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The Most Followed report is a summary of the most interesting corporate stories of the day, including the most popular stock exchange statements, the hottest topics on message boards, the biggest movers of the day as well as rumours and speculation.
Thursday's most followed: Tullow Oil, Magnolia Petroleum, ASOS, Kesa Electricals, Mulberry Group, Associated British Foods, Man GroupJanuary 19 2012, 12:53pm
The retail sector was in focus in London markets today thanks to another raft of Christmas trading reports, while oil and gas firms also drew interest with traders monitoring market reaction to yesterday’s disappointing trading production from Tullow Oil (LON:TLW).
The FTSE 100 oil firm emerged among the top searches on Google Finance as investors monitored market reaction to yesterday’s disappointing production report.
Tullow’s production missed its own forecasts mostly due to the weaker than expected performance of its main producing asset, the giant Jubilee offshore field in Ghana.
According to Credit Suisse, the market overreacted to the news and focused more on near-term issues.
The bank noted that the company was confident in receiving regulatory approvals for the Ugandan farm-out deal. The proceeds from the farm-out agreement of US$2.9 billion should provide it with financial flexibility, added Credit Suisse.
However, Citigroup said that while Tullow has enough cash in the bank to fund its operations in 2012-13, its expected capital expenditure (capex) for 2012 of US$2 billion is above Citi’s forecasts of US$1.6 billion.
The most followed companies in the oil and gas sector also included small cap Magnolia Petroleum (LON:MAGP).
The US-focused Magnolia drew attention as it relayed an operational update from major ExxonMobil (NYSE:XOM), which operates its biggest asset, the Hawkins oil field in Texas, where it holds a 0.01543 per cent working interest.
A new nitrogen rejection unit (NRU) plant that is expected to be operational next month is expected to boost production from the field, resulting in a “meaningful” uplift in revenues for Magnolia.
ExxonMobil has estimated that oil output will increase by more than 30 percent to 6-7,000 barrels of oil per day, gas production will reach 20-25,000 million cubic feet per day and the life of the field will extend by 25 years.
The upgrade will also result in the recovery of an additional 40 million barrels of oil equivalent.
We are highly encouraged by the results of our participation with ExxonMobil in the NRU plant, which is expected to significantly raise the efficiency of the Hawkins field,” said chief operational officer of Magnolia Petroleum Rita Whittington.
“We look forward to receiving the production results.”
Meanwhile, investors following the retail sector were busy scrutinising another batch of Christmas trading reports, all of which made the list of the most read RNS statements.
The results for the most important trading period of the year unveiled by the retailers today were in stark contrast to each other.
While ASOS (LON:ASC) beat expectations with its shares surging 15 percent, Kesa Electricals (LON:KESA) dropped after reporting a decline in like sales and revealed further charges related to the Comet sale.
In today’s statement, Kesa said its like for like sales dropped 1.3 percent in the period from the beginning of November to January 8 as sales at its main Darty France electrical store chain were down 4.7 percent.
In addition, Kesa revealed that the net debt of its struggling Comet division, which it has agreed to sell to the Hailey group, will exceed the agreed threshold by £10-15 million.
The results from ASOS were much better with the online fashion retailer reporting a 46 percent jump in sales for the December quarter, which came amid a strong performance across all of its markets.
Sales in the UK improved 10 percent, while international sales nearly doubled, soaring 93 percent.
“With the business continuing to perform well through these challenging economic times, we remain confident about the outlook and expect our full year results to be in line with market expectations,” said chief executive of ASOS Nick Robertson.
Luxury goods retailer Mulberry Group (LON:MUL), which is noted for its bags, also emerged atop the top performers in the sector this morning as investors cheered the 35 percent uplift in like for like retail sales in the six weeks to 14 January.
The group also said its wholesale business also did well as orders for spring and summer period of 2012 are currently up 35 percent compared to the same period of 2011.
The strong trading seen during the all-important Christmas season has led Mulberry to expect its full year results to top City forecasts.
In yet more good news for the sector, the Primark clothing stores owned by Associated British Foods (LON:ABF) traded well at the end of 2011, posting a 16 percent improvement in sales compared to the Christmas shopping season of 2010.
The outlook for this year offered in the report was upbeat owing to the decline in cotton prices compared to 2011, which should slash Primark’s input costs.
Meanwhile, AB Foods’ sugar business benefitted from an increase in sugar prices, seeing its revenues surge 21 percent year on year.
Turning to financial stocks, Man Group (LON:EMG) also ranked high on the list of the most searched for UK companies and was one of the most actively discussed stocks on message boards.
Investors took a closer look at Wednesday’s trading update from the hedge fund manager, which showed a decline in its funds under management (FUM) drop from US$64.5 billion at the end of September to US$58.4 billion at the end of 2011.
Net outflows during the final three months of 2011 reached US$2.5 billion.
However, the company also unveiled plans to save an additional US$75 million this year.
Arbuthnot said that volatility in the group’s assets is likely to continue, also noting that negative investment performance slashed Man’s assets by US$1.5 billion during the quarter, pressuring its performance fees.
On a positive note, Loungo said significant caution is already priced into the current valuation and a new dividend policy along with cost cuts could serve as catalysts for share price recovery this year.
Investors following Man Group speculated that the group is unlikely to increase its dividend and could actually reduce it given the shrinking profits.
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