Today's market overview
George Osborne’s £100bn plan to stimulate lending in the economy seems to presage another round of money printing in the UK, and with the US tipped to follow and Europe desperately needing to do something to stimulate growth, markets are in for another fix of monetary opiates. The Trader Dominic Picarda says this is likely to produce another run up in equities.
IC TIP UPDATES:
It seems that all that glisters is not necessarily gold for pawnbroker Albemarle & Bond (
ABM
), which has issued a profit warning this morning. The main problem has been a sharp drop off in the gold buying division but management says it is too early to say whether this is down to the recent awful weather or a more significant trend. As a result sales will still increase but come in below market expectations. Shares are off 5 per cent and we are downgrading them from a buy to a hold until the situation becomes clearer.
Cupid’s (
CUP
) strong performance looks set to continue after the company said the first half of the year had continued to see good demand for its dating services. We tipped Cupid as a buy last March at 123p and see no reason to change our recommendation even after a 66 per cent run up in its shares.
Brewer Diageo (
DGE
) has added a further 10.6 per cent to its holding in Vietnamese brewer Halico, taking its total stake to 45 per cent. At £14m, the outlay is small beer for a company of Diageo’s size, but it cements its position in another emerging market. We remain buyers.
KEY STORIES:
Heavily indebted food producer Premier Foods (
PFD
) has cheered investors with the divestment of its vinegar and sour pickles brands for £41m in cash, sending its shares 14 per cent higher. This is part of an ongoing strategy to concentrate on a smaller number of core brands.
Oil services and engineering business Lamprell (
LAM
) has had a torrid time since it issued a profit warning last month but the announcement of a new chairman, former Schlumberger, Halliburton and Wellstream man John Kennedy, has cheered investors this morning. The delivery of a rig to a subsidiary of Grupo Mexico, which will clear $70m of debt, has also helped sentiment.
Temporary power supplier Aggreko (
AGK
) has enjoyed a strong first half with revenues expected to be 15 per higher and trading profits up by 20 per cent. But its shares have suffered a small sell off today after the group said it expects some dampening effect from macro economic conditions and weaker margins in its International Power Projects business due to mobilisation costs.
OTHER STORIES:
Zambia-focused miner Berkeley Mineral Resources (
BMR
) has signed a memorandum of understanding with Chinese zinc and lead refiner Yunnan Xiangyun Feilong Non Ferrous Metals Company which is expected to lead to a joint venture for its Kabwe Mine.
The ‘extremely challenging’ economic conditions have hit United Carpets (
UCG
) hard and the company is reviewing its operations, terminating certain franchises, closing some stores and generally battening down the hatches. No surprise then that its shares have slumped 40 per cent today.
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