City sources predict FTSE 100 will open up 75 points from yesterday's close of 4,941.
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Rio Tinto chief executive Tom Albanese upped the pressure on the Australian government over its proposed resources "Super-Tax" as he said it is the "number one sovereign risk" faced by the company anywhere in the World. "We are now re-evaluating all our projects in Australia under the worst-case tax scenario. And we aren't the only ones who are doing this," Albanese said in his AGM statement.
Cable&Wireless Worldwide, demerged from Cable & Wireless in March, posted earnings in line with forecasts and says market conditions are improving. EBITDA was up to Ł431m for the year to 31 March from Ł326m in 2009. Revenue was little changed at Ł2.265bn. “Market conditions are improving and we are experiencing good momentum in our core business segments and key areas of future growth, both in the UK and globally,” said boss Jim Marsh.
Luxury retailer Burberry revealed a 23% increase in full year adjusted pre-tax profit as it opened more shops and saw strong growth in raincoats and shoes. Profit rose to Ł214.8m for the year ended 31 March from Ł174.6m a year ago. Sales were up 7% to Ł1.3bn. The full year dividend jumps 17%.
In the Press
BP’s chairman hit back at critics of the company’s response to the oil spill in the Gulf of Mexico, insisting that they ought to remember that the group was “big and important” for the US. As BP prepared to today launch latest attempt to halt the flow, Carl-Henric Svanberg told the Financial Times on Tuesday that “everything that can be done is being done” to staunch the spill caused by the April 20 explosion on the Deepwater Horizon rig.
Prudential’s efforts to persuade shareholders to back its $35.5bn takeover of AIA, the Asian business of AIG, have been dealt a blow after an influential voting adviser to investors told its clients to vote against the deal. RiskMetrics, the international proxy advisory service, issued a critical assessment of the AIA takeover bid, saying while a deal had “a sensible strategic rationale”, the Pru was paying a full price, the FT reports.
Bass ale, once Britain’s bestselling beer, has fallen so far out of favour with drinkers that it has been put up for sale for only Ł10m to Ł15m. Anheuser-Busch InBev, the world’s biggest brewer, whose brands include Budweiser, Stella Artois and Beck’s, is understood to be calling time on most of its British ale brands in a sale process that could also see Boddingtons, once dubbed the Cream of Manchester, and Flowers sold off, the Times reports.
Newspaper tips
John Dunsmore professed himself “completely knackered” yesterday after his first 15 months running the Irish cidermakerC&C Group. Corporate activity though has transformed C&C’s prospects. While the economic outlook either side of the Irish Sea remains uncertain, the revamped C&C looks well-placed. The shares have doubled to €3.21 since Dunsmore and his former S&N colleagues were parachuted in, but, even at 13 times current-year earnings, they offer strong potential upside. Buy says the Times.
Plumbing and heating group BSS is certainly not expensive: the stock trades on a multiple of 10.8 times broker estimates for the full year.BSS is among the safest plays in its sector and that should ensure strength as market volatility continues. Buy says the Independent.
The difficulty for banknote printer De La Rue is that profits look likely to head backwards from here. At 893p, the shares provide a 4.7% dividend yield but trade at 13 times earnings, which is up with events. There is better value elsewhere says the Times.
US close
Wall Street bounced back strongly near the close to all but wipe out the severe losses in early trading sparked by renewed fears over the health of Europe.
The Dow had opened more than 250 points down, but closed down just 22 at 10,043. Nasdaq dropped 2 points to 2,210 while the S&P 500 ended flat at 1,074.
Walt Disney was affected by a Wall Street Journal report that the group has formally terminated negotiations with Harvey and Bob Weinstein concerning the plan to sell them back Miramax Films.
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