FTSE 100	3542.4, +11.67	Dow	6547.05, -79.89
FTSE 250	5769.79, -61.76	Nasdaq	1268.64, -25.21
FTSE All Share	179167, +2.54	S&P 500	676.53, -6.85
Nikkei	7054.98, -31.05	Hang Seng	11694.05, +349.47
Oil (Crude)	$47.07	Gold	$918
Base Rate	0.5%	10 Yr Gilt	3.09%
£/$	1.385	£/€	1.0893
1 month LIBOR	1.229	3 month LIBOR	1.931

 

Markets

London - The FTSE 100 is currently 17.5 points higher at 3,559.90. Man Group leads the risers, up 8% after Citigroup upgraded the stock to buy from sell, citing a strong balance sheet and a low valuation. Antofagasta climbs 3.7% after reporting a 23.5% rise in net profit. Land Securities leads real estate companies lower, down 12.7%, after a report showed that housing sales dropped to their lowest level since at least 1978.
New York - US stocks dropped yesterday leaving the Dow and S&P 500 at new 12 year lows. Takeover news from the pharmaceutical sector failed to lift stocks while comments from billionaire investor Warren Buffett only helped to sour investor sentiment. He said the current environment was like an "economic Pearl Harbour", although he believes that over a 10 year period, investors will do "considerably better owning a group of equities" over US Treasury securities.

The Dow Jones dropped 79.89 points to close at 6,547.05 while the S&P 500 slipped 6.85 points to end at 676.53. The Nasdaq lost 25.21 points to finish at 1,268.64.

In deal news, Merck announced that it will buy Schering-Plough for $41.1 billion in a cash and stock deal. Merck believe this will enable them to compete with pharmaceutical industry leader Pfizer. However, investors were unsure this was the right time for such a merger ahead of healthcare reforms from President Obama that could dent drug prices. Merck slumped 7.7% while Schering jumped 14%. Pharmaceuticals were among the biggest losers on the Dow with Johnson & Johnson losing 2.9% and Pfizer edging 0.8% lower.

In further deal news investors learnt that Dow Chemical has finally agreed to go through with its purchase of Rohm and Haas. The two companies reached a settlement before they were due to battle in court over Dow’s refusal to close the deal. Dow dropped 10% while Rohm and Haas gained 4.7%.

Financials provided a bright spot for the session after US Federal Reserve Chairman Ben Bernanke attended a meeting on the economy with President Obama. Investors hoped this would lead to more clarity on plans to shore up the financial system. Bank of America rallied 19.4% and Wells Fargo surged almost 16%.

US light crude oil for April delivery gained $1.55 to $47.07 a barrel. COMEX gold for April delivery slid $24.70 to $918 an ounce. Treasury prices climbed, lowering the yield on the 10 year note to 2.91% from 2.87%.

Tokyo - The Nikkei slipped 31.05 points to close at 7,054.98 this morning, extending the indexes 26 year low. Companies with exposure to US markets, including Sony Corp, fell following the comments Warren Buffett. Tokyo Electric Power dropped 3.6 after crude prices rose.

Hong Kong - The Hang Seng surged 349.47 points higher to 11,694.05 this morning. HSBC led the rise, rebounding from yesterdays 24% slump, to finish 14% higher on the day. Cnooc followed crude prices higher, rising 7.4% while Aluminium Corp of China gained 4.3% as metal prices rose.

Economics

UK RICS house prices (Feb) 00.01 gmt

The recent rise in new buyer enquiries in this housing market survey provides a glimmer of hope regarding the UK economic outlook. If the government’s various schemes do manage to increase the flow of new credit towards mortgages, this survey suggests there are willing buyers. Rising unemployment could still dent this demand later in the year. But for now we expect this survey to improved, albeit very gradually, and remain at a level consistent with further price declines.

Uk Industrial Production (Jan) 09.30 gmt

The manufacturing PMI pointed to another sizeable contraction in production in January so a 2.5 percent monthly fall is expected on the official statistics, which would be the eleventh consecutive monthly decline.

US Wholesale inventories (Jan) 14.00 gmt

Sharp declines in wholesale sales since last July have caused the inventory to sale ratio to climb to 1.27, the highest level seen since 2002. Wholesalers have started to pare back they inventory levels over the past three months, and this adjustment is likely to have continued in January. Wholesale inventories are expected to fall by 0.9 percent.

US IBD/TIPP economist optimism (Mar) 14.00 gmt

The outlook for consumer confidence remains very grim, with gasoline prices creeping higher since the beginning of year, stock markets hitting new lows, and initial jobless claims continuing to climb. The IBD/TIPP index is expected fall to 43, from 44.6. Excluding the federal policies component, the index could drop to 45.5 from 46.4.

Corporate

Cattles warned it may have breached the terms attached to its bank loans and has suspended Finance Director James Corr over accounting errors uncovered during a forensic audit. "The board believes that Cattles is in breach of covenants under its borrowing arrangements and Cattles will therefore be seeking appropriate waivers from its relevant debt providers," the company said in a statement today. Cattles said it now expected to report a loss for 2008. "The board believes that the group will incur a significant loss before tax for the year ended 31 December, 2008," it said, adding that financial statements for 2007 would also need to be restated.
The company’s most recent guidance, issued just last week, had been for a pre-tax profit in 2008, albeit substantially lower than that reported a year earlier. Cattles, which said on March 3 it had suspended three top managers at its principal operating business Welcome Financial Services, said it had now suspended group Finance Director James Corr as well pending the outcome of an internal audit. Ian Cummine, chief operating officer at Cattles and chairman of Welcome Financial Services, and Adrian Cummings, compliance and risk director for Welcome Financial Services Lending, have also been suspended.

John Menzies Plc posted a lower full-year profit due to a fall in passenger flights and cargo volume, scrapped its final dividend and forecast a further decline in its core markets in 2009. The company said its long-term banking facilities have been secured to 2011 and beyond, while its short-term facilities have been secured ahead of schedule through to June 2010. The company said it would focus on generating cash and reducing debt in 2009, adding that it was reviewing its asset base and, where appropriate, may dispose of any non-core assets to further reduce debt. For the year ended Dec. 31, underlying pre-tax profit was at £30.7m, down from £30m a year ago. Revenue rose 8 percent to £1.67bn. Net debt before the effect of foreign exchange rates was £144.8m, an increase of £33.5m in the year, John Menzies said.

G4S posted a 23 percent rise in 2008 profit, hiked its dividend 30 percent and said it expected a strong performance this year as its broad range of customers shield it from recession. The company said profit before interest, tax and amortisation rose to £416m in 2008, just ahead of analysts’ forecasts for £404m. The full year dividend was 30 percent higher than in 2007 at 6.43 pence a share, the company said today. Chief Executive Nick Buckles said in a statement the group’s exposure to a broad range of industries and countries would see it hold out against the recession. The company provides security and protection in war-zones, parliament buildings, airports, to governments and at large-scale sporting or music events around the world.

Weir Group Plc beat expectations with a 53 percent increase in 2008 profit and said on Tuesday it had made a strong start to 2009. The company, which makes pumps for the mining, oil and gas, power generation and industrial markets, said it believes the current environment supports analyst forecasts for 2009 pre-tax profit of between £140m and £169m. Weir posted 2008 pre-tax profit of £176.2m on sales up 34 percent at £1.35bn. The consensus forecast was for profit of £174m. Weir had increased its own profit forecast twice towards the end of 2008 after its results were boosted by currency effects. "Growth in current year input and order book on a like for like basis, combined with good operational performance and the benefits from positive foreign currency translation effects, have provided a strong start to 2009," said the company in a statement.

Close Brothers Group Plc today posted a 45 percent fall in pre-tax operating profit to £38.5m in the six months to Jan. 31. "We remain soundly funded and well-capitalised," the bank said. "We are confident that our strong businesses and robust financial position will allow us to continue to deliver a solid overall performance in the current market environment," it added.

Mears Group Plc today reported a 26 percent rise in full-year underlying operating profit helped by new contact wins, raised its dividend by 18.8 percent and said it was confident of its future. "The sales pipeline remains buoyant and we have a number of significant opportunities which are at an advanced stage of the bidding process," Chairman Bob Holt said in a statement. Mears said its current order book stands at £1.6bn and a number of significant opportunities were at an advanced stage of the bidding process. The company declared a final dividend of 3.4 pence, taking the total dividend for the year to 4.75 pence, up from 4 pence a year earlier. The company reported an operating profit before amortisation and share option costs of £22.2m for the year ended Dec. 31 on a 38 percent growth in revenue to £420.4m. Mears also said it had already secured 89 percent and 54 percent of consensus forecast revenue for 2009 and 2010 respectively. Analysts were expecting Mears to report revenue of £458.4m for 2009 and £516.6m for 2010.

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

 

 

 

 

Posted: March 10th, 2009 under Asset Management.
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