News Column

UK WINNERS & LOSERS: Gowin New Energy Doubles As China Goes Green

June 30, 2014

James Kemp



LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Monday.

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FTSE 100 - WINNERS

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BAE Systems, up 1%. The defence company said it plans to reorganises its interests in Saudi Arabia into one company to enhance its working relationship with Riyadh Wings Aviation Academy LLC, its partner in the region. The two companies will bring together their training, electronics and IT systems engineering in Saudi Arabia into a single holding company, which will be majority owned BAE. Riyadh Wings will progressively acquire a 49% stake in the holding company which will be called OMC.



BP, up 0.6%. The oil giant has approached a US court seeking repayment from several companies part of the compensation they received related to the Gulf of Mexico oil spill. BP claims that these companies were allowed to inflate their losses by the administrator in charge of processing the claims.



Coca-Cola HBC AG, up 0.6%. The company, which is Europe's largest bottler of Coca-Cola products, said it intends to delist its American depositary receipts from the New York Stock Exchange, ending the programme because most trading of its shares takes place on the London Stock Exchange. The company said that the UK has become the main trading market for its shares, accounting for more than 85% of total volume in the 12 months ended June 18. In contrast, only 1.4% of its shares were held as ADRs at the end of that period, with trading volume in the US accounting for just 1.3% of the total.

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FTSE 100 - LOSERS

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EasyJet, down 5.2%. Bank of American Merrill Lynch has downgraded the company to Underperform from Neutral, lowering its price target by 36% to 1,150 pence from 1,800p.



Sports Direct International, down 2.8%. The UK's biggest sporting goods retailer by revenue said that it is not considering an offer to acquire UK footwear retailer, Office, following recent trade speculation. The company quashed the rumours, saying that such speculation was "unhelpful to the customers, staff, suppliers and other stakeholders of both companies."



TUI Travel, down 1.8%. The UK holiday operator's shares have given back some of their gains after a steep increase at the end of last week. The company's share price rose 3.5% on Friday after it said it had agreed to merge with its parent company TUI AG.



Lloyds Banking Group, down 1.3%. The company's private equity arm has turned down a takeover offer for part of its business, according to a Sky News report. Citing unnamed sources, the report states that Goldman Sachs recently proposed buying the London operation of Lloyds Development Capital. However, Goldman is not pursuing its interest in the business after its offer was rejected, while Sky News reported that a Lloyds spokesman denied it had any interest in offloading Lloyds Development Capital.



GlaxoSmithKline, down 0.8%. The investigation into allegations of bribery by Glaxo in China began with a sex tape involving the company's most senior executive in the country, Mark Reilly, the Sunday Times reported. The tape of Reilly and his Chinese girlfriend was attached to an email sent in March last year alleging that Glaxo was bribing doctors in China, the report said, and caused alarm at Glaxo.

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FTSE 250 - WINNERS

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Premier Oil, up 1.3%. The oil company has sold its non-operated interests in the producing Scott, Telford and Rochelle fields to MOL Group for a cash consideration of USD130 million. It said that MOL Group will assume the liabilities for future abandonment costs. The transaction, which comprises six UK North Sea licences, has an effective date of January 1, 2014 and is subject to certain pre-emption rights. Completion is subject to receipt of government approval, said the company. Year-to-date production at the Scott, Telford and Rochelle fields has averaged approximately 3,700 barrels of oil equivalent per year net to Premier.

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FTSE 250 - LOSERS

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FirstGroup, down 1.1%. The bus and rail company is set to face a backlash from investors over its annual remuneration report, led by Sandell Asset Management Corp., which said Monday that it intends to vote against the report due to concerns regarding corporate governance practices at the company. In a letter to FirstGroup's Chairman John McFarlane, Sandell Asset Management - which has an interest of approximately 3.1% in the company - said it will also encourage other shareholders to vote against FirstGroup's annual remuneration report, citing CEO pay and poor sector expertise as drivers behind this. Sandell's letter noted that FirstGroup's CEO remuneration package has risen 209% over the past five years and that Tim O'Toole is the highest paid CEO amongst his peers. However, during this five year period FirstGroup shares are the worst performing shares in its peer group, having returned -8% compared to +231% for its peers.

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AIM ALL-SHARE - WINNERS

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Gowin New Energy Group, up 99%. The China-focused company has seen its shares soar after reporting an increase in profit and revenue for 2013, boosted in part by the Chinese government's move to promote green energy. It posted pretax profit of CNY22.0 million for 2013, up from CNY6.2 million a year earlier, as revenue rose CNY161.6 million from CNY71.9 million following an increase in demand for LED outdoor-lighting products in China. Looking ahead Gowin said its expects continued growth in profits and revenues this year. It said at the end of the first quarter 2014, total sales, gross margins and net pretax profit grew year-on-year, fuelled particularly by local government contracts.



William Sinclair Holdings, up 29%. The horticulture products company's shares have moved sharply higher, even though it posted a widened pretax profit in its first half, after it said that it has reached a settlement over the buy-out of its land interests and peat extraction rights at Bolton Fell and the resultant closure of the factory at the site in Cumbria, northwest England. "This morning's interims from the company showing substantial pre-tax losses reflect challenging conditions combined with the seasonal pattern of the group whereby demand is seen for its gardening products from March/April onwards," says Nick Spoliar, an analyst at WH Ireland. However, "there is a notable piece of good news for the company," the analyst says. At GBP21.3 million, the settlement on Bolton Fell is higher than the GBP18 million to GBP20 million WH Ireland had been expecting.



LightwaveRF, up 21%. The company has signed a distribution agreement with Neonlite Electronic & Lighting (HK) Ltd to distribute its range of lighting controls across 84 countries. Neonlite will distribute the products under its Ingenium brand; and will manage the sales, marketing and branding of the product range. The company is initially targeting Germany and France, and expects to roll-out the product across Neonlite's full distribution network during 2015. LightwaveRF expects the agreement to substantially grow its existing volumes, it said.



Oxford Advanced Surfaces Group, up 16%. The technology developer has made its first commercial sale of its proprietary technology, Onto. The company said that an unnamed company placed an order for its EP1020 brush-coat product for adhesion promotion following a trial using the EP1000 evaluation pack. Oxford Advanced Surfaces said that whilst this was a one-off sale for a specific problem, it demonstrates the capabilities of Onto technology-based products. No financial details of the deal were disclosed.



Tiziana Life Sciences, up 11%. The company said it has entered into a license agreement with TTFactor Srl and the European Institute of Oncology to use twenty defined stem cell markers for breast cancer diagnosis. The stem cell markers form a model that can be used to predict the aggressiveness and course of the disease in patients. The inventor of the model, called the Top 20, is a consultant of Tiziana and member of its Scientific Advisory board. Under the deal, Tiziana will pay TTFactor, which is acting on behalf of the Italian Foundation for Cancer Research Institute for Molecular Oncology, EUR600,000 over 4 years to fund research into commercial products and services derived from the model. It will pay a royalty rate of 1.5% based on commercial sales of any products developed under the license agreement, in return for an exclusive licence to patents on the Top 20 genes.

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AIM ALL-SHARE - LOSERS

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Helius Energy, off 29%. The biomass-fired renewable energy generation company has warned that it still needs to secure additional funding to meet its working capital requirements, as it said its pretax loss narrowed slightly in the first half despite lower revenue and some higher expenses. It said its pretax loss narrowed marginally to GBP673,501 for the six months to end-March from GBP699,126 the previous year. The company said its revenues fell 25% to GBP110,316 from GBP145,935, due to reduced obligations as part of a deal at the Rothes whisky distillery, and both its administrative expenses and share-based payment costs increased. It said it is yet to secure financing for its major Avonmouth 100 megawatt biomass energy project, but it continues to make progress with the financing process, noting that it has progressed due diligence work with a group of banks to secure the debt financing required for the project.



Roxi Petroleum, down 22%. The company said it is yet to find any indications of oil in its secondary target in the Permian formation of its Airshagyl 5 deep well at the BNG contract area, Kazakhstan. In a statement prepared for its annual general meeting being held Monday, the oil and gas exploration and development company said the Airshagyl 5 well has been drilled to a depth of 4,236 metres and is yet to find oil. Its primary target is the Carboniferous formation, which is not expected to be reached until 4,390 metres, but its subsidiary target was supposed to be breached at 4,120 metres. The company said that due to high pressures and temperatures, drilling is going to continue at a slow pace on the Airshagyl 5 well towards its target depth of 4,700 metres.



Amur Minerals, down 13%. The nickel and copper exploration company's shares have fallen sharply even though it said its pretax loss narrowed slightly in 2013 as higher administrative expenses were offset by lower finance costs. The company, which is yet to produce any revenues, said its pretax loss narrowed to USD3.8 million from USD4.0 million the previous year. The company said an increase in administrative expenses was offset by a fall in its finance expenses, reducing its pretax loss.



Petro Matad, down 9.6%. The oil exploration company said its pretax loss narrowed in 2013, as expenses fell at the company, but it continues to struggle in its search for development partners for its operations in Mongolia. It aid its pretax loss narrowed to USD7.5 million from USD12.2 million the previous year. The company, which is yet to produce any revenue, said the reduction in losses resulted from reductions in its employee benefits expenses and in exploration expenditure. Petro Matad opened up a range of major fundraising and farm-out initiatives during 2013 in order to develop its exploration assets in Mongolia, but found that investors were unsure about its assets in the country and so not enough funding was raised to develop the sites significantly.

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Source: Alliance News


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