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Shell sells Norwegian units and enters joint venture in Scandinavia: Shell announced the sale of parts of its Norwegian operations to Finnish energy firm St1 for an undisclosed fee, further divesting its downstream activities.

North Sea oil industry ‘close to collapse’: Experts’ warning that oil price plunge is not all good news for U.K. economy: North Sea oil and gas tycoon and government adviser Sir Ian Wood has said around 10% of jobs may go, while Robin Allan, Chairman of the independent explorers’ association Brindex and Premier Oil executive, said that at current oil prices it is ‘almost impossible to make money’.

Babcock remains a hold despite defence deal: Babcock announced that it will pay £140 million for Defence Support Group (DSG), a government agency that maintains the Army’s equipment. With the acquisition comes a decade-long contract to overhaul and repair the British Army’s “land fleet” of vehicles, including tanks, Land Rovers and trucks. The DSG announcement means Babcock has replaced the revenues lost when it missed out on the contract to maintain military sites to rival Carillion. That’s not to say the company is struggling for work. Babcock bills itself as “working diligently behind the scenes”, and at its half year results in November announced an £18.5 billion order book, bolstered by wins including Magnox nuclear decommissioning and upgrades to the U.K.’s rail infrastructure. However, the 2015 Strategic Defence and Security Review is coming, and as the Treasury scales back the Forces in this age of austerity, future work may decline. There has been some concern over Babcock’s £1.6 billion acquisition of helicopter business Avincis earlier this year, which required a £1.1 billion rights issue and put pressure on free cash flow. However, Questor believes the deal was a good move for the company, helping to diversify its offering. Questor last looked at the company in May when the shares were at £11.78, and rated it a hold. With the dividend yielding 1.7% last year and forecast to increase to 2.1% this year, Babcock is no stand-out payer. The price-earnings ratio is also fairly punchy at 19.2 last year, falling to 15.5 for 2014/15. By comparison, Carillion yielded 5.3% last year and the P/E ratio was 9.5. Babcock is a solid company but the stellar run its shares have enjoyed over the past few years means they are fully valued. Babcock at £10.48 -13p Questor Says ‘Hold’.

IAG and Aer Lingus: luck of the Irish: Executives moving jobs often return to their old stamping ground to pick up favoured employees or clients. Far rarer, though, for them to return for the entire company. Willie Walsh, Chief Executive of Aer Lingus from 2001 to 2005, is proposing to do just that. The Irish airline has knocked back Mr Walsh, who is now Chief Executive of IAG. But he may be back. The prize for Mr Walsh is not staff or customers but landing slots at London’s Heathrow airport. Aer Lingus controls 23 slots there. IAG already has six slots on the Dublin-Heathrow route but over time it could reallocate them to more profitable routes. Aer Lingus also has access to seven slots at Gatwick. On its undisturbed price the Irish airline had a market value of €970 million. Set against that is net cash of nearly €381 million. Assume a 30% premium to the undisturbed price and IAG would be getting these slots for €827 million (or €29 million per slot). That is not cheap — other recent deals have valued Heathrow slots at half of that. He might be able to squeeze out some cost savings to make the price look more attractive — maybe. Aer Lingus made operating margins of 21% in the third quarter. All of IAG’s brands — BA, Iberia and Vueling — have margins below that. But Aer Lingus would definitely benefit from rejoining the One World alliance which it left in 2008, as it would gain added routes into the U.S. and elsewhere

Private developers boost housebuilding: Housebuilding levels have hit a post-2008 high thanks to private construction, but levels of public building have been falling sharply, according to new figures.

Shale byproduct prices track oil plunge: The collapse in crude oil prices has been accompanied by a parallel plunge in byproducts of the U.S. shale drilling boom, increasing pressure on energy drillers while handing a windfall to the petrochemicals industry.

We can’t cut our output, insists Saudi oil Minister: The Saudi oil Minister has admitted that his country would find it “difficult, if not impossible” to give up market share by cutting crude production despite the slump in oil prices.

At 0430GMT today, Brent crude oil one month futures contract is trading 0.25% or $0.15 higher at $59.42 per barrel, following optimistic global oil demand expectations from Saudi Arabia’s oil minister. Yesterday, the contract declined 3.12% or $1.91, to settle at $59.27 per barrel after Saudi Arabia’s oil minister stated that they would continue with their policy of maintaining output, despite plunging prices.

One in three property sellers cut asking prices, says Zoopla: A third of homeowners trying to sell have cut their asking prices since putting their homes on the market, according to the property website Zoopla, as the slowdown in the housing market forces sellers to be more realistic about their expectations.

Sell Optimal Payments after Finance Chief exit: Optimal Payments shares have been hammered this year. The company’s shares have tumbled almost 40% from highs of 536p in mid-September and are now down 9% for the year after its million Chief Executive was caught up in a controversial share sale. The online payment company announced the exit of the Finance Chief Keith Butcher last week and moved to calm the markets by insisting trading was still fine. The problems all stem from share dealings carried out by the company’s Chief Executive earlier this year. On 1 April the company made a regulatory announcement that Joel Leonoff had “pledged” 1.5 million Optimal Payments shares, or 38% of his entire holding, in return for £4 million in cash from a U.S. company called Equity First Holdings (EFH). The cash received for the shares was about a 30% discount to their £5.5 million market value. Meanwhile, the company said that trading was strong and it expected results for the year ended December to be “at least” in line with market expectations for pretax profits of £45 million, on revenue of £232 million, giving earnings per share of 24.4p. Optimal Payments is operating in a fast-growing online gambling market as its technology helps customers store cash and make payments. It has two main sources of revenue: NETELLER, an “e-wallet” business into which online gamblers can deposit money, and NETBANX, a system that processes transactions for online retailers. But, despite these encouraging prospects, Questor is nothing if not cautious and doesn’t like surprises such as those involving Mr Leonoff’s sharedealing. We are exiting our previous buy position and would rather hold cash going into next year. Optimal Payments at 325½p+12p Questor Says ‘Sell’.

Imagination Tech shares jump on better outlook: Imagination Technologies provided an upbeat profit outlook for the “first time ever”, sending shares 16% higher, even as a slump in sales of digital radios and rising costs led to a loss during the first half of the year. “Now that our product lines are complete and the heavy investment phase is over, we expect to see lower rates of operating cost growth going forward and increased focus on financial returns,” said Hossein Yassaie, Chief Executive. The company reported royalty revenues of £56.3 million, largely flat on £56.2 million in the same period last year. Licensing revenues, however, increased by 11% to £16 million, an encouraging sign given that they are seen as a leading indicator for future royalty revenues. The overall performance in the first half was relatively poor, with a £10.7 million loss before tax, down from a £2.2 million profit in the same period last year. Total group revenue in the first half was down 4% to £82.2 million for the six months to the end of October. The damage was partly done by its legacy digital radio business Pure, where it made a loss as revenue tumbled 35% to £9.4 million. Yet there are still other concerns around the company. It made a risky move into microchip design, buying the U.S. group MIPS last November for $100 million (£63 million). Although over the long term this deal may pay off, it will take time and investment. There is undoubtedly strong demand for smartphone and tablet technology which uses Imagination Technologies microchip designs but competition is getting fierce. Given the recent market selloff the prudent approach is to wait for the next set of results for strong cash generation and rising licensing revenue before upgrading shares from a hold. Imagination Technologies at 221p+31p Questor Says ‘Hold’.

Russian economic meltdown sparks wave of panic buying London homes: Wealthy Russians, desperate to get their money out of Moscow in the wake of the Russian economic crisis, are panic-buying in London this week, according to high-end estate agents.

Dunstone’s done good: Well-received maiden results from Dixons Carphone have brought the year to a stylish finish for Chairman Sir Charles Dunstone. Criticisms of his merger of Carphone Warehouse, the mobile phone retailer, with electricals store chain Dixons have so far been wide of the mark. Shares are up 24% since the deal, commanding an 18 times forward earnings multiple, ahead of where predecessor stocks stood. Dixons Carphone, whose maiden profits are 30% higher at £78 million pro-forma in the 31 weeks ended 1 November, has benefited from slackening competition. Rivals Phones 4U and Comet have both gone out of business. But could mobile operators improve their pricing power too, at the expense of the group, which sells contracts for them? BT Group’s £12.5 billion purchase of EE is no immediate threat. It adds a mobile group to a fixed-line titan active in broadband and TV. But consolidation among businesses serving gabbers, gogglers and keystrokers could drive down margins.

Wood Group cuts contractor pay in response to falling oil prices: Wood Group, one of the U.K.’s leading oil services companies, is to cut pay rates for North Sea contractors and freeze salaries of some of its British employees in response to the collapse in oil prices.

Chevron drops Arctic drilling plan: Chevron, the U.S. oil group, has shelved indefinitely a plan to drill in the Arctic Beaufort Sea off the north coast of Canada, citing “the level of economic uncertainty in the industry” as one of the reasons for the decision.

Merger deal to take insurers into top ten: Catlin Group, the insurer that is one of the most persistent takeover candidates on the stock market, is in talks with a larger insurer that would value the company at £2.53 billion

UK average earnings excluding bonus rose as expected in the August-October 2014 period In the August-October 2014 period, the average earnings excluding bonus climbed 1.60% on a YoY basis in the UK, meeting market expectations. In the May-July 2014 period, the average earnings excluding bonus had recorded a revised rise of 1.20%.

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At 0430GMT today, Brent crude oil one month futures contract is trading 0.33% or $0.20 higher at $61.38 per barrel. Yesterday, the contract climbed 2.21% or $1.32, to settle at $61.18 per barrel after the Energy Information Administration reported that crude oil inventories in the US dropped 0.85 million barrels in the week ended 12 December 2014.

WASHINGTON (Alliance News) - US crude oil ended higher for a second straight session on Wednesday, having touched an intraday high of near USD59 a barrel after an official weekly oil report from the Energy Information Administration showed crude oil stockpiles in the US to have dropped, albeit less than expected. Meanwhile, the US Federal Reserve in its monetary policy statement said it would be patient with regard to interest rate hikes, while expressing little concern over the potential impact of plunging oil prices on inflation. In essence, its was a Fed reassurance to markets that it will take its time before withdrawing any further support for the recovering economy. Crude oil prices have been under pressure after weak projections for global demand during a supply glut. Crude has plunged to its lowest since 2009 losing more than 40% from its summer-time highs. Earlier today, a weekly report from the US Energy Information Administration showed US crude oil inventories to have dropped by 0.85 million barrels in the week ended December 12, while analysts expected a decline of 2.36 million barrels. The report showed US crude oil inventories at 379.9 million barrels, end last week.