News Column

UK MORNING BRIEFING: ASOS Replaces Sports Direct As Conviction Buy

June 10, 2014

Tom Waite



LONDON (Alliance News) - UK shares have opened mixed Tuesday, with AIM marginally outperforming larger stocks.



Goldman Sachs joined other brokers in issuing positive notes about AIM giant ASOS following its recent share price decline. Goldman added ASOS to its Conviction Buy List, while removing Sports Direct, which remains a Buy. Sports Direct on Monday announced another attempt to award founder Mike Ashley with bonus shares.



ASOS is up 3.1% in early trade, while the FTSE 100's Sports Direct is down 1.1%



Here is what you need to know at the UK market open:

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MARKETS

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FTSE 100: down 0.3% at 6,852.29

FTSE 250: down 0.3% at 16,171.71

AIM ALL-SHARE: up 0.1% at 805.99

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Hang Seng: up 0.7% at 23,288.86

Nikkei 225: closed down 0.9% at 14,994.80

DJIA: closed up 0.1% at 16,943.10

S&P 500: closed up 0.1% at 1,951.27

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GBP-USD: down at USD1.6800

EUR-USD: up at USD1.3600



GOLD: up at USD1,255.70 per ounce

OIL (Brent): up at USD110.00 a barrel



(changes since end of previous GMT day)

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ECONOMICS AND GENERAL

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Tuesday's Key Economic Events still to come

(all times British Summer Time)



09:00 Italy Industrial Output

09:30 UK Industrial Production

10:00 Italy Gross Domestic Product

12:30 US NFIB Business Optimism Index

13:55 US Redbook index

15:00 UK NIESR GDP Estimate

15:00 US Wholesale Inventories

16:30 US 4-Week Bill Auction

18:00 US 3-Year Note Auction

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The total value of like-for-like sales in the UK was up 0.5% on year in May, the British Retail Consortium said. That was well shy of forecasts for an increase of 1.6% following the 4.2% gain in April. Total sales were up an annual 2.0%. In the three months ending in May, like-for-like sales were up 0.8% on year, while total sales gained 2.3%. Like-for-like food sales were down 2.2%, while non-food sales jumped 3.2%. Through the first five months of the year, like sales gained 1.2% and total sales jumped 2.7%.

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Consumer prices in China were up 2.5% on year in May, the National Bureau of Statistics said.

That was slightly above expectations for 2.4% and up from 1.8% in April. Among the individual components of inflation, food prices were up 4.0% on year and non-food prices gained just 2.0%. The bureau also noted that producer prices fell 1.4% on year versus forecasts for -1.5% after falling 2.0% in the previous month. On a monthly basis, consumer prices added 0.1% and producer prices fell 0.1%.

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The leaders of Britain, Germany and the Netherlands arrived Monday in Sweden for a two-day informal summit expected to focus on who they plan to endorse as the future head of the European Commission. German Chancellor Angela Merkel, British Prime Minister David Cameron and his Dutch counterpart Mark Rutte convened at the official retreat of Swedish Premier Fredrik Reinfeldt in the town of Harpsund for a meeting officially centring on economic recovery in Europe.

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Senior American and Iranian officials met for more than five hours Monday in rare, high-level direct talks in Geneva over Tehran's disputed nuclear programme. The talks were expected to continue all day Tuesday, said Marie Harf, deputy spokeswoman in Washington at the US Department of State.

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Israel's Knesset will elect a new president of the country on Tuesday to replace outgoing leader Shimon Peres, in a race that has been rife with smear campaigns. Over the weekend, Binyamin Ben-Eliezer, a former general and defence minister from the Labour party, pulled out of the race, amid corruption accusations, which he denies. This could make it easier for Reuven Rivlin, a former Knesset speaker from the right-wing Likud party, to be elected.

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BROKER RATING CHANGES

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GOLDMAN CUTS SPORTS DIRECT TO 'BUY' ('CONVICTION BUY LIST') - TARGET 1100 PENCE

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TRADERS: EXANE BNP CUTS BG GROUP TO 'NEUTRAL' ('OUTPERFORM')

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GOLDMAN CUTS BOOKER TO 'BUY' ('CONVICTION BUY LIST') - TARGET 200 (214) PENCE

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SHORE CAPITAL RAISES STHREE TO 'BUY' ('HOLD')

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GOLDMAN RAISES ASOS TO 'CONVICTION BUY LIST' - TARGET 5750 (6250) PENCE

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COMPANIES - FTSE 100

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The US Supreme Court ruled Monday that British oil giant BP PLC must continue paying compensation for damage done by the April 2010 oil spill in the Gulf of Mexico while the company appeals terms of its settlement with some businesses. The US Supreme Court said it will not interfere with a lower court's decision requiring BP to restart payments.

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Imperial Tobacco PLC said it will float its European logistics business, Logista, on the Spanish stock exchanges. The FTSE 100-listed cigarettes and tobacco company had said back in February that it was reviewing its options in relation to a potential IPO of CompaÑia de DistribuciÓn Integral Logista SA. In a short statement Tuesday, Imperial Tobacco said that it will launch an IPO of Logista via Imperial's indirect wholly-owned subsidiary Altadis SAU. The tobacco company said it will sell a portion of its shares to institutional investors, but will retain the majority of Logista shares.

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Rolls-Royce Holdings PLC said Tuesday it has won a GBP50 million contract to deliver deck machinery for four large anchor handlers for Edison Chouest Offshore. Rolls-Royce said the vessels are designed by North American Shipbuilder Inc and will be built in Brazil by Estaleiro Navship LTDA.

The vessels have been developed to operate specifically in Brazilian waters under an eight-year contract with Petrobras, though they will meet all demands for world-wide operations, said the FTSE 100-listed company.

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TheLondon Stock ExchangeGroup PLC is close to buying US index compiler and asset manager, Russell Investments, in a deal worth approximately USD2.8 billion, the Financial Times reported late Monday. The deal would substantially increase the UK group's US operations, said the newspaper, reporting that the two sides have now reached a tentative agreement on the price and structure of the deal and are planning to announce the agreement later this month, citing people familiar with the situation.

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Lonmin PLC said the talks set up by the South African Minister of Mineral Resources to solve the ongoing strikes that are crippling the platinum mining industry in the country and weighing on its economic growth dissolved without an outcome. Miners Lonmin, Impala Platinum Holdings Ltd and Anglo American Platinum Ltd, a subsidiary of Anglo American PLC met Monday with representatives of the Association of Mineworkers and Construction Union, on the last day for talks set up by Minister of Mineral Resources Ngoako Ramatlhodi to solve the wage strikes in the country, now in a 21st week.

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COMPANIES - FTSE 250

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KentzCorp Ltd said it has been awarded a services contract, valued at USD125 million, by Qatargas Operating Co Ltd for a new wastewater facility at the Qatargas Liquefied Natural Gas Plant in the Ras Laffan Industrial City, Qatar. The oil services company said its scope of work on the contract is to supply process engineering, procurement, installation, construction, and commissioning services to provide wastewater recycling and reduction facilities for four LNG trains.

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Ted Baker PLC reported strong sales growth in the first 19 weeks of its new financial year, which it said continues to be driven by a strong performance across the business, especially in the UK and North America. The British clothing and accessories retailer has seen its business driven by strong trading in the UK and the US, international expansion, and its online business as of late. It has also held up relatively well in a very competitive trading environment in the UK retail sector.

Group revenues increased almost 18% in the 19 weeks period to June 7, with retail sales up 16% and wholesale sales up 25%.

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Oxford Instruments PLC upped its total dividend for the year to end-March, as pretax profit was hit by costs relating to it acquisition of Andor Technology in January, and revenue continued to be damped by the strengthening of sterling. The technology tools and systems company proposed a total dividend of 12.4 pence, up from 11.2 pence in the previous year. Oxford Instruments posted a pretax profit of GBP24.0 million, down from a restated GBP28.4 million, as a rise in revenue to GBP360.1 million from GBP350.8 million was offset by GBP23.1 million in exceptional costs relating to acquisitions.

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COMPANIES - ALL-SHARE AND AIM

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President Energy PLC said it has increased its interest in Paraguay's Pirity Concession by 5% through the acquisition of LCH SA for both shares and cash.

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London brewer and pub company Fuller, Smith & Turner PLC Tuesday said it has bought a 51% stake in The Stable Pizza & Cider Ltd, a craft cider and pizza restaurant business, for GBP7.3 million, as well as the freehold of The Bull Hotel in Dorset.

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TLA Worldwide PLC said it has been appointed the commercial agent for the USA v All Blacks fixture at Soldier Field, Chicago in November by USARugby. No financial terms of the deal were disclosed.

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Max Petroleum PLC said its ZMA-E7 development well in Kazakhstan's Zhana Makat Field has reached total depth and has successfully found an expected region of hydrocarbons. The Kazakhstan-focused oil and gas company said the well reached a depth of 997 metres and found hydrocarbons in Jurassic sandstone reservoirs. It will now complete the well and place it on production as soon as possible.

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Private & Commercial FinanceGroup PLC said its full-year pretax profit increased by half, driven by an increase in revenue, as the AIM-listed finance house grew its portfolio for the first time since the start of the financial crisis. It said work also is being done to obtain a deposit-taking licence that would allow the group to further boost its size. Chairman David Anthony said he is confident of further profit growth and said the group hopes to be in a position to declare a dividend after March 2015. In a statement, Private & Commercial Finance, which lends to consumers and businesses, said it made a GBP1.3 million pretax profit in the 12 months ended March 31, compared with GBP829,000 a year earlier.

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Escher Group Holdings PLC said it has secured a new contract with the Royal Gibraltar Post Office for the automation of Point of Service across its post office network. The contract is a six year license and will see Escher's Riposte solution automate retail services including mails, parcels, express mail services, redirection service, stamp sales, and post boxes.

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Tuesday's Scheduled AGMs/EGMs



Plethora Solutions

London & Associated Properties

Lamprell

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Source: Alliance News


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