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Sep 20, 2012

The Economist | Politics This Week: Highlights of News Coverage from September 15th - 21st. 2012

The EconomistPolitics this week

China's vice-president, Xi Jinping (who has reappeared in public after an unexplained two-week absence), said that Japan should "rein in its behaviour" and stop "undermining Chinese sovereignty" in regard to the disputed Senkaku islands, which China calls the Diaoyu. His comments followed days of violent anti-Japanese protests in China. Mr Xi, who is likely to be China's next president, also described Tokyo's recent purchase of the islands from private owners as "a farce". See article
China linked Bo Xilai, a fallen former member of the Politburo, to a criminal act for the first time. The Xinhua news agency quoted witnesses at the trial of his former right-hand man, Wang Lijun, suggesting that he had tried to tell Mr Bo about suspicions that Mr Bo's wife had murdered a British businessman. Xinhua reported that Mr Wang was "angrily rebuked and had his ears boxed" by Mr Bo.
India's coalition government faced a backlash and a day-long strike by unions after it ended months of drifting and decided to loosen some restrictions on competition from foreign firms. One of the reforms would allow global retailers, such as Walmart, to enter the market, which small shop-owners say will put them out of business. A junior political party looked set to storm out of the coalition. See article
Aung San Suu Kyi, the Burmese opposition leader, visited America and called for a further easing of sanctions against Myanmar's government. Hillary Clinton, America's secretary of state, met Miss Suu Kyi and afterwards warned Myanmar's government against any "backsliding". Western sanctions have already been loosened, but many still remain in place. See article
Australian members of Parliament rejected a bill that would have legalised gay marriage, by 98 to 42 in the House of Representatives. Julia Gillard, the prime minister, and Tony Abbott, the leader of the opposition, both voted against it. Though gay marriage is not permitted, some Australian states do allow civil unions.

Creative destruction
Republicans winced as Mitt Romney's presidential campaign went decidedly off message. A tape emerged of the candidate speaking at a donors' event, where he disparaged "47%" of Americans for paying no income tax and having a "victim" mentality that makes them "dependent" on the government. Mr Romney also said that the Palestinians are incapable of making peace, a sharp difference from official American policy. See article
Teachers in Chicago returned to work after a week-long strike against reforms proposed by the mayor, Rahm Emanuel. Mr Emanuel won a longer school year, but failed to tie teachers' pay more closely to performance.
An official state board in Kansas scrapped its inquiry into whether Mr Obama qualified for the ballot in November's election. The review had been set up in response to complaints from "birthers", who still refuse to believe that Mr Obama was born in the United States. The president's name will now appear on Kansan ballot papers.

And on and on…
Heavy fighting continued in Syria's capital, Damascus, and in its second city, Aleppo. Human-rights groups and a UN report accused the regime of war crimes, but also said that opposition fighters were committing some atrocities. See article
The Shabab, an al-Qaeda-linked militia that used to dominate Somalia, was reported to be withdrawing from the port city of Kismayo, its last stronghold. 
Workers at the Marikana mine in South Africa, which is owned by Lonmin, a big platinum company, signed a deal that ended a six-week wildcat strike that has left 45 people dead. Miners will get a pay increase of between 11% and 22%, along with a one-off bonus of 2,000 rand ($240). See article
In Senegal MPs voted to abolish the country's Senate to pay for recent deadly floods. The opposition said it would be weakened, as most of the senators supported the former president.

Safety last
In Mexico an explosion and fire at a gas plant in the northern state of Tamaulipas killed 26 workers. The plant belongs to Pemex, the state oil monopoly, which has a poor safety record, exacerbated by the illegal tapping of pipelines by criminal gangs.
Also in Mexico, 131 prisoners escaped through a tunnel from a prison at Piedras Negras, close to the border with Texas. See article
Daniel Barrera, who is said by authorities to be Colombia's leading drug-trafficker and to export cocaine for the FARC guerrillas, among others, was arrested in Venezuela. 
The Canadian Auto Workers Union reached a tentative agreement on a four-year labour contract with Ford, averting a strike that might have spread to other carmakers in Canada. The deal cuts pay and benefits for some workers, but guarantees jobs at a time when Canada's car industry has been shrinking.

But what about free speech?

A French satirical magazine published a series of cartoons mocking the Prophet Muhammad, setting off a new wave of outrage among Muslims and condemnation from French leaders. The cartoons were published in spite of widening unrest over an American amateur video that has provoked violence throughout the Islamic world. France stepped up security measures at its embassies and cultural centres in 20 countries as a precaution.
The Russian government gave the American agency for international development until October 1st to cease all operations in the country. USAID helps fund several pro-democracy and human-rights groups. This has provoked the Kremlin, which accuses America of using its aid agency in Moscow to influence Russian politics. See article
The European Commission proposed capping the use of biofuels to 5% of all transport fuel, rather than raising the benchmark. This comes after a campaign by poverty groups, which argue that farming crops for fuel rather than food is a big factor behind rising food prices. 
Eleven European Union foreign ministers, led by Germany's Guido Westerwelle, called for greater economic, political, diplomatic and military integration. Britain's foreign secretary is excluded from the group of ministers. See article

The Economist | Business This Week: Highlights of News Coverage from September 15th - 21st 2012

The EconomistBusiness this week

» The Bank of Japan surprised markets by increasing the size of its asset-buying programme by ¥10 trillion ($128 billion). The programme now runs to ¥80 trillion and will continue for a further six months, to the end of 2013. Japan's move came less than a week after the Federal Reserve announced another round of quantitative easing, committing to buy $40 billion of mortgage-backed securities a month, and, for the first time, promising to keep on buying assets until the recovery is firmly established. It also extended its policy of keeping short-term interest rates near zero until at least mid-2015.

The gold bug

» With the central banks of Japan, America and the euro zone all loosening monetary policy (and the Bank of England expected to follow), gold prices hit six-month highs as investors turned to the metal, which is seen as a hedge against inflation.
» Russia's Central Bank sold a 7.6% stake in Sberbank, the country's biggest lender, in a long-awaited share offering on the London and Moscow stock exchanges. It was the biggest sale of assets in Russia's privatisation programme for 18 months, raising $5.2 billion. The Central Bank will still hold a majority stake in Sberbank, of 50% plus one share.
» The chief financial officer at Goldman Sachs decided to retire. David Viniar is a respected veteran of the bank who held the job for 12 years, longer than any other CFO currently on Wall Street. He is stepping down during a period of relative calm at Goldman; last month the SEC dropped its inquiry into the bank's marketing in 2006 of subprime-mortgage investments. Goldman's new financial boss is Harvey Schwartz, who has been helping to run the bank's securities division.
» Japan Airlines returned to the stockmarket for the first time since the end of its nearly three years under bankruptcy protection. Its share price took off slowly, rising by 1% on the first day of trading.

The hottest ticket in town
» Philip Anschutz put the entertainment division of his business empire up for sale. AEG is the world's second-biggest promoter of live events and its long list of assets include Los Angeles's Staples Centre arena, LA Galaxy football (soccer) club, a stake in the Lakers basketball team and the O2 concert venue in London. Any deal is likely to be one of the biggest ever in the sports and entertainment industry.
» Ofcom, Britain's communications regulator, ended its investigation into Sky television that was triggered by the phone-hacking scandal at Rupert Murdoch's British newspapers. Mr Murdoch's News Corporation holds a 39% stake in Sky; his attempt to take full control was met with stiff resistance, and a committee of MPs pronounced that he was "not a fit person" to run a global business. But using its legal standard, Ofcom's report concluded that Sky is indeed a "fit and proper" broadcaster.
» Heineken came a step closer to winning its bid to take control of Asia Pacific Breweries, after a Thai beer magnate dropped his opposition to a deal. Asia Pacific brews some of the most popular beers in fast-growing South-East Asia, including Anchor and Tiger, and recently expanded its business in Mongolia.
» America filed another complaint against China at the World Trade Organisation, this time alleging that export subsidies to its car industry are illegal. China responded by lodging a grievance over what it claims are illicit American tariffs on its goods. America's announcement came during a campaign visit by Barack Obama to the carmaking heart of the Midwest. See article»
» Alibaba, a giant Chinese e-commerce firm, said it had bought back around half of the 40% stake held in it by Yahoo!. The $7.6 billion deal was trailed earlier this year and paves the way for an IPO by Alibaba, when it might try to buy back some, or all, of Yahoo!'s remaining holding.
» It emerged that Square, the latest hot Silicon Valley start-up, is valued at around $3.3 billion, following its latest round of financing. Led by Jack Dorsey, who helped set up Twitter, Square has pioneered mobile-payment systems for smartphones, but it has rivals in this fast-developing market, including Google and PayPal.
» Pre-orders for Apple's iPhone 5 smashed the company's previous sales record, with more than 2m people placing reservations for the device. Apple's share price closed above $700 for the first time.

Expanding its global presents
» Ludendo, a French retail group, bought Hamleys,a 250-year-old British toyshop business. Hamleys is currently majority-owned by Landsbanki, a failed Icelandic bank. Its flagship London store is popular with tourists; now Hamleys is hoping to increase its international business.

NYT Dealbook Afternoon Edition -September 20, 2012-: Standard Deduction: A Strategy of Tattletales at the I.R.S

Thursday, September 20, 2012
Standard Deduction: A Strategy of Tattletales at the I.R.S. Victor Fleischer says that enforcement of tax laws requires finding a fair and effective way to overcome the information asymmetry between taxpayers and the I.R.S. But whistle-blowers are only one approach.
    In Calls for Market Reform, Multiple Voices A number of events in Washington this week put the spotlight on high-frequency trading, the proliferation of new exchanges and other concerns about the structure of the market.
    In Debt: Cheap Loans Could Spell Long-Term Headaches Stephen J. Lubben says that low interest rates have led many corporations to load up on debt, but this could lead to a flood of bankruptcies once maturities hit.
    Pawlenty to Become Wall Street Lobbyist Tim Pawlenty, the former Republican governor of Minnesota, was named chief executive of the Financial Services Roundtable on Thursday, replacing Steve Bartlett.
    Trulia Jumps 30% in Debut Trulia, the real estate information site, rose 30 percent in its debut to open at roughly $22, defying the recent lackluster performance of newly public stocks.
    Valuing What Anschutz Entertainment Might Be Worth News that the Anschutz Entertainment Group is being put up for sale sent the sports and entertainment worlds buzzing madly late on Tuesday. But what exactly would any prospective buyer be getting for what will likely be a multibillion-dollar purchase?
    Peugeot in Talks to Sell Logistics Business PSA Peugeot Citroën said that it was negotiating to sell its Gefco logistics business to J.S.C. Russian Railways as the French automaker struggles to stay afloat in a faltering European car market.
    Jefferies Shares Fall on Tough 3rd-Quarter Results Shares in the Jefferies Group plunged more than 6 percent on Thursday, as the firm reported earnings bolstered mostly by its new stake in the Knight Capital Group.
    Liberty Bids $2.5 Billion for Rest of Belgium's Telenet Liberty Global, the media company controlled by John C. Malone, offered on Thursday to buy the roughly half of Belgium's Telenet Group Holding that it did not already own for about $2.5 billion in cash, as it continues its push into Europe.
    Corporate Earnings Companies releasing results on Friday include Darden Restaurants and KB Home.

    DealBook Video
    Business Day Live: Pension Funds at Center of Labor Crisis
    Business Day Live: Pension Funds at Center of Labor Crisis At the center of labor disputes, a fight for the future of pensions. | The travel industry finds new ways to tack fees onto your trip.


NYT Afternoon Update -September 20, 2012-: Libya Envoy's Killing Was a Terrorist Attack, White House Says

The New York Times
September 20, 2012

Afternoon Update


Libya Envoy's Killing Was a Terrorist Attack, White House Says

The White House, after Republican criticism, said it was "self-evident" that last week's assault on the American diplomatic facility in Benghazi, Libya, was a "terrorist attack."

Heavy Casualties Reported in Syria Warplane Attack on Gas Station

At least 30 people, and as many as 100, were killed in Syria on Thursday in the northern Raqqa Province, when government warplanes bombed a gasoline station crowded with people, according to activist groups.

British Regulator Declares BSkyB 'Fit and Proper'

The announcement about Britain's biggest satellite pay-TV group, British Sky Broadcasting, offered a victory for its largest shareholder, Rupert Murdoch's News Corporation.

Tax Credit in Doubt, Wind Power Industry Is Withering

The American wind sector has been buffeted by weak demand for electricity, stiff competition from gas and uncertainty over a tax credit that has become a campaign wedge issue.

Jury Convicts Amish Group of Hate Crimes

A federal jury found Samuel Mullet Sr., the leader of a renegade Amish sect, and 15 followers guilty of conspiracy and hate crimes in a series of beard- and hair-cutting attacks in Ohio.

Video: TimesCast Politics | Sept. 20, 2012

A rough few weeks for Romney. | Voices of Wisconsin voters. | Romney's smaller than expected bank account. | The White House mixes politics and policy.

Opinionator | Townies

Jersey City, a Love Story

I had bangs and a publishing job. And I had been caught red-handed doing something ironic with a cupcake.

In Britain, Spending Outpaces Austerity

The desires of the British prime minister to cut the budget deficit are running up against a situation created over decades: the large number of public entitlements.
Euro Watch

Spanish Bond Sale Succeeds as Data Show Euro Zone Slump Accelerating

A sale of long-term debt met with high demand even after a report showed manufacturing activity slowing in the 17-nation currency zone.

Trulia Jumps 30% in Debut

Trulia, the real estate information site, rose 30 percent in its debut to open at roughly $22, defying the recent lackluster performance of newly public stocks.

Apple's iPhone Update Leaves Out Google's Maps

Early reviewers criticized the new Apple Maps app, saying it botched simple searches and did not come with information about public transportation.

Wal-Mart Will Stop Selling Kindles

Wal-Mart Stores Inc. is phasing out the sale of's Kindle Fire tablet and Kindle e-readers, the second major retailer to stop offering the items in six months.

CBS NEWS | Political Hotsheet Top Stories -September 20, 2012-: Romney makes renewed Medicare push

The CBS News Political Hotsheet newsletter


With polls showing Obama leading on Medicare, Romney goes on offense
Read full story
Romney makes renewed Medicare push

Pawlenty leaving Romney campaign Tim Pawlenty is stepping down a national co-chair of Mitt Romney's campaign for president

Does Romney really hate redistribution? Mitt Romney is railing against redistribution despite its central place in the American system

Romney: 'My campaign is about the 100 percent' Republican presidential candidate addresses "47 percent" fundraiser comments, immigration at Univision forum

Harry Reid unloads on Romney over The Senate Majority Leader attacked Romney on Wednesday for saying 47 percent of Americans consider themselves "victims"

Money Show Investors Daily Alert -September 20, 2012-: How to Keep Your Head in Crazy Markets :

Investors Daily Alert

The Daily Guru

No-Nonsense Investing

Jim Jubak on

Today's Top Pros' Top Picks
Finally, It's Time to Buy, Mary Anne & Pamela Aden

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GATA | THE GATA DISPATCH -September 20, 2012-: Next move in gold will be big, Hinde Capital's Davies tells King World News

Next move in gold will be big, Hinde Capital's Davies tells King World News

2:30p ET Thursday, September 20, 2012
Dear Friend of GATA and Gold:
As currency debasement increases, gold will be the only collateral to survive in the world financial system, Hinde Capital CEO Ben Davies tells King World News today. Government intervention against gold will be overwhelmed by the market at some point, Davies says, and the market seems short right now. His gold price target for the next move is. ... Well, it's a big target, so why spoil the fun? An excerpt from the interview is posted at the King World News blog here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

BIV Today's Business News -September 20, 2012-: Savvy miners seek M&A opportunities despite market turmoil

Human Resources

Christy Clark and BC Jobs Plan

B.C. launches jobs plan to align training with economic growth

A comprehensive plan to expand skills training programs and align them with economic opportunities across the province was announced yesterday by Premier Christy Clark.

CFOs expect modest hiring increases, business confidence improving

Staffing levels in accounting and finance are projected to increase slightly in the fourth quarter, according to 270 Canadian CFOs interviewed for the Robert Half Financial Hiring Index.

Retail and Manufacturing


B.C. organic cereal official snack for space station

First an appearance on Dragon's Den got it onto the launch pad; now an organic cereal made in B.C. will literally take off into space for snacking on by astronauts on the International Space Station.

Richmond ginseng grower dissolves company

A Richmond company that grew ginseng in Ontario is dissolving, thanks to losses from low ginseng prices in Asia.



Buying eggs in U.S. is no yolk to B.C. producers

B.C. egg producers are appealing to cross-border shoppers to stop buying eggs during their shopping sprees in the U.S.

Mining and Energy


Savvy miners seek M&A opportunities despite market turmoil

According to the new Mining Deals report from PwC, despite the marked slowdown in mergers and acquisitions (M&A) in the first half of 2012 at the hands of global economic uncertainty and lowered commodity prices, miners with cash are taking advantage of lower valuations by entering M&A discussions and finding creative ways to fund projects.

MarketWatch | Stocks and Markets in the News: Wall Street at Close Report -September 20, 2012-.

 By Deborah Levine 

SAN FRANCISCO (Marketwatch) -- U.S. stocks ended mixed on Thursday, with the Dow Jones Industrial Average DJIA +0.14% turning up late in the session to end at 13,596.93, up 18.97 points, or 0.1%. The S&P 500 Index SPX -0.05% ended down a fraction of a point at 1,460.26, after falling as low as 1,449.93 early in the trading day. The Nasdaq Composite Index declined 6.66 points, or 0.2%, to 3,175.96.


NYT Opinion Today -September 20, 2012-: I Know Why The Caged Bird Shrieks

The New York Times

September 20, 2012

Opinion Today

Campaign Stops

I Know Why The Caged Bird Shrieks

As a presidential candidate, Mitt Romney has lost himself. Co-opted convictions will always betray you.
Happy (Un)constitution(al) Day

Happy (Un)constitution(al) Day

Has the Supreme Court's recent decision in the Affordable Care Act case made Constitution Day unconstitutional?
Op-Ed Contributor

When Flexibility Hurts

The flawed incentives that guide businesses' employment practices hurt women at both ends of the labor market.

Money Show Traders daily Alert -September 20, 2012-.: Candle Chart Signals Market Top

Traders Daily Alert

Tips for Traders

Options Idea

Charts in Play

Currency Corner

Trading Idea of the Day

Today's Featured Videos & Exclusive Interviews

ADVFN III Evening Euro Markets Bulletin -September 20, 2012-.

ADVFN III Evening Euro Markets Bulletin
Daily world financial news

Thursday, 20 September 2012

London Market Report
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Losses pared but miners are hit hard

Market Movers
techMARK 2,128.73 -0.35%
FTSE 100 5,854.64 -0.57%
FTSE 250 11,928.98 -0.38%
Losses were pared in the final 90 minutes of trading in London on a day when investors fretted about a slow-down in the global economy.

Disappointing Chinese manufacturing data was released overnight, and the news was not good. China´s manufacturing sector Purchasing Manufacturers' Index (PMI) for the month of September came in at 47.8, after 47.6 in August, for its longest streak below the 50 point threshold – which indicates economic contraction – in eight years.

Closer to home, UK retail sales fell by 0.2% in August, slightly less than the 0.3% fall expected by economists. In year-on-year terms total retail sales grew by 2.7% (Consensus: 2.9%), which was not such good news for retailers, and neither was the fact that the previous month´s year-on-year reading was revised down to show a rise of only 2.3%, instead of the preliminary estimate of 2.8%.
Capital punishment
Capital Shopping Centres (CSC) is to tap the bond market to refinance its short-term borrowings and top up its war-chest. The shares dived after the group said it is offering £300m of senior unsecured convertible bonds due 2018. The bonds will have a coupon of 2.50% and an initial conversion price of 437.52p.

Online grocer Ocado was on offer after an underwhelming trading update. The firm said gross sales increased 9.9% in the 12 weeks to August 5th 2012 and that it expects an increase in the rate of sale growth in the fourth quarter.

Year-to-date gross sales growth to the end of the third quarter was 11.3%. Analysts at Panmure Gordon reckon the company may breach its net debt to EBITDA (earnings before interest, tax, depreciation and amortisation) covenant this year. They add that: "although we now believe that Ocado's days as a public company are limited, we don't think that the equity is worth very much."

Food and drink wholesale group Booker Group reported a 4.3% year-on-year rise in total sales in the 12 weeks to September 14th, with non-tobacco sales 3.9% higher, while tobacco sales rose by 5.1%.

On a like-for-like (LFL) basis, total sales rose by 4.4%, non-tobacco sales by 3.8% and tobacco sales by 5.4%. Peel Hunt had forecast LFL non-tobacco sales growth of 4.0%, which might account for why the shares lost a little ground.
Miners man the barricades
The Chinese PMI manufacturing data hit mining stocks hard. BHP Billiton, meanwhile, has confirmed it is to cease studies into the expansion of its Red Hill coal asset in central Queensland. The decision should not come as too great a surprise as the group announced on August 22nd that it would delay a number of project expansions because of current market conditions.

In South Africa, mining giant Anglo American Platinum (Amplats) has reported poor attendance at its Rustenburg process operations since it re-opened on Tuesday following a temporary halt to operations amid a wave of labour unrest that has hit the mining industry in South Africa in recent weeks.

The firm announced on Wednesday that the current industrial action is illegal and said it has given notice to its employees that they are required to return to work by Thursday's night shift.

Press reports suggest that striking miners remain defiant and have formed a barricade of burning tyres in a street near the mine.

There was better news at Lonmin as strikers returned to work after a pay settlement was agreed earlier this week, but the market appears not to like the terms of the agreement, as Lonmin's shares were among the hardest hit in the sector.

In other company news, Imperial Tobacco's operational performance in the year ended September 30th has been in line with its expectations. Tobacco net revenues are expected to be up by around four per cent with particularly good performances in its Eastern Europe, Africa & Middle East and Asia-Pacific regions. However, stick equivalent volumes are expected to decline by up to three per cent, the majority of which is due to ongoing market weakness in Ukraine and Poland and compliance with international trade sanctions against Syria.

BSkyB has said it welcomes an announcement by Ofcom that Sky "remains a fit and proper holder of its broadcasting licences".

Utility company United Utilities remains confident of delivering its 2010-15 regulatory out-performance targets after a solid start to the current financial year. Revenue in the year to the end of March 2013 should be higher than last year, but, as expected, the increase is slightly below the allowed regulated price rise, principally reflecting the ongoing impact of customers switching to meters and continued lower commercial volumes.
Other markets
The price of Brent crude bounce back today, with the most widely traded contract rising $1.46 to $109.65 a barrel. Gilts were in favour, as investors deserted equities. The yield on the benchmark 10-year gilt eased to 1.80% from 1.85% overnight. Yields move inverseley to prices.

FTSE 100 - Risers
Imperial Tobacco Group (IMT) 2,399.00p +2.70%
International Consolidated Airlines Group SA (CDI) (IAG) 158.80p +2.32%
ITV (ITV) 91.15p +1.84%
Ashmore Group (ASHM) 343.00p +1.33%
Amec (AMEC) 1,143.00p +1.06%
Marks & Spencer Group (MKS) 371.40p +1.01%
SABMiller (SAB) 2,725.00p +1.00%
British Sky Broadcasting Group (BSY) 734.00p +0.96%
WPP (WPP) 868.50p +0.93%
Diageo (DGE) 1,720.00p +0.70%

FTSE 100 - Fallers
Evraz (EVR) 260.80p -6.02%
Anglo American (AAL) 1,944.00p -4.42%
Capital Shopping Centres Group (CSCG) 332.40p -4.10%
Eurasian Natural Resources Corp. (ENRC) 343.60p -3.86%
Kazakhmys (KAZ) 724.50p -3.40%
Rio Tinto (RIO) 3,077.00p -2.67%
Vedanta Resources (VED) 1,054.00p -2.41%
Shire Plc (SHP) 1,832.00p -2.40%
BHP Billiton (BLT) 1,954.50p -2.27%
Burberry Group (BRBY) 1,037.00p -2.17%

FTSE 250 - Risers
Perform Group (PER) 390.00p +4.84%
Petra Diamonds Ltd.(DI) (PDL) 107.10p +4.49%
Ashtead Group (AHT) 338.80p +3.20%
Halma (HLMA) 448.50p +3.10%
Drax Group (DRX) 515.00p +2.18%
Ladbrokes (LAD) 185.90p +2.14%
Greene King (GNK) 606.50p +2.02%
BBA Aviation (BBA) 205.40p +1.99%
Phoenix Group Holdings (DI) (PHNX) 520.00p +1.76%
Rathbone Brothers (RAT) 1,348.00p +1.74%

FTSE 250 - Fallers
Bumi (BUMI) 250.10p -11.31%
Lonmin (LMI) 610.50p -6.29%
Essar Energy (ESSR) 118.20p -5.52%
Chemring Group (CHG) 343.00p -4.88%
Imagination Technologies Group (IMG) 511.50p -4.21%
Ocado Group (OCDO) 64.40p -4.17%
Ferrexpo (FXPO) 209.80p -3.89%
Talvivaara Mining Company (TALV) 169.10p -3.76%
Aquarius Platinum Ltd. (AQP) 45.00p -3.74%
Homeserve (HSV) 217.00p -3.73%

FTSE TechMARK - Risers
Filtronic (FTC) 44.88p +5.28%
Pace (PIC) 164.25p +4.95%
Xaar (XAR) 245.00p +4.26%
Ricardo (RCDO) 369.75p +3.28%
BATM Advanced Communications Ltd. (BVC) 16.25p +3.17%
Ark Therapeutics Group (AKT) 3.35p +2.29%
Optos (OPTS) 170.00p +1.80%
Timeweave (TMW) 22.50p +1.12%

FTSE TechMARK - Fallers
AEA Technology Group (AAT) 0.055p -8.33%
RM (RM.) 78.00p -4.29%
Promethean World (PRW) 23.00p -4.17%
XP Power Ltd. (DI) (XPP) 1,012.00p -3.62%
Antisoma (ASM) 1.65p -3.52%
Oxford Biomedica (OXB) 2.44p -2.40%
Phoenix IT Group (PNX) 144.50p -2.20%
Emblaze Ltd. (BLZ) 47.00p -2.08%

European Market
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European Markets Declined On Weak Economic Data

The European markets finished in negative territory Thursday, largely due to weak economic results from around the globe. The lackluster Chinese manufacturing data got the markets off to a weak start. European data also failed to impress investors, followed by the release of the U.S. weekly jobless claims in the afternoon, which came in above expectations. Energy stocks were under pressure due to falling oil prices, while miners and banks were also weak.

An indicator of China's manufacturing performance rose marginally in September from August's nine-month low, but continued to suggest deterioration in activity with production falling at the fastest pace in ten months. Flash results of a survey by Markit Economics and HSBC revealed Thursday that the purchasing managers' index (PMI) rose to 47.8 in September from 47.6 in August.

The European Central Bank's new government bond purchase program may last only for a few years, ECB Governing Council member Christian Noyer told Frankfurter Allgemeine Zeitung in an interview published Thursday.

Noyer, who heads the Bank of France, said he hoped that the impact of the program would be felt very quickly. "I would be surprised if such a program" is in place for several years, he told the magazine.

The European Union's Internal Market Commissioner Michel Barnier reportedly said on Thursday that he will work to find a compromise with Germany on the proposal for a banking union.

Banks' shareholders must be ready to take on more risk in banking operations without burdening the government and the tax payers, European Central Bank Governing Council member Erkki Liikanen said in an interview to newspaper Demokraatti.

It is the task of the shareholders and investors to ensure that the banks operate in such a way as to avoid losses, Liikanen, who heads the Bank of Finland, said.

Spain conducted a successful bond auction on Thursday, with borrowing costs falling amid hopes the country will request aid paving the way for the European Central Bank to purchase sovereign debt.

In the first bond auction held by Spain after the European Central Bank announced its new bond purchase plan earlier this month, the treasury raised EUR 4.8 billion from the sale of its benchmark 10-year bond and a new 3-year bond. The target set for the sale was between EUR 3.5 billion and EUR 4.5 billion.

The yield on the January 2022 bond dropped to 5.666 percent from 6.647 percent paid in the previous sale on August 2.

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.62 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.15 percent.

The DAX of Germany dropped by 0.02 percent and the CAC 40 of France finished lower by 0.62 percent. The FTSE 100 of the U.K. fell by 0.57 percent and the SMI of Switzerland decreased by 0.22 percent.

In Frankfurt, Commerzbank fell by 4.51 percent and Deutsche Bank lost 1.44 percent. Deutsche Bank confirmed that it reached agreement to sell private bank unit BHF-BANK to Kleinwort Benson Group, a unit of Belgium-based financial services group RHJ International, for 384 million euros.

BMW and Volkswagen finished down by 3.24 percent and 0.53 percent. Shares of Daimler declined by 2.22 percent. Daimler has said that it sees increasingly difficult market conditions in Europe.

Hawesko Holding decreased by 1.22 percent, after Berenberg started the stock with a "Hold" rating. Sky Deutschland climbed by 1.12 percent, after Barclays initiated the stock with an "Overweight" rating. Sartorius gained 1.52 percent, after Berenberg initiated the stock with a "Buy" rating.

In Paris, Total declined by 1.59 percent, amid falling oil prices. Renault dropped by 2.12 percent and Peugeot fell by 3.29 percent. Peugeot announced exclusive negotiations to sell 75 percent interest in its Gefco trucking unit to JSC Russian Railways for 800 million euros. The sale is aimed at reducing debt.

BNP Paribas fell by 1.54 percent, Societe Generale lost 2.26 percent and Credit Agricole closed lower by 1.09 percent.

Miners are notably lower in London. Rio Tinto declined by 2.67 percent and Eurasian Natural Resources fell by 3.86 percent. Anglo American dropped by 4.42 percent, Kazakhmys decreased by 3.40 percent and BHP Billiton lost 2.28 percent.

Imperial Tobacco increased by 2.70 percent. The company expects to report about 4 percent rise in fiscal 2012 tobacco net revenues at constant currency.

US Market Report
Stocks Stage Recovery Attempt After Seeing Early Weakness

Stocks have shown a notable recovery attempt over the course of the trading day on Thursday after coming under pressure early in the session. The rebound was partly due to the release of relatively upbeat manufacturing data.

The major averages have climbed well off their worst levels of the day but currently remain stuck in the red. The Dow is down 8.09 points or 0.1 percent at 13,569.87, the Nasdaq is down 10.18 points or 0.3 percent at 3,172.44 and the S&P 500 is down 3.22 points or 0.2 percent at 1,457.83.

The early weakness on Wall Street came on the heels of the release of a Labor Department report showing that jobless claims came in above estimates in the week ended September 15th.

While jobless claims edged down to 382,000 from the previous week's revised figure of 385,000, economists had expected jobless claims to drop to 373,000 from the 382,000 originally reported for the previous week.

Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, the labor market still can't gain any lasting traction in light of the obvious economic challenges."

Selling pressure was relatively subdued, however, as traders remained reluctant to make any significant moves amid uncertainty about the near-term outlook for the markets.

The subsequent recovery attempt was partly due to the release of a report from the Philadelphia Federal Reserve showing that its index of regional manufacturing activity rose by much more than expected.

The Philly Fed said its diffusion index of current activity rose to a negative 1.9 in September from a negative 7.1 in August, although a negative reading still indicates a contraction in regional manufacturing activity.

Among individual stocks, shares of Adobe Systems (ADBE) have moved higher even though the publishing and design software developer reported weaker than expected third quarter revenues and forecast fourth quarter results below analyst estimates.

Denbury Resources (DNR) is also posting a notable gain after announcing an agreement to sell its Bakken assets in North Dakota and Montana to Exxon Mobil (XOM) for $1.6 billion in cash

Meanwhile, Bed Bath & Beyond (BBBY) has come under pressure after the home furnishings retailer reported second quarter earnings that rose year-over-year but still came in weaker than expected.

Broker tip
Analysts at WH Ireland have issued a bullish note on Gulf Keystone Petroleum this morning.

The broker highlights the recent positive news-flow on the company –including the apparent resolution of the stand-off between authorities in Baghdad and Erbil and the construction of a new pipeline through Turkey- along with several other factors as possibly heralding a move by the company into the main FTSE index, from AIM.

As regards the latter factors WH Ireland highlights the fact that: “The company is on track to achieve 150,000bpd by 2015 and importantly has an array of funding options at its disposal to fund development including the sale of its 20% working interest in the Akri-Bijeel block, debt options and with early production from Shaikan set to reach 40k barrels per day by the first half of 2013 and this could provide valuable cash flows (assuming Baghdad continues payments).

These analysts also hold out the possibility that the company might yet be “taken-out.”

We maintain our BUY recommendation and target of 315p which implies a healthy 26% upside from here and reiterate our 450p take-out target, they conclude.

After a strong run in the share price, passing their target on the way, analysts at Panmure Gordon believe it is time to lock in some profits on Wolseley.

Hence, they cut their recommendation from Buy to Hold, while maintaining their 2500p target.

Their forecasts for a fiscal year 2012 earnings per shares (EPS) of 162p, versus a consensus estimate of 160p, and a fiscal year 2013 EPS of 184p (Consensus: 183p) imply a calendar 2012E price-to-earnings multiple of 16x falling to 14x. That compares with its near UK peers on circa 11x, although Home Depot appears to be on 18x.

Nevertheless, the broker admits that the company´s shares offer a sound long-term investment case. Panmure thus adds that: “We have been impressed with the action taken by management in recent years, with many of its problem businesses sorted out. The 63%/37% North America/Europe split is still an attractive “mix,” until signs of a stronger European recovery emerge.”

In a research not sent to clients this morning analysts from Seymour Pierce indicate that they will be closely watching for the success –or not- of real estate investment trust (REIT) Capital Shopping Centres´ just announced debt issue.

In their own words, the transaction “ to the proliferation of debt and equity raises in the sector.” More specifically, they point out how the terms offered are somewhat higher than those offered by British Land in a recent debt sale of its own.

As well, Seymour Pierce adds that: “Given the equity yield of 4.4%, and that CSCG is trading at an 11.3% discount to its June 30 2012 net asset value of 390p, the success of the issue is purely predicated on debt funds which have to deploy into the debt or convertible market rather than investors with a choice between debt and equity.”

“If the issue is successful and the other equity divestments occur we believe this may be very good news for the group as it would go a long way to rectifying the core financing problems of the group which we have regularly highlighted. The shares should react positively to the success of the issue and we will be reviewing our forecasts once the outcome has been published.”

Seymour Pierce currently has a “reduce” on shares of Capital Shopping Centres and a target of 327p.