News & Tips: WSP Group, easyJet, Bellway & more
Today's market overview
After four days of gains, the FTSE 100 Index contracted this morning as the market reacted to comments by US Federal Reserve chairman Ben Bernanke that effectively decreased the likelihood of a third round of quantitative easing. The gold price - which has been supported by expectations of Q3 – fell by 2.5 per cent in the wake of Mr Bernanke’s comments. It's too early to say for certain if this points to a tightening of US monetary policy, particularly given recent weak US jobs data, but the falls do indicate that markets had been anticipating a fresh round of stimulus measures. The fall in London's benchmark index also reflected overnight declines in Asian stock markets, which headed downwards despite the cut in Chinese interest rates.
IC TIP UPDATES:
A number of brokers have posted upgrades for Bellway (
) after it reported solid growth in net reservations and average selling prices. The UK housebuilder – which is up 37 per cent on our original 'buy' call – also remains on line to achieve its full year volume growth target, whilst operating margins are running at a healthy 11 per cent. It all adds up to a creditable performance in an otherwise challenging marketplace.
In another blow to its credibility, shares in specialist engineering group Lamprell (
) have plummeted after it revealed that it will post a bigger first-half loss than it predicted in last month's profits warning. Lamprell now expects to make a net loss of $15m-$20m for the first six months of 2012 – as opposed to its earlier prediction of "a small loss". Lamprell also announced that its Chairman Jonathan Silver is stepping down.
WSP Group (
) has agreed to the terms of a takeover bid from Canadian engineering group GENIVAR that values the British consultancy at £278m. The offer price of 435p represents a premium of 67.3 per cent to WSP's closing price on June 6 – WSP's share price reacted in kind.
Passenger numbers for budget flier easyJet (
) continued to grow in May. The airline flew 5.42m passengers last month, representing a 14.4 per cent increase year-on-year. easyJet also reported that its load factor – a measure of how full its jets are – increased to 88 per cent from 84.1 per cent last May. Rolling 12-month passenger numbers rose by 7.4 per cent to 56.9m.
Shares in specialist recruiter SThree (
) fell this morning after the company's interim update revealed that profit growth slowed in the second quarter as its key markets became more difficult. SThree did report a 12 per cent rise in gross profits to £99.9m, but demand for placements across the company's range of sectors remains patchy – the standout performers being the energy, resources and biotech sectors. The company also reported a 14 per cent rise in profits from permanent placements, although macro conditions could undermine this progress in the second half.
story-url-News & Tips_News_080612.xml
By Mark Robinson,
08 June 2012