Guardian Stockbrokers Market Daily 05 December 2014

Markets Daily www.guardianstockbrokers.com

1 Guardian Stockbrokers: 14 City Road, London, EC1Y 2AA T. 020 7638 6996, F. 020 7638 6997 [email protected]

Key Global Indices

FTSE 100

DJIA

DJ Euro STOXX50

05 December 2014

Contents

Key Corporate Releases 2

Commodity, Currency & Fixed Income 3

Sector Performers, Director Dealings & Dividend Calendar

4

Economic Snapshots 5-8

Newspaper Summary 9-13

UK Market Snapshot UK markets finished mixed yesterday. The BoE kept its interest rates unchanged and its

quantitative easing at the same level as expected. Ferrexpo tumbled 8.2%, after a leading

broker added the company in its ‘least favoured’ list. Oil stocks, BP, Tullow Oil and EnQuest declined 2.3%, 2.9% and 6.6%. Meanwhile, reports emerged that Saudi Arabia has slashed

all its January oil prices to the US and Asia. Rio Tinto eased 2.6%, after it revealed tougher

conditions for the company and the industry in the short term. Bucking the trend, Betfair

Group surged 7.6%, following a strong rise in its H1 pre-tax earnings. TUI Travel rallied 3.6%,

after it doubled its annual profits ahead of its planned merger with German parent firm, TUI

AG. easyJet climbed 2.9%, buoyed by robust passenger numbers in November. The FTSE

100 declined 0.6%, to close at 6,679.4, while the FTSE 250 rose 0.2%, to settle at 15,840.5.

US Market Snapshot US markets closed lower yesterday, as investors were disappointed that the ECB did not opt

for any immediate fresh stimulus measures. Guess slumped 9.5%, on the back of downbeat

third quarter profits. Sears Holding Corp tumbled 4.4%, after reporting a wider-than-expected

Q3 net loss. Energy stocks, Chevron, Newfield Exploration and Transocean lost 1.3%, 3.7%

and 4.6%, respectively. Keurig Green Mountain fell 1.1%, as investors appeared

unimpressed with its decision to acquire the remaining stake of MDS Global Holding that it

does not already own. On a brighter note, Avago Technologies soared 8.4%, following an

upbeat Q4 earnings and revenues. Microsoft added 1.6%, after Barnes & Noble revealed its

intention to acquire the former’s stake in struggling US-based bookstore, Nook. Airline stocks,

Southwest Airlines and Delta Air Lines gained 0.8% and 3.7% respectively. The S&P 500

slipped 0.1%, to settle at 2,071.9. The DJIA shed 0.1%, to settle at 17,900.1, while the NASDAQ slid 0.1%, to close at 4,769.4.

Europe Market Snapshot Other European markets finished lower yesterday, after the ECB Chief, Mario Draghi, failed

to unveil any immediate measures to boost the economy and postponed the decision to

introduce new stimulus plans if needed in 2015. Banking stocks, Commerzbank, UniCredit

and Bankia plunged 2.3%, 4.1% and 6.0%, respectively. Oil stocks, Total, Technip and

Seadrill tumbled 3.1%, 3.8% and 5.6%, respectively. On the contrary, Ryanair Holdings

soared 8.4%, after increasing its full year earnings projections for the third time this year.

Orange gained 1.0%, after a broker raised its rating on the stock to "Neutral" from

"Underperform." The FTSEurofirst 300 index declined 1.4%, to close at 1,380.8. Among other

European markets, the German DAX Xetra 30 slid 1.2%, to close at 9,851.4, while the French

CAC-40 shed 1.5%, to settle at 4,323.9.

Asia Market Snapshot Markets in Asia are trading mostly higher this morning. In Japan, Itochu Corp has gained

0.9%, amid reports that it, along with Thailand's Charoen Pokphand Group, was planning to

acquire a stake in China's Citic. Sony Corp has advanced 0.8%, reversing its initial losses

triggered by a revelation from a newspaper that the company had revealed more sensitive

information than previously believed in the recent hacking incident. In Hong Kong, Haitong

Securities has soared 10.0%, following news that the company intends to acquire the

investment-banking unit of Portuguese bank Banco Espirito Santo. However, Sinopec

Shanghai Petrochemical lost 3.2%, on the back of news that its head of oil-field-services unit

was under a Government investigation. In South Korea, Korean Air Lines has added 0.2%,

after the South Korean government confirmed the launch of a feasible study for a likely

expansion of Jeju International Airport. The Nikkei 225 index is trading 0.1% higher at

17904.3. The Hang Seng index is trading 0.7% up at 24007.7, while the Kospi index is

trading 0.1% lower at 1985.4.

6,042

6,267

6,491

6,715

6,939

Jun-14 Aug-14 Oct-14 Dec-14

SMA20 SMA50

15,776

16,344

16,912

17,480

18,048


SMA20 SMA50

2,776

2,917

3,059

3,201

3,342


SMA20 SMA50

Last

Close

1D%

Chg

5D%

Chg

1M%

Chg

1Y%

Chg

S&P 500 2,071.9 -0.1% -0.04% 3.0% 15.6%

DJIA 17,900.1 -0.1% 0.4% 3.0% 12.7%

Nasdaq 4,769.4 -0.1% -0.4% 3.2% 18.1%

Nikkei 225* 17,904.3 0.1% 3.7% 6.1% 16.1%

Shanghai Composite* 2,881.3 -0.6% 10.2% 19.3% 28.8%

DJIA at London close 17,842.4 4:30*Time - GM T

Last

Close

1D%

Chg

5D%

Chg

1M%

Chg

1Y%

Chg

FTSE 100 6,679.4 -0.6% -0.7% 3.5% 2.6%

FTSE 250 15,840.5 0.2% -0.3% 2.9% 4.7%

DJSTOXX 50 3,043.7 -1.5% -1.0% 3.6% 7.5%

FTSEurofirst 300 1,380.8 -1.4% -0.8% 4.1% 8.4%

German DAX 30 9,851.4 -1.2% -1.2% 7.5% 7.8%

France CAC 40 4,323.9 -1.5% -1.3% 4.7% 4.2%

Markets Daily

2 www.guardianstockbrokers.com

UK

US

Note: All Estimates are for Full Year

Key Corporate Releases Today

Key Corporate Announcements Today

Key Corporate Announcements for Monday

AGMs

Associated British Foods, Bezant Resources, Churchill Mining, Green Reit, James Halstead, LP Hill, Trading Emissions, Waterman Group,

ISG.

Final Dividend Payment Date

Aberdeen Asian Smaller Companies Inv Trust, Allocate Software, Ashmore Group, Genus, James Halstead, JPMorgan Overseas Inv Trust,

JPMorgan Smaller Companies Inv Trust, Matchtech Group, NWF Group, Regenersis, Sky.

Interim Dividend Payment Date

Amati VCT , Balfour Beatty, Bluefield Solar Income Fund Limited, First Derivatives, GCP Student Living, Grafenia , Laird, Marshalls, Maven

Income & Growth VCT, Mission Marketing Group, Next Fifteen Communications, Pace, Redefine International, SABMiller, Scottish Mortgage

Inv Trust, SThree, Stobart Group Ltd., William Hill.

Special Dividend Payment Date

Aberdeen Asian Smaller Companies Inv Trust

Trading Announcements

SThree

AGMs

Armour Group, Hunter Resources, Stellar Diamonds.

EGMs

Patagonia Gold

Final Dividend Payment Date

Just Retirement Group

Interim Dividend Payment Date

Rotala

Trading Announcements

GVC Holdings

Company Name Results Currency Estimated EPS Estimated Revenue (Mn)

JSC Acron Q3 RUB - 1,932.66

Berkeley Group Holdings Plc Interim GBP 1.93 1,671.30

Polar Capital Technology Trust Plc Interim GBP 0.32 92.30

Full Year Consensus

Company Name Results Currency Estimated EPS Estimated Revenue (Mn)

Big Lots Inc Q3 USD 2.40 5,271.71

Genesco Inc Q3 USD 5.11 2,635.93

Shanda Games Ltd Q3 USD 0.80 769.57

Johnson Outdoors Inc Q4 USD 1.89 -

Oil-Dri Corporation of America Q1 USD - -

Full Year Consensus

Markets Daily


2.1%

2.7%

2.9%

3.6%

6.5%

0.0% 2.5% 5.0% 7.5%

Sage Group PLC/The

TUI Travel PLC

easyJet PLC

Persimmon PLC

IMI PLC -2.6%

-2.8%

-2.9%

-3.0%

-3.2%

-7.5% -5.0% -2.5% 0.0%

J Sainsbury PLC

Severn Trent PLC

Tullow Oil PLC

Anglo American PLC

Rio Tinto PLC

Company Name Volume (Mn) CMP (p) 1D % Chg

Lloyds Banking Group 112.3 79.57 -0.1%

Vodafone Group 79.3 223.65 -1.6%

BP 34.5 426.90 -2.3%

BT Group 24.9 411.50 0.8%

Barclays 23.7 242.65 -0.5%

Commodity, Currency and Fixed Income Snapshots

UK Risers & Fallers and Most Actives

Company Name Volume (Mn) CMP (p) 1D % Chg

Taylor Wimpey 23.8 135.80 2.5%

Ladbrokes 17.8 116.00 1.8%

EnQuest 10.5 45.75 -6.6%

Centamin 9.4 49.90 0.9%

Afren 8.5 46.42 -2.1%

FTSE 100 Index

FTSE 250 Index

At 0430GMT today, Brent crude oil one month futures contract is trading 0.6% or $0.42

lower at $69.22 per barrel. Yesterday, the contract declined 0.4% or $0.28, to settle at

$69.64 per barrel, following reports that Saudi Arabia was providing customers in Asia

record discounts on its crude, in a bid to protect its market share.

At 0430GMT today, Gold futures contract is trading 0.39% or $4.70 lower at $1202.80

per ounce. Yesterday, the contract declined 0.08% or $1.00, to settle at $1207.50 per

ounce, on rising speculations that the US nonfarm payrolls would come above

expectations. Meanwhile, the holdings in the SPDR Gold Trust remained unchanged at

720.02 metric tons.

In the US, long term treasury prices rose, pushing yields lower, as investors speculated

that the US nonfarm payrolls would come above expectations, thereby strengthening the

case for the Federal Reserve to raise its key rates soon. Yesterday, yield on 10-year

notes fell 4 basis points to 2.25%, while yield on 2-year notes lost 2 basis points to

0.55%. Meanwhile, 30-year bond yield fell 5 basis points to 2.94%.

At 0430GMT today, the EUR is trading 0.05% lower against the USD at $1.2377.

Investors would turn all their attention to the release of the US nonfarm payrolls data,

slated to release later during the day. Meanwhile, the Euro region’s Q3 GDP data would

also be closely followed. Yesterday, the EUR strengthened 0.59% versus the USD, to

close at $1.2383, after the ECB announced its decision to wait and watch rather than

implementing stimulus measures immediately.

At 0430GMT today, the GBP is trading 0.23% lower against the USD at $1.5640.

Yesterday, the GBP weakened 0.06% versus the USD, to close at $1.5676, after the

BoE held its benchmark interest rate on hold at a record low of 0.5% and maintained the

size of its bond portfolio unchanged at £375 billion.

Commodity

Currency

Fixed Income

1.5624

1.5653

1.5681

1.5710

1.5738

0:00 7:05 14:10 21:15 4:20

GBP/USD

69.0

69.4

69.8

70.2

70.6

0:00 6:50 13:40 20:30 3:20

Crude Oil - Brent

1,201

1,204

1,206

1,209

1,212

0:00 6:50 13:40 20:30 3:20

Gold

-4.0%

-4.2%

-6.6%

-7.9%

-8.2%

-9.0% -6.0% -3.0% 0.0%

Ferrexpo PLC

Nostrum Oil & Gas PLC

De La Rue PLC

Oxford Instruments PLC

EnQuest PLC

3.6%

3.6%

4.3%

5.3%

7.6%

0.0% 3.0% 6.0% 9.0%

DS Smith PLC

Entertainment One Ltd

James Fisher & Sons PLC

Victrex PLC

Betfair Group PLC

Markets Daily


FTSE All Share Index- Performance

UK Top Sector Performers

UK Worst Sector Performers

FTSE All Share Advance - Decline

UK Director Dealings

UK Director Buys

UK Director Sells

UK Dividend Calendar

Sector Current Price 1D Change 1D (%) Change 1M (%) Change 1Y (%) Change

Software & Computer Services 1245.2 33.2 2.7% 9.7% 12.8%

Industrial Transportation 2662.5 41.2 1.6% -7.5% -18.7%

General Industrials 3901.6 56.7 1.5% 1.7% -7.3%

Household Goods 12516.9 169.2 1.4% 3.0% 15.1%

Industrial Engineering 8582.3 101.3 1.2% -8.9% -12.4%

Sector Current Price 1D Change 1D (%) Change 1M (%) Change 1Y (%) Change

Oil Equipment & Services 17368.1 -438.5 -2.5% -17.4% -22.7%

Oil & Gas Producers 7267.5 -122.9 -1.7% -5.6% -6.9%

Mining 14806.8 -244.4 -1.6% -1.7% -6.1%

Mobile Telecommunications 5045.6 -77.6 -1.5% 8.3% -3.8%

Food & Drug Retailers 2718.5 -36.2 -1.3% 7.5% -39.3%

Number Volume %

Advance 288 35.97%

Decline 327 63.08%

Unchanged 30 0.95%

Ticker Company Name Director Volume / Price Trade Value

BCAP Better Capital Moulton, Jon 1,000,000 @ 80.10p £801,000

MSI MS International O'Connell, Michael 13,785 @ 151.00p £20,815

QIL Qannas Investments Limited (DI) Alseddiqi, Jassim Mohamed 31,250 @ $0.90 $28,125

RB. Reckitt Benckiser Group Hennah, Adrian 13,222 @ 5,177.00p £684,503

RIC Richoux Group Diliberto, Salvatore 200,000 @ 15.00p £30,000

SGE Sage Group (The) Kelly, Stephen 78,646 @ 442.75p £348,205

Ticker Company Name Director Volume / Price Trade Value

ADN Aberdeen Asset Management Gilbert, Martin 1,337,172 @ 461.10p £6,165,700

ADN Aberdeen Asset Management Laing, Andrew 173,589 @ 461.10p £800,419

ADN Aberdeen Asset Management Rattray, Bill 242,094 @ 461.10p £1,116,295

ADN Aberdeen Asset Management Richards, Anne 382,138 @ 461.10p £1,762,038

ADN Aberdeen Asset Management Young, Hugh 450,000 @ 461.10p £2,074,950

IDH Immunodiagnostic Systems... Dahlen, Patrik 44,751 @ 323.00p £144,546

Ex-Date Ticker Company Name Dividend Amount Ex-Dividend Pay

5-Dec No scheduled announcements today

8-Dec No scheduled announcements on Monday

Markets Daily


Bank of England holds its interest rate

The Bank of England (BoE) kept its interest rate steady at 0.50%, in line with market expectations. Also, the BoE asset purchase facility

remained steady at GBP 375.00 billion in the UK, at par with market expectations.

UK Halifax house price index rises more than expected in November

The Halifax house price index in the UK recorded a rise of 0.40% in November on a monthly basis, compared to a drop of 0.40% in the

previous month. Market expectations were for the Halifax house price index to advance 0.30%.

UK new car registrations record a rise in November

On a YoY basis, new car registrations recorded a rise of 8.00% in the UK, in November. New car registrations had recorded a rise of 14.20%

in the previous month.

European Central Bank holds its interest rate steady

The European Central Bank held its interest rate steady at 0.05%, meeting market expectations.

Policymakers to reassess ECB’s quantitative easing measures early next year, says Mario Draghi

The European Central Bank (ECB) President, Mario Draghi, at the press conference following the ECB’s policy decision, stated that

policymakers would reassess the central bank’s stimulus measures early next year and then only decide whether the Eurozone economy

would be in need any additional stimulus measures. Furthermore, he hinted that the ECB would act even if it does not find unanimity among

policymakers.

French ILO unemployment rate records a rise in 3Q 2014

National Institute of Statistics and Economic Studies (INSEE) has indicated that ILO unemployment rate in France climbed to 10.40% in 3Q

2014, compared to a revised level of 10.10% in the prior quarter. Markets were expecting ILO unemployment rate to advance to a level of

10.30%.

Number of planned layoffs by US companies drop in November

On an annual basis, the number of planned layoffs by US companies fell 20.70% in November, in the US. The number of planned layoffs by

US companies had recorded a rise of 11.90% in the previous month.

US initial jobless claims drop in the last week

In the US, the seasonally adjusted initial jobless claims fell to a level of 297.00 K in the week ended 29 November 2014, less than market

expectations of a drop to 295.00 K. In the previous week, initial jobless claims had recorded a revised reading of 314.00 K.

US continuing jobless claims climb unexpectedly in the last week

The seasonally adjusted continuing jobless claims advanced unexpectedly to 2362.00 K in the week ended 22 November 2014, in the US,

compared to market expectations of a fall to 2318.00 K. Continuing jobless claims had registered a revised reading of 2323.00 K in the

previous week.

Canadian Ivey PMI climbs in November

Richard Ivey School of Business has indicated that the seasonally adjusted Ivey PMI in Canada registered a rise to 56.90 in November,

higher than market expectations of an advance to a level of 52.50. Ivey PMI had recorded a reading of 51.20 in the prior month.

Japanese foreign exchange reserves rise in November

Ministry of Finance has reported that, in November, foreign exchange reserves advanced to $1269.10 billion in Japan. Foreign exchange

reserves had registered a level of $1265.90 billion in the previous month.

Setting a specific inflation target is “unreasonable”, say’s BoJ’s Sato

Bank of Japan (BoJ) policy board member, Takehiro Sato, stated that the central bank should not commit to achieving a specific inflation rate

within a specific time frame as it cannot control prices directly.

Key Economic News

Markets Daily


Economic Calendar

Country BST Economic Indicator Relevance Consensus/

*Actuals Previous/

**Previous Estimate Frequency

UK 9:30 Consumer Inflation Expectations - 2.80% As scheduled

Eurozone 9:00 ECB's Nowotny Presents Austrian Central Bank's GDP Forecast

- - As scheduled

Eurozone 10:00 Gross Domestic Product s.a. (QoQ) (Q3) (F) 0.20% 0.00%** Quarterly

Eurozone 10:00 Gross Domestic Product s.a. (YoY) (Q3) (F) 0.80% 0.70%** Quarterly

Eurozone 10:00 Household Consumption (QoQ) (Q3) 0.30% 0.30% Quarterly

Eurozone 10:00 Gross Fixed Capital (QoQ) (Q3) -0.20% -0.30% Quarterly

Eurozone 10:00 Government Expenditure (QoQ) (Q3) 0.20% 0.20% Quarterly

Eurozone 11:00 ECB Announces 3 Year LTRO Repayment - - As scheduled

Eurozone 13:15 ECB's Visco, Italy Finance Minister Padoan Speak at Rome Event

- - As scheduled

Germany 7:00 Factory Orders n.s.a. (YoY) (Oct) 0.00% -1.00% Monthly

Germany 7:00 Factory Orders s.a. (MoM) (Oct) 0.50% 0.80% Monthly

Germany - Foreign currency reserves (Nov) - $38135.58 mn Monthly

Germany - Special Drawing Rights (SDRs) (Nov) - $17690.15 mn Monthly

Germany - Gold in official reserves (Nov) - $127655.88 mn Monthly

Germany - Gross Official reserve assets (Nov) - $193036.17 mn Monthly

Germany - IMF Reserve Position (Nov) - $9553.31 mn Monthly

Germany - Germany- Manufacturing Order-Total (Oct) - 107.70 Monthly

Germany - Germany- Domestic Orders (Oct) - 99.40 Monthly

Germany - Germany- Foreign Export Orders (Oct) - 114.50 Monthly

Germany - Plant and Machinery Orders (Oct) - 112.90 Monthly

France - Foreign currency reserves (Nov) - $30170.65 mn Monthly

France - Special Drawing Rights (SDRs) (Nov) - $14314.32 mn Monthly

France - Gold in official reserves (Nov) - $97864.47 mn Monthly

France - Gross Official reserve assets (Nov) - $151723.56 mn Monthly

France - IMF reserve position (Nov) - $7979.96 mn Monthly

Italy 8:45 Padoan Attends Conference With Weidmann, Schaeuble

- - As scheduled

Italy - Foreign currency reserves (Nov) - $34834.07 mn Monthly

Italy - Special Drawing Rights (SDRs) (Nov) - $9447.00 mn Monthly

Italy - Gold in official reserves (Nov) - $98604.39 mn Monthly

Italy - Gross Official reserve assets (Nov) - $149582.92 mn Monthly

Italy - IMF reserve position (Nov) - $5588.56 mn Monthly

Markets Daily


Economic Calendar


*Actuals Previous/


Spain 8:00 Industrial Production (YoY) (Oct) - 3.60% Monthly

Spain 8:00 Industrial Output Cal Adjusted (YoY) (Oct) 1.40% 1.00% Monthly

Spain 8:00 Foreign currency reserves (Nov) - $28175.40 mn Monthly

Spain 8:00 Special Drawing Rights (SDRs) (Nov) - $3977.27 mn Monthly

Spain 8:00 Gold in official reserves (Nov) - $10560.22 mn Monthly

Spain 8:00 IMF reserve position (Nov) - $2667.23 mn Monthly

Spain 8:00 Gross Official Reserves Assets (Nov) - $47576.06 mn Monthly

US 13:30 Percent of unemployed by duration : Less Than 5 weeks (Nov)

- 26.30% Monthly

US 13:30 Percent of unemployed by duration : 5 to 14 weeks (Nov)

- 24.70% Monthly

US 13:30 Percent of unemployed by duration : 15 to 26 weeks (Nov)

- 16.30% Monthly

US 13:30 Percent of unemployed by duration : 27 weeks and over (Nov)

- 32.70% Monthly

US 13:30 Average Hourly Earnings (Nov) - 20.70 Monthly

US 13:30 Underemployment Rate (Nov) - 11.50% Monthly

US 13:30 Average Hourly Earnings All Employees (MoM) (Nov)

0.20% 0.10% Monthly

US 13:30 Average Hourly Earnings All Employees (YoY) (Nov)

2.10% 2.00% Monthly

US 13:30 Average Weekly Hours All Employees (Nov) 34.60 34.60 Monthly

US 13:30 Change in Manufacturing Payrolls (Nov) 15.00 K 15.00 K Monthly

US 13:30 Unemployment Rate (Nov) 5.80% 5.80% Monthly

US 13:30 Change in Household Employment (Nov) 320.00 K 683.00 K Monthly

US 13:30 Change in Non-farm Payrolls (Nov) 230.00 K 214.00 K Monthly

US 13:30 Change in Private Payrolls (Nov) 225.00 K 209.00 K Monthly

US 13:30 Trade Balance (Oct) -$41.20 bn -$43.00 bn Monthly

US 13:45 Fed's Mester Speaks on Financial Stability in Washington

- - As scheduled

US 15:00 Durable Goods Orders (Million) (Oct) (F) - $243806.00 mn** Monthly

US 15:00 Inventories / Shipment Ratio (Oct) - 1.30 Monthly

US 15:00 Unfilled Orders/Shipments (Oct) - 6.71 Monthly

US 15:00 Factory Orders (MoM) (Oct) 0.00% -0.60% Monthly

US 19:45 Fed's Fischer Speaks Via Video to IMF Event in Washington

- - As scheduled

US 20:00 Consumer Credit Outstanding-Total SA (Oct) - $3266990.02 mn Monthly

US 20:00 Consumer Credit Change (Oct) $16.50 bn $15.92 bn Monthly

US 21:15 Commercial and Industrial Loans at All Commercial Banks (Oct)

- $1732.80 bn Monthly

Markets Daily


Economic Calendar


*Actuals Previous/


US - Gross Official reserve assets (28-Nov) - $134479.51 mn Weekly

US - Foreign currency reserves (28-Nov) - $43026.73 mn Weekly

US - IMF reserve position (28-Nov) - $28000.13 mn Weekly

US - Special Drawing Rights (SDRs) (28-Nov) - $52411.59 mn Weekly

US - Gold in official reserves (28-Nov) - $11041.06 mn Weekly

Canada 13:30 Labour Productivity (QoQ) (Q3) - 1.80% Quarterly

Canada 13:30 Full Time Employment Change (Nov) - 26.50 K Monthly

Canada 13:30 Part Time Employment Change (Nov) - 16.50 K Monthly

Canada 13:30 Participation Rate (Nov) 66.00% 66.00% Monthly

Canada 13:30 Unemployment Rate (Nov) 6.60% 6.50% Monthly

Canada 13:30 Net Change in Employment (Nov) 0.00 K 43.10 K Monthly

Canada 13:30 International Merchandise Trade (Oct) C$0.15 bn C$0.71 bn Monthly

Japan 5:00 Coincident Index (Oct) (P) 110.00 109.80 Monthly

Japan 5:00 Leading Economic Index (Oct) (P) 104.10 105.60 Monthly

Note: High Medium Low

Markets Daily


The Times

Draghi ready for QE – but not just yet: A

wait-and-see approach to pumping money

into the struggling Eurozone economy was

outlined by the European Central Bank,

amid uncertainty over the impact of

plummeting oil prices.

Scottish islands better connected after

cables laid: Residents on the Scottish

islands know the frustration of “buffering”

only too well. However, downloading delays

could soon be cut after the completion of a

web of underwater cables.

Regulator to quit over £6 billion

insurance blunder: One of the City

regulator’s most senior officials is set to

resign over a report into the bungled

announcement of an investigation into the

insurance industry that led to a collapse in

the share prices of several of the country’s

biggest insurers.

Woodford puts £5 million into Atom

online bank: Neil Woodford, the star stock-

picker, has abandoned his boycott of bank

shares, plunging £5 million into Atom Bank,

the ambitious, embryonic challenger lender.

EU plan to cap card fees ‘may backfire’:

Lenders across Europe face losing €2.8

billion a year if regulators press ahead with

a plan to cut fees charged on debit and

credit card transactions, a new report has

found.

Towergate bankers seek equity bids:

Towergate’s bankers have invited its

bondholders to make a play for control of

equity in the company, as the fate of the

insurance broker hangs in the balance.

Below stairs, ITV servants are revolting:

In an upstairs- downstairs dispute

reminiscent of Downton Abbey, staff at ITV

are to ballot for industrial action over a

“miserly” 2% pay rise, as the package for

Adam Crozier, the Chief Executive, hit £8.4

million.

World is forced to change gear as the

price of oil dives: As Saudi Arabia hinted

that it would let oil prices sink even further,

petro-crats in Iran, Russia, Venezuela,

Libya and Nigeria began to realise that their

time is rapidly running out.

Tax breaks to boost North Sea

production: The Treasury has promised

more tax breaks for the oil industry in next

year’s budget to help it to extract as much

oil and gas from the North Sea as possible.

Traders place bets on $40 oil as Saudi-

led price war rages: The outlook for oil

prices is so dire that growing numbers of

investors are betting that they will plunge to

less than $40 a barrel, a level not seen

since the financial crisis.

The Independent

Canary Wharf predators launch 11th-

hour hostile bid at £2.6 billion: Canary

Wharf’s Qatari and Canadian suitors went

hostile with a “take it or leave it” £2.6 billion

bid to win control of the Docklands

developer Songbird Estates.

Director to quit as report into FCA

bungle looms: One of the City watchdog’s

Chief policymakers is set to quit his

£364,000-a-year job ahead of the

publication of a damning report into its

handling of market-sensitive news about

the insurance industry.

Co-op Bank scraps bonus plan for

Bosses over fears of stress test failure:

The Co-operative Bank has torn up this

year’s long-term incentive plan for its senior

Executives amid expectations that it has

failed stress tests mandated by the Bank of

England.

Financial Times

Unilever to run spreads business as

separate unit: Unilever is to run its

underperforming margarine and spreads

business as a standalone unit, in a move

investors said was a likely precursor to

disposal.

Orange Chief says BT poised to decide

on bid for EE or O2: BT should decide

whether to buy a mobile operator in the

U.K. before Christmas, says the Chief

Executive of Orange, which is in talks to sell

EE to the British telecoms group.

Capital Group cuts Aviva stake amid

takeover of Friends Life: Capital Group,

among the world’s biggest asset Managers,

has sold about £410 million worth of shares

in Aviva since a leak two weeks ago forced

the insurer to set out preliminary terms of

the sector’s biggest deal in 15 years.

Church challenges Shell and BP over

climate change: The Church of England

has waded in to the debate over climate

change by urging Royal Dutch Shell and BP

to cut their carbon emissions and invest

more in renewables, the first time it has

attempted to use its position as an investor

as a “force for good”.

Bentley creates 300 jobs with Crewe

R&D centre: Bentley is to build a research

and development centre at its Crewe

headquarters, creating 300 jobs as the

luxury carmaker seeks to produce a new

generation of models and capitalise on its

global success.

Microsoft quits struggling ereader Nook:

Microsoft is bailing out of Nook, the

struggling ereader business owned by

Barnes & Noble, in a move that clears the

way for America’s largest bookstore chain

to spin off the lossmaking division.

EU’s Hill considers shelving bank

structural reforms: The EU’s new financial

services Chief may withdraw a proposal

next year to overhaul the structure of big

European banks if it remains mired in a

political stalemate.

BTG buys U.S. healthcare group for up

to $475 million: BTG has reinforced its

status as one of Europe’s fast-growing

healthcare companies with a deal worth up

to $475 million to buy the U.S. maker of a

device that helps tackle breathing

difficulties.

Digital challenger bank Atom secures

backing of Jim O’Neill: Jim O’Neill, the

former Chairman of Goldman Sachs Asset

Management, has joined a number of high-

profile investors to back Atom, the U.K.’s

first digital-only bank aiming to challenge

high street lenders.

U.S. oil reserves at highest since 1975:

U.S. proven oil reserves last year rose to

their highest level since 1975, official

figures have shown, in the latest sign of

how the shale revolution has transformed

the country’s energy supply outlook.

Reckitt Benckiser looks to core of

‘health, hygiene and home’: Next week

shareholders in RB — the former Reckitt

Newspaper Summary

Markets Daily


Benckiser — will vote on ending the

household group’s dependency on its

opiate-substitute business.

SoftBank buys $250 million stake in

GrabTaxi: SoftBank has bought a $250

million stake in GrabTaxi, a Southeast

Asian Uber-style taxi-hailing app, in the

latest example of the Japanese telecoms

group expanding its reach into faster-

growing parts of Asia.

Ryanair passenger numbers jump 22%

as it revises up profits: Ryanair has

offered further proof that trying to please

customers is more profitable than annoying

them as it reported that passenger numbers

in November jumped 22% on last year to

6.35 million.

Lex:

Global Brands Group: Beckham on

board: David Beckham’s advert for Haig

Club whisky is all about the power of

celebrity. Diageo knows Mr Beckham sells,

which is why they hired him. Mr Beckham

knows it, too. On Wednesday, Hong Kong-

listed brand management company Global

Brands Group signed a deal with the former

English footballer and his business partner

Simon Fuller to exploit the pulling power of

celebrities. The partners will own half each

of a joint venture intended to create new

lifestyle brands, backed by high-profile

sports and entertainment stars. The

business, as yet, has no other names

signed up and no products to sell, although

revenues from most of Mr Beckham’s

existing endorsements are part of the deal. Yet, despite Mr Beckham’s zeal for this

“first of a kind” joint venture, it is not, in fact,

the first time that GBG has attempted to

create celebrity-branded products. In 2010

LF U.S.A (now renamed GBG U.S.A)

partnered with Star Branding to create

MESH. Its goal is also to develop brands

inspired by names such as Jennifer Lopez

and Marc Anthony. GBG does not disclose

earnings from individual brands, but

perfumes from Ms Lopez’s stable reportedly

garnered revenues of around $80 million in

the decade to 2012. GBG’s contribution to

— and revenues from — subsequent

development is unclear. In 2011 Beyoncé

and Tina Knowles’ Beyond Productions

joined LF U.S.A. So the deal may not be so

revolutionary. Still, the involvement of Mr

Beckham and Mr Fuller may give the

venture more drive.

Budget airlines: load up: The largest U.K.

-listed budget airlines, Ryanair and easyJet,

have made a good business of digging

away at the foundations of the flag carriers.

Both eroded the price of short-haul holiday

flights, forcing larger airlines to adopt

similar discounting. Next easyJet, followed

by Ryanair, took aim at the flag carriers’

business customers. By doing so, both

found another rich vein of passengers.

Thursday’s November air traffic data,

released by both companies, prompted

Ryanair to upgrade its full year earnings

forecast. Share prices of both reacted

positively, with Ryanair up 8% and easyJet

up 3%. One reason for the delight is the

suggestion of less seasonality in their

businesses. November falls between

holiday travel periods. Yet load factor

(passengers as a proportion of available

seats) grew for both — Ryanair’s by seven

percentage points. This despite having 13%

more seats available than last year. Rising

load factors hint that pricing is relatively

firm. The real reason to own these two

airlines is their stronger return on capital,

which is notable given their lack of net debt.

Their returns on invested capital (equity

plus net debt) have consistently remained

above larger rivals. The question is whether

the two can sustain these relatively high

returns in the next couple of years, as their

fleets expand further and they continue to

take on the bigger airlines.

Unilever: I can’t believe its not a spin-

off: Margarine and other spreads are 7% of

sales and although Unilever is taking

market share, it is a declining market. So

the unit is a drag on growth. On Thursday,

Unilever said it would put most of the

spreads business into a standalone unit so

that a dedicated team can focus on turning

it around. It is not, Unilever insists, the first

step towards a full separation. And the

group’s management seems more

enthusiastic about other parts of the

empire. Over the past six years it has sold

€2.8 billion of turnover, mainly in foods.

Pasta sauces, peanut butter and diet drinks

have all been shown the door. In the same

period it has bought €3 billion of turnover,

mainly in personal care. True, by spinning

off foods Unilever would lose a cash

machine that can fund growth elsewhere,

but with net debt (according to Jefferies) of

just one times earnings before interest, tax,

depreciation and amortisation, the group

has plenty of flexibility. The combined

market capitalisation of the two companies

is $100 billion. The internal separation

Unilever has proposed looks like a messy

halfway house, and raises questions about

how committed the company is to food in

general and spreads in particular. It should

dispel those questions, and be decisive.

Lombard:

Sky Bet a successful accumulator for

Darroch, trophy asset builder: CVC made

Jeremy Darroch an offer he could not

refuse. The private equity business is

purchasing the online gaming arm of Sky

for up to £720 million. Mr Darroch, Chief

Executive since 2007, had not been

planning to sell. But what is a chap to do

when West End swells propose buying an

80% stake at 15 times trailing earnings? The tenacious Mr Darroch, who was

advised by Goldman, gets £600 million

upfront and £120 million if Sky Bet hits

earnings targets. He could invest in content,

which cliché designates king of the

converging realms of phones, TVs and

computers. He could bid for the mobile

operators EE and O2, which are up for sale,

in competition with arch-rival BT. Sky Bet

was growing strongly. But Mr Darroch is still

well shot of it. Internet gambling is a

different technological arms race to

broadcasting. The dangers of errors were

underlined on Wednesday when Ladbrokes

announced the departure of Chief

Executive Richard Glynn. His turnround

plan was weakened by online inadequacy,

only atoned for latterly through a tie-up with

Playtech.

Buchan the trend: James Buchan’s books

feature plucky British heroes who are not

above a spot of poaching. There is more

than a dash of that in Oliver Hemsley, Chief

Executive of Numis and a fan of the

adventure writer. The broking group has

dodged the bullets that finished off some

other mid-cap brokers. Pretax profits of

£24.4 million announced on Thursday were

up 8% on the year and the highest since

2007. Survivors need to be. Shares in

Numis are down 31% from March, when the

outlook was better for the initial public

Markets Daily


offerings whose fees bolster Numis’s

revenues. Moreover equity research, at

which Numis excels, is set for a regulatory

shake-up seek to stop fund Managers

passing on costs. At least Mr Hemsley, who

owns 8% of Numis, only has to contend

with Martin Wheatley, zealous Boss of the

Financial Conduct Authority. The

protagonists of Buchan’s ripping yarns

fought it out with trigger-happy

gamekeepers and Bolshevik spies.

The Daily Telegraph

Premier Foods tells suppliers: Give us

money or face losing our business:

Premier Foods has been criticised for

asking suppliers to hand over money or

face losing business with the company.

ECB paralyzed by split as irreversible

deflation trap draws closer: The

European Central Bank has dashed hopes

for quantitative easing this year and

acknowledged for the first time that the

institution’s elite board is split on plans for a

€1 trillion liquidity blitz.

Uber shrugs of controversies to raise

$1.2 billion for global expansion: Uber,

the high profile mini cab application

company, has raised $1.2 billion (£765

million) to fund its rapid expansion across

the globe.

Stamp duty reform triggers panic buying

of high-end London homes: Forget bread

and milk, wealthy individuals, families and

investors were panic buying high-end

London homes right up to midnight.

Vladimir Putin promises ‘harsh’

measures to fight ruble traders as

currency crashes: As Russia hurtles

towards a recession, Vladimir Putin, the

country’s President, has slammed

speculators for the decline of the ruble.

GlaxoSmithKline scraps sale of old

drugs: GlaxoSmithKline has scrapped the

sale of its older drugs portfolio after

spending months trying to offload the

division to private equity firms and rival

companies.

British Gas fined £11.1 million for failing

to insulate homes: British Gas has been

hit with an £11.1 million penalty for failing to

provide thousands of poor households with

free insulation under a Government

scheme, Ofgem has announced.

Starbucks to start selling beer and wine:

Starbucks is to add beer, wine, and evening

snacks to thousands of cafes, expand lunch

options and roll out mobile ordering.

Bank of England keeps interest rates on

hold in December: The Bank of England

has kept interest rates on hold at 0.5% in

December.

The Questor Column:

Housebuilders shares get stamp duty

boost: Investors in the U.K.’s property

sector were given a boost by the Autumn

Statement, as the cut in stamp duty sent

shares in housebuilders higher, but bank

shareholders hoping for a quick return to

dividends received more bad news. Shares

in the housebuilders are enjoying a strong

finish to the year. Fears that George

Osborne, the Chancellor, would take action

to curb rising house prices, mixed with

rumours of an interest rate rise early next

year, have proved to be unfounded.

Persimmon, the U.K.’s largest

housebuilder, saw its shares move 1.9%

higher following the cut in stamp duty. The

stock is up more than 20% since mid-

October and is 25% higher so far this year.

Business is still booming for the builders.

Bovis Homes was another winner, with

shares rising 2.4%. Last month the

company reported a better profit margin

thanks to higher house prices, and house

sales on target to increase 30% when

compared with last year. The other large

FTSE 250 housebuilders – Redrow, Barratt

Developments and Taylor Wimpey – are all

reporting higher average prices for the

houses they sell and strong advance sales

of properties. The improving profit

performance has also allowed them to pay

down debt levels and strengthen balance

sheets. Several factors mean the shares

look worth holding on to for the income.

Foxtons’ shares plunged in October after

the company warned that London’s housing

market was cooling. The shares may still

have further to fall, as they are currently

trading on 13 times forecast earnings and

don’t look that cheap, as profits are

decidedly shaky. Banks were also handed

some bad news in the Autumn Statement.

The amount of losses made in previous

years that can be used to reduce tax was

limited to 50% of profits. Shares in Lloyds,

RBS and Barclays all fell following the

announcement by the Chancellor. The tax

measure doesn’t affect TSB because the

company doesn’t have any losses. Questor

is still of the opinion that U.K. banks look

destined to remain low- growth, low-profit

and exposed to an interest rate shock next

year, and we would steer clear for now. Mr

Osborne didn’t pull any rabbits out of the

hat for U.K. investors in the Autumn

Statement, but then little else would be

expected five months away from a general

election.

The Guardian

ECB cuts Eurozone growth forecasts

and fails to deliver QE for Christmas:

The European Central Bank has cut its

growth forecasts for the Eurozone, piling on

the gloom even as it failed to deliver an

early Christmas present in the form of more

stimulus.

George Osborne rattled by tax experts’

accusations of colossal scale of cuts:

George Osborne was drawn into a

confrontation with Britain’s leading tax and

spending experts after the Institute for

Fiscal Studies said he had a duty to spell

out his deficit reduction plans and warned

of cuts on a “colossal” scale.

British workers suffer biggest real-wage

fall of major G20 countries: British

workers suffered the biggest fall in real

wages of all major G20 countries in the

three years to 2013, according to the

International Labour Organisation (ILO).

Property investors in Islington who

leave homes empty could face jail:

Property investors who leave homes empty

just to make money from property price

rises could be fined or even jailed under

proposals made by a London council.

Aldi chops Christmas tree price to

£19.99: The cheapest real Christmas tree

on the high street has gone on sale in

branches of Aldi, for £19.99. The tree, a

first for Aldi, is of the Nordman fir variety

which makes up more than 80% of sales of

real trees.

Mulberry slips on luxury bags blunder:

Mulberry has slumped to a first-half loss

after a disastrous push upmarket, but

claims its new strategy is working with sales

rising in recent weeks.

Markets Daily


Daily Mail

Tui Travel shrugs off Russian woes to

double its annual profits: Tui Travel

shrugged off Russian woes to double

annual profits in its final set of results

before the group ties up with German

parent firm Tui AG to create the world’s

biggest holiday group.

Cautious spending customers continue

to worry Boss of brewer and pubs firm

Greene King despite record half year

sales: Greene King Boss Rooney Anand

warned that customers remain cautious

about spending on eating and drinking out

as the brewer and pubs operator posted

record half year sales.

Ryanair and easyJet shares boosted by

axing of loathed air passenger tax for

children and bumper November traffic:

The scrapping of air passenger duty for

children and a big boost to recent traffic

figures sparked a rise in Ryanair and

easyJet shares this morning.

Sale of controlling 80% stake in sports

gaming business Sky Bet sees pay-TV

giant Sky bank £600 million: Satellite-

broadcaster Sky has banked an initial £600

million after selling its controlling stake in

the sports betting business Sky Bet it

formed in 2001.

Daily Express

Autumn Statement: U.K. finances are

still under pressure: Compared to any of

its major rivals, the U.K. economy is going

through a period of strong and sustained

growth, but not enough to allow Chancellor

George Osborne to offer Budget

giveaways.

Shock as banks told to payback an extra

£4 billion taxes in next five years: Banks

will pay an extra £4 billion in taxes during

the next five years after a change to rules

allowing them to offset past losses in the

financial crisis against profits.

Kid’s TV and orchestras are to benefit

from tax breaks to encourage U.K.

creative industry: Live–action children’s

television and orchestras are the latest

beneficiaries of tax breaks that George

Osborne claimed have ushered in a “golden

age” for Britain’s creative industries.

George Osborne’s Autumn Statement of

business rate reform welcomed by

British high street: The Chancellor gave

an early Christmas present to the British

high street by pledging to reform business

rates as his autumn budget was warmly

welcomed by leaders from industry and

business.

The Scottish Herald

Minister to pressure FCA on banks deal:

The government is to ask the Financial

Conduct Authority to explain why it cannot

publish its agreement with the British

Bankers Association on how the review of

mis-sold complex loans was conducted.

Menzies Director quits: John Menzies has

said Non-Executive Eric Born has resigned

from the board after four years, due to other

business and personal commitments.

London mandate for Braveheart:

Braveheart, the AIM-listed investment

management group, has been selected as

a consortium partner to manage the London

Co-investment Fund.

Lamb and beef firm JW Galloway posts a

loss: Scotbeef Owner JW Galloway has

swung to a pretax loss for the year ending

March 2, citing the high impact of absorbing

a sharp rise in cattle prices early in the

trading period as a consequence of the

horsemeat scandal.

The Scotsman

Martin Gilbert cashes in on Aberdeen

share rise: Aberdeen Asset Management

Chief Martin Gilbert has pocketed almost

£6.2 million after selling a tranche of shares

in the fund Manager, which he co-founded

more than 30 years ago.

Greene King cautions on Christmas

trade: Greene King, the Belhaven-owning

pubs and brewing group that has made a

recommended £774 million takeover bid for

Spirit Group, reported a leap in Christmas

bookings.

Skye’s the limit as brewery crowdfunds:

Isle of Skye Brewery is to use crowdfunding

in a bid to raise a minimum of £150,000 to

fund expansion plans, including a new

visitor centre at its base in Uig.

Lord Smith to take the helm at Forth

Ports: Forth Ports named Lord Smith of

Kelvin, who last week delivered a package

of recommendations for further Scottish

devolution, as its new Chairman.

City A.M.

Euro retail sales fail to stage a late

comeback: Eurozone retail sales fell at

their slowest rate for five months, survey

data revealed.

New car sales set to overtake pre-

recession levels next year: New car

sales are showing no signs of hitting the

brakes after increasing for the 33rd

consecutive month in November.

Officials vote to hold rates: Bank of

England (BoE) officials voted to keep policy

rates at 0.5%.

No banking unit safe from probes: Every

part of Britain’s banks will be open to

scrutiny by the new Competition and

Markets Authority (CMA), its Chief

Executive Alex Chisholm said.

Ethiopia becomes poorest country to

issue bond: The Government of Ethiopia

has launched its first ever dollar bond,

becoming the poorest country ever to raise

money in the international sovereign

market, it was revealed.

House price growth slows but could be

boosted by tax reform: The house price

boom continued to cool in November, data

from a U.K. mortgage provider shows.

Wages start to climb as talent pool is

used up: The Long squeeze on workers’

wages is coming to an end, as recruiters

report that employers are competing harder

for talent.

Hays Recruitment buys 80% stake in IT

staffer Veredus: Leading British human

resources and recruitment company Hays

has acquired 80% of Veredus Corporation,

a specialist IT staffer based in Tampa,

Florida, for $44 million (£28 million).

Markets Daily


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Guardian Stockbrokers Market Daily 05 December 2014