ISG2 Nov 2012 09:12
From **************: Wednesday 31st October 2012
The Markets
The New York Stock Exchange opened after the longest closure since 9/11 as the aftermath of Hurricane Sandy began to sink in. The storm has created an estimated 18 to 24 billion pounds in clearing up costs. In the UK, a report suggested that millions of poor and middle income households may remain unaffected by any economic recovery. The Commission on Living Standards warned that high unemployment will keep wages low and called for state subsidies to boost employment. On the continent, Greece's draft budget for 2013 predicts a deeper recession and worse debt problems than previously forecasted. Instead of shrinking 3.8%, the economy is expected to contract by 4.5%, with government borrowing predicted to reach 5.2% of economic output rather than the originally anticipated 4.2%. Meanwhile, unemployment in the Eurozone rose by 10 basis points in September to 11.6%, some 25.8 million people, exceeding consensus forecasts of 11.4%.
At the London close the Dow Jones was down by 42.69 points at 13,064.52 and the Nasdaq was down by 18.78 points at 2,969.17.
In London the FTSE 100 fell by 63.62 points to 5,786.28; the FTSE 250 finished 7.34 points down at 11,944.00; the FTSE All-Share lost 28.53 points to 3,026.45; and the FTSE AIM Index increased by 1.66 points to 3133.51.
Broker Notes
Following the recent surge in share price, Getech (GTC) has been downgraded from a "buy" to an "outperform" by WH Ireland, but with an increased target price of 52.5p, from 35p. The broker believes that Getech's strong momentum and supportive oil and gas prices coupled with improved marketing should give it a rating at least in line with the wider oil and gas sector, of around 14.1 times earnings. The shares jumped 2p to 51.5p.
Panmure Gordon upgraded its recommendation on Interior Services Group (ISG) from a "hold" to a "buy" and raised the target price from 112p to 170p. The broker was impressed by the company's new contract wins, particularly against a backdrop of a tough UK construction market. Panmure added that the office refurbishment company's international expansion through acquisition and organic growth will help diversify revenues, with overseas revenues now accounting for 20% of total sales