Weekend news and share tips

By ShareCast and Weekend City Press Review, 27 June 2011

■ Drugs giants AstraZeneca and Bristol-Myers Squibb announced over the weekend that an extension to the phase 3 trial of their jointly developed dapagliflozin drug indicated that the drug, when added to metformin, provides a new therapeutic option for treatment of type 2 diabetes in patients who have inadequate glycaemic control with metformin alone.

■ Global banking titan HSBC said its Saudi wholesale and investment banking business is to merge with a subsidiary of the Saudi British Bank (SABB).

■ Grocery deliverer Ocado said the only limit on its growth is capacity as it moved into profit in the half year to 15 May and announced a deal to supply products from French supermarket Carrefour.

■ UBM , the FTSE 250 business events organiser and publisher has signed an agreement to sell its UK entertainment and technology product portfolio to Intent Media Ltd for £2.4m.

■ Salamander Energy has discovered oil at one of its projects in Thailand.

■ Betfair , the online betting exchange, is to begin searching for a new chief executive after David Yu, the current man in charge, told the board he wants to move on after 10 years at the helm.

■ Wolfson Microelectronics , which makes semiconductors for smartphones and other electronic devices, said today that it expects 2011 revenues to be at the lower end of previous guidance.

■ Rockhopper Exploration , the AIM listed exploration company says it has found "commercially viable" levels of oil off the north coast of the Falkland Islands.

■ Struggling music retailer HMV is to sell off its Canadian arm as the firm searches for ways to pay down its debts.

■ An exploration update from Noricum Gold has sent shares in the Austria-focused gold group sharply higher.

■ Premier Oil 's Gajah Laut Utara-1 exploration well in Indonesia is being plugged and abandoned after the oil exploration company found the majority of the Oligocene sandstones, which reported oil shows, are tight.

■ A rise in profits and a contract win helped Cohort narrow what its chief executive sees as the unjustified gap between the share price and the real value of the defence technology group.

■ Oil and gas firm President Petroleum has expanded its footprint in Argentina by acquiring a 50 per cent working interest in the CNO-8 Peusto Guardian license in Salta Province, which has immediately added to net production by 225 barrels of oil per day.

■ Brewing giant SABMiller said Domenic De Lorenzo, who is responsible for mergers and acquisitions, corporate strategy and development, will join its Group Executive Committee, effective 1 July.

■ Shares of Madagascar Oil , which were suspended since last December, slumped 48 per cent on its first day of trading following its resolution of the dispute on its Tsimiroro Block with the Government of Madagascar.

■ Gold miner Avocet Mining said it has completed the sale of the majority of its south-east Asian assets, including the sale of its 100 per cent interest in Penjom gold mine in Malaysia, for about $170m.

■ Managed services provider Redstone said an existing client has extended the contract for a further four years for an estimated value of up to £10m.

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NEWSPAPER SHARE TIPS (18-19 JUNE 2011) courtesy of Weekend City Press Review:

■ : Martin Waller says Betfair will come under pressure this week when delivering its maiden results since floating last autumn to reveal whether it is interested in joining the bidding for .

■ : David Budworth thinks investors would need to be 'out-and-out pessimists' to buy gilts at current levels, with equities offering much better value.

■ : Professional investors on both sides of the Atlantic identify seven global stocks to form the basis of an international portfolio: Apple, US$323, BP , 435.5p, GlaxoSmithKline , £12.73, Google, US$487, Royal Dutch Shell , £21.13, Microsoft, US$24.65, and McDonald's, US$82.65.

■ : Derek Pain thinks Fuller, Smith & Turner will have to pay substantially more than 200p a share to acquire portfolio member The Capital Pub Co mpany.

■ : Ian Lyall reviews a new book which claims Warren Buffett has all the investment traits usually associated with successful female investors ('Warren Buffett Invests Like a Girl...and Why You Should Too' by LouAnn Lofton).

■ The worst may be over for Savile Group where chairman Jonathan Cohen has just added to his stake to take his total holding to 2.4m shares.

■ : James Ashton says director buying at shows that the management believe the recovery is underway, although raising the dividend again would send a stronger signal.

■ Full-year figures from telecoms operator Daisy Group on Tuesday should show the benefits from the 'buy and build' acquisition strategy under CEO Matthew Riley.

■ : Garry White says avoid Dixons Retail , 16p, given the gloomy outlook for the electrical goods sector.

■ Keep buying Hargreaves Services , £10.40, following its 'reassuring' trading update last week.

■ : Joanne Hart says buy Eros International , 203.5p, as a play on the continuing growth of India's 'Bollywood' film industry.

■ : Take some profits in Halma , first recommended in June 2008 at 206p and now 392p, but hold the rest for more upside.

PRESS HEADLINES courtesy of Weekend City Press Review:

Bank warns lenders over bad loans

The bank of England has warned that the reluctance of UK banks to take action against delinquent borrowers could lead to another financial crisis if provision is not made for the level of bad loans they carry on their books. The Bank's new Financial Policy Committee said that for every home that had been repossessed or in arrears, another four have had their loan terms relaxed or renegotiated. []

China threatens to block Airbus A380 deal in row over EU emissions plan

China has threatened to block an order for 10 A380 aircraft from Hong Kong Airlines in protest at the EU's plan to include international airlines within its new emissions trading scheme. The aircraft, made by EADS-owned Airbus, have a list value of US$3.8bn. China may also block other proposed Airbus deals. []

High Street faces summer of woe

A radical reshaping of UK High Streets this summer is forecast by retail analysts as an increasing number of chains go under, hit by rising costs, weak consumer demand and growing online competition. In the past week alone, Habitat, Moben Kitchens and Dolphin Bathrooms have collapsed, while the future of fashion chain Jane Norman is uncertain. []

Osborne foils Lib Dem plan for new £1m mansion tax

The Chancellor is planning to derail any attempt by the Liberal Democrats to revive plans for an annual 'mansion tax' on property worth £1m or more. Treasury sources say there are no plans for such a tax in spite of senior Lib Dems suggesting it remains a 'high priority'. []

Hornby a hot tip for Coral

Andy Hornby, the former HBOS and Alliance Boots CEO, is on the short-list for the MD position at bookmaker Coral, part of the private equity-owned Gala Coral Group. Hornby left Boots in March, saying he needed a 'break'. []

Bid revolt brews at SAB

SABMiller is facing a shareholder revolt over its £6.5bn approach for Australia's Foster's Group. The institutional investors reportedly think the move looks 'expensive' and there appears little justification to focus on a mature market at the expense of fast-growing emerging economies. []

Lloyds leaves state aid behind

Lloyds Banking Group CEO Antonio Horta-Osorio is expected to reveal this week that the bank is on course for an early exit from the Bank of England's special liquidity scheme. The news will come alongside the results of a strategic review which could lead to the loss of another 15,000 bank jobs. []

Euro relief as China pledges debt bail-out

Chinese premier Wen Jiabao has pledged to buy 'billions of euros' of European debt to help the euro survive the Greek debt crisis. The move was announced during the Chinese leader's current four-day European trip. Turning to Asia for support of the eurozone has also been backed by Jim O'Neill, chairman of Goldman Sachs Assert Management, is a column for the Sunday Telegraph. Meanwhile, Sir James Dyson claims that there have been at least 100 illegal copycat versions of his products from Chinese companies. []

Blank urges 'no more branch sell-offs' for Lloyds

Sir Victor Blank, former chairman of Lloyds Banking Group, believes that the bank should not be forced to sell off more branches than the 600 it is being required by the EU to give up on competition grounds. Blank, in an interview, also defended the rescue merger with HBOS which led to the government taking a 41 per cent stake in Lloyds. []

Blackstone to refinance Center Parcs as expansion gains pace

Blackstone is undertaking a £1bn refinancing of holiday group Center Parcs five years after it took the company private in a £1.5bn deal. The refinancing will provide capital for a fifth UK leisure park and also makes an early sale of the group unlikely. []

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