City sources predict FTSE 100 will open down 55 points from yesterday’s close of 4,965. Stocks to watch
High Street bellwether stock Marks and Spencer reported a 3.6% rise in UK like for like sales in the first quarter but said it is cautious about the outlook for consumer confidence and spending. Like for like sales in general merchandise, which includes clothing, were up 6.0% in the 13 weeks ended 3 July, with like for like sales growth in food of 1.5%.
Storage firm Big Yellow Group said it enjoyed a “robust” quarter with a particularly “strong” June. Annualised store revenue, for the 51 wholly owned stores, rose 9% to Ł59.8m at 30 June 2010. Total store revenue was Ł14.4m for the quarter, up 10% from the same quarter last year.
Private equity leviathan 3i said its investments are stabilising or improving while the pipeline of investment opportunities looks promising. Investment in the second quarter of 2010 totalled Ł105m, compared to Ł79m in the second quarter of 2009. Of the Ł105m invested, Ł70m was pumped into the existing portfolio with the remainder going into the group’s first investment in Vedici.
International specialist bank and asset manager Investec said it has received a number of approaches from parties interested in acquiring its Rensburg Fund Management (RFM) subsidiary. The business was acquired as part of the takeover of Rensburg Sheppards in June. Investec has appointed Fenchurch Advisory Partners to report on the strategic options for RFM.
In the Press
BP has agreed an unprecedented deal to give the US Government the last word on worldwide asset sales, mergers or corporate restructuring in the wake of the Deepwater Horizon oil disaster. It has bowed to pressure from the Department of Justice, which has asked to be notified at least 30 days before BP undertakes any transaction that could affect the future shape of the company. BP has also agreed to submit monthly financial statements, details of credit and loan agreements and other reports about its financial health, the Times reports.
Apple has banned dozens of applications from its iTunes digital store after bogus purchases from hundreds of compromised customer accounts drove the apps to the top of the popularity charts for paid electronic books. Apple said it banned a Vietnamese developer using the name Thuat Nguyen for violations including “fraudulent purchase patterns” and removed his apps from the store. But other apps also enjoyed a sudden rush to bestseller status, suggesting that hackers were using the same techniques more broadly, the FT reports.
The Bank of England has made nearly Ł10bn in paper profits by buying UK government bonds as part of emergency efforts to pump money into the British economy. The financial shot in the arm – a buy-back programme that began in March 2009 and involved purchasing nearly Ł200bn in gilts – has generated gains of Ł9.7bn for the Bank, according to analysis for the Financial Times.
Newspaper tips
Online gamer PartyGaming’s protracted merger talks with Bwin, its Austrian rival, are apparently still on — just. But the biggest game in town is the US, where the authorities, despite their earlier moralistic stance, need the revenues. Any move will probably be on a state-by-state basis, and PartyGaming says that talks with potential US partners are going well. The shares are selling on about 11 times this year’s earnings, suggesting that they are about up with events, the Times writes.
Persimmon beat expectations on Tuesday as it reported revenue for the first half of 2010 was up 26% with margins improving from 1.5% last year to 7.5%. The Telegraph, though, simply does not feel confident enough about the health of the housing market to recommend a housebuilder at present and here could be better opportunities to acquire in the sector when the uncertainty of the October spending review has passed. Avoid.
Defence group Meggitt is not expensive, compared to some of its peers on 11 times this year's forecast earnings, with a moderate prospective yield of 3%. But after a strong rally in the first part of 2010 there is not much scope for further upside. Sell says the Independent. US close
US investors came back from their Independence Day holiday fresh enough to send the Dow higher for the first day in eight, despite a wobble near the close on a worse than expected decline in service sector figures.
Dow Jones closed 57 higher at 9,743. Nasdaq added 2 points to 2,094. The S&P 500 was up 5 points to 1,028. All three indices had been much higher earlier in the day.
The Institute for Supply Management’s index of non-manufacturing businesses, which covers about 90% of the US economy, fell from 55.4 in May to 53.8 in June. A much smaller fall to 55 was expected.
The sale of some of its assets in the Gulf of Mexico to Superior Energy Services made oil services provider Baker Hughes the best performer in the S&P.
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