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Today’s market overview

Equities are off colour again this morning and The Trader Dominic Picarda acknowledges that he did not see the weakness yesterday coming but now he feels we could be in for a little period of consolidation before another leg upwards.

IC TIP UPDATES:

New Britain Palm Oil (NBPO) has finally responded to the 550p a share partial offer from Malaysian investor Kulim today, advising investors to reject the offer as it undervalues the business. Management also feel that, should Kulim build up a sufficient stake, it may jeopardise New Britain’s listing. We maintain our buy rating.

Lloyds’ insurer Novae (NVA) delivered an improved combined ratio of 91.6 per cent in the opening half of the year which helped boost profits to £21.1m, although this was also helped by foreign exchange gains. Gross written premiums actually dipped to £361.8m as the company deliberately reduced its reinsurance presence. Buy.

A consortium of which Kier Group (KIE) is a member has won a contract to design build and maintain a total of nine fire stations throughout South East London, worth £70m. Buy.

Quintain Estates and Development (QED) has announced its first quarter trading update confirming that its London Designer Outlet at Wembley is 70 per cent let prior to opening in September. Furthermore, the iQ Student accommodation business has already secured lettings for 85 per cent of its portfolio before A-level results are even published. Buy.

KEY STORIES:

Tui Travel’s (TT.) third quarter results showed an 18 per cent improvement in underlying profits, which leaves management confident of delivering 10 per cent underlying profit growth for the full year. A total of 84 per cent of the summer season capacity has been sold.

Eurasian Natural Resources Company (ENRC) has increased production across most of its divisions in the second quarter with the key iron ore division increasing primary concentrate production up by 16.8 per cent.

Insurer Lancashire (LRE) has agreed a deal to buy privately owned Lloyds’ insurer Cathedral Capital for £266m from Alchemy Capital and the management team. Lancashire is using its cash reserves plus the proceeds from a placing of 9.99 per cent of its share capital to fund the deal.

Housing group Grainger (GRI) announces that it has reached its debt reduction target ahead of schedule, bringing net debt down to £985m with loan to value within its portfolio down to around 50 per cent. During the 10 months to July the company has completed sales worth £258.7m, up from £202.1m in the same period last year.

Strong emerging markets performance has benefited Old Mutual’s (OML) interim outturn with adjusted operating profits up by 14 per cent to £801m after net inflows of £9.1bn into the group over the period.

OTHER COMPANY NEWS:

Johnson Service Group (JSG) has sold off its facilities management business for £32.2m to a vehicle backed by Lyceum Capital Partners. The proceeds will be used to pay down debt and invest in the remaining textiles business.

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