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Today’s market overview

Equities are holding to their gains of last week and The Trader Dominic Picarda is ignoring any nay sayers and staying positive.

IC TIP UPDATES:

Costain (COST) is likely to be one of the main beneficiaries of today’s announcement that EDF is going ahead with the Hinckley C new nuclear power station in Somerset. Pending the final investment decision, Costain will provide the design and delivery of the water cooling systems. No value has been given for the contract. We keep our buy on Costain.

Rail scheduling and monitoring technology specialist Tracsis (TRCS) has won a ‘significant’ framework agreement for its rail condition monitoring equipment for an existing customer. This extends the relationship out over the next five years. Buy.

IC Top 100 Funds constituent HICL Infrastructure (HICL) has acquired a 50 per cent interest in the Brighton Children’s Hospital facilities management project and a 29 per cent stake in a Falkirk Schools project which runs four schools.

Japan Residential (JRIC) announces an uptick in the average occupancy of its residential portfolio in the country over the past 12 months, from 94.9 per cent to 95.7 per cent. Buy.

KEY STORIES:

Hot on the heels of the success of the Royal Mail flotation, Merlin Entertainment has announced its intention to float this morning. The amusement park giant, second only to Disney worldwide, generated revenues of more than £1bn from its 99 attractions in 2012, recording a cash profit of £346m. The float, which will have a retail element, will raise around £200m to pay down debt and allow the likes of Blackstone and CVC to cash in some of their holdings. The free float will be at least 20 per cent.

Also joining in the fun is Infinis, the renewable power company owned by private equity house Terra Firma, which has announced its intention to float. The business, which owns 147 power generating assets from landfill gas to windfarms with a capacity of 621MW, is looking for a free float of at least 30 per cent and will also include a retail element.

Co-op Bank says that a review of its financial situation suggests it is likely to need to put aside a further £100m-£105m to settle customer claims including PPI redress. It also reports that the terms of its recapitalisation plan, first announced in June, are now likely to be ‘materially different’ after discussions with disgruntled bond holders but no further details were disclosed.

Third quarter results from Quindell Portfolio (QPP) showed gross sales of £98.1m and adjusted cash earnings of £34.5m. Management says that the company is now delivering run-rate growth of around £300m a year and should hit the top end of expectations for the full year and exceed those expectations in the market for 2014.

Balfour Beatty (BBY) has won a £64m contract for electrification of a 12 mile stretch of the Great Western Line as part of the Crossrail project.

Engineer Senior (SNR) says that performance since 1 July has been in line with expectations and that strong cash generation has allowed it to reduce net debt by £10m to £61m.

OTHER COMPANY NEWS:

Anglo Pacific (APF) has announced a change of management with South African natural resources investment specialist Julian Treger taking over as chief executive and Mark Potter joining as chief investment officer, replacing John Theobald and Chris Orchard respectively.

Graphene Nanochem (GRPH) has announced the resumption of operations at its palm oil refinery in Malaysia. The plant has been shut down since 2012 due to the poor economics of the industry, but this has now changed.

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