Professional Documents
Culture Documents
Intelligent Investor UK Edition January 17 2011
Intelligent Investor UK Edition January 17 2011
Intelligent Investor UK Edition January 17 2011
17 January 2011
U.K.
The Economic Monitor Series. Free Edition.
Stock recommendations and price targets from top FTSE 100 closed at 5985.70, down 16.37 points or 0.27%.
brokerage firms
Sterling rose as high as $1.5955, its strongest since November 23,
Analysis and views on BP share price, BHP and Crude oil climbing above $1.5935, the 61.8 percent Fibonacci retracement of
prices the pound's stumble in November-December, which could pave
the way for a test of $1.60. By 1605 GMT it had edged back to
$1.5908, up 0.3 percent on the day. The euro fell a full percentage
Economic Indicator Watch point to 83.50 pence, pulling back from a rise to near 85 pence on
Friday. Traders said bids were rumoured at 83.50 and 83.40 pence.
Important Events Scheduled on January 18
By 1040 GMT, the March gilt future was one tick lower at 117.63,
Economic Events & Indicators while the equivalent Bund future was 5 ticks lower. In the cash
market, the yield on ten-year gilts was flat changed at 3.61 percent,
keeping the spread against Bunds little changed at 57 basis points.
Nationwide Consumer Confidence (December) The yield on two-year gilts was one basis point higher at 1.34
percent but down from a one-year high of 1.39 percent hit on
RICS House Price (December) Friday.
CPI (December) Spot gold was last almost unchanged on the day at $1,360.50 by
1555 GMT, having touched a one-week low of $1,354.99 on Friday
and having fallen by more than U.S. gold futures which were down
RPI (December)
0.1 percent at $1,359.70.
Corporate Events U.S. crude for February fell 36 cents to $91.18 by 1450 GMT, while
ICE Brent for March lost 50 cents to $97.88.
Rio Tinto fourth quarter 2010 operations review.
STOCK INDICES
African Barrick Gold Q4 2010 production report.
INDEX LAST CHNG % CHNG
IG Group Holdings interim results
FTSE 100* 5985.7 -16.37 -0.27
Burberry Group, Experian, SABMiller, Record, Carphone FTSE 250* 11741.51 -0.90 -0.01
Warehouse Group trading announcements DAX* 7078.06 2.36 0.03
Arden Partner, Safestore Holdings final results CAC 40* 3975.41 -7.87 -0.20
Stoxx Europe 600 284.06 0.29 0.10
Breaking News * CLOSING VALUES
Disclaimer: The views and investment tips expressed by investment experts are their own, and not that of IBTimes or its management. We advise users to check with certified experts before
taking any investment decisions.
The Intelligent Investor - U.K.
Shares in BP were up on the FTSE 100 in morning trading after the energy giant said it had been awarded four
deepwater offshore blocks near the coast of southern Austalia.
BP will be exploring the four blocks, which cover a 24,000 km2 area, for reserves of oil and gas. BP will also have the
right to "develop any commercially viable discoveries".
The exploration phase will take place over a six year period and will be subject to "detailed environmental assessment".
Dr Phil Home, Managing Director of BP's Australian upstream oil and gas business, said, "The Ceduna Sub Basin is a
very exciting new exploration area for BP. Our experience tells us that the geology has a high potential for containing hydrocarbons."
Resource giant BHP Billiton is refocusing on organic growth after a string of failed high-profile takeover attempts.
The world's largest miner is set to advance over $62 billion worth of projects this year.
The company should also have six large projects that progress to feasibility stage, with coal, oil and gas the main focus.
BHP reported a net profit of $15.3 billion For the year ended 30 June 2010. The diversified mining giant is due to release its quarterly production
report this week.
BHP is expected to approve at least nine projects this year, including delivering on iron ore expansions in Western
Australia's Pilbara region.
Deutsche Bank analyst Paul
This year is about getting back to core business for BHP.
Young
"It is going to be about talking about organic growth and the upside, which the market probably needs to refocus
on,"
Crude oil prices headed towards $114, technical indicators bullish : analyst
By IBTimes
Crude oil prices could be headed towards $114 per barrel, said Richard Perry, chief market strategist at Central Markets, on CNBC.
Perry said when prices rose above $90 in December, it broke through the trading range of $66 to $90. The next target from a technical analysis point
of view is $114.
Oscillators and moving averages are supportive of higher prices, said Perry. The 50-day moving average, at around $90, could prove to be a support
level for corrections.
Perry thinks what may happen is that crude oil prices approaches $100, meets resistance at this psychologically important level, gets support at the
$90 level in the ensuing correction, and subsequently rising above the $100 level and head towards $114 per barrel.
The Intelligent Investor - U.K.
TOP STORIES
Economic Events
Company Events
Rio Tinto, global miner, will announce its fourth quarter 2010 operations review. Recently it has completed the divestment of 61 per cent of Alcan
Engineered Products (AEP) to certain investment funds affiliated with Apollo Global Management, LLC (Apollo) and the Fonds Stratégique
d'Investissement (FSI). The miner said, in October that its 2010 iron ore production was maintained at 234 million tonnes. The world's second-largest
miner of the steel-making raw material also said it was driving all its divisions near or above capacity to cash in on strong mineral prices.
Analysts say that the company is growing continuously due to the insatiable resources appetites of giant Asian economies China and India. Chief
Executive Tom Albanese said that the company had achieved record production in iron ore, alumina and coking coal.
African Barrick Gold, a U.K based gold producer in Tanzania, will report its fourth Quarter 2010 production report. The company reported in
October, fall in its third-quarter profit by 7.9 percent after output of the precious metal declined. Its net income fell to $39.9 million from $43.3
million a year earlier, the London-based company said today in a statement. African Barrick’s so-called attributable gold output dropped 23 percent
to 164,996 ounces in the quarter.
Full-year production will be comparable to 2009’s 716,000 ounces, according to the statement. The company reduced its forecast from 750,000-
800,000 ounces on Oct. 14 after saying the Buzwagi mine in Tanzania was “widely infiltrated” by fuel thieves. Its quarterly sales declined 1.1 percent
to $208.8 million.
IG Group Holdings, a world-leading provider of financial spread betting and CFDs, is expected to announce its interim results for the six months to
30 November 2010. The Group expects to report revenue of around £157 million against £143.8 million reported a year ago, for the first half, an
increase of 9 percent over the prior year. Costs during the period were in line with management expectations. The group said in December that its
revenue from the group’s UK financial business grew by 4 percent to £83 million while group’s Australian business achieved revenue of £23 million.
The Group’s offices in mainland Europe achieved revenue of £27 million, an increase of 24 percent from last year. All of the European offices
delivered growth, but Germany continues to be the fastest growing of these offices, achieving revenue growth of 56 percent.
Analysts forecasts the company to report full year revenue of £330.06 million with an EBIT of £163.24 million. EPS (pre amortisation) is estimated to
be at 34.17 pence.
British luxury group, Burberry Group, will announce its third quarter 2010 trading Update and Interim Management
Statement. The retailer is expected to have benefited from robust economies in Asia and Latin America and is likely to
show a benefit from strong emerging markets, particularly in Asia. Analysts expect the company to report full year profit
of 43.75 pence per share, against 35.10 pence reported a year ago. Full year revenue is expected at £1,464.21 million with
a full year pre tax profit of £266.04 million.
Experian, the global information services company, will release its interim management statement. The firm reported
strong performance, with improving trends across all regions, during its first half. Its revenue from continuing activities
rose 8 percent at constant exchange rates while reported organic revenue growth of 7 percent. The company reported total group revenue of
US$2.0 billion. For the year as a whole, the company expects to deliver similar rates of organic revenue growth to the first half, and targets modest
improvement in its EBIT margin.
The company is estimated to report full year profit of 63 cents per share for the year ended March 2011. Full year Revenue for FY 2011 is expected at
$4,179.95 million with a pre-tax profit of $761 million.
SABMiller, one of the world's largest brewers, with brewing interests and distribution agreements across six continents, will release its trading
statement on 18 January 2011, for third quarter FY 2011. SABMiller said in November that its UK subsidiary, Miller Brands, has delivered lager volume
growth of 25 percent on an organic basis in the first six months of the financial year to September 2010. The group reported rise in revenue by 7
percent, with organic, constant currency revenue growth of 4 percent. EBITA margin rose by 90 basis points (bps) to 17.3 percent during the period.
Although consumer spending remains subdued, the trend of incremental improvement in economic conditions across most of its emerging markets
is expected to be maintained.
Analysts have forecasted the company to report an EPS (pre amortisation) of $1.843 per share, against $1.64 reported a year ago. Full year revenue is
expected at $18,783 million with a full year dividend of 77 cents per share.
The firm recently advanced into territory dominated by the world’s biggest brewer, Anheuser-Busch Inbev, with the purchase of CASA Isenbeck,
Argentina’s third-largest brewer. The move strengthened its presence in Latin America and will dilute its dependence on the European market which
has been flat, at best, recently.
Record, a specialist currency manager and provider of currency hedging services for institutional clients, will declare its third quarter trading updates.
The company posted fall in its first-half profits after steep drop in client numbers, due to the currency market turmoil. Profits before tax in the six
months to end-September amounted to 7.1 million pounds ($11.32 million) compared with 8.2 million pounds reported in the same period last year.
The Intelligent Investor - U.K.
Carphone Warehouse Group will release its trading updates for third quarter. The company, said in November, that Group’s strong first half
performance gives the confidence of upgrading full year Headline EPS guidance to 13.5p-14.0p.
In CPW Europe, the firm continues to expect smartphones to stimulate consumer demand, particularly in the postpay segment. Smartphone
penetration in the lower value prepay segment is still expected to be modest in H2 with the potential for a broader product range in this segment in
2011. Stronger than anticipated growth and improved profit margins in Best Buy Mobile US have delivered substantial out-performance in H1, and
the firm expects continued strong performance in the second half, with full-year profit-share guidance raised to £85-95 million.
British stockbroker, Arden Partners, will declare its final results. The broker said in November that recent trading had been better-than-expected and
for the full-year it expects to report a small net operating profit. The company completed two large corporate transactions and equity trading has
been better-than-expected, since its profit warning on September 10.
Arden Partners said that the business has been cash generative for the year and at October end it had strong cash balances and regulatory capital.
Analysts expect the company to report first half profit of 1.70 pence per share while full year revenue is estimated at £13.30 million. Net profit for FY
2010 is expected at £0.40 million with a net debt of £9.10 million.
British self-storage retailer, Safestore Holdings, will declare final results. The company is estimated to report full year profit of 10.188 pence per
share for the year ended October 2010. Full year Revenue for FY 2010 is expected at £71.50 million with a pre-tax profit of £26.53 million.
Nationwide Building society is due to release consumer confidence figure for the month of December.
The index gauging people's expectations for the next six months fell to
61 in November from 70 in October, also the lowest since March 2009.
The spending index also declined 13 points on the month to 79, the
lowest since November 2008.
For the month of November, England and Wales house prices fell for a fifth consecutive month rising only slightly to -44 from October's 18-month
low of -49.
The level is still far behind levels of -80 which were common when house prices were falling fastest in 2008. The average number of sales per
surveyor edged to its lowest since June 2009, down to 14.8 from 15.2.
RICS had also stated that 43 percent of the surveyors it polled said prices were broadly stable over the past 3 months.
It also added that the prospect of hefty cuts to government spending and employment next year was putting many people off buying a house, and
first-time buyers still found it hard to get a mortgage.
The Intelligent Investor - U.K.
CPI mm (December)
Forecast: 0.7%, Prior: 0.4%
CPI yy
Forecast: 3.3%, Prior: 3.3%
RPI mm (December)
Forecast: 0.7%, Prior: 0.4%
RPI yy
Forecast: 4.8%, Prior: 4.7%
RPI-X mm (December)
Forecast: 0.7%, Prior: 0.4%
RPI-X yy
Forecast: 4.8%, Prior: 4.7%
Office of National Statistics will release figures on British consumer price inflation on Tuesday, Jan 18 at 0930 GMT, which had hit a six-month high
of 3.3 percent in November. Analyst forecast the inflation level to have remained at that uncomfortably high level in December, more than a
percentage point above the BoE's target.
Energy prices are likely to be the main issue. Petrol prices is also expected to rise on the month and several major utility companies raised their tariffs
for gas and electricity.
With consumer price inflation expected to hit 4 percent early this year, investors are arguing the Bank of England's credibility and pricing in the risk of
a prolonged inflation overshoot. That has led some investors to price in a rise in interest rates as soon as May.
Howard Archer, IHS Global Insight said that the Bank of England forecasts inflation to average 3.2-3.3 percent in the fourth quarter and to rise just
above 3.5 percent early in 2011.