Welcome to our summary of the weekend's quality press tips, provided on Mondays by Weekend City Press Review.
PRESS TIPS:
The Times
■ Tempus: Martin Waller looks at the airline sector, suggesting that International Consolidated Airlines Group (Last IC rating: Sell, 31 May) is worth a punt for a short-term bounce as this traditionally happens when the shares, 142p, fall close to their float price. But avoid easyJet (Last IC rating: Hold, 9 May) as its growth from further expansion looks limited, especially with Sir Stelios Haji-Ioannou still preferring the focus to be on dividends rather than boosting the airline's size.
The Independent
■ No Pain, No Gain: Derek Pain charts the mistakes which have seen Rivington Street Holdings (No IC rating), acquired at 27.5p a share and then nearly doubling in price, collapse to 4p (he sold at 13p). He says the company was hit by over-ambitious expansion as well as the need to change accounting policies to enable a switch from the Plus market to Aim.
The Daily Mail
■ Investment Extra: Ian Lyall reveals that according to the Equity Gilt Study from Barclays Capital, a £100 investment in shares 60 years ago would be worth £108,000 today, while the same amount put into gilts would have returned just £6,850.
The Sunday Times
■ Inside the City: Matthew Goodman believes the emergence of activist US investor Nelson Peltz on the InterContinental Hotels Group (Last IC rating: Hold, 14 Feb) share register will keep the management on their toes, which is good news for other shareholders.
■ ...The market expects Melrose (Last IC rating: Buy, 7 Mar) to go back on the acquisition trail shortly after missing out on Charter last summer.
The Sunday Telegraph
■ Questor: Buy Halfords (Last IC rating: Hold, 31 May), 239.5p, for its yield, with the 15 per cent fall late last week after the results offering a buying opportunity.
■ Buy Royal Bank of Scotland (Last IC rating: Sell, 24 Feb), 19.5p, as there is potential for new investors at this level, with the share consolidation due this week also likely to reduce volatility.
The Mail on Sunday
■ Midas: Joanne Hart says buy Magnolia Petroleum (No IC rating), 2p, as a speculative US oil play which could deliver strong growth over the next few years. TomCo Energy (No IC rating), 1.5p, is another oil stock for 'adventurous investors' prepared to back its innovative extraction technology.
Business press headlines courtesy of Weekend City Press Review:
Fears of global slowdown intensify
Fears of a global slowdown were exacerbated by poor jobs and manufacturing data from the US and UK, as well as signs of weakness in the Chinese and Brazilian economies. The downbeat news saw government borrowing costs fall to all-time lows and raised expectations that the Bank of England would embark on further quantitative easing when the MPC meets this week. A 'defiant' Spanish government also said it would tap sovereign bond markets this week to try to avoid a massive bailout. [Financial Times pp.1, 2, 6, 7]
BP heads for shake-up with move to sell $30bn stake in Russian venture
BP is seeking to sell a 50 per cent stake in TNK-BP which could be worth up to US$30bn, a move which would end its nine-year profitable investment in Russia and potentially lead to a radical reshaping of the group. BP said it was considering a sale after receiving 'unsolicited approaches' for its stake, with sources suggesting the potential buyer was either Rosneft or Gazprom. Some analysts believe a sale of the TNK-BP stake - which provides a third of BP's oil output - could leave it vulnerable a takeover. [Financial Times pp.1, 17]
Kremlin bids for BP's $25bn Russian arm
The Kremlin is understood to be a surprise US$25bn bidder for BP's 50 per cent stake in TNK-BP, a move which could lead to a showdown between President Putin and the Russian oligarchs who own the rest of the country's third biggest oil group. The oligarchs are already believed to have made an approach to BP, as has state holding company Rosneftegaz. BP CEO Bob Dudley, who has appointed Morgan Stanley as an adviser on the sale, is said to have prepared a 'master plan' to invest the windfall from pulling out of Russia. [Sunday Times pp.3.1, 3.5]
Bank poised for £50bn cash boost
The Bank of England is coming under pressure for drastic action this week to boost the economy, amid fears of the impact on the UK if the eurozone collapses. Economists believe the Monetary Policy Committee could decide on Thursday for a further £50bn of quantitative easing, with speculation that interest rates may also be reduced further from their historic low of 0.5 per cent. The move follows weak economic data suggesting the economy has stalled. [Sunday Times p.3.1]
Madrid calls in Big Four to audit stricken lenders
The 'Big Four' accountancy firms - PwC, Ernst & Young, Deloitte and KPMG – are set to be appointed by the Spanish government to audit the country's banking system. The so-called 'granular' audit has been ordered by Spain's bank rescue fund, with a focus on second-tier lenders and regional savings banks. [Sunday Times pp.3.1, 3.7]
Short-sellers scent blood at struggling Facebook
Hedge funds and other speculative investors have launched a short-selling attack on Facebook's shares, down 27 per cent in value since the recent IPO. Some 33m shares - about 8 per cent of the stock sold at the float - are on loan to short-sellers who believe the shares will be hit by increased doubts over Facebook's ability to generate extra revenues, especially in comparison to rivals such as Google. [Sunday Times p.3.1]
Wonga in £1bn US float plan
Wonga is poised to hire investment bankers to organise a £1bn stock market float early next year in the US, either on Nasdaq or the New York Stock Exchange. Although a final decision on a float has not yet been taken by the board of the short-term loan company, criticised for its high interest rates, it is believed that a London listing has already been ruled out. [Sunday Telegraph p.B1]
BP shareholders set to land $15bn windfall
BP may return about US$15bn to shareholders from the sale of its 50 per cent stake in TNK-BP, depending on how much it gets from a Russian buyer in what may prove a tough negotiating process. One leading shareholder says BP has already indicated it would keep half the funds for investment, with the rest returned as either a share buy-back or special dividend. [Sunday Telegraph pp.B1, b8]
Pressure on pay advisers over soaring bonuses
Institutional investors are turning their anger over excessive executive pay on to remuneration consultants, such as New Bridge Street, Hay Group and Towers Watson. It is understood that several chairmen of major companies have received complaints from shareholders over the quality of advice from pay consultants, arguing that it benefits individual directors rather than the company as a whole. [Sunday Telegraph pp.B1, B5]
Circle poised to make bid for second NHS hospital
Healthcare group Circle, which last week saw its shares fall 60 per cent in a day after investors were spooked by a £47.5m cash call, is considering a bid to take over the management of a second NHS hospital. Circle CEO Ali Parsa is interested in running Nuneaton's George Eliot hospital to add to the recent deal to manage Hinchingbrooke in Cambridgeshire. [Sunday Telegraph p.B1]
