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Wednesday's news and tips

Created:

5 May 2010

Written by:

ShareCast

■ Budget pub chain JD Wetherspoon is slightly more cautious about the consumer outlook after seeing a 0.8 per cent dip in like-for-like sales in the 13 weeks to April 25.

■ Insurer Legal & General increased sales by 2 per cent during the first quarter and by 18 per cent over the previous three months and says it's on track to deliver £600m of cash in 2010.

■ Next expects profits this year to be at the top end of market forecasts after sales in the first three months to April were strong, though it is still very cautious on the outlook for consumer spending.

■ Better control of costs enabled accountancy software giant Sage to post a healthy rise in interim profits, though sales fell again albeit a slower rate than this time last year (IC COMMENT).

■ BP's chief executive has said the company is winning the race to try and contain the oil spill in the Gulf of Mexico.

■ Like-for-like sales in the first four months of the year were down by 14 per cent in the first four months of 2010 the building materials group CRH said as it predicted that the sales decline will continue to moderate.

■ The need for companies and the public sector to cut costs has helped keep Carillion's order book healthy, the support services group said today, reporting a strong performance in the first five months of the year.

■ Antofagasta ramps up copper production in the first quarter as it sought to profit from high prices for the red metal.

■ Eastern Europe focused JKX Oil & Gas has started the year positively with good progress made on all development and exploration assets during the first quarter, but the shares fell today as oil prices slid again.

■ Lower room rates helped Millennium and Copthorne fill up its hotels in the first quarter, resulting in an improvement in profits and revenues.

■ Medgenics, the sustained-action therapeutic protein delivery technology company, saw losses before tax last year narrow to $4.41m in 2009 from $4.85m the year before.

■ Telecoms test equipment supplier Spirent Communications says trading has started positively in 2010 and the company is on course to achieve expectations for this year.

■ Consulting engineer and environmental services provider WSP says it is seeing early signs of a pick up in activity in the UK private sector.

■ Sub-prime lender Provident Financial said it is on track to deliver good quality growth in 2010.

■ Caterer Compass has increased its presence in France with the acquisition of foodservice group Caterine Restauration from Industries & Finances Partenaires for €34m.

■ Miner Xstrata saw higher production in all of its main commodity businesses in the first three months of 2010.

■ Defence giant BAE Systems has continued to trade in-line with expectations since February's final results and predicts growth for three of its four operating groups.

■ Stabilisation in the retail sector has kept occupancy rates high for the year so far, the shopping centre operator Liberty International said.

■ Insurer Prudential has had to postpone publication of its prospectus detailing the terms of its $20bn rights issue to fund the $35.5bn acquisition of AIG's Asian (AIA) businesses.

■ Property website Rightmove said it is confident of meeting its improved expectations after a strong start to 2010.

■ Paper and packaging group Mondi has reached agreement to sell its central and eastern European paper supplier Europapier to the Austrian paper group Heinzel for €60m.

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 (5 MAY 2010):

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

PRESS HEADLINES:

Spain's Prime Minister was forced to deny that his country was seeking a financial rescue yesterday amid mounting concern that financial contagion from Greece was spreading.

As world stock markets were hit by a wave of selling and the euro suffered another battering, José Luis Rodríguez Zapatero dismissed as "complete madness" talk that he was on the verge of seeking €280 billion in aid from his eurozone partners, the Times reports.

Fears that the Greek rescue package will not prevent a wider European meltdown and concern that a mining super-tax will puncture the commodity boom saw London shares plunge to a two-month low. The fall was mirrored in bourses across the world, with Wall Street down 225 points, dropping beneath the critical 11,000 point mark following dismal Asian trading, the Telegraph adds.

The FTSE All-World equity index plunged 2.5 per cent – its sharpest one-day downward move in three months – while the euro slumped to a fresh one-year low, ending the session just below $1.30, and industrial commodities followed suit. Gold hit new 2010 highs, before relapsing, and US Treasuries rose as investors sought havens in the face of intense stress in markets linked to European fiscal woes, the FT reports.

British Airways has been forced to prove itself sufficiently British to stay in the FTSE 100 after its proposed merger with Iberia. The new holding company for BA and Iberia will be called International Airlines and will be incorporated in Spain. It will also have a listing in Madrid, which according to FTSE rules makes the British flag carrier Spanish. BA is understood to have had three meetings with FTSE International, the company that arranges the FTSE 100 and other indices, to discuss the issue of retaining an additional primary London listing, the Times reports.

Goldman Sachs was reported last night to be considering settlement talks with the US regulators over the fraud charges brought against it last month. The reports came as the firm's equities division was fined $450,000 for violations of regulations on short selling in 2008 and 2009 in what has now become a daily war of attrition by regulators against the bank, the Times reports.

A new ash cloud grounded flights for the second day in Ireland and the UK after European transport ministers on Tuesday expressed reservations about financial aid for airlines and airports stricken by the Icelandic volcano eruption. Airspace over Scotland and Northern Ireland and airports in the region will be closed again from early on Wednesday morning due to volcanic ash that has been drifting southwards from Iceland. Britain's aviation authority said airports in north-west England and north Wales could also be affected, the FT reports.

Prudential was scrambling last night to price its record $21bn rights issue amid turmoil in world markets. Market analysts predicted that Prudential would price its rights issue at a discount of just under 40 per cent to the expected share price after the fundraising. They speculated that the company would offer existing investors about four new shares for every share that they hold at present, for an expected price of about 135p, the Times reports.

A band of US politicians has effectively killed oil companies' hopes that vast swaths of coastline will be opened to new deepwater drilling, amid concerns about BP's catastrophic spill. Bill Nelson, a New Jersey senator, and Robert Menendez, a Florida senator, joined California governor Arnold Schwarzenegger in condemning the US government's plans to relax laws restricting new drilling. "The president's proposal for offshore drilling is dead on arrival," said Mr Nelson, adding that any new climate-change laws that support offshore drilling "are not going anywhere," the Telegraph reports.

Essar Energy, the UK's largest stock market listing in more than two years, on Tuesday suffered the worst debut of a big London flotation in almost eight years. The power and oil company spun out of India's sprawling Essar Conglomerate tumbled 7.2 per cent on its first day of trading after raising £1.2bn ($1.8bn) last week – the worst fall of any UK share listing since music retailer HMV sank 7.5 per cent in May 2002, according to Dealogic, the FT reports.

Confidence among manufacturing exporters is at its highest level since comparable records began in 1996. The Chartered Institute for Purchasing and Supply (Cips) said yesterday that its managers' index of sentiment on export orders in April had risen to 60.71. Any reading of 50 and above signifies expansion, the Independent reports.