Equities are holding onto the strong gains they made last week amid growing signs that money is flooding back into shares after a period of dominance by fixed income assets. The Trader warns that historical precedence is not necessarily promising for the last time such a rotation happened but is remaining bullish for now.
IC TIP UPDATES:
Simon Thompson recommendation Moss Bros (MOSB) enjoyed a strong Christmas trading period which means it now expects to surpass analysts forecasts for its full year performance. Like for like sales for the 24 weeks to 12 January rose by 2.7 per cent and cash gross profit was 9.5 per cent better in the same time period.
Afferro Mining (AFF) has confirmed that the exclusivity period for talks with a potential buyer has expired and, although talks are ongoing with the interested party, the company is likely to pursue discussions with other potential buyers. Buy.
Pubs group Greene King (GNK) posted record sales over the Christmas period including record Christmas Day sales of £2.7m and the sale of 448,000 Christmas meals during December. Retail like for like sales were up 3.7 per cent in the 36 weeks to 6 January. We keep our buy rating.
Engineering specialist Ricardo (RCDO) says recent trading has met expectations and the acquisition of AEA Europe is bedding down nicely. We maintain our buy rating.
Environmental services business Silverdell (SID) has won a £12m contract with Hydro Quebec for the decommissioning of a thermal power plant. Buy.
KEY STORIES:
Cable & Wireless Communications (CWC) has agreed the sale of its 51 per cent interest in Macau Telecom to CITIC Telecom International for $749.7m, allowing the business to pay down debt and concentrate on its core Central American and Caribbean operations.
Waste management specialist Shanks (SKS) has signed a landmark 25 year, £750m Private Finance Initiative waste management contract with Wakefield District Council, partly funded by the recently launched Green Investment Bank. Shanks will build various waste treatment facilities including waste to power operations.
Housebuilder Taylor Wimpey (TW.) expects full year profits to be at the upper end of expectations with operating profit expected to be 40 per cent better. Average selling prices were 6 per cent ahead in 2012 and the company started 2013 with an order book of £948m, up 14 per cent on last year.
OTHER COMPANY NEWS:
Shares in medtech specialist Angle (AGL) have surged this morning on news of a ‘major breakthrough’ in the potential usage of its Parsortix non-invasive cancer diagnostic product.
Lochard Energy (LHD) has requested its removal from the Australian Stock Exchange in an effort to streamline its costs. Meanwhile lack of finance means the company is unable to fund its own well on the Thunderball prospect and will likely lose the licence. The company expects cash flow to improve during this year as it monetises its share of production from the Athena field.
Cluff Natural Resources (CLNR) has been awarded two underground coal gasification licences at Deeside and Loughor Estuary.
Pure Wafer (PUR) says record levels of productivity at its two manufacturing operations and good global demand for semiconductors will see the company meet market expectations for the first half.
