Date: Friday 18 Jun 2010
London open City sources predict FTSE 100 will open up 10 points from its previous close of 5,254.
Stocks to watch
US politicians carried out an eight hour-long assault on BP chief Tony Hayward last night, accusing the oil man of ignoring the risks his company was taking drilling a mile down in the Gulf of Mexico. There was "not a single e-mail or document that you paid even the slightest attention to the dangers at this well," Henry Waxman, joint chairman of the House committee on energy and commerce, told a subdued Hayward Thursday. The Briton said he was “deeply sorry” for the spill, the worst environmental disaster in US history.
Fund manager Henderson has scrapped its planned acquisition of fund boutiques run by US asset manager RidgeWorth Capital Management after failing to agree terms with owner SunTrust Banks. The £1bn UK firm said discussions “have been discontinued as the parties have not reached agreement on terms”.
Blue-collar recruitment and training specialist Staffline now expects earnings for both the first half and full financial year to be significantly ahead of current expectations. The company upped its forecasts thanks to a number of new business wins and the impact of recent acquisitions together with increased demand from existing clients.
Engineering services group Lamprell has secured a $129m new contract from Seajacks for the design and construction of a Gusto MSC NG-5500 design self-elevating and self-propelled offshore wind turbine installation vessel. The vessel, named "Seajacks Zaratan", will be constructed at Lamprell's Hamriyah facility and is due to be delivered in 2012.
In the Press
Qatar’s sovereign wealth fund is set to take over Songbird, the listed owner of Canary Wharf, as the Gulf state steps up its London spending spree. The Qatar Investment Authority, which already owns Harrods and stakes in Barclays and the London Stock Exchange, plans to spend more than £700m to mop up the 76% of Songbird that it does not already own, The Times has learnt.
Tesco is on a collision course with activist investors over executive pay. A major American investment group, affiliated to trade union-sponsored pension funds with holdings in the supermarket group, last night urged shareholders to vote against Tesco’s remuneration report at next month’s annual general meeting. CtW Investment Group is incensed that Tim Mason, the boss of Fresh & Easy, Tesco’s fledgeling American chain, earned £4.3m in salary and bonuses last year despite steep losses. CtW said Mr Mason was being rewarded for running a “floundering” loss-making business, the Times reports.
The cost of cancelling landline telephone contracts early is set to fall by up to 85% after Ofcom said it was slashing the charges levelled by BT, Virgin Media and TalkTalk. Up until now, customers with months left to run on contracts could be forced to pay up to £120 in penalty charges to switch providers. However, following an investigation, the regulator ruled that the charges were excessive and deterred people from moving. Ofcom is investigating similar charges in the mobile and pay-TV markets, the Times reports.
Newspaper tips
The Telegraph has recommended five companies that could be replacements for BPin an income portfolio. The five are: National Grid, Royal Dutch Shell, Vodafone, Scottish and Southern Energy and RSA Insurance.
There could be significant opportunities for contractor Balfour Beatty, which stands on an attractive price of 7.6 times estimated full-year earnings. Balfour Beatty is a good recovery play, but wait to see further signs of a significant return of global infrastructure opportunities. Hold says the Independent.
WS Atkins draws 70% of its sales from the UK and the outlook for infrastructure spending remains bleak — as underlined by yesterday’s move by the Government to cancel or suspend £11.5bn of projects. As it is, the company’s work in hand, at 54 per cent of budgeted revenues, has remained reassuringly steady year-on-year. The other prop is the puniness of sterling, which could encourage bid interest. At 695½p, or ten times earnings, and yielding 4%, hold on says the Times.US close
US shares rallied near the close despite the distraction of BP chief executive Tony Hayward's appearance in front of a congressional committee on the Gulf of Mexico oil spill.
Hayward got a verbal blasting from all of the congressman, but the committee is no nearer finding out why the Deepwater Horizon rig disaster happened. Across the markets, Dow Jones rose 24 points to 10,434 with Nasdaq one better at 2,307 and the S&P 500 a touch higher at 1,116.
The euro was higher again after Spain saw good results for its bond auctions, easing concerns the country might suffer the same fate as Greece.
Back in the US, the Department of Labor announced weekly jobless claims which rose to 472,000, against expectations of 450,000 claims. The week before, 452,000 made claims.
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