Equity markets rose to a seven-week high this morning as investors regained confidence on the back of a rally in commodity prices. However, US markets are predicted to open on a softer note later today, after the company reporting season saw Alcoa failing to meet what were regarded as fairly undemanding hurdles set by analysts. The Trader Nicole Elliot highlights a warning from Jose Vinals, IMF's director of monetary and capital markets, of the vulnerabilities of emerging markets to market turmoil.
IC TIP UPDATES:
XP Power (XPP) delivered a 9.1 per cent increase in revenue for the first nine months of the year to £81.7m. Trading in Europe remains strong although order intake in North America was weaker in the third quarter. A third quarter dividend of 15p a share will be paid on 14 January, making 42p per share so far this year, up from 39p in the first nine months of the previous year. Buy
Communications service provider Alternative Networks (AN.) posted an upbeat trading report for the year to September, with very strong cash flow helping to cut debt from £41m in January 2014 to £18.7m, beating its own internal £20m target. Despite a slow start ahead of the general election, revenues in the Advanced Solutions division are expected to have risen by 10 per cent, while in Mobile Network Services the group delivered 9 per cent growth in subscriber numbers. Buy.
KEY COMPANY STORIES:
Ladbrokes (LAD) has signed a £1.35bn facility with a syndicate of banks to fund the proposed merger with Gala Coral announced in July. Subject to completion of the deal, the new financing will have three tranches, the first maturing in October 2016, with extension options to 2018, and the other two maturing in June 2019 and October 2020.
Glencore (GLEN) is to reduce zinc metal mine production by 500,000 tonnes in order to preserve the value of its reserves at a time when commodity prices are so low. The reduction represents around one-third of the company's annual zinc production, and operations at Lady Loretta in Australia and Iscaycruz in Peru will be suspended.
Oil & gas production rose by 6 per cent in the second quarter at Vedanta Resources (VED), while integrated silver production jumped by nearly two thirds. The group also recorded record production from its tier-1 zinc mines, while cutting costs at Copper-Zambia.
SABMiller (SAB), which recently rejected a £65bn bid from rival Anheuser-Busch InBev, has announced plans to increase its target annual run rate cost savings to at least $1.05bn (£685m) by March 2020. The savings will come from the brewer's supply chain, including procurement, manufacturing and distribution. Annualised savings of $221m in the year to March 2015 are expected to rise to over $430m in the current year.
OTHER COMPANY NEWS:
Video-advertising specialist Blinkx (BLNX) continued to rationalise its operations and product portfolio, and in the wake of an earlier profit warning the company is expected to report an adjusted cash loss of around $7m (£4.6m) in the first half of the year to September. However, it expects to return to profitability within a year as continued growth in its core products more than offsets declines in non-core products.
