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■ International Power and French energy giant GDF Suez have revived talks about entering a partnership to create a new London listed electricity group.
■ Engineer Tomkins today confirmed it has received a bid approach from a Canadian consortium worth 325p a share in cash.
■ Recruiter SThree said half year pre-tax profit fell sharply but remains cautiously optimistic, in an improving but not yet fully recovered market.
■ Department store Debenhams has completed the refinancing of its borrowings and signed a new £650m senior credit facility.
■ Industrial conveyor belt maker Fenner said trading is comfortably meeting expectations with revenue and underlying operating profit in the third quarter well ahead of the comparable period last year.
■ BP has been told it can keep the cap on its broken well in the Gulf of Mexico for another 24 hours despite fears it may be causing a new leak elsewhere on the ocean floor.
■ Financial software systems provider Brady said it achieved revenue growth of around 20 per cent in the first six months of 2010 and is on track to meet full year company expectations.
■ Kazakhstan focused Max Petroleum has had its subsoil use licence for the Astrakhanskiy Block in Western Kazakhstan terminated as it has failed to comply with work obligations stipulated under the licence.
■ Advertising giant WPP Group said WPP Digital, its digital investment arm, has bought a minority stake in Leading Smart, a BVI company, which has a controlling interest in the parent company of Moment Systems, the leading digital advertising measurement company in China.
■ Electronics component manufacturer e2V reports trading since March has been significantly ahead of the same time last year.
■ BT is raising the cost of phone calls by 10 per cent and the monthly line rental charges by 50p from October.
■ E-learning firm ILX said it is upbeat about full year prospects with first quarter revenues and profits across the group 'substantially ahead' of last year.
■ Shares in platinum miner Aquarius plunged as the South African government ordered root and branch changes to mine construction after a spate of fatal accidents.
■ Food and household goods giant Unilever has agreed to sell its Italian frozen foods business Findus to Birds Eye Iglo, the European group of companies that owns the Birds Eye brand in the UK, for €805m.
■ UK Financial Investments, the body that oversees the taxpayers' stakes in banks Royal Bank of Scotland, Lloyds and Northern Rock, has appointed Jim O'Neil as head of market investments.
■ Warm weather and sales helped retail sales in central London jump by 14.4 per cent from the same period a year ago in June, the British Retail Consortium (BRC) said.
■ The Pensions Regulator has refused clearance for a plan from convenience food group Uniq to pay off a £436m deficit in its pension scheme.
Courtesy of Sharecast
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NEWSPAPER SHARE TIPS (17-18 JULY 2010) courtesy of Weekend City Press Review :
The Times
■ Tempus: Martin Waller thinks that while the Ocado IPO could still be pulled at the last minute, his 'hunch' is that it will get away. But retail investors should steer clear.
■ Personal Investor: Robert Cole says that in his 'darker moments' he thinks index-linked gilts are the only really sound investment around at present. However, his long-term equity winners are AstraZeneca, BHP Billiton, Land Securities, Computacenter and Unilever.
The Independent
■ No Pain, No Gain: Derek Pain believes that while outsourcing group Servoca continues to struggle, its 'day will come' when market conditions improve.
The Daily Mail
■ Investment Extra: Ian Lyall suggests potential income stocks for BP shareholders who have lost their dividend payments this year. These are: Man Group (forecast yield of 6.6 per cent), Royal Dutch Shell (7 per cent), RSA Insurance (7 per cent) and National Grid (7.2 per cent). But the star pick is Aviva (8.2 per cent).
■ Brokers' Tips: Buy DSG International at 28p, says Execution Noble; Buy IQE at 21p, says Killik; Buy SDL at 504p, says Altium Securities; Buy Supergroup at 800p, says Oriel Securities.
■ Sell Capita at 744p, says Execution Noble; Sell N Brown at 252p, says Liberum Capital; Sell (reduce) Marks and Spencer at 348p, says Arden Partners; Sell Mothercare at 530p, says Execution Noble.
The Sunday Times
■ Inside the City: James Ashton thinks Wednesday's trading update from Cable & Wireless Worldwide, 85p, might convince the City it is undervalued, although it is hard it see where the real catalyst for changing sentiment will come from.
The Sunday Telegraph
■ Sunday Questor: Garry White says buy Ryanair, Eu3.80, for its 'stunning cash generation abilities'.
■ Hold Cranswick, 874p, as much of the good news is already in the price.
The Mail on Sunday
■ Midas: Joanne Hart says Bango, 97p, is worth a punt for speculative investors as a play on the growing demand for internet access via mobile phones and an easy way to pay for downloaded content.
■ Neil Craven thinks retail investors should avoid the Ocado IPO, although they should also keep an eye open for a buying opportunity later on.
■ Ask Andy: Andy Brough of Schroders thinks Telecity Group is a quality defensive business with its portfolio of internet data centres and the potential for increasing earnings in an uncertain economic environment.
PRESS HEADLINES courtesy of Weekend City Press Review :
Cameron to fight BP's corner in US
David Cameron will tell President Obama during this week's visit to Washington that BP must have a 'stable and strong ' future for the sake of the UK economy and those who rely on its dividend income. BP is hoping that the so far successful cap on the leaking Gulf of Mexico well and the rising share price will signal that the oil major has turned the corner after nearly three months of crisis, although substantial pressures on the company remain. Meanwhile, the US financial reform legislation passed last week will force greater transparency on oil and mining multinationals over payments made to governments as part of anti-corruption measures. [Financial Times pp.1, 4]
Royal Bank of Scotland considers suing Goldman after losing $841m on Abacus product
Royal Bank of Scotland may take legal action against Goldman Sachs for the US$841m losses it made from being sold its Abacus toxic mortgage product in spite of being awarded US$100m compensation from the US$550m fine imposed on Goldman by US regulators. The RBS board will now take a final decision on whether to pursue Goldman through the civil courts for the balance it claims is owed. But while Goldman shares rose on Friday in the wake of the Securities and Exchange Commission settlement, other bank stocks remained subdued due to concerns about the global economy. Meanwhile, the Financial Times says in its main editorial that Goldman must accept its reputation has been damaged and questions remain over its leadership and future strategy. [Financial Times pp.15, 8]
Candover weighs options after bid collapse
Candover Investment faces an uncertain future after the collapse of takeover talks with Alberta Investment Management Corporation. Candover's shares fell 11p to 660p on the news and it must now decide whether to try and find a new bidder, raise extra funds itself or go into run-off. [Financial Times p.12]
Chocoholic hedge fund takes large bite out of the world's cocoa stocks
London hedge fund Armajaro has helped drive cocoa prices to their highest for 33 years by taking delivery of 240,100 tonnes of cocoa, equivalent to about 7 per cent of annual global production. The fund's bet on prices continuing to rise comes after a 150 per cent increase over the past two-and-a-half years, forcing chocolate makers to reduce the size of their products as well as raising prices. [Financial Times p.1]
UK tax could drive us out, says Citigroup
Citigroup has threatened to pull out of the UK if further taxes are imposed on the bank. The US-domiciled bank revealed it faced a Q2 bill of £263m to cover the 50 per cent tax on discretionary bonuses and is concerned at proposals by the coalition government for additional taxes on banks' profits and pay. Citigroup's quarterly net profits fell 37 per cent to US$2.7bn, forcing the shares down more than 6 per cent. [Times p.51]
BP ponders break-up after spill
BP is considering plans for a radical restructuring of the company, including selling its refineries and petrol stations, reducing its US operations and bringing engineering in-house instead of outsourcing. The debate over 'Future BP' is in addition to plans to sell about 10 per cent of its assets to help finance the Gulf of Mexico oil spillage clean-up costs, with the latest measures to stop the leak appearing to be successful. Investors clearly believe BP's recovery is under way, with the share price up by a third over the past month and Fidelity fund manager Anthony Bolton suggesting that the current price is a 'once in a lifetime' buying opportunity. Meanwhile, the Sunday Times says in its main editorial that BP's future success depends on a change of leadership. But David Cameron, when he meets President Obama this week, must make clear it also remains an important global business. [Sunday Times pp.3.1, 3.5, 3.16]
Fears mounting of American double-dip
Weak US economic data is raising fears that the American economy could be headed for a double-dip recession, while at the same time the eurozone debt crisis appears to be easing after successful bond auctions by some of the smaller members and a renewed appetite for UK gilts. Results of the stress tests on European banks on Friday are not expected to produce any major problems. UK growth figures this week are also set to show the economy growing in Q2 by about 0.6 per cent, twice the rate of the first quarter. [Sunday Times pp.3.1, 3.7]
Ocado poised to deliver
Ocado is expected to get its IPO away this week in spite of continuing criticism from some analysts over the valuation, now thought likely to be nearer £800m than the £1bn initially mooted. But while Ocado's founders may still have the last laugh and achieve their intended price, it may take much 'arm-twisting' by the several investment banks hired by Ocado to achieve even partial success. [Sunday Times pp.3.3, 3.7]
Failed safety device on BP's Gulf rig was modified in China
BP is reported to have ordered Transocean, owner of the Deepwater Horizon rig in the Gulf of Mexico, to overhaul a key piece of safety equipment (which eventually failed) in China rather than the US to save money. Although carrying out such engineering work in China is regarded as routine, the disclosure will further embarrass BP. But signs the latest capping measures are proving successful will not prevent more questions being asked about the company's perceived lack of a safety culture. [Observer pp.7, 36-37]
JP Morgan questions UK future
JP Morgan is reportedly reviewing its commitment to its new £1.5bn HQ in Canary Wharf because of concerns about the level of support for the UK financial sector from government and regulators. Jamie Dimon, the bank's CEO, is understood to be concerned at the scale of the UK investment given the uncertainty about extra costs being imposed, with some sources suggesting the bank was 'on the verge ' of quitting the HQ development. Meanwhile, Goldman Sachs is expected to reveal with this week's Q2 results that it is setting aside up to 45 per cent of its 2010 revenues for pay and bonuses. [Sunday Telegraph p.B1]
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