LONDON (Alliance News) - The following stocks are the leading risers and fallers on the main London indices midday Thursday.
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FTSE 100 - WINNERS
Rio Tinto, up 2.9%. The mining giant leads the blue chip gainers after saying it plans to invest USD400 million to increase its iron-ore production in Western Australia by 24% to 360 million tonnes a year. Rio Tinto said it plans a series of low-cost brownfield expansion programmes to feed into increasing levels of infrastructure currently being developed. Rio Tinto said that from a base run rate of 290 million tonnes per year by the end of 2014, it plans to expand by more than 60 million tonnes a year between 2014 and 2017.
Old Mutual, up 2.1%. Bernstein Research upgraded Old Mutual Thursday to Outperform from Market-Perform, with a price target of 230p. The price target suggests a 16% upside to the current price.
Anglo American, up 1.7%. Anglo's share price has fallen by 18% since September and is now trading at more "comfortable valuations" of 12.0x 2014 earnings, says Liberum analyst Ben Davies. By comparison BHP Billiton trades at 11.8x. The mining company holds a strategy day on December 10 and there is potential for a positive share price response from the day as new CEO Mark Cutifani is a strong communicator, says Liberum as it upgrades the stock to Hold on Thursday.
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FTSE 100 - LOSERS
Persimmon, down 5.9%. The housebuilding sector took a heavy knock mid-morning Thursday as Mark Carney delivered the Bank of England's financial stability report. Carney said that the UK housing market no longer needs the support of the Funding for Lending scheme, and the scheme will now be re-focused onto small- and medium-sized businesses and away from property. Persimmon, the only FTSE 100-listed house builder, dropped sharply on the news to lead the blue chip fallers.
Kingfisher, down 5.3%. The home improvement retailer reporting trading for the third-quarter that was behind analyst expectations. Third-quarter retail profit was GBP271 million, against the consensus forecast of GBP281 million, which is mainly due to a weak performance from Kingfisher's French operation. In the UK, sales at B&Q were almost flat, with a continuing decline in market share. Going forward, analysts expect to see a pick up in the home-improvement market, which tends to lag the housing market.
Imperial Tobacco and British American Tobacco, down 2.4% and 2.8%, respectively. The tobacco companies are falling after the Times reported that, in a political U-turn, Prime Minister David Cameron said cigarettes are to be sold in plain packaging in the UK before the next election. The Government will announce within days that it is pressing ahead with the measure, aimed at making smoking less attractive to youngsters, the paper says.
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FTSE 250 - GAINERS
Thomas Cook, up 14%. The travel company rocketed to the top of the FTSE 250 gainers table after announcing cost savings well ahead of expectations. Thomas Cook had planned GBP110 million of cost savings in 2013 but actually achieved GBP134 million. Furthermore, with an acceleration in savings announced, management now expects to achieve GBP340 million of cost savings by 2014 and GBP440 million by 2015. The combination of the much better-than-expected cost savings and increased revenue targets is likely to drive up consensus earnings forecasts by 5% to 10%, says Jefferies analyst Ian Rennardson.
RPC, up 5.6%. Panmure analysts raised RPC to Buy from Hold Thursday, with an increased price target of 584.0p. The new price target suggests nearly a 90% upside to the current price.
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FTSE 250 - LOSERS
Taylor Wimpey, down 7.6%. Barratt Developments, down 5.5%. Bovis Homes Group, down 5.3%. Bellway, down 4.2%. The whole house building sector took a heavy hit Thursday when Bank of England Governor Mark Carney said that the housing market no longer needs the support of the Funding for Lending scheme and the funding now will be re-focused on SMEs. The BoE also said that favorable capital treatment for new home loans made under the FLS would end on Dec. 31. Five, mainly small, lenders benefit from this at present. Carney said the changes to the FLS did not have implications for a separate government scheme, Help to Buy, which aims to lift construction and assist home-buyers who lack large mortgage deposits, and which the BoE will review next September.
Marston's, down 6.3%. The British brewer and pub operator is a big faller despite reporting that it increased revenue and a swing back to a pretax profit for the year ended October 5, recovering after being forced to take GBP223.3 million in exceptional charges last year. The company also announced an increase in disposal activity. Having sold 130 pubs in 2013, Numis Securities expects the pub chain to sell 380 pubs in 2014. To reflect earnings dilution from the increased disposals Numis has cut its 2014 earnings forecasts by about 9.0%.
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AIM - WINNERS
Sigma Capital, up 52%. The finance and property company has agreed a GBP700M Joint Venture with Gatehouse, a Sharia compliant bank, to build up to 6,600 private rental homes in Britain. The venture will initially build 2,000 new homes in north-west England, with a development cost of 200 million pounds.
Ceramic Fuel Cells Limited, up 31%. The Australian fuel cell technology company said it has signed a cooperation deal with Baltic distributor Synergy International OÜ, and will initially sell it 1,000 BlueGEN micro power plants with a value of over EUR20 million over the next two years. The agreement has an option to be extended for a third year, the company said.
Mercom Oil Sands, up 24%. The company's shares are gaining on the news that it has reached an out-of-court settlement with Nordic Petroleum ASA over the Chard Oil Sands leases in Canada. Mercom, which recently switched from an oil exploration and development company to an oil and gas investment company, said it has agreed to pay an undisclosed cash sum, together with the issue of 13.0 million shares in Mercom, to Nordic in full and final settlement of the dispute.
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AIM - LOSERS
Publishing Technology, down 35%. The company warned that it now expects its full-year results to be below market expectations and similar to last year's result as it brought forward research and development spending. The company also dismissed rumors that it may be in takeover talks. In a statement, it said it delayed the expected reduction in R&D spending this year as it brought forward some spending planned for later, notably on the incorporation of web technology HTML5.
Manroy, down 13%. The defense contractor said takeover talks with US Ordnance Inc have ended, but it remains in active discussions with Herstal SA. It said Thursday that it remains in talks about an all cash offer from Beretta Holding, but the discussions are currently not active.
Pentagon Protection, down 13%. Shares in the glass protection and security products and services specialist are lower despite management saying the results for its last financial year are expected to be in line with expectations, while a strong sales pipeline gives it confidence that it will meet or beat expectations for the current year. Its last financial year ended September 30, and it expects to release the detailed results in the second half of January. Pentagon added that it is considering a fundraising in the first quarter of 2014, subject to terms and market conditions, so it can take advantage of a growing market, particularly in the US. It stressed that it has sufficient working capital for current requirements.
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By Jon Darby; jondarby@alliancenews.com; @jondarby100
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2 Mar 2015 10:15