. Consumers remain pessimistic about labour market and business conditions.

US FOMC minutes (Aug 10 meeting) 19:00 BST/14:00 EDT

At this meeting, the Fed decided to stop the natural shrinkage in its balance sheet. The FOMC announced that it would reinvest the principal payments from its holdings of agency debt and agency MBS back into longer-term Treasury securities. News reports suggested that this decision was a contentious one. The arguments expressed by FOMC members for and against taking this step will provide some further insight into the likelihood of a move towards outright quantitative easing.

Corporate

Bunzl PLC today said it expects higher profits in the second half, boosted by acquisitions, after reporting an 8% increase in first-half pre-tax profit. Chief Executive Michael Roney said "good growth in profitability and the resumption of acquisition activity gives us a platform and momentum for further growth." The company, which has made eight acquisitions so far this year including two announced on Tuesday, spending some GBP100 million, said the expected boost to revenue will come through in the second half of the year. For the first half to June 30, Bunzl booked a 2% increase in revenue to GBP2.34 billion. Only half of that was due to acquisitions made last year, with the remainder coming from organic growth.

The above details are provided for information only and are not intended to be construed as solicitation for the sale or purchase of any particular investment nor as specific investment advice.

Posted: August 31st, 2010 under Asset Management.
Comments: none

Markets

London - The FTSE 100 dropped 78.89 points yesterday to 5,155.95. Again, hit by the US housing data, losses were broad with miners weighing heavily. Rio Tinto Group and BHP Billiton Plc fell 4.3% and 1.5% respectively as metals prices retreated in London. WPP’s shares retreated 4% to 644.5p after posting first-half net income that missed the £163.5 million average estimate of analysts, even though profit jumped 39% from a year earlier to £150.8 million and sales rose 3.5 percent to 4.44 billion pounds.

New York - US stocks plummeted yesterday following a large drop in existing home sales. The National Association of Realtors said existing home sales plunged 27% lower last month to an annual rate of 3.83 million units. This was the lowest since the association began tracking the figure in 1999 and well below forecasts of between 4.5 and 4.7 million. The Dow Jones dropped 133.96 points to 10,040.45, the S&P 500 slumped 15.49 points to 1,051.87 and the Nasdaq tumbled 35.87 points to 2,123.76. Losses were broad based with economically sensitive companies causing the biggest drags. Boeing weighed heavily on the Dow, sliding 3.7%. Financials were also among the biggest losers with the KBW Bank Index losing 2.2%.

Tokyo - Asian markets declined following the housing data from the US. The Nikkei slid 149.75 points to 8,845.39 this morning. Stocks also suffered after a government report showed Japan’s export growth slowed and disappointment is spreading over the lack of policy action to rein in the strong yen.

Hong Kong - The Hang Seng is currently 118.67 points lower at 20,540.04.

Economics

US Durable goods orders (Jul) 13:30 BST/08:30 EDT

We expect durable goods orders to rise by 3.8% due to a surge in aircraft orders. Boeing reported 130 orders in July, nearly three times the number from a year ago. It was the highest monthly total since the start of the recession in December 2007 and partly reflects the Farnborough International Airshow that took place in the middle of the month. Ex-transportation orders are likely to be much more subdued – we look for an unchanged result in July. The ISM new orders series has fallen by over 12pts over the past two months, and respondents’ comments on sluggish sales have been notable.

US New-home sales (Jul) 15:00 BST/10:00 EDT

New-home sales remain close to their lowest levels in more than 40 years. As a result, we may continue to see big monthly swings in percentage terms, but there is limited scope for persistent declines in the absolute number of sales. Still, the recent evidence has been poor, with the latest NAHB survey showing declines in the present sales and buyer traffic categories. Applications for mortgages to purchase homes also remain low. We look for new-home sales to fall to 320,000.

US FHFA house price index (Jun) 15:00 BST/10:00 EDT

The FHFA house price index has risen for the past three months, but this trend may be about to reverse as the data begin to capture more of the transactions that occurred after the homebuyer tax credit expired at the end of April. We look for the June house price index to fall by 0.5%.

Corporate

Admiral Group Plc posted a 21% rise in first-half pre-tax profit and raised interim dividends on a continued rise in the number of customers signing up for car insurance, and said this year promises to be a "year of great opportunity" for the company. Admiral said pre-tax profit for the six months ended June 30 was £126.9 million, up from £105.3 million a year earlier. Chief Executive Officer Henry Engelhardt said this year "is shaping up to be a year of great opportunity and I’m extremely proud of how everyone at Admiral has stepped up to the challenge." "The U.K. car insurance business continues to be the driving force behind our success and in the first half of 2010 we shifted up yet another gear," Engelhardt said. The company raised premium rates by around 14% in the first half and increased customer numbers by 23% to 2.37 million from 1.92 million a year earlier. It raised its interim dividend by 18% to 32.6p a share. In the U.K., Admiral also operates the Confused.com price comparison Web site. It runs web-based insurance operations in Spain through Balumbaes, in Italy through ConTe.it and in Germany through AdmiralDirekt.de. In October last year, it launched its car insurance operations in Richmond, Virginia, in the U.S., trading under the brand name Elephant. Engelhardt said the company plans to launch an insurance operation in France next year as the final part of its five-year strategic plan.

Aggreko Plc, which rents generators to provide temporary power and cooling systems, today reported that first-half pre-tax profit climbed 19% year-on-year, underpinned by the Vancouver Winter Olympics and FIFA World Cup contracts, and boosted its outlook for 2010. The company said that it expects to "make further good progress in the second half and that the outcome for the year as a whole will be slightly better than our previous expectations." Aggreko in June had said its performance for the year will be significantly better than expected, boosted in part by work at this summer’s soccer World Cup finals in South Africa. It added that its closing order book was up 49% year-on-year. In a sign of confidence in its prospects, Aggreko hiked its interim dividend 50% to 6.55 pence a share from 4.37 pence. Pre-tax profit in the six months to June 30 rose to £127.1 million from £106.9 million in the same period a year earlier.

Revenue rose 17% to £583.6 million from £499.8 million. Aggreko credited its growth in the first half to the strength of its local businesses, which fulfilled contracts at events such as the U.K.’s Glastonbury music festival, the U.S. Super Bowl, the Eurovision Song Contest and the U.K. and U.S. golf open championships. It said it had made a good start to summer trading in North America, where it is supporting the Gulf of Mexico oil spill clean-up and floods in Nashville, Tenn.

BHP Billiton Ltd. said today that its full-year profit more than doubled on the back of higher commodity prices and strong global demand for steelmaking materials. The world’s largest mining company said net profit in the year ended June 30 was US$12.72 billion, up 116.5% from $5.88 billion the previous year when earnings were hit by the collapse in commodity prices following the global financial crisis, leading to production cuts, selloffs and write downs. The company, whose US$38.6 billion hostile bid for Potash Corp. of Saskatchewan Inc. was rejected by the Canadian fertiliser company’s board last week, said revenue rose 5.2% to $53.80 billion in the year to June 30 from $50.21 billion the previous year. Excluding exceptional items, underlying net profit was $12.47 billion, up 16.3% on the previous year’s $10.72 billion and slightly below a $12.6 billion consensus of 11 international broker forecasts compiled by the company. The company said it achieved record sales volumes in iron ore, metallurgical coal used in steelmaking, and petroleum, but warned that Chinese economic growth that has driven the recent boom in steel materials is likely to slow to "more sustainable levels" of around 8%, which could put a kink in the bounce back in commodities since their trough in late 2008 and early 2009.

Support services provider Serco Plc today said it still sees significant potential for growth despite ongoing cost cutting by governments and businesses, as it posted a 21.6% increase in first-half pre-tax profit. The company, which provides services in the private and public sectors such as education, IT, security and business process outsourcing, as well as running prisons and detention centres, said it signed £2.2 billion worth of contracts during the period and reported a £16.7 billion order book, slightly lower than that of £17.1 billion in December. First-half pre-tax profit rose to £101.4 million from £83.4 million while revenue rose 9.8% to £2.14 billion. Serco remained largely resilient throughout the recession as governments and businesses continue to face challenges to deliver better services while providing improved productivity. Chief Executive Christopher Hyman said that many of its government and commercial customers are still seeking to reduce costs and that Serco has the necessary skills to help them. But while industry experts believe that pressure to cut costs in both governments and private companies will ensure good growth at outsourcing companies, the U.K. services sector is not yet clear of spending cuts. The U.K. government has yet to finalize its approach and providers of services are set to meet the Minister for the Cabinet Office, Francis Maude, who has asked 19 major government suppliers to help cut the cost of services. The government will cut spending in education, transport and local government, among others, and renegotiate some 70 contracts with suppliers of public services including Serco as well as rival outsourcing giant Capita Group Plc and security services provider G4S Plc. Serco lifted its dividend by 18.9% to 2.2p.

The above details are provided for information only and are not intended to be construed as solicitation for the sale or purchase of any particular investment nor as specific investment advice.

Posted: August 25th, 2010 under Asset Management.
Comments: none

Markets

London - The FTSE 100 dropped 78.89 points yesterday to 5,155.95. Again, hit by the US housing data, losses were broad with miners weighing heavily. Rio Tinto Group and BHP Billiton Plc fell 4.3% and 1.5% respectively as metals prices retreated in London. WPP’s shares retreated 4% to 644.5p after posting first-half net income that missed the £163.5 million average estimate of analysts, even though profit jumped 39% from a year earlier to £150.8 million and sales rose 3.5 percent to 4.44 billion pounds.

New York - US stocks plummeted yesterday following a large drop in existing home sales. The National Association of Realtors said existing home sales plunged 27% lower last month to an annual rate of 3.83 million units. This was the lowest since the association began tracking the figure in 1999 and well below forecasts of between 4.5 and 4.7 million. The Dow Jones dropped 133.96 points to 10,040.45, the S&P 500 slumped 15.49 points to 1,051.87 and the Nasdaq tumbled 35.87 points to 2,123.76. Losses were broad based with economically sensitive companies causing the biggest drags. Boeing weighed heavily on the Dow, sliding 3.7%. Financials were also among the biggest losers with the KBW Bank Index losing 2.2%.

Tokyo - Asian markets declined following the housing data from the US. The Nikkei slid 149.75 points to 8,845.39 this morning. Stocks also suffered after a government report showed Japan’s export growth slowed and disappointment is spreading over the lack of policy action to rein in the strong yen.

Hong Kong - The Hang Seng is currently 118.67 points lower at 20,540.04.

Economics

US Durable goods orders (Jul) 13:30 BST/08:30 EDT

We expect durable goods orders to rise by 3.8% due to a surge in aircraft orders. Boeing reported 130 orders in July, nearly three times the number from a year ago. It was the highest monthly total since the start of the recession in December 2007 and partly reflects the Farnborough International Airshow that took place in the middle of the month. Ex-transportation orders are likely to be much more subdued – we look for an unchanged result in July. The ISM new orders series has fallen by over 12pts over the past two months, and respondents’ comments on sluggish sales have been notable.

US New-home sales (Jul) 15:00 BST/10:00 EDT

New-home sales remain close to their lowest levels in more than 40 years. As a result, we may continue to see big monthly swings in percentage terms, but there is limited scope for persistent declines in the absolute number of sales. Still, the recent evidence has been poor, with the latest NAHB survey showing declines in the present sales and buyer traffic categories. Applications for mortgages to purchase homes also remain low. We look for new-home sales to fall to 320,000.

US FHFA house price index (Jun) 15:00 BST/10:00 EDT

The FHFA house price index has risen for the past three months, but this trend may be about to reverse as the data begin to capture more of the transactions that occurred after the homebuyer tax credit expired at the end of April. We look for the June house price index to fall by 0.5%.

Corporate

Admiral Group Plc posted a 21% rise in first-half pre-tax profit and raised interim dividends on a continued rise in the number of customers signing up for car insurance, and said this year promises to be a "year of great opportunity" for the company. Admiral said pre-tax profit for the six months ended June 30 was £126.9 million, up from £105.3 million a year earlier. Chief Executive Officer Henry Engelhardt said this year "is shaping up to be a year of great opportunity and I’m extremely proud of how everyone at Admiral has stepped up to the challenge." "The U.K. car insurance business continues to be the driving force behind our success and in the first half of 2010 we shifted up yet another gear," Engelhardt said. The company raised premium rates by around 14% in the first half and increased customer numbers by 23% to 2.37 million from 1.92 million a year earlier. It raised its interim dividend by 18% to 32.6p a share. In the U.K., Admiral also operates the Confused.com price comparison Web site. It runs web-based insurance operations in Spain through Balumbaes, in Italy through ConTe.it and in Germany through AdmiralDirekt.de. In October last year, it launched its car insurance operations in Richmond, Virginia, in the U.S., trading under the brand name Elephant. Engelhardt said the company plans to launch an insurance operation in France next year as the final part of its five-year strategic plan.

Aggreko Plc, which rents generators to provide temporary power and cooling systems, today reported that first-half pre-tax profit climbed 19% year-on-year, underpinned by the Vancouver Winter Olympics and FIFA World Cup contracts, and boosted its outlook for 2010. The company said that it expects to "make further good progress in the second half and that the outcome for the year as a whole will be slightly better than our previous expectations." Aggreko in June had said its performance for the year will be significantly better than expected, boosted in part by work at this summer’s soccer World Cup finals in South Africa. It added that its closing order book was up 49% year-on-year. In a sign of confidence in its prospects, Aggreko hiked its interim dividend 50% to 6.55 pence a share from 4.37 pence. Pre-tax profit in the six months to June 30 rose to £127.1 million from £106.9 million in the same period a year earlier.

Revenue rose 17% to £583.6 million from £499.8 million. Aggreko credited its growth in the first half to the strength of its local businesses, which fulfilled contracts at events such as the U.K.’s Glastonbury music festival, the U.S. Super Bowl, the Eurovision Song Contest and the U.K. and U.S. golf open championships. It said it had made a good start to summer trading in North America, where it is supporting the Gulf of Mexico oil spill clean-up and floods in Nashville, Tenn.

BHP Billiton Ltd. said today that its full-year profit more than doubled on the back of higher commodity prices and strong global demand for steelmaking materials. The world’s largest mining company said net profit in the year ended June 30 was US$12.72 billion, up 116.5% from $5.88 billion the previous year when earnings were hit by the collapse in commodity prices following the global financial crisis, leading to production cuts, selloffs and write downs. The company, whose US$38.6 billion hostile bid for Potash Corp. of Saskatchewan Inc. was rejected by the Canadian fertiliser company’s board last week, said revenue rose 5.2% to $53.80 billion in the year to June 30 from $50.21 billion the previous year. Excluding exceptional items, underlying net profit was $12.47 billion, up 16.3% on the previous year’s $10.72 billion and slightly below a $12.6 billion consensus of 11 international broker forecasts compiled by the company. The company said it achieved record sales volumes in iron ore, metallurgical coal used in steelmaking, and petroleum, but warned that Chinese economic growth that has driven the recent boom in steel materials is likely to slow to "more sustainable levels" of around 8%, which could put a kink in the bounce back in commodities since their trough in late 2008 and early 2009.

Support services provider Serco Plc today said it still sees significant potential for growth despite ongoing cost cutting by governments and businesses, as it posted a 21.6% increase in first-half pre-tax profit. The company, which provides services in the private and public sectors such as education, IT, security and business process outsourcing, as well as running prisons and detention centres, said it signed £2.2 billion worth of contracts during the period and reported a £16.7 billion order book, slightly lower than that of £17.1 billion in December. First-half pre-tax profit rose to £101.4 million from £83.4 million while revenue rose 9.8% to £2.14 billion. Serco remained largely resilient throughout the recession as governments and businesses continue to face challenges to deliver better services while providing improved productivity. Chief Executive Christopher Hyman said that many of its government and commercial customers are still seeking to reduce costs and that Serco has the necessary skills to help them. But while industry experts believe that pressure to cut costs in both governments and private companies will ensure good growth at outsourcing companies, the U.K. services sector is not yet clear of spending cuts. The U.K. government has yet to finalize its approach and providers of services are set to meet the Minister for the Cabinet Office, Francis Maude, who has asked 19 major government suppliers to help cut the cost of services. The government will cut spending in education, transport and local government, among others, and renegotiate some 70 contracts with suppliers of public services including Serco as well as rival outsourcing giant Capita Group Plc and security services provider G4S Plc. Serco lifted its dividend by 18.9% to 2.2p.

The above details are provided for information only and are not intended to be construed as solicitation for the sale or purchase of any particular investment nor as specific investment advice.

Posted: August 25th, 2010 under Asset Management.
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