Equities have sold off a little after a good run this week. Click here to find out what The Trader Nicole Elliott thinks of the latest market moves.
IC TIP UPDATES:
The London-focused pub group Fuller, Smith & Turner (FSTA) seems to be firing on all cylinders. Managed pubs and hotels - its largest division - posted a 5.6 per cent rise in like-for-like sales in spite of strong comparatives. Its tenanted estate also saw like-for-like profits rise 3 per cent and its beer company saw total beer and cider volumes rise 1 per cent, thanks in part to a doubling of volumes year-on-year of its craft lager Frontier. Buy.
Shares in Halosource (HALO) cratered by a third after the water filtration technology group said its full-year net loss will be higher than market expectations. Operational issues at the company’s drinking water facility in China and some delays in customer rollouts means “temporarily”, the company cannot fulfil customer orders, thereby reducing revenues. The company does not expect an impact on 2016 however, and we remain long-term buyers.
Hayward Tyler (HAYT) has raised £8.4m to repay loans and make investments in its capacity by issuing 9.3m shares at 90p each. The engineer reported that the fundraising was oversubscribed as shares rose 4 per cent. Buy.
KEY STORIES:
The banker bashing is far from over. Former senior managers of failed bank HBOS, which became part of Lloyds Banking Group (LLOY) and ultimately dragged in taxpayer funds to keep the combined entity afloat, could face further investigation from regulators. A report from the Prudential Regulation Authority recommended a further investigation into former bosses James Crosby, Andy Hornby and former chairman Lord Stevenson, among others. The report damned the decision-making of the regulator of the time, the Financial Services Authority, as "materially flawed" and its investigations as unreasonably limited.
Melrose Industries (MRO), the group that buys underperforming manufacturing companies and turns the around, warned that its full year performance could be towards the lower end of market expectations. Revenues at Brush, which makes electricity generating equipment, were down 17 per cent in the ten months to October.
Spectris (SXS) also warned that full-year profits could be at the lower end of forecasts after worsening trading conditions in its core US market and currency fluctuations triggered a 1 per cent fall in like-for-like sales in the four months to October.
Lonmin’s (LMI) shareholders have approved its deeply discounted rights issue, clearing the way for the platinum miner to raise $407m and avoid financial collapse – for the time being at least. Refinancing of group debt depended upon the equity issue going ahead. Lonmin has suffered amid slowing demand in top platinum consumer China, which has sent prices near a seven year low beneath $850 an ounce. Hold.
OTHER COMPANY NEWS:
The crystal ball is out for next year. Goldman Sachs is predicting Brent crude oil at $50 a barrel in 2016 due to oversupply. It forecasts gold to remain at $1,100 per ounce for the next three months, $1,050 an ounce for the next six months and $1,000 an ounce for the next 12 months. Goldman Sachs also expects copper prices to fall to $4,800 a ton by end -2015 and to $4,500 a ton by end-2016.
