FTSE 100	3804.99, -52.11	Dow	7486.58, +90.88
FTSE 250	6191.70, -20.09	Nasdaq	1491.22, +29.11
FTSE All Share	1923.11, -23.69	S&P 500	794.35, +16.23
Nikkei	7945.96, -26.21	Hang Seng	13130.92, +13.75
Oil (Crude)	$48.14	Gold	$889.10
Base Rate	0.5%	10 Yr Gilt	3%
£/$	1.426	£/€	1.0593
1 month LIBOR	1.149	3 month LIBOR	1.786

 

Markets

London - The FTSE 100 is currently 1.52 points better at 3,806.51. Randgold Resources leads the index higher after gold futures rallied. The miner is currently 11.8% higher. FirstGroup jumps 11.7% after saying full year earnings would be in line with analysts’ expectations. Prudential climbs 9.2% after reporting stronger than expected results. British Land drops 3.8% after announcing that shareholders have agreed to buy 97% of the stock for sale in its rights offer. Friends Provident loses 2.1% after Citigroup downgraded the shares to "hold" from "buy". HSBC loses 2.4% as investors lock in profits following several sessions of repeated gains.

New York - The Federal Reserve sent stocks higher yesterday following the conclusion of its two day policy meeting. As expected, interest rates were held steady near 0%, but more positively the Fed announced it would buy $300 billion in long term Treasury bonds and an additional $750 billion in mortgage backed securities. It is hoped the move will bring down interest rates on corporate debt and mortgage loans, easing the flow of credit. Treasury prices rallied as a result, sending the yield on the 10 year note down to 2.51% from 3.01%.

The Dow Jones climbed 90.88 points to close at 7,486.58 while the S&P 500 gained 16.23 points to end at 794.35. The Nasdaq jumped 29.11 points to finish at 1,491.22.

Financial companies and house builders benefited from the Fed’s comments, with leading companies including Bank of America up 22.3% and DR Horton adding 7.7%.

The Nasdaq was helped to a near 2% gain by IBM after a report in the The Wall Street Journal said it is in talks to buy Sun Microsystems for around $6.5 billion or $10 to $11 per share. That price was more than a 100% premium from Sun Micro’s closing price on Tuesday and sent the stock 79% in Wednesday’s trade. IBM slipped 1%.

After the bell, Oracle Corp gave the tech sector a further boost by reporting better than expected quarterly results. The world’s second largest software maker also said it would pay its first ever dividend, sending shares 5.9% higher in extended trade.

US light crude oil for April delivery slid $1.02 to $48.14 a barrel. COMEX gold for April delivery dropped $27.70 to $889.10 an ounce.

Tokyo - The Nikkei slipped 26.21 points to close at 7,945.96 this morning. Exporters led the drop after the dollar slumped following the announcement from the Fed. Honda, which gets more than half its sales from North America, fell 3%. Retailers were lower after nationwide department store sales fell the most since 1998.

Hong Kong - The Hang Seng edged 13.75 points higher to 13,130.92 this morning. The index spent much of the session in negative territory, but reversed gains after Sino Land said first half profit had increased. Zijin Mining, China’s largest gold producer jumped 9.3% after bullion rallied on speculation the Federal Reserve’s plan to increase money supply will weaken the dollar.

Economics

UK CBI industrial trends (Mar) 11.00 bst

Sterling weakness appears to be having precious little effect in supporting the UK manufacturing sector, as the downturn in global demand appears to be outweighing any benefits from improving competitiveness. This trend looks set to continue in March.

US Initial jobless claims (week 14 Mar) 12.30 gmt

Initial jobless claims continued to trend at a very high level, above 600,000 for the past six weeks. The four week average has climbed to 650,000, and a similar reading is expected this week. Continuing claims for the previous week could climb again, up to a new cycle high of 5.4m.

US Leading indicators (Feb) 14.00 gmt

February leading indicators are expected to have fallen 0.9 percent, with negative contributions coming from higher jobless claims, lower stocks and consumer confidence, and a further decline in the manufacturing work week. A step drop in building permits is also expected, which will be released prior to this report. Money supply growth has been a boost for LEI for the past five months, but real M2 was roughly unchanged in February.

US Philadelphia Fed (Mar) 14.00 gmt

The Philadelphia Fed fell 17 points to -41.3 in February, the lowest reading so far this cycle. However, the survey did reach even weaker levels in 1974/75, and 1990. In each of these previous episodes, the index only remained at -40 or lower for either two or three months. HSBC’s best estimate is for the headline index to rise to -38 this month.

Corporate

Prudential PLC reported Thursday it swung to a net loss last year due in part to losses on investments and said Chief Executive Mart Tucker will be replaced by current Chief Financial Officer Tidjane Thiam in October. The company also said this year will remain challenging for the company. The company said net loss last year was £1.34 billion on a European Embedded Value basis. It posted a net profit of £2.96 billion in 2007. Prudential’s short-term investment losses in 2008 totalled £5.13 billion and compared with a gain of £174 million the previous year. However, its operating profit, which doesn’t factor short-term investment returns, was at £2.96 billion, up 17% from £2.53 billion in 2007. The group’s operating profit was higher than the £2.56 billion expected by 15 analysts polled by the company. The company also said it has quit the auction process to acquire AIA, the Asian operations of troubled U.S. insurer American International Group Inc, but is still looking out for future acquisitions.

Cape Plc posted a 43 percent rise in full year adjusted pre-tax profit, beating analysts’ expectations, helped by contributions from acquisitions and continued organic growth. The company said the higher levels of activity seen in the second half of 2008 has continued into 2009 and it believes the demand for energy over the medium term will present good opportunities for further growth. "With 70 percent of our revenues from the downstream energy, power generation and later cycle production markets our business is only partially impacted by lower energy prices," Chairman Sean O’Connor said today. For the year ended Dec. 31, 2008, the company said its pre-tax profit before exceptional items was £48.3m, compared with £33.7m last year. Revenue rose 45 percent at £622.7m. Three analysts on average had expected the company to report pre-tax profit before exceptional items of £45.5m, on revenue of £590.9m.

Aegis expects a resilient performance in more difficult markets in 2009 after organic sales grew by a better-than- expected 4.6 percent in 2008, helped by the weak British pound. Aegis said it had put in place a cost-cutting programme that would include axing 5 percent of its workforce. Operating profit rose 10.7 percent on a constant currency basis to £185.4m. Sales were £1.342bn, beating the £1.29bn forecast. "This is a good set of results in increasingly difficult market conditions," Chairman and interim Chief Executive John Napier said in a statement. "We have planned and initiated firm action to improve efficiency and reduce costs across more than 40 countries." about the future of the two medium-sized companies, but did not say what action he might take.

Premier Farnell fell short of expectations by posting a 3 percent rise in annual profit and said it was "dissatisfied" with the result as fourth-quarter sales slowed. The group reported an underlying pre-tax profit of £72.5m on sales 1 percent higher at £804.4m for the year to the end of January 2009. The consensus forecast showed analysts, on average, expected the company to report a profit of £76m for the year to the end of January 2009. The full-year gross margin was largely flat at 39.6 percent. However, Farnell’s underlying fourth quarter pre-tax profit fell 16 percent to £16.4m on revenue 8 percent down at £200.2m as business slowed markedly led by an 8.2 percent fall in marketing and distribution sales. The company said it was unhappy with its full-year performance, despite outperforming key electronics markets. "Whilst we are encouraged by our strategic progress and our out performance of these markets, we are dissatisfied with our business results," Chief Executive Harriet Green said in a statement. "In the fourth quarter, our performance was impacted by the rapidly changing global economy.

T Clarke Plc reported an 86 percent rise in 2008 adjusted pre-tax profit on higher revenue, raised its final dividend by 8 percent and said it expected 2009 revenue to be at more modest levels. "While market conditions remain challenging and visibility on future workload is more limited now than it has been for some time, we continue to further diversify our business…so that we are not overly dependent on any one sector," Chief Executive Pat Stanborough said in a statement. T Clarke said adjusted pre-tax profit for the year ended Dec. 31 rose to £15.2m from £8.2m a year ago. Revenue rose 15.4 percent to £223.7m. Including goodwill impairment of £1.8m, pretax profit rose to £13.4m. The company raised its final dividend by 8 percent to 8.75 pence, lifting the total dividend to 13 pence from 12 pence year ago. T Clarke said its order book at the year-end stood at £160m, compared with £215m at the end of 2007, in addition to contracts worth £30m currently under negotiation.

Imagination Technologies expects strong unit volume growth for the year and said it concluded a significant license with a major consumer electronics company in November as well as a number of smaller deals. The company now expects the total unit shipment for the year to exceed 75 million units, compared with 47 million units last year. The company also said it was progressing a number of "significant" licensing agreements with existing and new partners, which it expects to close during the second half. Imagination said "Pure" has seen a general softening of the UK market due to the recession, but the export markets for Pure have continued to be very strong and will be a key growth driver going forward.

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 19th, 2009 under Asset Management.
Comments: none

 Print this post