Date: Thursday 20 Sep 2012
Losses were pared in the final 90 minutes of trading in London on a day when investors fretted about a slow-down in the global economy.
Disappointing Chinese manufacturing data was released overnight, and the news was not good. China´s manufacturing sector Purchasing Manufacturers' Index (PMI) for the month of September came in at 47.8, after 47.6 in August, for its longest streak below the 50 point threshold – which indicates economic contraction – in eight years.
Closer to home, UK retail sales fell by 0.2% in August, slightly less than the 0.3% fall expected by economists. In year-on-year terms total retail sales grew by 2.7% (Consensus: 2.9%), which was not such good news for retailers, and neither was the fact that the previous month´s year-on-year reading was revised down to show a rise of only 2.3%, instead of the preliminary estimate of 2.8%.
Capital Shopping Centres (CSC) is to tap the bond market to refinance its short-term borrowings and top up its war-chest. The shares dived after the group said it is offering £300m of senior unsecured convertible bonds due 2018. The bonds will have a coupon of 2.50% and an initial conversion price of 437.52p.
Online grocer Ocado was on offer after an underwhelming trading update. The firm said gross sales increased 9.9% in the 12 weeks to August 5th 2012 and that it expects an increase in the rate of sale growth in the fourth quarter.
Year-to-date gross sales growth to the end of the third quarter was 11.3%. Analysts at Panmure Gordon reckon the company may breach its net debt to EBITDA (earnings before interest, tax, depreciation and amortisation) covenant this year. They add that: "although we now believe that Ocado's days as a public company are limited, we don't think that the equity is worth very much."
Food and drink wholesale group Booker Group reported a 4.3% year-on-year rise in total sales in the 12 weeks to September 14th, with non-tobacco sales 3.9% higher, while tobacco sales rose by 5.1%.
On a like-for-like (LFL) basis, total sales rose by 4.4%, non-tobacco sales by 3.8% and tobacco sales by 5.4%. Peel Hunt had forecast LFL non-tobacco sales growth of 4.0%, which might account for why the shares lost a little ground.
The Chinese PMI manufacturing data hit mining stocks hard. BHP Billiton, meanwhile, has confirmed it is to cease studies into the expansion of its Red Hill coal asset in central Queensland. The decision should not come as too great a surprise as the group announced on August 22nd that it would delay a number of project expansions because of current market conditions.
In South Africa, mining giant Anglo American Platinum (Amplats) has reported poor attendance at its Rustenburg process operations since it re-opened on Tuesday following a temporary halt to operations amid a wave of labour unrest that has hit the mining industry in South Africa in recent weeks.
The firm announced on Wednesday that the current industrial action is illegal and said it has given notice to its employees that they are required to return to work by Thursday's night shift.
Press reports suggest that striking miners remain defiant and have formed a barricade of burning tyres in a street near the mine.
There was better news at Lonmin as strikers returned to work after a pay settlement was agreed earlier this week, but the market appears not to like the terms of the agreement, as Lonmin's shares were among the hardest hit in the sector.
In other company news, Imperial Tobacco's operational performance in the year ended September 30th has been in line with its expectations. Tobacco net revenues are expected to be up by around four per cent with particularly good performances in its Eastern Europe, Africa & Middle East and Asia-Pacific regions. However, stick equivalent volumes are expected to decline by up to three per cent, the majority of which is due to ongoing market weakness in Ukraine and Poland and compliance with international trade sanctions against Syria.
BSkyB has said it welcomes an announcement by Ofcom that Sky "remains a fit and proper holder of its broadcasting licences".
Utility company United Utilities remains confident of delivering its 2010-15 regulatory out-performance targets after a solid start to the current financial year. Revenue in the year to the end of March 2013 should be higher than last year, but, as expected, the increase is slightly below the allowed regulated price rise, principally reflecting the ongoing impact of customers switching to meters and continued lower commercial volumes.
The price of Brent crude bounce back today, with the most widely traded contract rising $1.46 to $109.65 a barrel.
Gilts were in favour, as investors deserted equities. The yield on the benchmark 10-year gilt eased to 1.80% from 1.85% overnight. Yields move inverseley to prices.
FTSE 100 - Risers
Imperial Tobacco Group (IMT) 2,399.00p +2.70%
International Consolidated Airlines Group SA (CDI) (IAG) 158.80p +2.32%
ITV (ITV) 91.15p +1.84%
Ashmore Group (ASHM) 343.00p +1.33%
Amec (AMEC) 1,143.00p +1.06%
Marks & Spencer Group (MKS) 371.40p +1.01%
SABMiller (SAB) 2,725.00p +1.00%
British Sky Broadcasting Group (BSY) 734.00p +0.96%
WPP (WPP) 868.50p +0.93%
Diageo (DGE) 1,720.00p +0.70%
FTSE 100 - Fallers
Evraz (EVR) 260.80p -6.02%
Anglo American (AAL) 1,944.00p -4.42%
Capital Shopping Centres Group (CSCG) 332.40p -4.10%
Eurasian Natural Resources Corp. (ENRC) 343.60p -3.86%
Kazakhmys (KAZ) 724.50p -3.40%
Rio Tinto (RIO) 3,077.00p -2.67%
Vedanta Resources (VED) 1,054.00p -2.41%
Shire Plc (SHP) 1,832.00p -2.40%
BHP Billiton (BLT) 1,954.50p -2.27%
Burberry Group (BRBY) 1,037.00p -2.17%
FTSE 250 - Risers
Perform Group (PER) 390.00p +4.84%
Petra Diamonds Ltd.(DI) (PDL) 107.10p +4.49%
Ashtead Group (AHT) 338.80p +3.20%
Halma (HLMA) 448.50p +3.10%
Drax Group (DRX) 515.00p +2.18%
Ladbrokes (LAD) 185.90p +2.14%
Greene King (GNK) 606.50p +2.02%
BBA Aviation (BBA) 205.40p +1.99%
Phoenix Group Holdings (DI) (PHNX) 520.00p +1.76%
Rathbone Brothers (RAT) 1,348.00p +1.74%
FTSE 250 - Fallers
Bumi (BUMI) 250.10p -11.31%
Lonmin (LMI) 610.50p -6.29%
Essar Energy (ESSR) 118.20p -5.52%
Chemring Group (CHG) 343.00p -4.88%
Imagination Technologies Group (IMG) 511.50p -4.21%
Ocado Group (OCDO) 64.40p -4.17%
Ferrexpo (FXPO) 209.80p -3.89%
Talvivaara Mining Company (TALV) 169.10p -3.76%
Aquarius Platinum Ltd. (AQP) 45.00p -3.74%
Homeserve (HSV) 217.00p -3.73%
FTSE TechMARK - Risers
Filtronic (FTC) 44.88p +5.28%
Pace (PIC) 164.25p +4.95%
Xaar (XAR) 245.00p +4.26%
Ricardo (RCDO) 369.75p +3.28%
BATM Advanced Communications Ltd. (BVC) 16.25p +3.17%
Ark Therapeutics Group (AKT) 3.35p +2.29%
Optos (OPTS) 170.00p +1.80%
Timeweave (TMW) 22.50p +1.12%
FTSE TechMARK - Fallers
AEA Technology Group (AAT) 0.055p -8.33%
RM (RM.) 78.00p -4.29%
Promethean World (PRW) 23.00p -4.17%
XP Power Ltd. (DI) (XPP) 1,012.00p -3.62%
Antisoma (ASM) 1.65p -3.52%
Oxford Biomedica (OXB) 2.44p -2.40%
Phoenix IT Group (PNX) 144.50p -2.20%
Emblaze Ltd. (BLZ) 47.00p -2.08%
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