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News & Tips: Quintain, Whitbread & more

Global stocks have reached record levels
May 22, 2015

Low central bank borrowing costs are said to be behind the highs experienced on the global stock markets. Click here for The Trader Nicole Elliott's view of the markets.

IC TIP UPDATES:

Shares in Quintain Estates (QED) were boosted by the company’s full-year results today, as well as the sale of its 50 per cent interest in the Wembley Park Hilton for £40m in cash to its joint venture partner Oaktree Capital Management. In the figures, residential sales were lifted by strong demand, and the company has a four-year pipeline for the completion of 1,200 further homes. Buy.

Buy tip ReNeuron Group (RENE) has seen its shares march on today after the US Food and Drug Administration granted fast-track status to its cell therapy for hereditary sight-loss disease retinitis pigmentosa. Buy.

Segro (SGRO) is to acquire 90 per cent of Italian logistics company Vailog Srl for €39.6m (£28.2m). The latter is financed by €54m of net debt, which will be refinanced by Segro after the acquisition is completed. We reiterate our buy recommendation.

WPP (WPP) has announced that its Chinese marketing business Always Marketing Services – which is majority owned by the media giant’s subsidiary J. Walter Thompson – has bought Singapore marketing company 3ree. The latter offers a range of services including event management and digital marketing. Buy.

Simon Thompson recommendation Moss Bros (MOSB) saw its shares rise by 6 per cent today after announcing like-for-like sales up 7.4 per cent, driven by strong retail sales. Hire sales were also up 6.4 per cent on a LFL basis.

Little movement today in the share price of our buy tip Close Brothers (CBG), following its interim management statement. Its loan book is up 6 per cent from the beginning of this year to £5.6bn at the end of April. Buy.

KEY STORIES:

The board of Asia Resource Minerals (ARMS) have requested the suspension of its UK-listed shares until it can regain full control of the company’s “procedures, systems and controls” of its Indonesian subsidiary PT Berau. Yesterday the company commenced legal proceedings against PT Berau’s former president director Amir Sambodo concerning his departure from that role.

Whitbread (WTB) has appointed Alison Brittain as its next chief executive, taking over from Andy Harrison who departs in February 2016. Brittain is currently group director of the retail division at Lloyds Banking Group, and non-executive director at Marks & Spencer.

The Financial Conduct Authority has announced the terms of its market study of investment and corporate banking. The wide-ranging investigation will consider “choice, transparency, bundling and cross-subsidisation in debt and equity capital markets, mergers and acquisitions and acquisition financing”. It will also look at the relationship between these transactions and other corporate broking and lending services. The FCA is also conducting a thematic review of how insurance companies handle claims from small businesses.

Tungsten (TUNG) has seen its shares rebound 14 per cent today after it placed 21.9m new ordinary shares at a price of 80p, citing strong demand from institutional investors. Founder and former CEO Edmund Truell bought 3.7m shares as part of the placing.

OTHER COMPANY NEWS:

Quindell (QPP) has received approval from the Financial Conduct Authority to sell its professional services division to Australian law firm Slater and Gordon.

The Competition and Markets Authority has said the acquisition of the personal lubricant brand K-Y from Reckitt Benckiser Group (RB.) could lead to higher consumer prices in the market, in a provisional finding.

Seven Trent (SVT) has boosted its adjusted EPS by 15.9 per cent year-on-year, but reported pre-tax profits were down 54 per cent at £148.2m, dampened by fair value losses on financial instruments.

Graham Beale is to stand down as chief executive of mutual Nationwide Building Society in July 2016.