UK investors woke to a surge in the share prices of mining stocks such as Anglo American (AAL), Rio Tinto (RIO), Antofagasta (ANTO) and Lonmin (LMI) as the oil price hit a five-week high and the US dollar weakened. The Trader Nicole Elliott highlights several other developments: US hedge funds announced their worst monthly fall in assets since 2008, the Bank of Japan refrained from launching further stimulus measures, and UK shop prices fell by 1.9 per cent year-on-year in September.
IC TIP UPDATES:
Full-year sales rose 7 per cent at Gemfields (GEM) after the precious gem miner netted $153m from the auction of three emeralds and three rubies. The group boosted production and lowered operating costs in its emeralds business, but unit operating costs in the rubies division more than doubled to $2.57 and the average grade of gems fell in both segments. Buy.
Grainger (GRI) announced that Standard & Poor had raised its credit rating for the residential property owner and manager's £275m senior secured notes from 'BBB-' to 'BB+'. Management has also refinanced its property investment bank facility, reducing its cost, raising the ceiling from £120m to £150m and extending it to 2020. Buy.
Life science tools and services group Horizon Discovery (HZD) has signed an in-licensing and option agreement with French research-based pharmaceutical group Servier for a cancer treatment. The deal could be worth over £50m in clinical milestones, payments linked to net sales and tiered royalties. Buy.
Investors sent shares in Hydrodec (HYR) up 3 per cent after the oil re-refining group completed the sale of its Knowsley offices for about £685,000 in cash. The move is a key part of management's restructuring programme, intended to realise operational efficiencies in a tough trading environment. Buy.
Shares in IQE (IQE) climbed 2 per cent after the group's semiconductor components - called 'wafers' - were successfully used to enable efficient, high-power broadband in transistor devices. The study's results support management's belief that the group's innovative wafers will power future satellite communications and '5G', the next generation of high-speed wireless technology. Buy.
Diamond developer Paragon Diamonds (PRG) updated investors on its proposed $6.5m purchase of the Mothae Kimberlite Resource in Lesotho from Lucara Diamond. Lucara has agreed to give Paragon sufficient time to complete its $15m funding package wiuth Acrux Resources. Buy.
KEY STORIES:
Embattled supermarket giant Tesco (TSCO) posted a 55 per cent decline in adjusted operating profits for the 26 weeks to 29 August. Like-for-like sales fell 1.1 per cent in the UK but rose 1 per cent internationally. Management slashed capital spending by 61 per cent and closed 53 unprofitable stores; its restructuring programme is on track to generate £400m in annual cost savings.
Investors sent shares up 3 per cent in SABMiller (SAB) after rival Anheuser-Busch inBev (Eu: ABI) announced a £68bn proposal to combine the two beer giants. The offer of 4,215p a share comes after SAB's board privately rejected previous bids of 3,800p and 4,000p, and represents a premium of about 44 per cent to SAB's closing share price on 14 September, before takeover speculation took off.
OTHER COMPANY NEWS:
Nostrum Oil & Gas (NOG) has withdrawn its proposed offer for Tethys Petroleum (TPL) after one of the latter's major shareholders, Pope Asset Management, informed Nostrum that it doesn't support the deal.
