Thursday, October 22, 2009

LONDON Market Open Report (Thu, Oct 22, 2009)

London open: Miners drag Footsie lower
Miners are leading London’s blue chips lower in early dealings on Thursday after both Lonmin and Anglo American updated the market.

US blue chips also turned down sharply overnight as investors mulled another rush of third quarter earnings figures.

Over here, platinum miner Lonmin saw a 20% decline in production of the precious metal in the fourth quarter after having to shut down mines for safety reasons and for maintenance. The firm, which operates in South Africa, the source of most of the world’s platinum, mined 2.6m tonnes during the quarter.

Fellow mining giant Anglo American has announced plans to divest assets including its zinc and tarmac operations as it seeks to focus on its core operations.

Fresnillo, Xstrata, Kazakhmys and Antofagasta are also among the main fallers.

Bus and rail group National Express, which is facing a merger approach from rival Stagecoach, warned that full year pre-tax profits will be ‘slightly’ below previous expectations.

Aviva has announced that it is restructuring its European operations, turning its 12 separate continental businesses into a single pan-European unit.

Oilfield services firm Petrofac said it is increasingly confident that the group will deliver earnings growth for the full year of at least 20%.

Sportswear retailer Sports Direct still expects, at current exchange rates, to achieve underlying EBITDA of at least Ł150m this financial year. The sportswear retailer said trading continues to be in line with expectations.

Telecom operator Colt Telecom reported a 3.7% increase in quarterly EBITDA as revenue fell 4.9%. For the quarter ended 30 September 2009 EBITDA rose to €79.5m from €76.7m the same time a year before as demand improved in Data and Managed Services and as the group tightened costs.

Newspaper and magazine wholesaler Smiths News revealed a 44% drop in annual pre-tax profit after was hit by a number of charges but said revenue improved during the year.

In other news, a two-day national postal strike has begun this morning after the union and Royal Mail failed to sort out their differences.

Up to 42,000 mail centre staff and drivers have launched a 24-hour strike on Thursday, with around 78,000 delivery and collection workers set to take action on Friday.

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