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News & Tips: HSBC, Carpetright, IG Group, Diageo, Tullow Oil, Whitbread, Asos, Amerisur, 3Legs, Nostra Terra & more

Today's market overview

Equities are marginally down but The Trader Dominic Picarda has spotted a cyclical support for equities which is likely to further boost the seasonal lift they are enjoying right up to Christmas.

IC TIP UPDATES:

Sell recommendationHSBC (HSBA) is to pay $1.9bn (£1.2bn) in fines to authorities in the US for inadequate controls which allowed itself to be used for money laundering by Mexican drug cartels. Standard Chartered (STAN) is also being hit with another $327m fine on top of the $340m it agreed to pay earlier this year.

Fellow sell recommendation Carpetright (CPR) has reported a 4.7 per cent fall in revenue for the six months to 27 October with its European operations causing most concern with a 17.7 per cent reversal in sales. The company has slashed net debt by 70 per cent to £16.3m.

Diageo (DGE) has terminated discussions with the owners of the Cuervo brand after failing to agree a suitable deal. We maintain our buy rating.

Inter dealer broker IG Group (IGG) says trading remains ‘subdued’ although the business continues to take market share.

Manufacturer Avingtrans (AVG) has updated on trading saying that revenues will be in line with expectations but margins have been hit by the sale of the Jena Tec business and its replacement with two acquisitions, which will affect profits for 2013. Management expect this to bounce back with better than expected profits in 2014.

Location technology specialist Ubisense (UBI) has announced a strategic partnership with Japanese materials specialist Daifuku. We keep our buy rating.

FastJet (FJET) has announced a 50 per cent increase in passenger numbers in November over the previous year. This only includes two days of operations for its new routes in Tanzania. We maintain our speculative buy recommendation.

KEY STORIES:

Tullow Oil (TLW) has announced two transactions, the acquisition of Norwegian exploration business Spring Energy for $372.3 and the sale of its gas interests in UK and Dutch Southern North Sea, which currently produce the equivalent of 18,000 barrels a day. Meanwhile, in Ghana, the Jubilee Phase 1A production well has been brought on stream, producing 16,500 barrels a day.

Online retailer Asos (ASC) has seen sales grow by 30 per cent in the first three months of its financial year with UK sales 24 per cent better and international sales 34 per cent ahead but margins dipped by 1 per cent against tough comparatives from last year.

Whitbread’s (WTB) strong performance continues with the group reporting 3.3 per cent like for like sales growth in the 13 weeks to 29 November with Costa coffee again the outstanding division, producing 7.7 per cent like for like sales growth.

Materials specialist Victrex (VTC) has performed resiliently in tough conditions. It grew revenues by 2 per cent to £219.8m and produced a marginal improvement in profits to £94.5m.

Ashtead (AHT) is enjoying a purple patch in trading with revenues up 17 per cent in the first half and profits hitting a record £141m, the board expects full year performance to beat expectations.

OTHER COMPANY NEWS:

Columbian oil explorer Amerisur Resources (AMER) has said that it remains on track to produce 5,000 barrels of oil per day by the year end.

Polish unconventional gas explorer 3Legs Resources (3LEG) has announced improved gas flows from its Lebien LE-2H well.

Nostra Terra Oil & Gas (NTOG) says that the second well at the Chisholm Trail prospect in Oklahoma is outperforming its first well there.

Touch screen technology specialist Zytronic (ZYT) has announced strong results for the year to September with profits up by 18 per cent to £4.2m but warned that current trading is running behind last year's levels.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
11 December 2012

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