Today’s market overview
Equities are holding steady this morning after a four consecutive sessions of reversals culminated in a healthy sell off yesterday. The Trader Dominic Picarda is happy to concede that the downtrend is set in, and is acting accordingly.
IC TIP UPDATES:
Alongside its interim results, Rio Tinto (RIO) has announced it has agreed to finance the continuing development of the Oyu Tolgoi mine in Mongolia by Turquoise Hill Resources and will also consider refinancing the existing debts Turquoise owes it. Half year results suffered from weaker commodity prices despite impressive production performance with underlying earnings dipping by 18 per cent to $4.2bn. We maintain our buy recommendation.
Simon Thompson recommendation IQE (IQE) reports that its concentrated photo voltaic solar wafer technology is ready for high volume manufacturing.
Bookmaker Ladbrokes (LAD) reports that good operational progress, especially in the development of its online venture with Playtech, has not yet been reflected in its financial performance. Group operating profit in the first half of the year fell by 19.8 per cent to £85.7m with gaming machines in shops proving to be a weaker performer, although this was expected. Nonetheless we retain our buy rating.
Cairn Energy (CNE) has agreed to farm in to exploration licences offshore Mauritania held by Chariot Oil & Gas. Cairn is paying $26m for a 39 per cent stake. Buy.
Packaging specialist Mondi (MNDI) is benefiting from recent acquisitions and better operational performance, it posted a 35 per cent increase in half year profits to €366m. Buy.
Oil services specialist Amec (AMEC) has announced a 250MW solar power installation contract in Nevada alongside half year results which showed flat revenues at a shade under £2bn and a 4 per cent rise in underlying earnings to £158m. We keep our buy recommendation.
Enterprise Inns (ETI) says that trading has improved markedly in recent months after the prolonged winter hurt the business. After a 4.2 per cent decline in like for like bet income in the six months to March, the period since has seen this improve to a 2.7 per cent reversal and the sunny weather in July helped produce a positive figure for the five weeks to 3 August. Buy.
Aviva (AV.) produced a much improved first half performance, posting a post-tax profit of £766m compared with a loss of £624m last year. New business increased by 17 per cent and the company also managed to shave 9 per cent off its operating costs as part of its long term turnaround plan.
Fellow financial services giant Standard Life (SL.) also posted glowing results which boasted record flows into the business. It ended the period with group assets under management of £232.8bn, up from £218.1bn at the end of 2012. This helped produce a 6 per cent uplift in operating profit at £304m.
Schroders (SDR) has also benefited from improved trading conditions for financials. Its half year results showed a 25 per cent uplift in pre-tax profits to £221.7m after a 21 per cent rise in assets under management.
Housebuilder Bellway (BWY) is benefiting from the improving conditions in the housing market, which have been supported by government initiatives. A trading update for the year to July reported an 8.2 per cent rise in legal completions with a 3 per cent rise in the average selling price. The order book at the end of the year was £679.5m, compared with £441.2m at the same point of the previous year.
Stamps and collectibles continue to be popular according to Stanley Gibbons (SGI), it posted a 17 per cent rise in revenues and 9 per cent improvement in trading profits for the six months to June, although investment in its online business hit reported profits.
Posh car dealer HR Owen (HRO) has confirmed the board’s rejection of the recent a 130p a share offer from Berjaya Philippines. It also reported a 23.2 per cent improvement in pre-tax profits for the six months to June.
OTHER COMPANY NEWS:
Circle Oil (COP) reports another oil discovery in Egypt which should help to push its daily production up from 11,227 barrels of oil per day to more than 13,000.
Kazakh oil explorer Max Petroleum (MXP) says that its latest well on the Zhana Makat field has discovered oil and will be placed on production as soon as practicable.
- Rio Tinto posts record iron production (bigpondnews.com)
- Rio Tinto half-year profit plunges by 71 per cent (abc.net.au)
- Aust shares close higher (news.theage.com.au)
- Emerging Markets Chief Quits In Blow To Amec (news.sky.com)
- Market follows Wall Street, opens lower (bigpondnews.com)
- FTSE LIVE: Markets cheered by surprise China trade data (dailymail.co.uk)
- In the markets… (theoilandgasworld.wordpress.com)
- Rio Tinto First-Half Profit Falls 18% as Metal Prices Slide – Bloomberg (bloomberg.com)
- Stocks to watch at close on Thursday (news.theage.com.au)
- Aust shares recover some of Wed losses (bigpondnews.com)