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Today’s market overview
Equities in London have flown out of the blocks this morning after the Federal Reserve surprised everyone last night by holding off on tapering its QE3 monetary easing programme. The Trader Dominic Picarda is pleased with the news, but isawaiting a little pull back now before piling in.
IC TIP UPDATES:
Half year results from Gulf Keystone Petroleum (GKP) showed losses reducing to $26.4m as the company enters ramp up phase in production from its giant Shaikan discovery in Kurdistan. The first production facility at Shaikan PF-1 is producing 12,400 barrels of oil per day (bopd) as it builds up to its capacity of 20,000 bopd and a second 20,000 bopd production facility should be in operation by the end of the year. Meanwhile drilling is ongoing on other areas of the discovery and the field development plan has been approved. We keep our buy recommendation.
Sell recommendation. Asos (ASC) has confounded expectations with another stellar performance in the past three months which means full year profits are likely to beat expectations. The three months to August saw UK retail sales rise by 49 per cent and international sales up by 47 per cent. Total group revenues for the year were up by 39 per cent. Our recommendation is under review.
Russian oil company Exillon (EXI) has formally initiated a strategic review which is likely to lead to the sale of the company. Following interest in buying the company from founding shareholder Maksat Arip, confirmed in late July, the company has since received further expressions of interest and is now in a ‘formal sales process’. We will review our recommendation in a tip update.
Simon Thompson recommendation. IQE (IQE) has issued strong half year results showing revenues up 84 per cent and cash earnings up 162 per cent at £10.5m, boosted by acquisitions. The company admits that its wireless device end markets were hit recently by uncertainty ahead of the release of the latest wave of smart phones but are expected to pick up sharply again now.
Fellow Simon Thompson tip. Global Energy Development (GED) increased its production by 16 per cent to 235,000 barrels during the six months to June but turnover fell marginally due to lower realised oil prices. The company remains focused on finding a farm out partner for its Magdalena interests in Colombia.
Booker (BOK) has reported another solid trading period for its core cash and carry business with like for like sales up 3.5 per cent in the 12 weeks to 13 September. The performance at the acquired Makro business is also showing signs of turning around. The company has opened two more branches in India, taking the total to six. Buy.
United Utilities (UU.) says trading is in line with expectations for its first half, with revenues expected to be slightly higher than the same period last year after regulatory price increases which means underlying profits will be up ‘moderately’.
Insurance services specialist Quindell Portfolio (QPP) has made a further investment in telematics specialist ingenie and also taken 40 per cent stakes in two businesses it is spinning out in the UK and Canada. The company, which specialises in using telematics to set drivers’ insurance costs is looking to expand its offering to the over-25’s market. Simultaneously, Quindell announced a contract win in Canada for its telematics services.
OTHER COMPANY NEWS:
Animal feeds specialist Anpario (ANP) has enjoyed another strong half year as it benefits from expansion into the US, Brazil and China. Revenues rose by 20 per cent and adjusted earnings by 28 per cent.
Electronics supplier Premier Farnell (PFL) continues to suffer from subdued end markets, with revenues growing just 0.9 per cent in the first half although a margin improvement helped total profits rise by 19.8 per cent to £38.1m.
- Gulf Keystone Wins Lawsuit Over Ex-Soldier’s Iraqi-Oil Claim (bloomberg.com)
- Russian oil producer Exillon to explore sale (worldbulletin.net)
- Gulf Keystone wins court battle over Kurdistan oilfields (theguardian.com)
- Gulf Keystone wins UK court case over Kurdistan oilfield ownership (uk.reuters.com)
- ingenie to Extend its Telematics Insurance Offering to Experienced Drivers and Launch in Canada (sys-con.com)
- Quindell profits double as contracts flow in (thetimes.co.uk)
- Hampshire firm set to create 100 new jobs (dailyecho.co.uk)
- Questor share tip: Quindell Portfolio still a buy despite naysayers (telegraph.co.uk)
- Should you join the rush into Aim shares? (telegraph.co.uk)
- UPDATE 2-Gulf Keystone wins Kurdistan oilfield ownership court case (uk.reuters.com)