Market overview: 27 January

By Sharecast, 27 January 2012

Serco awarded MoD contract; African Barrick Gold raises resources estimates in Tanzania; New year off to subdued start at LSE. Plus a summary of business press headlines.

■ Public sector services group Serco has signed a contract with the UK Ministry of Defence (MoD) to provide training and support to the British Army prior to deployment on operations around the world.

■ FTSE 250 gold miner African Barrick Gold (ABG) has hiked its previous resource estimate for the Tusker deposit at the Nyanzaga Project in Tanzania.

■ Bourses operator London Stock Exchange said total income in its fiscal third quarter was up 17 per cent year-on-year but added that the fourth quarter has started with subdued secondary market trading.

■ Healthcare outsourcing group Synergy says that trading has been in line with expectations since the half-year point but it will incur a one-off charge after a "re-organisation" in response to macroeconomic risks.

■ Investec , the specialist banking group, is to take a majority stake in Neontar, the Irish corporate finance and wealth manager.

■ Marston 's said its pubs had a good Christmas and New Year while the brewer's cask ales saw increased sales and outperformed the market.

■ An impairment provision by Northbridge Industrial Services , has seen its stock drop 6 per cent in morning trading (IC COMMENT).

■ Banknote and security printer De La Rue has traded in line with expectations for the second half of the financial year, the firm said.

■ Aveva , the Cambridge based engineering technology company, has released a bullish management statement, putting to rest any qualms that it might be suffering similar problems in China to its rival, Invensys.

■ Plastic packaging firm RPC has revealed that revenues in the quarter ended December 31st were significantly ahead of the same period the previous year.

■ Range Resources says initial production rates at a new well in Trinidad have peaked at 102 barrels of oil per day.

■ The dispute between integrated oil giant BP and oilfield services firm Transocean over the Gulf of Mexico oil rig tragedy rumbles on, after a US court ruling on Thursday offered judgements that both sides could claim as supporting their views.

■ A profits warning from Hornby , maker of the eponymous trains sets, has sent the share price off the rails.

■ Orchid Developments , the Bulgaria focused property company, has leapt 61 per cent this morning after revealing that it has received a takeover approach from a third party.

■ Creston , the research and communications company, has issued a profits warning after seeing a slower than expected inflow of new business during the fourth quarter of its fiscal year to date.

■ Bourses operator London Stock Exchange finished 2011 with a flourish, with only the Capital Markets division failing to increase revenues from the year before.

■ The east Africa-focused oil company, Aminex, says an intermediate casing string has been set on its Ntorya-1 well onshore in Tanzania.

■ So now we know the answer to a question which has been hanging over the 83 per cent state owned Royal Bank of Scotland for several weeks.

■ Bayfield Energy has announced that its appraisal drilling programme in Trinidad will begin on Friday 27th.

■ Russia and Kazakhstan-focused gold producer Polyus Gold has quashed rumours that it is considering a merger with rival precious metals miner Polymetal.

■ Gas exploration and development firm Forum has processed the 2D and 3D seismic data relating to the SC72 Recto Bank block acquired in 2011 and is now interpreting the findings.

Business press headlines:

The Treasury will on Friday publish plans for a radical overhaul of financial regulation that will hand the Chancellor new powers to take charge in a crisis, rein in the might of the Bank of England, and provide extra protection for consumers. The new Financial Services Bill will be put to Parliament on Friday morning alongside a memorandum of understanding between the Treasury and the Bank that will set down how the authorities should respond to another financial crisis. It will make clear that responsibility lies with the Chancellor whenever taxpayers' money is put at risk to avoid a repeat of the Northern Rock fiasco when Alistair Darling found he could not order the Bank to act, The Telegraph says.

David Cameron and Boris Johnson were caught up in a new round of cross-Channel tensions yesterday after the favourite to replace Nicolas Sarkozy as President of France threatened to scupper the EU's economic rescue plan and undermine the City. François Hollande, the socialist tipped to win power in May, set out a manifesto that declared war on financial services and promised to rip up the EU's fiscal treaty, due to be approved on Monday. The Prime Minister, the Mayor of London and British business chiefs were taken aback by Mr Hollande's plans, claiming that they would damage financial centres. Mr Johnson accused him of "political vindictiveness", The Times explains.

Faltering efforts to resolve the Eurozone debt crisis may lead to growth forecasts for this year being cut again. Angel Gurría, secretary-general of the Organisation for Economic Co-operation and Development, said that Europe's approach to the crisis was "like going to a prize fight with one hand tied behind your back". Leaders needed to use the firepower of the European Central Bank "to the hilt", he said. The OECD cut its forecast for this year's growth in the Eurozone to 0.2 per cent in November. "Even those recent numbers may prove too optimistic because of the trend for slower or sometimes negative growth in [the] Eurozone in particular," Mr Gurría said. He urged the coalition in Britain not to relent in cutting the deficit despite the fall in GDP in the fourth quarter, warning that countries could lose credibility in the financial markets "very fast", The Times reports.

Capital Shopping Centre 's agreement to buy land from its biggest shareholder Peel Group is "confusing", according to City analysts. The FTSE 100 retail property group will pay an initial £13.3m to acquire land next to its Braehead shopping centre in Glasgow and a development plot in Malaga, Spain. However, it could eventually pay about £100m because of clauses in the agreement, and the proposals have met a backlash from analysts and investors. "Two deals totalling £13m at first seem immaterial, but they are not," said Robert Duncan at Jefferies. "The Spanish land option is confusing and we are concerned that CSC risks diluting its core UK franchise investing in a market in which it has no track record through a transaction with its major shareholder." The land in Spain has planning consent for an 860,000 sq ft shopping centre, The Telegraph writes.

Stephen King, group economist at HSBC, has predicted a return to the world economy of 1,000 years ago - with the centre of world trade centred on China, India, Indonesia, and the east coast of Africa. Trade between emerging markets will rise sharply in the coming years, said Mr King as the European and the US economy slowed. "Where will global growth come from? Much will come from the growing connections between these countries over the next 20 to 30 years. We will see a ten-fold expansion of trade, an extraordinary change." Citing the car industry as an example, he said emerging market companies would create products for other emerging markets, with smaller, cheaper cars produced by Indian and Chinese companies for Indian and Chinese consumers. Emerging markets had invested heavily in trading infrastructure, he added, citing the fact that five of the world's top container shipping ports were now in China, according to The Telegraph.

Fuel prices have risen again just 24 hours after one of Britain's biggest refineries went bust, stopping supplies to filling stations. Administrators for the Coryton oil refinery in Essex have rushed to strike a deal with suppliers and customers to get fuel delivery trucks rolling again today but the action came too late to prevent long queues forming outside several filling stations in the South East yesterday as diesel pumps ran dry. Supermarkets - which usually set the trend - have put up to 1p a litre on the price of diesel and unleaded. On average across the UK, diesel rose to 142.32p (from 142.21p) per litre and is now within a fraction of a new record. Petrol rose to 134.03p per litre (from 133.89p), the AA reported.

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