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 says it was no shock that Amec and M+W Group walked away from Kentz Corporation (KENZ), 492p - the company has an order backlog of US$2.8bn and US$220m cash, making its own M&A activity likely; analysts give a fair value of 550p, but, given the failed bids, getting there may take some time (Last IC rating: Hold, 20 Aug - also see AMEC and M+W Group go cold on Kentz - 13 Sept); Laird Group (LRD) (Last IC rating: Buy, 8 Aug), 235.25p, looks attractive; JD Wetherspoon (JDW) (Last IC rating: Sell, 15 Mar), 752p, is one of the more solid picks in the sector.
The Independent
■ No Pain, No Gain: Derek Pain is hanging on to two shares doing well: Avation (AVAP), bought in January 2011 at 83.5p and now 93.5p with a target from WH Ireland of 125p (Last IC rating: Buy, 17 Mar 2008); and Spirit Pub Company (SPRT), bought two years ago at 42p and now 75p, with a Panmure Gordon target price of 110p (Last IC rating: Buy, 26 Apr).
■ Market Report: Buy Halfords (HFD) (Last IC rating: Sell, 23 May), 406p; Sell Debenhams (DEB) (Last IC rating: Buy, 18 Apr), 102p; Hold Bellzone Mining (BZM) (Last IC rating: Sell, 29 Mar), 4.24p.
The Daily Mail
■ Investment Extra: Ian Lyall looks back at the 'Great Panic' and its repercussions, and concludes that HSBC (HSBA) (Last IC rating: Buy, 5 Aug) and Standard Chartered (STAN) (Last IC rating: Buy, 6 Aug) may suffer from the stalling Asian tiger economies, and Lloyds Banking Group (LLOY) (Last IC rating: Hold, 1 Aug) looks the more appealing of the nationalised banks.
The Sunday Times
■ Inside The City: Danny Fortson looks at the four fashion chains due to update the City this week: Asos (ASC) looks set to continue its rise with a 40 per cent increase on Q4 sales year-on-year (Last IC rating: Sell, 16 Jul); French Connection UK (FCCN) has a long way to go (Last IC rating: Hold,, 13 Mar); JD Sports Fashion (JD.) is expected to reveal annual profits of £70m and is to expand into Europe (Last IC rating: Buy, 19 Jun); and Debenhams (DEB), trading at half of its 2006 listing price of 200p is one to miss (Last IC rating: Buy, 18 Apr).
■ Gulf Keystone (GKP), 210p, is more attractive than ever, but chief executive Todd Kozel won't be easy to rein in, nor will he allow an easy ride for any suitor (Last IC rating: Buy, 10 Sept).
The Sunday Telegraph
■ Questor: John Ficenec advises investors to hold BG Group (BG.), £12.04; production warnings, unrest in Egypt and big capital investment in Australia make the stock one for the long-term (Last IC rating: Sell, 26 Jul).
■ Buy Deutsche Post DHL, Eu23.33; an alternative to the Royal Mail that has finished restructuring and looks set for a 9 per cent dividend increase this year (Last IC rating: Buy, 6 Jun).
The Mail on Sunday
■ Midas: Joanne Hart looks at the Royal Mail flotation, and concludes that if chief executive Moya Greene can deal with the decline of traditional mail, the unions, inefficiency and the growing parcels market, the shares will do well (Last IC rating: Await documents, 10 Jul).
Business press headlines courtesy of Weekend City Press Review:
BoE to discuss property bubble fears
The Bank of England's Financial Policy Committee is to meet on Wednesday to examine whether a bubble is forming in the housing market and what steps can be taken to prevent it. Conservative peer Lord Wolfson, Antony Jenkins of Barclays and RICS have all expressed concerns, with RICS calling for a 5 per cent cap on annual house price growth. The meeting will be the first test of the FPC's willingness to act; attempts to make banks hold more capital will force up the cost of mortgages but be in direct opposition to the Funding for Lending scheme. [Financial Times, pp.1,3]
Co-op rebels challenge bank losses
A group of bondholders have accused the Co-operative Bank of pushing thorough write-offs totaling £379m through the lender's books with last month's first-half results. The bondholders have written to chairman Richard Pym outlining their concerns that the bank is pushing as many losses as possible to persuade investors to go along with the deal, including £150m from the value of a new technology system leaving it a worthless asset on the bank's books. It is claimed that £230m has been written off that could be reclaimed from the taxman. [Sunday Times, p.3.1]
Sultan of Brunei in secret £500m swoop on London
The Sunday Times reveals that the Sultan of Brunei has secretly bought most of Queensway in West London for £500m, with the aim of creating an estate in the style of historic landowners. The Brunei royal family now own about 75 per cent of properties on the road in deal arranged by Siahaf, a development company owned by British Johnny Sandelson and Bruneian Mohamad Shuif Hussain. The development of Queensway into a model village is a six-year project. [Sunday Times, p.3.1]
Lenders threaten Help to Buy plan
Banks are warning that the second phase of George Osborne's Help to Buy scheme could leave them with too many high-risk loans, and will impose limitations: both Lloyds Banking Group and Nationwide's existing schemes have a maximum loan of £350,000 for 95 per cent mortgages. While the first phase offered cheap mortgages to first-time buyers, the second phase is open to any buyer and any property up to £600,000. [Sunday Times, p.3.3]
Revealed: food giant kept Lehman alive
Cargill, the world's biggest grain trader, played a pivotal role in saving the London arm of Lehman Brothers, the Sunday Times revealed. Cargill provided an emergency US$100m loan that allowed administrators to pay staff while they explored options. Five days later Nomura bought the bank. [Sunday Times, p.3.1]
BAE sweetheart deal on carrier costs in peril
Ministers are trying to re-negotiate a £5.3bn contract to build two aircraft carriers with BAE Systems (BA.); the MoD wants the company to take more responsibility for spiraling costs, up form £3.6bn when the contract was signed in 2008, to £5.3bn, and to change a 2009 deal that gives the defence giant a virtual monopoly on military shipbuilding at its three shipyards in Portsmouth, Govan and Scotstoun. [Sunday Times, p.3.3]
Legal fight threatens Royal Mail
TNT Post UK is going to the High Court in November to challenge the 20 per cent VAT exemption the Royal Mail enjoys as the 'universal provider' of UK postal services, in a bid to take the exemption to European courts. Nick Wells, TNT chief executive, told the Sunday Telegraph that allowing a privatised Royal Mail to retain such an advantage is unfair to other providers. [Sunday Telegraph, p.B1]
Airport chief faces conflict challenge
Campaigners behind the Stop Stansted Expansion campaign are to make an application to the High Court for a judicial review of the status of the Airports Commission if Geoff Muirhead refuses to resign from it. Mr Muirhead continued to act as an adviser to Stansted-owner Manchester Airports Group, of which he was chief executive until 2010, while serving on Sir Howard Davies's commission.
Gatwick's expansion plans were dealt a blow as Air China announced it would stop flights between the airport and Beijing from next month flights, but will continue to operate from Heathrow. [Sunday Telegraph, pp.B1, B3]
Markets hold breath as Fed looks to slow QE
The US Federal Reserve is expected to taper quantitative easing by scaling back on its US$85bn a month bond buying this week. Leading analysts expect the Fed to cut the monthly amount by US$10bn; stock markets and bond yields climbed as investors reacted to the prospect with alarm. [Sunday Telegraph, p.B2]
IGas in talks over shale energy that could power UK for six years
Aim-listed IGas (IGAS) is in talks with landowners in Lancashire and Cheshire over shale gas drilling rights: the company believes there could be 172tn cubic feet of shale gas under the 300 square mile area; if 105 can be extracted, it would supply the UK's gas needs for six years. IGas is to begin drilling for shale gas in Barton, Greater Manchester, and has had a joint venture since 2008 with Peel Holdings for coal bed methane extraction from Peel's entire land holdings. [Sunday Telegraph, p.B1]
