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Tuesday's news and tips

Created:

24 November 2009

Written by:

ShareCast

■ Lloyds Banking Group has priced its record £13.5bn rights issue at 37p a share, a discount of 59.5 per cent to last night's closing price.

■ Housebuilder Bovis announced that its finance director Neil Cooper will leave the company to take the same job at bookmaker William Hill.

■ Tile and flooring specialist Topps Tiles is to shore up its balance sheet with a placing of up to 17.1m new of shares, approximately 10 per cent of its issued ordinary share capital.

■ Lloyds List publisher Informa has confirmed reports it is in discussions over the possible acquisition of German publisher Springer.

■ Mining giant Rio Tinto has entered into an agreement with a smaller peer in Australia's Pilbara region to buy iron ore from the company.

■ Water supplier Severn Trent posted a rise in turnover and profits in the six months to September 30 and lifted its dividend (IC COMMENT).

■ Home maintenance specialist Homeserve is on track for a year of "strong growth" as its core business did well at the halfway stage and good levels of new policy sales (IC COMMENT).

■ Telecoms group Kcom reported a sharp rise in half-year profits despite a drop in revenues as it maintained its interim dividend (IC COMMENT).

■ Plumbing supplies distributor BSS reported a drop in half-year profits and said it expects market conditions to remain challenging throughout 2010 (IC COMMENT).

Continues below...

■ A dearth of new releases in the first quarter of its financial year contributed to a slide in interim profits at Indian entertainment media company Eros.

■ Andor Technology reported a 67 per cent rise in half-year profits but said it remains cautious about the economic outlook.

■ Hamworthy says a big drop in orders for its marine and offshore fluid handling systems caused first-half profits to fall more than a fifth, but there were no surprises and the company remains confident of meeting full-year forecasts.

■ The Bank of England provided emergency funding of £61.6bn to Royal Bank of Scotland and HBOS as the financial system faced meltdown, it was revealed today.

■ Shares in Aquarius Platinum, which mines for the precious metal in South Africa, are sharply lower after it said it will issue $250m worth of bonds to pay back debt and construct a processing plant at one of its mines.

■ Eastern European coffee shop operator Coffeeheaven saw losses narrow in the six months to September 30 as revenues continued rising in spite of the effects of the credit crunch.

■ Intermediate Capital, an investor in and manager of buyout debt, saw profits plunge 80 per cent in the six months to 30 September, although it is more upbeat about prospects.

■ Petrofac, the oil & gas facilities service provider, said it has established a joint venture agreement with Zamil to create and operate a new service centre facility in Saudi Arabia.

■ Investment company Alliance Trust beefed up its exposure to equities to 90.6 per cent during the quarter ending 31 October

■ One-off charges lowered first half profits at banknote printer and cash handling machines specialist De La Rue

■ Specialist mortgage lender Paragon is considering increasing its lending book again after bad debts stabilised in the second-half and wholesale funding markets picked up.

■ Condom and footcare products supplier SSL posted a sharp rise in profits in the six months to September 30, as strong growth in emerging markets helped drive sales higher.

FOR A SUMMARY OF LATEST MOVEMENTS IN EQUITY, COMMODITY AND CURRENCY MARKETS, SEE FT.COM'S MARKETS PAGE

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NEWSPAPER SHARE TIPS (24 NOV 2009):

Full round-up of newspaper share tips (sourced from Sharecast)

PRESS HEADLINES:

Lloyds Banking Group will on Tuesday launch the UK's largest rights issue to raise £13.5bn ($22bn), offering investors new shares at 36p each, a huge discount, ahead of a shareholder vote on Thursday.

The rights issue is part of a £22.5bn capital raising that aims to repair the bank's balance sheet after its ill-fated 2008 takeover of HBOS. The bank is expected to price the new shares at just over 36p, allocating about four shares for every three that investors currently own, the FT reports.

Standard & Poor's has given warning that nearly all of the world's big banks lack sufficient capital to cover trading and investment exposure, risking further downgrades over the next 18 months unless they move swiftly to beef up their defences .Every single bank in Japan, the US, Germany, Spain, and Italy included in S&P's list of 45 global lenders fails the 8pc safety level under the agency's risk-adjusted capital (RAC) ratio. Most fall woefully short, reports the Telegraph.

The Conservative Party would scrap home information packs (Hips) "in a matter of weeks" after coming to power, the Shadow Housing Minister said yesterday. Grant Shapps, housing spokesman for the Conservatives, told The Times that it would be his first task, should his party win the next general election.

Tesco charges up to 3p a litre more for petrol than its rivals in areas where it faces no local competition, according to data seen by The Times. A snapshot of petrol prices across Britain reveals that Tesco charged 109.9p a litre for unleaded petrol at 164 locations. Only two Morrisons and eight Sainsbury's charged as high a price. No branches of Asda did. The effect is even more pronounced with diesel: Tesco charges 6p a litre more at its most expensive store than at its cheapest.

Beleaguered mobile phone company Sony Ericsson suffered a further blow yesterday when the UK's two largest mobile phone retailers withdrew its flagship Satio handset from sale. Carphone Warehouse and Phones4U suspended sales of Sony Ericsson's Satio after a flood of returns from angry customers citing problems with the phone, the Telegraph reports.

Jamie Dimon, chief executive JP Morgan Chase, is being discussed as a potential successor to Tim Geithner when the current US Treasury Secretary to hang up his hat. Mr Dimon, who successfully steered the banking conglomerate through the choppy waters of the global financial crisis, is thought of as a strong candidate to take over from Mr Geithner when the time comes, the Telegraph reports.

Rolls-Royce could lose a $1.5bn (£903m) contract awarded only five months ago by Gulf Air after the carrier announced a big change in strategy. The Bahrain-based airline said yesterday that it would renegotiate contracts with Airbus, Boeing and Rolls-Royce for new long-haul aircraft and engines as it seeks to save $2.65 billion over the next five years, the Times reports.

The Cosmen family has increased its stake in National Express to almost 20 per cent and has not ruled out raising it further as its members look to strengthen their hand ahead of the transport company's vote on a £360 million rights issue, the Times reports.

Informa, the publisher of Lloyd's List, has held early stage talks with its rival Springer Science and Business Media over buying the German academic publisher whose private equity owners are looking to sell the whole business at a reduced valuation. Springer, owned by the UK private equity groups Candover and Cinven, was initially negotiating with leading private equity rivals to sell a stake of as much as 49 per cent for about €400m, the FT reports.

Stark divisions are emerging among economic policymakers about how quickly governments and central banks should withdraw emergency support measures, with Dominique Strauss-Kahn, the managing director of the International Monetary Fund, warning on Monday about the risks of early exit. In a speech in London, Mr Strauss-Kahn said the global economy stood at the cusp of recovery but remained vulnerable to shocks and policy mis-steps. Fiscal and monetary stimulus programmes should not be stopped too soon, he said, the FT reports.

Meanwhile, the world's leading economies have returned to positive growth for the first time since the spring of last year. The Organisation for Economic Co-operation and Development, which comprises the 30 most-developed nations, said their combined growth rate for the third quarter of this year was 0.8 per cent – compared with zero growth between April and June, the Independent reports.

JC Flowers, the US private equity group run by dealmaker Chris Flowers, has strengthened its London team after appointing Sir Callum McCarthy, former chairman of the UK's Financial Services Authority, to the new position of European chairman, the FT reports.