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Today’s market overview

Equities bounced back hard yesterday on the first hint of a resolution to the US debt impasse and have continued to rise this morning. The Trader Dominic Picarda reckons this could be the start of the upturn he has been waiting for.

IC TIP UPDATES:

Japan Residential Investment Company (JRIC) has sold a residential building in Osaka for £2m, 26 per cent ahead of its valuation in May. This takes total sales this year to £10.3 at a 24.5 per cent premium to book valuations. We keep our buy recommendation.

KEY STORIES:

The scale of the demand for Royal Mail (RMG) shares was reflected in the price action this morning after its shares started conditional trading, rising by 36 per cent to 450p almost instantly. Full unconditional trading begins on Tuesday.

Military countermeasures specialist Chemring Group (CHG) has issued both good news and bad in today’s trading update. Firstly it has won a contract in the Middle East, which will book profits in this financial year. But of more concern is the US federal government shut down which has impacted October order intake. Furthermore, problems with quality and production at its Kilgore production facility in the US has also hit revenues, as has the shift in the dollar/sterling exchange rate. All told, this will result in an £8m hit to operating profit this year.

Patent specialist RWS Group (RWS) says that strong recent trading means revenues for the year are likely to come in 10 per cent ahead of last year adjusted profit before tax should be in the region of £20.9m, well ahead of current market expectations.

Consumer debt acquisition specialist Arrow Global (ARW) began trading on the London Stock Exchange this morning after raising around £50m for the business.

Arbuthnot Banking Group (ARBB) reports that it has traded well in the third quarter and its offshoot, Secure Trust Bank (STB) also reports strong demand for both its deposit and lending arms. Secure Trust is building capacity to increase its lending to small and medium enterprises and also expects to launch an invoice financing business next year as it continues to take advantage of the state of flux among the mainstream banks.

OTHER COMPANY NEWS:

Bluefield Solar Income Fund (BSIF) has acquired an operational 6.9MW solar park in Devon for £9.35m.

XP Power (XPP) is benefiting from a pick up in demand for its power control equipment for the electronics industry and has seen revenues grow by 11 per cent in the three months to 30 September, which means over the opening nine months of the year revenues are up 7 per cent. Order intake over the third quarter exceeded revenues recorded during the period.

Transense Technologies (TRT) reports that it is seeing stronger business opportunities now than at any point previously with its tyre management systems business recording multiple orders in recent months and other areas of the business also performing well. This has prompted a boardoom change with chairman David Kleeman stepping down to a non-executive deputy chairman role and David Ford becoming executive chairman.

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