FTSE 100	5060.95, -78.39	Dow	10012.23, +10.05
FTSE 250	9035.91, -187.93	Nasdaq	2141.12, +15.69
FTSE All Share	2596.72, -41.31	S&P 500	1066.19, +3.08
Nikkei	9951.82, -105.27	Hang Seng	19454.28, -210.80
Oil (Crude)	$71.19	Gold	$1052.80
Base Rate	0.5%	10 Yr Gilt	3.89%
£/$	1.5571	£/€	1.1395
1 month LIBOR	0.524	3 month LIBOR	0.619

 

Markets

London - UK stocks closed lower on Friday on fears over the health of the global recovery as US employment data failed to impress, while ICAP fell following a warning on profits. ICAP fell by nearly 20 percent, after the company said full year earnings would miss analyst’s expectations. The FTSE100 closed 78.39 points lower at 5060.92. Energy stocks were lower, with BG Group 3.2 percent lower after its fourth quarter earnings, excluding non operations, missed expectations. Royal Dutch Shell and BP fell 0.9 percent.

Miners were also under pressure, as metals prices, retreated as investors turned to the dollar as a safe haven. Sterling fell to an eight and a half month low against the dollar as concerns over euro zone sovereign debt problems boosted the appeal of the currency. Xstrata and Randgold Resources were 5.2 and 2 percent lower ahead of results today.

Banks were lower, with Barclays, HSBC, Lloyds Banking Group, Standard Chartered and RBS were 1.2 to 5.7 percent lower. BAE Systems rose 1.6 percent, after the company reached a settlement with the US and the UK that will see it pay total fines of around $450m, and draws a line under a long running corruption investigation on both sides of the Atlantic. Compass rose 5.1 percent after the company said it made a good start to its current fiscal year, with its rate of sales decline slowing and its pipeline of new business remaining strong.

New York - US shares erased big losses at the close on Friday, with technology stocks leading the advance. The DJIA closed 10 points higher at 10012, having fallen as low as 9835 earlier. The S&P500 rose 3.08 points to close at 1066.19, and the Nasdaq added 15.69 points to finish at 2141.12. Stocks fell sharply in the afternoon as worries about a growing debt crisis in Europe exacerbated uncertainty about the US economic outlook. But the market changed direction, as the dollar trimmed bigger gains and some of the selling pressure gave way. Worries about the Euro zone caused investors to drop riskier assets and seek the US dollar and government debt. The dollar rose to a more than 6 month high versus the euro and also gained against the yen. The dollar’s strength then dragged on commodity prices, oil and gold stocks and companies and sectors that have benefited from a weaker dollar. Strength in tech stocks such as Cisco Systems, Microsoft and Intel helped temper broader losses and eventually led a comeback.

In company news, Goldman Sachs has surprised Wall Street by announcing that it is paying CEO Lloyds Blankfein $9m in company restricted stock as his bonus. He was expected to receive a much larger payment. Earlier, JPMorgan said CEO Jamie Dimon was given a $16m bonus last year, in restricted stock and options.

Toyota’s chief executive apologized Friday for the recall of 8 million cars. However, he did not announce a new recall of the Prius Hybrid, despite reports of brake problems. Earlier the company said it is also examining the brake systems of the Lexus Hybrid vehicles since they used the same system as the 2010 Prius. The stock gained 3.5 percent.

In economic news, the Labour Department reported that employers cut 20,000 from their payrolls last month. Employers had been expected to add about 15,000 jobs. Employers cut a bigger than initially reported 15,000 jobs from their payrolls in December. The January report had some positive signs, including an increase in the work week and an increase in temp agency employment. But the report also showed that the impact of the recession on the labour market was far worse than initially reported. The unemployment rate fell to 9.7 percent from 10 percent in December. Economists expected it to hold steady at 10 percent.

US light crude for March delivery fell $1.95 to close at $71.19 a barrel on NYMEX. Treasury prices rose, lowering the yield on the 10 year note to 3.54 percent from 3.61 percent.

Tokyo - The Nikkei average fell 1.1 percent to a two month closing low today, with exporters such as Sony Corp hurt by a stronger yen, while anxiety over fiscal problems in Europe continued to dent investor confidence. Beer maker Kirin Holdings slid more than 7 percent after saying that it and fellow beer maker Suntory had scrapped a plan to create one of the world’s largest good and beverage makers, citing differences over governance and a merger ratio. The Nikkei closed 105.27 points lower at 9951.82, its first close below 10,000 since December 10.

Economics

There is no major economic news today.

Corporate

Xstrata reinstated dividends today citing an encouraging outlook for commodities demand in the medium term after posting an expected 41 percent fall in 2009 profit on weaker metals prices. "Robust economic growth and demand for commodities from industrialising nations is likely to continue," Chief Executive Mick Davis said in a statement, adding that Asia would be the main driver of metals demand as the pace of recovery in rich nations was uncertain. "The medium term outlook for commodity demand remains very promising.”A final dividend of 8 cents per share will be paid in May. Xstrata said attributable profit, excluding exceptional items and discontinued operations, fell to $2.77bn last year from $4.70bn in 2008 mainly due to weaker metals prices on 16 percent lower revenue of $23.5bn. This compared to a consensus profit forecast of $2.76bn. Xstrata said it delivered real cost savings of $501m, representing a 5 percent fall in the operating cost base. The group said it had over $8bn in projects currently under construction and a further $9bn were due to be approved in 2010. The mine expansions will cost $14bn in capital spending over the next three years, including $4.9bn in 2010. Xstrata dropped a "merger of equals" proposal for Anglo that would have created a group with a market value of $96bn after refusing demands from Anglo shareholders that it pay a premium. Xstrata posted mixed production data last week, showing an 11 percent rise in coal output and a five percent fall in mined copper, its two most profitable products. Any increased output, however, was offset by currency effects and weaker prices after demand was hammered during the downturn. Average coal prices last year fell as much 38 percent, copper slid 26 percent and zinc 11 percent. Xstrata has said currency effects, such as a strong South African rand, also pressured margins.

St Modwen Properties reported a 20 percent decline in full year net asset value per share, but said the property market was showing signs of recovery and it was confident of returning to growth in profits and NAV in 2010. The company said its portfolio had not yet seen the resurgence in values experienced in other parts of the property market, but added that it was now starting to see important signs of improvement. The company said "Property market prospects still remain uncertain. The economy may be slowly emerging from recession, but business confidence remains fragile, with continued pressure on rents and occupancy levels". St Modwen’s net asset value per share for the year ended November 30 fell to 200 pence from 251 pence a year earlier. Pre-tax loss for the year widened to £119.4m from a loss of £73.1m in the previous year. The company said it was not paying a final dividend for the year, and it expected to resume payment of dividends when it starts seeing a rise in NAV.

YouGov Plc said it remained confident that trading for the full year would be in line with expectations and said it was well placed for further growth. The company repeated its belief that group profitability would be stronger in the second half of the financial year than in the first. They added "YouGov’s financial position remains strong with substantial cash balances of £15m as at 31 January 2010. This will leave the group well placed to support its strategy of growth and innovation." Numis analysts said the £15m cash balance was well ahead of their forecast of £12m and said they retained their view that YouGov was well placed to benefit when markets recover.

---

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: February 8th, 2010 under Asset Management.
Comments: none

 

FTSE 100	5139.31, -113.84	Dow	10002.18, -268.37
FTSE 250	9223.84, -193.97	Nasdaq	2125,43, -65.48
FTSE All Share	2638.03, -57.8	S&P 500	1063.11, -34.17
Nikkei	10057.09, -298.89	Hang Seng	19665.08, -676.56
Oil (Crude)	$73.14	Gold	$1062.40
Base Rate	0.5%	10 Yr Gilt	3.85%
£/$	1.568	£/€	1.1471
1 month LIBOR	0.523	3 month LIBOR	0.616

 

Markets

London - Fears for the global economy pushed UK stocks to their lowest close in three months on Thursday as spiking risk aversion hammered banks and miners while energy stocks fell on weaker commodity prices. The FTSE100 closed 113.84 points lower at 5139.31, its lowest close since November 5. Banks were the biggest drag on the index. HSBC, RBS, Barclays and Lloyds Banking Group were 3.7 to 7.8 percent lower. As expected, the Bank of England kept rates at 0.5 percent and announced they would not extend the £200bn quantitive easing programme. The ECB also kept rates on hold at a record low of 1 percent.

Vodafone was one of the five stocks in positive territory, up 3.6 percent after the company raised its outlook and posted third quarter revenue ahead of forecasts. Autonomy rose 2.7 percent after it said it was confident about 2010 when posting rises in fourth quarter earnings that met forecasts. GlaxoSmithkline turned positive, after posting its fourth quarter results which beat forecasts, it closed 0.7 percent higher.

Miners fell as metal prices were knocked again as the dollar strengthened. Antofagasta, Lonmin, Rio Tinto, Xstrata and BHP Billiton fell 4 to 6 percent. Royal Dutch Shell fell 2.1 percent after it posted a 75 percent fall in fourth quarter profit to $1.8bn. BP fell 1.6 percent and Tullow Oil lost 1.9 percent. Unilever fell 3.5 percent after it warned of increasing competition from its rivals trying to attract cash strapped shoppers, overshadowing a forecast beating rise in quarterly underlying sales.

New York - Fears from a growing debt crisis in Europe dragged US shares lower on Thursday, sending the market to its lowest close in three months. The DJIA closed 268 points lower at 10002.26, its lowest point since November 4, the index dipped below 10,000 late in the day, falling to that level for the first time since early November. The S&P500 closed 34.17 points lower at 1063.11 and the Nasdaq closed 65.48 points lower at 2125.43. Debt woes propelled the dollar to a more than seven month high versus the euro, which hit dollar traded commodities such as oil and gold.

Weaker than expected labour market reports on both Wednesday and Thursday also played a role, making investors nervous ahead of today’s January jobs report. Employers are expected to have added 15,000 jobs to their payrolls after cutting 85,000 in the previous month while the unemployment rate is expected to have held steady at 10 percent. The number of Americans filing new claims for unemployment rose to 480,000 last week from a revised 472,000 the previous week. Economists expected 455,000 new claims. Continuing claims rose to 4,602,000 from 4,600,000 the previous week. Economists expected 4,581,000. December factory orders rose 1 percent versus forecasts for a rise of 0.5 percent. Orders rose 1 percent in the previous month.

After the close Wednesday, Cisco Systems reported better than expected quarterly sales and earnings.
Toyota Motor reported improved earnings in its most recent quarter and also lifted its estimates for the fiscal year ending in March. But the results did not include the impact of the huge recall of millions of vehicles due to gas pedal problems. Toyota estimates that the global recall could cost it as much as $2bn.

The dollar gained against the euro and on worries about sovereign debt in Greece, Spain and elsewhere in Europe. COMEX gold for April delivery fell $49 to settle at $1062.40 an ounce. US light crude for March delivery fell $3.84 to close at $73.14 a barrel on NYMEX. Treasury prices rallied, lowering the yield on the 10 year note to 3.61 percent from 3.70 percent.

Tokyo - The Nikkei average fell almost 3 percent to a two month closing low today, as risk aversion rose on growing sovereign debt problems in Europe, although Toyota shares managed to find a floor despite mounting recall woes. Mitsui & Co and other resource linked shares took a beating after a key commodities index saw its biggest daily loss in almost six months on Thursday, hit by a 5 percent fall in crude oil and a steep fall in gold. The 19-commodity Reuters-Jefferies CRB index, which counts U.S. crude oil as its main component, closed 2.6 percent lower, after trading to its lowest levels since October 12.

Toyota Motor Corp rose to become one of the few gainers on the Nikkei after it put a forecast beating third quarter and raised its annual outlook. The share gain came despite news it was also is preparing to recall its iconic Prius hybrid car to address more than 100 complaints about delayed braking, spreading its quality woes to one of its most important models. The stock gained 1.1 percent to Y3315. Nomura Securities cut their price target on the stock to Y4, 000 from Y4, 800, but reiterated their buy rating, saying that they expected substantial improvement in earnings even factoring in risk. As of Thursday, shares in Toyota had lost as much as 23 percent in the two weeks since it announced a multi-million-vehicle recall for sticky accelerator pedals in North America, which has spread to most regions in the world.

Hitachi gained 3.3 percent to Y315, after it exceeded market expectations by swinging to its first quarterly net profit in six quarters on cost cuts and a recovery in its power system operations. It also raised its forecast just below the market consensus. Sony added 0.3 percent, after it halved its annual loss forecast on a rebound in its flat TV business and cost cuts. After the bell, Panasonic Corp said its quarterly profit jumped more than threefold to the highest level in five quarters as it cut costs and enjoyed robust TV sales, and it lifted its outlook above market expectations.

Economics

UK PPI (Jan) 09:30 GMT

PPI has surprised to the upside in recent months as much as CPI. We expect a further rise to 5 percent in January, coinciding with a further increase in core inflation.

US Consumer credit (Dec) 20:00 GMT

Total consumer credit has fallen by 4.5 percent since it’s speak in mid-2008, reflecting a combination of household deleveraging and tighter credit conditions. Credit card debt, which accounts for just over one third of the total, is down by around 10% since its peak. An additional drop of USD7bn is expected for consumer credit in December

Corporate

BG Group Plc said it was targeting strong growth in oil and gas production in the coming decade as it reported a 38 percent drop in fourth quarter profits due to weak gas prices. BG said it expected to grow output at the upper end of its compound annual growth rate target range of 6 to 8 percent to 2020, after it made big oil and gas discoveries in Brazil and bought U.S. shale gas assets. BG said fourth quarter net profit was £465m. Excluding one-offs and non-operating items the result was £592m, just short of an average forecast of £606m. Gas prices have been hit by an increase in production in the U.S. and low demand caused by the global recession.

British Airways will make ‘record losses’ this year even though it posted its first quarterly operating profits for over a year. The company posted a third quarter operating profit of £25m, though its pre-tax loss still came in at £50m, down from £122m last time. For the nine months so far this year, BA has made an operating loss of £86m and a pre-tax loss of £342m, nearly five times the figure this time last year. Revenue in the third quarter fell by 12.9 percent and stripping out currency movements would have slumped by 18 percent. Chief Executive Willie Walsh said "While we are on the right track, we still expect to make record losses this year. Permanent structural change is being introduced in all areas and will return us to sustained profitability. "We are working with our staff, their unions and the trustees about solutions to address our £3.7 bn pension funds’ deficit and are discussing a range of changes to future pension benefits". BA’s cabin crew are set to ballot again over possible strike action because of the changes proposed. Passenger revenue was down 13% in the last three months, on capacity down 3.9%. Yields were down 11%, 15.8% excluding exchange, largely as a result of lower year on year surcharges and sales mix within cabin class. Premium traffic volumes have declined by 9.7% in the year to date, significantly better than industry figures as disclosed by IATA. Walsh added that" Volumes are stable and yields are starting to show improvement". Separately, BA said last months heavy snow took its toll as January traffic fell by 7 percent, with premium traffic sown by 2.1 percent and non premium traffic 7.9 percent lower. Cargo business traffic rose by 6.5 percent. The airline added that its passenger load factor rose by 1 percent to 74.2 percent, as cuts in capacity of 8.3 percent outweighed the decline in passengers. Passenger numbers in January fell from £2.33m to £2.14m.

Blacks Leisure plans to raise £22m in a share sale to speed up its turnaround plan, which includes opening and refurbishing stores, it said today. The group said it was conducting a fully underwritten placing and open offer of 40.74m new shares at 54 pence each, a 4.4 percent discount to last nights closing price. That will raise £20.28m net of expenses. CE Neil Gillis said "The proceeds will underpin a selective expansion of our outdoor retail estate by the addition of up to 35 new stores, in towns where we have previously traded successfully or which currently lack an outdoor retail offer and accelerate the refurbishment of our core estate which has suffered from years of underinvestment". The group will also cancel its seasonal peak working capital facility of £7.5m. The sale is underwritten by Singer Capital Markets, which is acting as sole financial adviser, sponsor and broker to the company.

ICAP said today, third quarter revenue was slightly higher than the year before, but a rebound in overall activity levels at the start of 2010 has been a little weaker than last year. Revenue for the three months to 31 December was also consistent with the performance for the nine months as new business coming on stream offset a fall in core voice revenues. The quarter began strongly before activity slowed significantly from mid-November leading into the seasonally quieter markets of December, said the group. This, along with the continuing investment in strategic initiatives, was reflected in lower operating margins for the period. ICAP now expects profit before tax, amortisation and impairment of intangibles arising on consolidation and exceptional items for the financial year ending 31 March 2010 of £295m-£315m. It made £346m last year. On US plans for regulation of proprietary trading, it said it continues to expect that our electronic broking business will be a substantial beneficiary of a shift to more transparent markets arising from increased electronic trading. Voice broking will continue to be required for more complex, less liquid products which are unsuitable for electronic broking,’ it said. CE Michael Spencer said "We expect to be able to take advantage of the likely restructuring of the financial markets post crisis and remain positive about the medium term outlook for the business".

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: February 5th, 2010 under Asset Management.
Comments: none

 

FTSE 100	5253.15, -30.16	Dow	10270.55, -26.3
FTSE 250	9417.81, -62.96	Nasdaq	20341.64, -380.44
FTSE All Share	2695.83, -15.22	S&P 500	1097.28, -6.04
Nikkei	10355.98, -48.35	Hang Seng	20341.64, -380.44
Oil (Crude)	$76.98, -$0.25	Gold	$1112, -$6
Base Rate	0.5%	10 Yr Gilt	3.91%
£/$	1.587	£/€	1.1468
1 month LIBOR	0.522	3 month LIBOR	0.616

Markets

London - The FTSE 100 lost 30.16 points to close at 5,253.15 yesterday. BAE dropped 2% after Lockheed Martin said Europe’s biggest arms company may share the loss of fees on their jet-fighter program. Lonmin led mining companies lower as metals retreated. On the upside, Standard Life jumped 3.5% after saying fourth quarter revenue increased. This morning the FTSE is 23.42 points lower at 5,229.73.Miners drag the index lower as metals continue to retreat, while Vodafone tops the risers after third quarter revenue exceeded expectations. All eyes will be on the Bank of England announcement, due at midday, although the central bank is not expected to raise interest rates from the current record low level until October at the earliest.

New York - US stocks retreated yesterday following disappointing corporate and economic data. President Obama also helped stocks lower after reiterating his plans to overhaul the health care system and impose stricter regulatory reforms on Wall Street. The Dow Jones fell 26.3 points to 10,270.55, the S&P 500 lost 6.04 points to 1,097.28 while the Nasdaq edged 0.85 points higher to 2,190.91.

In economic news, the Institute for Supply Management’s index showed the US services sector grew less than expected in January. This overshadowed a report from payroll services firm ADP that said employers in the private sector cut 22,000 jobs in January following a revised loss of 61,000 jobs in December. Among stocks the healthcare sector was one of the worst affected sectors following Obama’s reform plans and Pfizer’s quarterly figures. The drug maker reported higher quarterly earnings that missed estimates, while also forecasting 2010 earnings that came in short of expectations.

Tokyo - The Nikkei fell 48.35 points to close at 10,355.98 this morning. Toyota continues to drag the market lower as it considers expanding its car recall of millions of vehicles for sticking accelerator pedals.

Hong Kong - The Hang Seng tumbled 380.44 points to 20,341.64. Commodity producers fall in line with metal prices and mainland banks dropped on news Bank of Communications may need to raise funds.

Economics

UK Bank of England rate announcement (Feb) 12:00 GMT

The quantitative easing programme was extended to GBP200bn in November. These funds will have been exhausted by the end of January and so the MPC needs to consider at this meeting whether to extend the programme. Analysts think it is more likely to choose to ‘pause’, shifting to ‘wait-and-see’ mode. While GDP was weaker than initially expected, the MPC appear to be leaning away from these initial estimates. The governor noted in his recent speech that ‘the MPC is acutely aware that initial data releases are often revised.’ The other indicators, such as business surveys, employment and the housing market suggest that the economy is growing at a more robust pace. In addition, with an election looming, the MPC will want to highlight its independence from the political cycle. The chancellor chose to increase government spending in the Pre-Budget Report rather than consolidate the deficit, ignoring advice from the ratings agencies and the governor himself. With inflation well above target, expanding gilt purchases and a further increase in public borrowing in the pre-election Budget could call in to question the MPC’s commitment to meeting its inflation target.

US Non-farm productivity (Q4, prelim.) 13:30 GMT/ 08:30 EST

Payroll hours worked ‘only’ fell 0.4% in Q4, which will probably result in slower productivity growth in Q4 than we have seen in the previous two quarters. Analysts will have a better read after Q4 GDP is released (not available at the time of writing), but at this point analysts expect a productivity increase of 4.1%, with unit labour costs falling 0.8%.

US Initial jobless claims (week 30 Jan) 13:30 GMT/ 08:30 EST

Initial claims have been discouraging recently, averaging 474,000 over the past two weeks, after earlier readings in the first half of the month averaged 438,500. Analysts look for a decline to 450,000 this week.  

Corporate

Aviva, the U.K.’s second-biggest insurer by market capitalization, Thursday posted a 14% fall in life and pensions new business sales in the fourth quarter but said it started the New Year "in a strong position." Despite the fall in year-on-year figures, the fourth-quarter sale of GBP7.94 billion represents a strong 21% increase from the third quarter, helped by bank assurance operations in Europe. Aviva also strengthened its capital position, with surplus capital at GBP4.5 billion at end-December, up from GBP2 billion in 2008. The company said that total new business sales last year were GBP32 billion, down 11% from GBP36.24 billion in 2008. This is calculated on a present value of new business premiums (PVNBP) basis, where 100% of single premiums are added to the expected present value of new regular premiums. The result was higher than the GBP31.3 billion average forecast from 11 analysts polled by Aviva.

Centrica retail arm British Gas said Thursday it had cut its standard gas prices by an average 7%. The price cut, which will benefit 8 million households, takes effect immediately and makes British Gas, on average, the cheapest supplier of standard gas and electricity in the U.K. The change will save the average gas customer GBP55 a year, the company said in a statement. This is the third time British Gas has cut prices in the past 12 months–cutting a total of GBP187 off the average annual dual fuel bill.  
Royal Dutch Shell today promised further cost cuts and job losses after it posted a 28.7% fall in adjusted profit for the fourth quarter, as lower oil and gas production and a big loss in refining offset higher crude oil prices. Chief Executive Peter Voser said Shell’s refining and marketing division is enduring tough times. "We are not assuming that there will be a quick recovery, and the outlook for 2010 is uncertain," "We are taking steps to improve our performance," and Shell reduced costs by an additional $1 billion in the fourth quarter, bringing total 2009 cost reductions to $2 billion he said. "For 2010, we are targeting a further underlying cost reduction of at least $1 billion, and a reduction of some 1,000 employees," he said. The Anglo-Dutch energy company said the clean current cost of supplies, a keenly-watched figure that strips out gains or losses from inventories and other non-operating items, was $2.77 billion in the three months ended December 31 2009, compared with $3.89 billion in the fourth quarter of 2008.  This was below expectations of $3.01 billion

Anglo-Dutch consumer goods group Unilever today posted a 1.8% rise in fourth-quarter sales, driven by strong volume growth, but said it expects competition to intensify in 2010. The maker of Ben & Jerry’s ice cream, Dove soap and Lynx deodorant said underlying sales–which strip out acquisitions, disposals and currency movements–grew 1.8% in the fourth quarter, compared with a 3.4% rise in the previous three months and in line with analyst’s forecasts. This measure of sales is closely watched because it’s a directly comparable measure of how the company’s products are selling. The sales rise was wholly a result of a 5% increase in volumes, which followed a 3.6% volume rise in the previous three months. Prices in the fourth quarter actually fell 3.1%. "We expect continued pressure on consumer spending power and heightened levels of competitive activity in 2010," said Chief Executive Paul Polman. "We will continue to focus on volume growth as the main driver of long-term value creation, whilst delivering steady and sustainable year-on-year improvement in operating margin and strong cash flow." Polman took the helm of the group in January last year, pledging to make volume growth his key priority. Prior to his arrival, Unilever had been criticized for allowing volumes to slip as it aggressively raised prices. The company increased prices by over 9% in the fourth quarter of 2008, partly to offset higher commodity costs. Still, it was criticized by some analysts and industry experts for raising prices too much just as many of its markets were tipping into recession. Unilever’s operating margin was up one percentage point in the period, compared with expectations of a 1.1 percentage point rise. Margins are benefiting from a sharp drop in commodity prices in the past year.

Vodafone Group, the world’s largest mobile operator by sales, Thursday raised its free cash flow target as third-quarter revenue growth exceeded expectations and service revenue in Europe showed some signs of stabilization. Shares in the company rose sharply in early trading on the improved outlook, which Chief Executive Vittorio Colao attributed in part to strong data revenue amid rising demand for smartphones. The company’s revenue also gained from a currency effect as the euro strengthened against sterling. The group raised its free cash-flow range by GBP500 million to between GBP6.5 billion and GBP7 billion. Vodafone sharpened the range of its full year adjusted operating profit view to between GBP11.4 billion and GBP11.8 billion, from previously guidance in a range of between GBP11 billion and GBP11.8 billion.

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: February 4th, 2010 under Asset Management.
Comments: none

 

FTSE 100	5283.31, +35.9	Dow	10296.85, +111.32
FTSE 250	9480.77, +168.66	Nasdaq	2190.06, +18.86
FTSE All Share	2711.05, +22.01	S&P 500	1103.32, +14.14
Nikkei	10404.33, +33.24	Hang Seng	20722.08, +449.90
Oil (Crude)	$77.23, +$2.80	Gold	$1117.40, +$13.10
Base Rate	0.5%	10 Yr Gilt	3.94%
£/$	1.603	£/€	1.1467
1 month LIBOR	0.519	3 month LIBOR	0.616

 

Markets

London - The FTSE 100 climbed 35.90 points to 5,283.31 yesterday with gains among miners offsetting lower than expected earnings at BP. Rio Tinto led its sector higher after Citigroup advised buying the shares. The index is 6.5 points higher at 5,276.81 this morning. Investors will be eyeing the mining sector ahead of Antofagasta and Eurasian Natural Resources release of fourth quarter output figures.

New York - US stocks made strong gains again yesterday as investors continued to welcome positive economic data and better than expected corporate earnings. The Dow Jones jumped 111.32 points to 10,296.85, the S&P 500 gained 14.14 points to 1,103.32 and the Nasdaq rose 18.86 points to 2,190.06. The housing market gave stocks a lift after the National Association of Realtors’ pending home sales index rose 1%, in line with expectations. Furthermore, homebuilder D.R. Horton reported its first quarterly profit in almost three years. Shares in the company rallied 10.9%.

Tokyo - The Nikkei gained 33.24 points to close at 10,404.33 this morning. Data from the US and gains in commodities help the index higher. Toyota Motor continued to see-saw, down 5.7% today, after saying US sales declined amid an expanding recall.

Hong Kong - The Hang Seng rallies 449.90 points to 20,722.08, again lifted by the US. In corporate news, Esprit Holdings, Hong Kong’s biggest listed clothier, advanced 6.2% after its first half profit beat estimates.

Economics

UK PMI services (Jan) 09:30 GMT

The service sector PMI has risen sharply in recent months and is well above its average for the past decade. The survey is now at its highest level since January 2007. Analysts therefore expect a slight dip in this index which would be consistent with a slowing in the pace of growth.

US ADP employment change (Jan) 13:15 GMT/ 08:15 EST

The ADP loss of 84,000 in December was again weaker than the officially reported drop of 64,000 for private sector employment. One of the possible factors is that the ADP model uses initial jobless claims as an input, and these remain somewhat high. However, the relevant claims reading this month fell to a cycle low 446,000. Analysts look for the January ADP employment to fall by 20,000.

US ISM non-manufacturing (Jan) 15:00 GMT/ 10:00 EST

The detail of December’s non-manufacturing ISM report was not as robust as its manufacturing counterpart, as the service-sector index has trailed behind ISM manufacturing for the past six months. Still, the latest Beige Book indicates generally improving conditions, and analysts look for this month’s reading to climb to 52.0. 

Corporate

Autonomy Corp said today that it is confident about the outlook for 2010 after seeing some signs of improvement in the macro environment at the end of last year, as it reported record fourth quarter revenue and earnings due to strong demand for its software products. Autonomy, which makes software that helps companies keep track of their mass of e-mails, phone calls and documents, posted a 53% rise in revenue to $223.1 million for the fourth quarter ended Dec. 31, in line with market expectations, from $145.4 million a year ago. Excluding exceptional items, adjusted fully diluted earnings rose 35% to 33 cents a share from a year earlier because of strong demand for its software during the economic downturn. The regulatory burden of information recording and retrieval has boosted demand for Autonomy’s products substantially, and through a series of well-placed acquisitions the company has increased demand for its core technology platform, Intelligent Data Operating Layer. 

Insurer Standard Life posted a 7% fall in full-year life and pensions new business sales as weak performances from the U.K. and Europe overwhelmed higher results from Asia and Canada. The drop in sales gives a preview of how other major U.K. life insurers are likely to have performed last year, with more companies posting results in the next few weeks. Standard Life also said it is "entering 2010 with good momentum in many of our businesses, and though the external environment is likely to remain uncertain we believe we have the opportunity to accelerate growth" in some of its businesses. The company said total sales for the year ended Dec. 31 on a present value of new business premiums basis, or PVNBP, were GBP14.66 billion, down from GBP15.68 billion in 2008.

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: February 3rd, 2010 under Asset Management.
Comments: none

 

FTSE 100	5247.41, +58.89	Dow	10185.53, +118.20
FTSE 250	9312.11, +74.81	Nasdaq	2171.20, +23.85
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Nikkei	10371.09, +166.07	Hang Seng	20272.18, +28.43
Oil (Crude)	$74.53, +$1.54	Gold	$1104.30, +$21.30
Base Rate	0.5%	10 Yr Gilt	3.91%
£/$	1.592	£/€	1.1442
1 month LIBOR	0.519	3 month LIBOR	0.616

 

Markets

London - The FTSE 100 jumped 58.89 points to 5,247.41 yesterday. Utility shares led the market higher on speculation the Ontario Teachers’ Pension Plan may bid for Northumbrian Water Group. Severn Trent and United Utilities both climbed more than 2% as a result. This morning the FTSE loses 29.95 points to 5,217.46. BP leads the decline after its quarterly results missed estimates. Rio Tinto tops the risers board after Citigroup upgraded the stock to Buy from Hold.

New York - US stocks rallied yesterday, reviving the bullish sentiment among investors. Wall Street ended its worst month in almost a year on Friday, with all three major indices ending at two month lows. The Dow Jones gained 118.20 points to 10,185.53, the S&P 500 jumped 15.31 points to 1,089.18 and the Nasdaq rose 23.85 points to 2,171.20. Stocks were lifted by both better-than-expected economic and corporate data. Exxon Mobil reported a profit of $6.05 billion or $1.27 per share, down about 18% from the fourth quarter of 2008 when oil prices were lower and fuel demand was higher. However, the results still topped forecasts to send shares 2.7% higher.

In economic news, the Institute for Supply Management’s manufacturing index showed the sector grew in January at a faster rate than expected. This followed similar reports from China, Australia and the euro zone and helped give a boost to industrial materials companies.

Tokyo - The Nikkei advanced 166.07 points to 10,371.09 this morning, following the positive mood in the States. In other news, Toyota gained after saying dealers will begin fixing flawed pedals that led to a recall.

Hong Kong - The Hang Seng rose 28.43 points to 20,272.18.

Economics

US Pending home sales (Dec) 15:00 GMT/ 10:00 EST

Another decline in pending home sales in December, following November’s 16% plunge, would be a disappointing outcome, raising further questions about underlying housing demand and, therefore, how quickly the overhang of existing homes for sale is likely to be reduced. The level of sales in the West probably has further to fall, and analysts look for an overall decline of 2% for the pending home sales index. However, the extension and expansion of the homebuyer tax credit should help set a new floor for sales within another month or two. 

Corporate

BP Plc today posted a 68.3% rise in adjusted profit for the fourth quarter due to increased oil and gas production and a higher average oil price, but missed analysts expectations due to a weaker-than-expected performance in refining. BP Chief Executive Tony Hayward said he expects the economic recovery this year to be "slow and gradual" so BP will continue to focus on improving upstream operational performance and reducing downstream costs. The U.K.-based energy giant said the clean replacement cost of supplies, a keenly-watched figure that strips out gains or losses from inventories and other non-operating items, for the three months ended December 31 2009 totalled $4.38 billion, compared with $2.61 billion for the fourth quarter of 2008.

Imperial Tobacco Group Plc said today that it has made a good start to the year despite a weak economic environment. The world’s fourth-largest global tobacco group by sales said in its first-quarter trading update that its performance and financial position in the financial year to date is in line with management expectations. The maker of Davidoff, Gauloises Blondes, Gitanes Blondes and JPS cigarettes said it had increased prices across its portfolio in the U.K., Spain and France since the start of the year. Price increases are essential in mature markets, where volumes are either in long-term decline or at best flat. The company added that its focus on cash generation was helping to further reduce debt. "This has been recognized with Moody’s recently changing their credit rating outlook from negative to stable," it said. Imperial could face a tough time in its home U.K. market if government plans to cut smoking by half over the next 10 years succeed. As well as measures to end vending machine sales and tighten up restrictions in underage selling, the government said Monday it was also looking at banning logos and colour from cigarette packaging.

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: February 2nd, 2010 under Asset Management.
Comments: none