London open
City sources predict FTSE 100 will open up 10 points from previous close of 5,038.
Stocks to Watch
Sugar and sweeteners giant Tate & Lyle is to mothball its Fort Dodge plant in a move which put a Ł217m dent in full year profits, as the company announced a new focus on its Speciality Food ingredients business. Adjusted pre-tax profit eased to Ł229m in the year to 31 March from Ł247m the year before. Sales dipped to Ł3,506m from Ł3,553m while net debt was cut to Ł814m from Ł1,231m.
Hedge fund manager Man Group has decided to halve the dividend for the current financial year after reporting a 27% slump in profit for the year just ended. The company, which last week agreed to buy New York-listed rival GLG Partners for $1.6bn, posted a profit before tax of $541m for the year to 31 March, down from $743m in 2009.
Telecoms firm Cable & Wireless said it has been a “challenging year” as it faced difficult condition in the Caribbean. The group, which split into two in March, posted pre-tax profits of $383m from $394m on revenues of $2.34bn against $2.44bn.
In the Press
Shareholders owning up to 15 per cent of the Prudential are preparing to write to the chairman telling him they will oppose the insurer’s $35 billion takeover of AIA. It is understood that some of the Pru’s biggest institutional owners are among those poised to write to Harvey McGrath within the next 48 hours. Their move represents a hammer blow to the Pru’s chances of getting the 75 per cent approval it needs to clinch the bid, writes the Times.
The Takeover Panel has publicly criticised Kraft Foods over the handling of its takeover of Cadbury in a shock move that has cost the US company's leading adviser his future job at the City regulator. Peter Kiernan, a banker at Lazard, which advised Kraft on its controversial Ł11.7bn takeover, has withdrawn his candidacy to become director general of the Panel, the Telegraph reports.
Signs of a recovery at the UK’s two government-backed banks have prompted Standard & Poor’s to upgrade a key measure of the credit worthiness of Lloyds Banking Group and Royal Bank of Scotland, says the FT. The agency said there was evidence that the two banks were making progress in their recovery. S&P raised the “stand-alone” credit profile of the banks’ core businesses – a measure that reflects their existing government support – from triple B to triple B plus.
Newspaper Tips
If newly demerged Cable & Wireless Worldwide (CWW) presents investors with a conundrum, that is not solely on account of its name. Despite its moniker, this is not the bit of the old Cable & Wireless that serves Monaco, Macau and Montserrat, but the fixed-line corporate telecoms carrier that takes in Energis and Thus and does three quarters of its business in Britain. The other confusion stems from CWW’s explicit pitch to shareholders of providing them with growth, rather than income. At 79˝p, or ten times earnings, CWW may live up to its growth aspirations. But the risk that it will be punished by the stock market if it doesn’t counsels caution. Pass, says the Times.
It’s said that it is better to travel than to arrive. Not at Hogg Robinson, the corporate travel agency whose shares change hands at less than a third of the price at which they were floated four years ago. Neither did yesterday’s full-year figures do much to send them higher. Net debt has fallen to Ł78 million, and should continue to drop, but the net pension deficit is stubbornly high: Ł93.3 million, or bigger than the company’s stock market value. At 28žp, or five times earnings, and yielding 4 per cent, there should be better times to buy, believes the Times.
If the projections for a recovery in business travel prove to be well founded, then Hogg's could offer exceptional value. But the risks and uncertainties are substantial. So we would suggest a speculative buy only for those with strong stomachs, says the Independent.
City analysts took a bus up to Milton Keynes yesterday to take a look at Domino's Pizza's new commissary. The commissary is expected to be able to service 500 stores and double its capacity over time. Trading on a December 2010 earnings multiple of 22.7 times, falling to 20.2 in 2011, the rating is unarguably high. However, with the company's management's excellent track record of delivery, the cost efficiencies from the site at Milton Keynes are likely to generate earnings upgrades and the expansion plans look achievable. Buy says the Telegraph.
US close
Stocks bounced early on, but nerves set in after lunch and a final lurch into the red during the last hour of trade had the Dow Jones closing below 10,000 for the first time in 3˝ months.
Bargain hunters stepped in as the opening bell sounded, picking up cheap stock following the month-long sell-off. The Dow was above 11,300 in April.
Data from the Commerce Department gave housebuilders a boost. New homes sales rose a bigger than expected 14.8% in April to a seasonally adjusted rate of 504,000, up from 439,000 the month before.
Meanwhile, durable-goods orders rose a better than forecast 2.9% in April.
But investors, already panicked by fears about global growth, the weak euro and military tensions in the Korean peninsular, heard reports that China may review its portfolio of European bonds.
That was enough to turn a 130-point gain into a 69-point loss for the Dow, which ended the day at 9,974, its worst finish since 8 February. The tech-laced Nasdaq Composite fell 15 points to 2,195, while the broad-based S&P 500 dropped 6 to 1,067.
City sources predict FTSE 100 will open up 10 points from previous close of 5,038.Stocks to Watch
Sugar and sweeteners giant Tate & Lyle is to mothball its Fort Dodge plant in a move which put a Ł217m dent in full year profits, as the company announced a new focus on its Speciality Food ingredients business. Adjusted pre-tax profit eased to Ł229m in the year to 31 March from Ł247m the year before. Sales dipped to Ł3,506m from Ł3,553m while net debt was cut to Ł814m from Ł1,231m.
Hedge fund manager Man Group has decided to halve the dividend for the current financial year after reporting a 27% slump in profit for the year just ended. The company, which last week agreed to buy New York-listed rival GLG Partners for $1.6bn, posted a profit before tax of $541m for the year to 31 March, down from $743m in 2009.
Telecoms firm Cable & Wireless said it has been a “challenging year” as it faced difficult condition in the Caribbean. The group, which split into two in March, posted pre-tax profits of $383m from $394m on revenues of $2.34bn against $2.44bn.
In the Press
Shareholders owning up to 15 per cent of the Prudential are preparing to write to the chairman telling him they will oppose the insurer’s $35 billion takeover of AIA. It is understood that some of the Pru’s biggest institutional owners are among those poised to write to Harvey McGrath within the next 48 hours. Their move represents a hammer blow to the Pru’s chances of getting the 75 per cent approval it needs to clinch the bid, writes the Times.
The Takeover Panel has publicly criticised Kraft Foods over the handling of its takeover of Cadbury in a shock move that has cost the US company's leading adviser his future job at the City regulator. Peter Kiernan, a banker at Lazard, which advised Kraft on its controversial Ł11.7bn takeover, has withdrawn his candidacy to become director general of the Panel, the Telegraph reports.
Signs of a recovery at the UK’s two government-backed banks have prompted Standard & Poor’s to upgrade a key measure of the credit worthiness of Lloyds Banking Group and Royal Bank of Scotland, says the FT. The agency said there was evidence that the two banks were making progress in their recovery. S&P raised the “stand-alone” credit profile of the banks’ core businesses – a measure that reflects their existing government support – from triple B to triple B plus.
Newspaper Tips
If newly demerged Cable & Wireless Worldwide (CWW) presents investors with a conundrum, that is not solely on account of its name. Despite its moniker, this is not the bit of the old Cable & Wireless that serves Monaco, Macau and Montserrat, but the fixed-line corporate telecoms carrier that takes in Energis and Thus and does three quarters of its business in Britain. The other confusion stems from CWW’s explicit pitch to shareholders of providing them with growth, rather than income. At 79˝p, or ten times earnings, CWW may live up to its growth aspirations. But the risk that it will be punished by the stock market if it doesn’t counsels caution. Pass, says the Times.
It’s said that it is better to travel than to arrive. Not at Hogg Robinson, the corporate travel agency whose shares change hands at less than a third of the price at which they were floated four years ago. Neither did yesterday’s full-year figures do much to send them higher. Net debt has fallen to Ł78 million, and should continue to drop, but the net pension deficit is stubbornly high: Ł93.3 million, or bigger than the company’s stock market value. At 28žp, or five times earnings, and yielding 4 per cent, there should be better times to buy, believes the Times.
If the projections for a recovery in business travel prove to be well founded, then Hogg's could offer exceptional value. But the risks and uncertainties are substantial. So we would suggest a speculative buy only for those with strong stomachs, says the Independent.City analysts took a bus up to Milton Keynes yesterday to take a look at Domino's Pizza's new commissary. The commissary is expected to be able to service 500 stores and double its capacity over time. Trading on a December 2010 earnings multiple of 22.7 times, falling to 20.2 in 2011, the rating is unarguably high. However, with the company's management's excellent track record of delivery, the cost efficiencies from the site at Milton Keynes are likely to generate earnings upgrades and the expansion plans look achievable. Buy says the Telegraph.
US close
Stocks bounced early on, but nerves set in after lunch and a final lurch into the red during the last hour of trade had the Dow Jones closing below 10,000 for the first time in 3˝ months.
Bargain hunters stepped in as the opening bell sounded, picking up cheap stock following the month-long sell-off. The Dow was above 11,300 in April.
Data from the Commerce Department gave housebuilders a boost. New homes sales rose a bigger than expected 14.8% in April to a seasonally adjusted rate of 504,000, up from 439,000 the month before.
Meanwhile, durable-goods orders rose a better than forecast 2.9% in April.
But investors, already panicked by fears about global growth, the weak euro and military tensions in the Korean peninsular, heard reports that China may review its portfolio of European bonds.
That was enough to turn a 130-point gain into a 69-point loss for the Dow, which ended the day at 9,974, its worst finish since 8 February. The tech-laced Nasdaq Composite fell 15 points to 2,195, while the broad-based S&P 500 dropped 6 to 1,067.
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