LONDON Pre-Market Report((Tuesday, November 10, 2009)

Revenue rises by more than 9% at Vodafone

London open

City sources predict FTSE 100 will open up 11 points from the previous close of 5,235.


Stocks to Watch

Vodafone traded in line with expectations during the first half, raising revenue by over 9% and adjusted operating profit by 2.4%. It expects full-year profit to be between Ł11-11.8bn

Barclays remains on course for a record-breaking year after third quarter profits came in close to market forecasts. For the three months to September, profits fell from Ł2.84bn to Ł1.56bn giving a nine-month total of Ł4.54bn (2008: Ł5,595m), a decrease year on year of 19% (Ł1,053m).

Imperial Tobacco boosted full-year profit before tax by 52% thanks to the acquisition of Franco-Spanish rival Altadis. The cigarette maker has also announced the departure of its CEO. Pre-tax profit for the 12 months ended 30 September jumped to Ł945m from Ł621m in 2008 on revenue up 29% to Ł26.52bn, reported the firm, best known for its Lambert & Butler cigarettes.

In the Press

Cadbury shareholders have signalled that they will hold out for at least an 800p-a-share offer from Kraft, the US food giant, which made a 715p-a-share offer yesterday, says the Times.

More properties coming on to the market did not stop house prices rising in October, according to the Royal Institution of Chartered Surveyors. The institution’s figures showed an increase from 21 per cent to 34 per cent in the number of surveyors reporting a price rise rather than fall last month — the third positive month in a row, the Times writes.

People are more optimistic about the economy than at any time for the past 18 months, according to a Populus poll for The Times today. It shows that the number of voters thinking the country as a whole will do well over the next year has risen from a quarter to a third since July and is now the highest since April 2008. But nearly two thirds still think that the country will do badly over the next year.

Newspaper Tips

Security firm G4S reported organic growth, which excludes the impact of acquisitions, down slightly to 4.2pc for the first nine months of the year, compared with 4.8pc in the first half. This is still a good result considering the current climate. They still look good value at around 12 times next year’s earnings. This is slightly below European peer Securitas, and G4S arguably has a better strategy. This is a defensive stock that looks good in both a down and upturn. A solid buy for these uncertain times, thinks the Telegraph. The Independent agrees.

IMI, which supplies hydraulic controls for trains, is running ahead of time. Yesterday’s year-end trading update was released more than a week ahead of schedule. More important, the FTSE 250 engineering conglomerate said that current-year profits would be “materially ahead” of forecasts. On raised 2010 earnings forecasts, the shares still trade on only 11 times next year’s numbers, not dear given the scope for further upgrades. The 4.2 per cent prospective dividend yield also appeals. Hold on, recommends the Times. IMI is looking like a solid recovery play, adds the Telegraph.

It will take more than Hurricane Ida — which was downgraded yesterday to a tropical storm — to blow Hiscox off course. Yesterday’s trading update from the second-largest quoted Lloyd’s of London insurer showed that it was on track to report a doubling of pre-tax profits in 2009. Hiscox’s attraction is that it has a strong capital base. But the problem is that, at 338p, up 10p, or a 29 per cent premium to Numis Securities’ forecast of net tangible assets, Hiscox is a discovered jewel. Even so, the Times says ‘hold’.

US close

The Dow Jones industrial average hit its highest level in more than a year as stocks roared in approval at G20 finance ministers’ plans to keep economic stimulus in place until the global recovery is assured.

The Dow jumped 203 points to 10,226, the Nasdaq Composite climbed 41 to 2,154, while the broader S&P 500 rose 23 to 1,093.

Among the top risers were credit card firm American Express and the digger maker Caterpillar.

But company news was dominated by food giant Kraft, which today outlined an unimproved offer for chocolate company Cadbury. It is offering 300p cash plus 0.2589 of its shares for each Cadbury share, valuing the British company at around 710p a share – based on a Kraft share price of $26.38, down 40 cents on the day. Kraft was one of the few fallers on the Dow after Cadbury issued a brusque rejection of the offer.

There was talk that Kraft would be able to increase the cash element of the bid but it may be waiting to assess the initial response to the bid before considering any additional temptations for Cadbury shareholders.

Elsewhere, it’s thought General Electric and Comcast have agreed on a value for NBC Universal of about $30bn. GE owns 80% of NBC. The valuation would pave the way for a joint venture between Comcast and NBC, although 20%-shareholder Vivendi is yet to rubber stamp the deal.

RadioShack shares jumped after the electronics retailer said that it intends to sell Apple’s iPhone 3G and iPhone 3GS at stores in Texas and New York.

Sector Risers

Name	Value	% Change
Industrial Metals	4,538.27	+4.7%
Mining	19,758.73	+4.2%
Life Insurance	3,927.74	+3.9%
Electronic & Electrical Equipment	1,523.90	+2.7%
Automobiles & Parts	2,686.44	+2.7%

Sector Fallers

Name	Value	% Change
Industrial Transportation	1,952.41	-2.5%