LONDON Pre-Market Report (Mon, Oct 12, 2009, )

Davies and Bishop withdraw from race for ITV role

London open

City sources predict FTSE 100 will open around 24 points up from its previous close of 5,162.

Stocks to watch

The long running soap opera revolving around the chairman role at TV broadcaster ITV took another twist on Monday morning as two candidates withdrew from the running. Former Reed Elsevier boss Sir Crispin Davies and former BMI boss Sir Michael Bishop, have both recently ruled themselves out of the race for the chairman role. In the meantime, current chief operating officer, John Cresswell, has agreed to act as interim chief executive officer (CEO) but has said he will be off as soon as the company appoints a permanent CEO.

Troubled sportswear group JJB Sports has confirmed plans for a rights issue to raise Ł100m are now back on track after it suspended the cash call on Friday after rumours surrounding executive chairman David Jones. JJB added that it has received expressions of interest for three times the Ł100m it intends to raise during pre-marketing last week.

Diversified miner Xstrata has agreed to sell its 70% interest in El Morro, which operates a copper-gold mine in Chile, to gold miner Barrick Gold for $465m. Xstrata chief executive Charlie Sartain said the project, which is also known as El Morro, would create more value as part of Barrick’s portfolio.

In the Press

A fire sale of public assets will be announced by Gordon Brown today to help cut the Government's mounting deficit. The Tote, the Dartford crossing, the student loan book, the Channel Tunnel rail link and the Government's stake in Urenco, which enriches uranium for nuclear power stations worldwide, will all be offered to private bidders in the next two years, in an attempt to raise Ł3bn, the Independent reports.

Barclays is planning to spin off a Ł4bn portfolio of complex credit assets as the bank presses ahead with a process to clean up its balance sheet and ease shareholder concerns over its investments. The bank is looking at a deal to shift up to Ł4bn of the assets off its balance sheet in an echo of a similar transaction it undertook last month with a Ł12.3bn portfolio, people familiar with the matter said. That deal involved a team of 45 Barclays staff, led by Stephen King, head of principal mortgage trading, leaving the bank, the FT reports.

The embattled retailer JJB Sports last night insisted that its plans for a Ł100m cash call were "back on track" after a weekend of turmoil thanks to lurid – and false – reports about its chairman's finances that swept through the City. The cash call – suspended on Friday – could be relaunched as soon as today as the company's brokers worked furiously to shore up support, which was shaken by the rumours that began to spread on Thursday night, the Independent reports.

General Motors is increasingly concerned about the stalemate in negotiations on Opel and Vauxhall's future and has kept alive plans to keep its European operations or sell them to another party. In a sign that the deal could still collapse, GM has said it wants to see progress on talks with European governments about funding and job cuts by the end of the week, according to sources close to the talks, the Telegraph reports.

Newspaper tips (Sunday)

Indian mining group Vedanta issued an upbeat production report last week. The company revealed that it had significantly upped production at the majority of its operations in the second quarter. However, Vedanta share appear to be up with events. The shares are up an impressive 298pc since December last year, so the stance is hold, says the Sunday Telegraph.

Tesco's interim results last week showed just how resilient the group's business model is during turbulent times. Tesco's current-year multiple is 12.9 times, William Morrison is trading on 13.6 times and Sainsbury is the highest rated in the sector at 13.7 times current-year earnings. However, Sainsbury's shares are supported by their slightly higher yield, ut Tesco remains the preferred sector play because of the international growth profile and the prospects for Tesco Bank. Shares in Tesco remain a buy says the Sunday Telegraph.

Add in Ł50m-of cash that Renewable Energy Generation will have once a Canadian disposal is completed and the firm is worth some Ł93m, even without ascribing any value to the oil business or the sites for which REG hopes to receive planning permission. Today, REG shares are trading at 60p, making the company worth Ł60m on the stock market. The shares are undervalued. Buy says the Mail on Sunday.

US close

US stocks closed the week on a strong note with tech stocks going well following positive broker coverage.

The Dow Jones industrial average was up 78 at 9,864 while the broader based S&P 500 Composite rose 6 to 1,071. The tech heavy Nasdaq added 15 points at 2,139.

Credit Suisse upped its price target for internet search giant Google and Barclays made some optimistic comments about computer hardware companies. Computer mainframe giant IBM was the best performing Dow Jones 30 constituent on the back of Barclays’ comments.

Sector Risers

Name	Value	% Change
Technology Hardware & Equipment	330.12	+2.0%
Industrial Metals	4,550.62	+1.8%
Food Producers	4,674.79	+1.6%
Automobiles & Parts	2,822.05	+1.4%
General Financial	5,357.55	+0.6%

Sector Fallers

Name	Value	% Change
Construction & Materials	3,513.62	-2.3%
Mobile Telecommunications	3,037.16	-1.6%
Forestry & Paper	3,590.09	-1.3%
Electricity	6,412.69	-0.9%
Chemicals	4,074.49	-0.9%