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Today’s market overview

Shares are off marginally in early trading in London as investors await tomorrow’s announcement from the Federal Reserve on tapering of QE3. The Trader Dominic Picarda expects some volatility over the next two trading sessions but for equities to then settle back into their upwards trend.

IC TIP UPDATES:

Retailer Debenhams (DEB) has seen performance remain on track in the past 10 weeks which has helped contribute to like for like sales growth of 2 per cent for the year to August which should deliver profits in line with expectations. Online is a bright spot with sales up by 46 per cent. We keep our buy rating.

IG Group (IGG) grew group revenues by 15 per cent in the three months to end August, driven by a strong pick up in Europe, where revenues surged by 31 per cent, and the UK, up 16 per cent. Japan and Australia were more subdued. We retain our buy recommendation.

The shareholders of Afferro Mining (AFF) have voted in favour of the takeover offer by International Mining Infrastructure Corporation (IMIC) which should clear the way to completion of the transaction in the coming weeks. We continue to advise investors to hold for now.

Galliford Try’s (GFRD) strong full year results reflect the buoyancy of its house building operations with pre-tax profits rising by 17 per cent despite a 2 per cent reversal in overall revenues. The company reported a 16 per cent increase in reserved, contracted or completed sales at the year end to £450m. The construction order book is flat at £1.7bn. Buy.

Corporate litigation and patent investment specialist Juridica (JIL) has taken a $2m strategic stake in intellectual property creation business ipCreate and formed a strategic alliance with the business. IpCreate specialises in helping patent holders monetise their patents. We keep our buy on Juridica.

Burford Capital (BUR), which provides investment capital for litigation, has enjoyed a bumper six month performance, growing pre-tax profits by 65 per cent to $9.7m. Meanwhile a ramp up in activity in the UK market means the business has written $150m worth of new business during the first half, more than it booked in the whole of 2011 and 2012 put together. We maintain our buy recommendation.

KEY STORIES:

The government managed to rapidly offload a stake of around 6 per cent in Lloyds Banking Group (LLOY) to institutions as it tested the water for offloading the rest of its stake, which still accounts for around one third of the business. An accelerated book build was opened and closed rapidly at the end of the trading day yesterday with institutions snapping up £3.2bn worth of shares at 75p each in quick fashion.

Housebuilder Crest Nicholson (CRST) timed its return to the equity markets earlier this year almost to perfection, coming just as the housing market began to accelerate again. This is reflected in today’s trading statement which shows reservations up 46 per cent year on year in the period since 1 May. All planned 2013 completions have been covered by sales and reservations and forward sales total £145m, almost double the level recorded this time last year.

Imagination Technologies (IMG) says trading remains in line with expectations and that the current performance supports forecasts of £30m-£35m in licensing revenues, or up to £43m including the MIPS acquisition. The company is also guiding towards shipments of more than 650m units in for the full year, or 1.35bn including MIPS.

OTHER COMPANY NEWS:

Advanced Computer Software (ASW) says it expects to report results in line with expectations with revenues up by 74 per cent and profits 67 per cent higher at no less than £22m.

Max Petroleum (MXP) reported mixed results from appraisal wells in Kazakhstan with the BCHW-3 well on the Baichonas West field proving uncommercial but the UTS-16 confirming the presence of hydrocarbons and being put on production.

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