FTSE 100	4279.98, +49.96	Dow	8299.86, -23.05
FTSE 250	7320.85, +127.89	Nasdaq	1792.34, +27.42
FTSE All Share	2181.64, +26.53	S&P 500	900.94, +5.84
Nikkei	9796.08, +205.76	Hang Seng	18251.50, +359.35
Oil (Crude)	$68.67	Gold	$934.40
Base Rate	0.5%	10 Yr Gilt	3.72%
£/$	1.635	£/€	1.1723
1 month LIBOR	0.659	3 month LIBOR	1.214

 

Markets

London - The FTSE 100 is currently 11.05 points lower at 4,268.93. Lonmin tops the fallers, down 2.4%, after saying it has shut down a South African furnace for repairs. It is suggested that the miner may as third parties to process the ore it mines in the interim. BP is in focus after saying Ericsson CEO Carl-Henris Svanberg will replace Peter Sutherland as its chairman from January 1 2010. Also, Indonesia’s state energy firm Pertamina has agreed to buy BP’s stake in an offshore oil and gas block in West Java for $280 million.

On the upside, Royal Bank of Scotland gains 3.4% after Cazenove upgraded the stock to Outperform. Standard Life benefits from an upgrade from Bank of America to Buy, pushing shares 2.5% higher.

New York - US indices finished mixed on Wednesday following the Federal Reserve’s decision to keep interest rates unchanged. Stocks rose in the morning following a government report that showed durable goods orders rose 1.8% in May, against expectations for a fall. But stocks feel back after the Fed’s announcement. Although the rate decision was as expected, the central bank said nothing about expanding its $300 billion debt buyback program that is meant to keep long term rates from spiking, disappointing investors.

The Dow Jones fell 23.05 points to close at 8,299.86 while the S&P 500 added 5.84 points to end at 900.94. The Nasdaq gained 27.42 to finish at 1,792.34.

Boeing was again the heaviest weight on the Dow, losing 5.8% and knocking almost 20 points off the blue chip index. The further delay in the production of its 787 Dreamliner caused broker Oppenheimer to downgrade the stock to Underperform from Perform and cut its share price estimate to $40 from $42.

Oracle helped tech stocks higher and the Nasdaq higher after reporting its quarterly results late Tuesday. Record profit margins and a better than expected forecast pushed shares 7% higher.

US light crude oil for August delivery slipped $0.57 to $68.67 a barrel. COMEX gold for August delivery gained $10.10 to $934.40 an ounce. Treasury prices slumped, raising the yield on the 10 year note to 3.68% from 3.63%.

Tokyo - The Nikkei rose 205.76 points to close at 9,796.08 this morning as investors reacted to the economic data from the US. Mitsubishi Corp gained 4.4% after metal prices jumped the most in three months while Shinsei Bank and Aozora Bank both soared 11% after confirming they are in talks to merge.

Hong Kong - The Hang Seng is currently 359.35 points higher 18,251.50. Property companies lead the way amid signs the real estate market is recovering as the outlook for global growth improves. Sun Hung Kai Properties added 4.8% after the Standard newspaper said the developer is raising prices at its Sky One project.

Economics

US GDP (Q1, final) 13:30 BST/ 08:30 EDT

The final reading of Q1 GDP is expected to be unchanged from the preliminary estimate of -5.7%, with the GDP deflator also staying at 2.8%.

US Initial jobless claims (wk 20 Jun) 13:30 BST/ 08:30 EDT

Last week’s initial jobless claims were close to unchanged at 608,000, and the four-week average fell for the second straight week, down to 615,750. Analysts look for initial claims to fall to 600,000 this week. Meanwhile, continuing claims for the previous week fell sharply to 6.69 million from 6.84 million – the biggest weekly drop since 2001. The insured unemployment rate fell to 5.0% from 5.1%, the first decline since December. Analysts look for continuing claims to hold steady in this week’s reading.

Corporate

DSG International posted a slightly better than feared 78 percent slump in full year profit and said it expected trading to remain subdued. "The difficult economic backdrop across Europe and subsequent impact on consumer spending has been well publicised. The group expects these conditions to continue through the coming year in many of its markets", the company said. DSG made a profit before tax and one off items of £50.5m in the year to May 2. This compares with analysts consensus forecasts of £43.1m and £225.6m in the previous year. After one off charges of £190.9m the group made a pre-tax loss of £140.4m on sales down 1 percent to £8.23bn. DSG ended the period with net debt of £477.5m and had already said it would not pay a dividend.

Costain Group said today it continued to perform in line with its expectations with a strong order book and significant new contracts. The company said "The group continues to benefit from its strategic focus on targeted blue chip customers in chosen sectors". Costain said its net cash position was significantly in excess of £100m and it had no significant borrowing. The group preferred bidder positions of over £800m and the current level of tendering activity remains high.

Goldshield said today full year profit rose over 70 percent and that it has seen an encouraging start to the current financial year. However, the company said it expects to face a more challenging economic environment in the short term. Goldshields pre-tax profit for the year jumped 72 percent to £21.3m, on sales up 16 percent to £98.4m. It raised its dividend to 8.7 pence compared with 8 pence last time. On Wednesday, the company confirmed that it had received a bid approach, sending the stock 5 percent higher. The Times newspaper cited speculation that the bid was from founder Ajit Patel, who stood down in 2007 to concentrate on fighting a case brought against the company by the SFO. The company finally won the case in December 2008 when, following victory for Goldshield in July, the Court of Appeal refused the SFO leave to appeal.

DS Smith posted a 35 percent fall in full year adjusted pre-tax profit mainly on lower demand for its products, but said it "has adequate resources to continue in operational existence for the foreseeable future". The company said it slashed its final dividend to 1.8 pence from 6.2 pence earlier as a part of its cost cut measures, bringing the total dividend for the year to 4.4 pence, down 50 percent from a year ago. For the year ended April 30, the company said its pre-tax profit before one off items fell to £72.5m from £111m last year. Revenue, however, grew 7 percent to £2.1bn. Analysts were expecting the company to report a full year pre-tax profit before exceptional items of £65.1m on revenue of £2.1bn.

Microfocus posted a 31 percent rose in adjusted pre-tax profit today, broadly in line with expectations, helped by high proportion of recurring revenue. The group reported adjusted pre-tax profit of $115.9m for the year to end-April, up from $88.6m, on revenue of $274.7m, up 20.4 percent. Analysts had expected the group to post adjusted pre-tax profit of $114.4m on sales of $275.8m. The company entered the application testing market earlier this year through the acquisition of Compuware Corp, and on June 18 trumped a rival bidder with an $88m offer for Borland Software Corp. It said it was confident it would continue to deliver superior shareholder returns, although the Compuware acquisition was expected to reduce the overall group margin. The company is paying a final dividend of 11.1 cents a share, giving a total payout for the year of 15.6 cents, up 20 percent.

Lavendon Group said today it is performing in line with its expectations despite tough trading conditions in Europe. Lavendon said group revenues fell 5 percent in the five months to end May and dropped 13 percent on a constant currency basis, with weakness in Europe partially offset by sales in the Middle East jumping 39 percent on the back of new supply contracts. Lavendon said local currency revenues in Spain are down 42 percent year on year, whilst rental revenues in France and Belgium fell 18 percent. It added net debt levels have been reduced in line with its plans.

Misys said total revenue for the year to end May rose about 40 percent to £695m, helped by the creation of its Allscripts-Misys healthcare business in October 2008. The company said that total order intake increased by 60 percent to about £430m. On a like for like basis, excluding the Allscripts deal and currency movements, revenue rose by about 3 percent, while adjusted operating profit increased by about 15 percent. It said it achieved revenue growth across financial services, with strength in banking partially offset by a decline in treasury and capital markets. The company also said Allscripts-Misys cost synergies were ahead of company expectations and it was well placed in the strategically important healthcare market.

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: June 25th, 2009 under Asset Management.
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