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News & Tips: RBS, LMS Capital, Faroe Petroleum, Direct Line, Bumi, Rockhopper Exploration, ITM Power, Biome Technologies & more

Today's market overview

Markets are steady today after yesterday’s lurch higher, but The Trader Dominic Picarda is unsure as to whether this represents a revival of the rally or just another bout of extreme choppiness.

IC TIP UPDATES:

Royal Bank of Scotland ( RBS ) has become the latest bank to set aside millions more for Payment Protection Insurance compensation payment. In RBS’ case it added a further £400m to its compensation pot, taking it to £1.7bn in total. This contributed to the bank's loss of £1.26bn in the third quarter compared with a £2bn profit this time last year. On an operating level, profits came in at £1.05bn.

Simon Thompson recommendationLMS Capital ( LMS ) has launched a tender offer to return £40m to investors. Meanwhile the company’s net asset value dipped by 3p to 85p in the three months to September, mainly due to currency fluctuations. The company had £51.5m of cash at the end of September.

Fellow Simon Thompson recommendationBP Marsh & Partners ( BPM ) has increased its stake in investee company Besso Insurance.

Engineer Meggitt ( MGGT ) has confirmed it continues to trade well and is expecting to post revenue growth of 10 per cent in 2012. But the company has hinted at softening in military demand as a result of the drawdown in activity in Iraq and Afghanistan. Revenue growth next year is expected to be a single digit figure.

After a strong recent run in its shares, Quindell Portfolio ( QPP ) has decided to raise £26.5m at 13p a share in a placing. The funds are for working capital and to gear the business up for contracts it expects to win in the coming months. We keep our buy rating.

Meanwhile Aureus Mining ( AUE ) has announced plans to raise $80m from investors to help develop the New Liberty gold project in Liberia.

Faroe Petroleum ( FPM ) has announced it is relinquishing a licence in the West of Shetland area. Oil has been discovered in the P1161 licence but Faroe has failed to find an economic way of exploiting it. We keep our buy rating.

KEY STORIES:

Direct Line Insurance ( DLG ) has issued its maiden figures as a public company. It has grown the number of policies by 4 per cent since the beginning of the year to 20.1m and operating profits for the nine months to September were £347.9m, against £337.8m last year.

Sticking with insurance, Admiral Group ( ADM ) has grown turnover by 3 per cent to £1.74bn in the year to date but third quarter group turnover dipped by 2 per cent.

Falkland Island oil explorer Rockhopper ( RKH ) has received extensions to various licences it holds in the region which will allow the company to carry out further exploration.

Coal miner Bumi ( BUMI ) has appointed Rothschild Group as a financial adviser to evaluate the recent offer received from the Bakrie family to buy out the Indonesian assets of the business. Confusingly, Nat Rothschild, who is related to Rothschild Group head Baron David de Rothschild and recently resigned from the Bumi board, is said to be planning a counter offer. Such a move could further sour an already fractious relationship with the Bakrie family.

OTHER COMPANY NEWS:

Sula Iron & Gold ( SULA ), which only floated on Aim last month, has announced a fast track placing to raise £450,000 to advance its projects in Sierra Leone.

Hambledon Mining’s ( HMB ) board has announced that it is recommending an offer for 60 per cent of the company’s shares at a 66 per cent premium to yesterday’s closing price. The buyer is African Resources, a vehicle in which Kazakhstan’s Assaubayev family have an interest.

ITM Power ( ITM ) has signed an agreement with ABO Wind of Germany to identify and develop wind to hydrogen projects incorporating ITM’s energy storage technologies.

Biome Technologies ( BIOM ) has announced reduced revenues of £10.2m for the nine months to September, compared with £15.3m last year. The company recently announced the sale of its 50 per cent interest in Biotec Holding to concentrate on its Bioplastics division.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
02 November 2012

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