LONDON (Alliance News) - The following stocks are the leading risers and fallers on the main London indices midday Monday.
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FTSE 100 - Winners
BAE Systems, up 2.9%, after Citigroup raised the defence and security company's price target by 28% to 460 pence from 360p, with a Neutral recommendation.
Rolls-Royce Holdings is up 1.9% after Citigroup increase its price target by 7% to 1,280p from 1,200p, maintaining a Buy rating for the company.
Burberry's share price, up 1.4%, is benefiting from Goldman Sachs raising its target price to 2,282 from 2,181p.
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FTSE 100 - Losers
Royal Bank of Scotland Group, down 5.3%, is the biggest faller on the blue-chip index after JP Morgan reached a tentative deal with US regulators for a USD13 billion settlement of a series of investigations into mortgage-backed securities. RBS has a USD30 billion exposure to the issue, just a little less than JPMorgan Chase, and is expected to be in line for a fine. Shore Capital analyst Gary Greenwood says the US regulator is a "very political animal" and could be lenient on RBS given "a fine on RBS is effectively a fine on the UK government". In an article published in Monday's Telegraph, Chancellor George Osborne says there is no chance the bank will be left in its current form, and the go-ahead for a split into a good bank and a bad bank will be given within weeks. Osborne told the newspaper that while the government was looking at the sale of another tranche of Lloyds Banking Group, including a retail offering, it wasn't even close to being able to sell RBS shares.
Prudential, down 1.4%. Having been the biggest riser on the FTSE 100 Friday, the company's share price is retracing. Shares in the insurance group had been lifted by an upbeat statement from rival AIA. Shares still have a long way to fall before reaching pre-announcement levels.
SABMiller, down 0.8%, continues to fall after Numis Friday downgraded the company to Add from Buy, lowering its target price to 3,500p from 3,700p and revising down its 2014 earnings per share forecast by 1% after the company cut its own 2013 EPS forecast to 237.2p from 238.7p, on the back of accounting rule changes. Numis also noted weakness in some of the brewer's high-margin countries.
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FTSE 250 - Winners
Synergy Health, up 3.8%, is the biggest FTSE 250 winner. The company's share price has been boosted after Numis raised its recommendation to Buy from Add, with a price target of 1,300 pence following a drop in Synergy's share price this month. In a disappointing trading statement on October 10, the health-care services provider had reported revenue growth for the first half was at the lower end of its expectations. Charles Weston, analyst at Numis, believes that "the fall in share price creates a buying opportunity." Although wary that the company's exposure to governmental buyers and regulatory bodies is likely to lead to regular delays within the business, Weston believes that structural growth opportunities and Synergy's ability to consolidate will lead to strong long-term growth. Numis maintains its full-year forecasts. However, the investment bank is hopeful that Synergy's November financial results will contain favourable news with regards to the strategic review of European expansion opportunities. Numis also is looking for a decision whether Synergy's joint marketing agreement with Sinopharm will be expanded to cover the whole of China. With no acquisition since July 2012, Weston "would not be surprised if the company delivers another deal in the next six to twelve months."
QinetiQ Group, up 3.6%. The Sunday Times reported that the UK defence firm is set to be broken up after bosses at the former Ministry of Defence research arm put its American division up for sale, sending sale documents to potential suitors last week. The paper quotes industry sources saying that they believe the sale of the American business could spark interest in the rest of Qinetiq, which was controversially privatised in 2006.
Centamin climbs 2.9% after Nyota Minerals said that Centamin had reduced its shareholding just days after Nyota rebuffed Centamin and signed development partner deals with another company. Nyota said that Centamin sold 20 million shares Thursday and Friday, lowering its holding to 151 million shares or 17.2% of the company's issued share capital. A spokesman for Nyota declined to comment on why Centamin reduced its stake in the company. Nyota last week said it had signed two agreements with a new development partner for its Tulu Kapi Gold Project in Ethiopia but a spokesman told Alliance News at the time that the sales deal was not with Centamin, which was one of the key players in discussions over Nyota's future.
Senior, up 2%. The company's interim management statement is in-line with expectations, says Jefferies. The manufacturer of high-end technology components and systems said its adjusted pretax profit for the period was in line with the board's view. The group is expecting a GBP2 million hit to second-half profits from emerging-market currency weakness, with the Brazilian real, Indian rupee and the South African rand having seen large moves since the start of the year. "This is a phenomenon we will see across the industrial sector in this interim period", says Jefferies analyst Andy Douglas, who is unconcerned about the GBP2 million "headwind". Douglas does not expect to change Jefferies' Buy rating or price target of 305p.
Informa, up 1.6%. The company is confident that it will meet full-year expectations following a strong third quarter. The company said that its cash performance remained on track, and the sale of its five Corporate Training businesses had generated proceeds of around USD100 million, which it had used to pay off debt. In an interim management statement for the nine months ended September 30, the events and publishing company said that its organic revenue growth was 1.1%. In its Academic Information division like-for-like revenue growth was 4.0%, reflecting good performance by its books and journals businesses. However, David Reynolds, an analyst at Jefferies, believes the interim management statement is "a tad soft," calling the company's growth "relatively anaemic." Despite this, the unimpressive growth may not matter. Having announced the sale of the five corporate training businesses for about USD180 million earlier in the year and announced on October 10 that company CFO Adam Walker was resigning, all eyes are on the new management team and the the tempting thought of major corporate actions that will come with them, says Reynolds.
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AIM - Winners
Mediwatch, up 26%. The company, after the UK market close Friday, said it had received an initial approach from Laborie Medical Technologies Europe Limited, with a potential acquisition on the cards. Laborie must decide whether or not to make an offer for Mediwatch by 5pm on November 15.
HaloSource Inc jumps 28% after the water technology company said it has signed a deal with Industrial Dewatering International LLC for IDI to distribute its HaloKlear technology in Texas and New Mexico, and thinks the deal could generate over USD1 million in revenues over the next three years.
Xenetic Biosciences, up 18%. General Sales & Leasing Inc is considering a takeover offer for Xenetic, the two companies said Monday as they announced non-binding takeover talks that could lead to the US company selling its current business and concentrating solely on the Xenetic business. In a statement, Xenetic said there's no guarantee an offer will be made, but it is hoping a takeover will facilitate its move to being quoted on a US stock market more easily, more quickly and in a more cost-effective manner than would be possible were Xenetic to apply for such a quotation itself. General Sales & Leasing was incorporated in August 2011 for the purpose of owning and operating helicopters for use in sightseeing tours and as pilot training aircraft. If the takeover completes, it will dispose of its entire current business and focus on Xenetic. Its sole director will step down and be replaced by directors from the Xenetic board. It is listed on the US Over-the-Counter Bulletin Board.
Sorbic International climbs 13% after it said it expects its full year results to exceed market expectations after EBITDA increased in the period to August 31, with margins showing "significant improvement." Sorbic, which produces the food preservatives Sorbic Acid and Potassium Sorbate, also said it remains involved in negotiations over its facility in Inner Mongolia and would give an update in due course. On March 23, 2012, Sorbic received official notification from the Ulanqab, Inner Mongolia, local authority that the industrial zone in which Sorbic's manufacturing facility is situated had been identified as an area to be rezoned. The company has since been in talks with local authorities in order to agree a compensation package for the relocation of Sorbic's manufacturing facility.
Eurasia Mining climbs 12% on the back of the news that its licence at Monchetundra in the Kola Peninsula in Russia is being extended for three years to December 2016. "The three year extension gives the company ample time to develop the project and extend the resources that we have discovered from our successful exploration," Managing Director Christian Schaffalitzky said in a statement. The company said two priority areas of platinum group metals and base metal mineralization have been identified in the licence area, and both areas offer potential open cut mining opportunities.
Fox Marble Holdings is up 11% after it achieved its first sales in the UK, as four quarry sites became operational. The marble quarrying and production company, operating in Kosovo and the Balkans region, said it has made the first sales of its Sivec marble from Macedonia to the UK and also sold a small amount of marble from a site in Kosovo to a customer in Lebanon. Fox Marble also said that, in pursuit of its growth strategy, it has recently agreed a distribution agreement in the US, particularly for its Cremo Fiorito Olta, Illyric white and Rosato Grey Cervenilla marble from the Rahovec quarry located in Kosovo. The company said it is now preparing slabs for shipment to the US and expects to start receiving its first revenues by the end of the year.
Alexander Mining, up 9.5%, has seen its shares jump after it signed a strategic technical partnership with its largest shareholder that will see its mineral processing technology commercialized in Turkey for the first time. Ebullio Group has bought base metals miner Red Crescent Resources Ltd for USD10 million in cash and shares and wants to use Alexander processing technology at the company. Red Crescent is a Canadian company but owns zinc and copper assets in Turkey.
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AIM - Losers
African Copper, falling 20%, is the biggest faller on the AIM index. The company said it processed a lot less copper ore in the first half of its current financial year because its mining contractor failed to strip enough waste material to expose high grade blocks of sulphide ore, meaning less was delivered to its processing plant. The company said it processed about 12% less ore in the six months to September 30 as it had to switch to process its stockpiles of less-productive oxide ore. The copper producer processed 193,041 tonnes of ore in the second quarter, down from 250,022 tonnes a year earlier, and 373, 274 tonnes in the first half of the fiscal year, down from 421,930 tonnes a year earlier. That meant it the amount of copper in concentrate it produced fell to 1,862 tonnes in the second quarter, from 2,881 tonnes. However, in the first half it produced 4,937 tonnes of copper in concentrate, up from 4,490 tonnes. It said throughput was also affected by mill stoppages in August and September to repair and replace the mill actuator and brush ring on the main mill motor.
Nyota is down 15% after its key strategic shareholder, Centamin, reduced its shareholding in the company.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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