British Airways, ARM Holdings, Lloyds, Segro and Kingfisher fall, but FTSE 100 holds on
Overview: the mining sector helped the FTSE 100 turn positive following early declines amid a mixed start on Wall Street.
Precious metals producers Randgold Resources (LSE: RRS), Fresnillo (LSE: FRES) and Lonmin (LSE: LMI) made it to the leaderboard with gains of 6%, 4.5% and 2% respectively. Other notable risers included power generation company International Power (LSE: IPR) and interdealer broker ICAP (LSE: IAP), which was in recovery mode after plummeting 16% on Friday, with both stocks advancing 2.5%, as well as beverage group SABMiller (LSE: SAB), British American Tobacco (LSE: BATS) and mobile satellite company Inmarsat (LSE: ISAT), which all tacked on about 2%.
The markets were dragged down by financial stocks with insurers emerging among the heaviest fallers in the index. Legal & General (LSE: LGEN) and Aviva (LSE: AV) both lost 4%. Other notable fallers included airline British Airways (LSE: BAY) with a 3% loss, chip maker ARM Holdings (LSE: ARM) and commercial property Segro (LSE: SGO), which declined 2% and 1.5% respectively. Retailer Kingfisher (LSE: KGF) also lost 1.5%.
US stocks were off to a mixed start as while the Dow Jones Industrial Average slid 0.15%, the broader S&P 500 index rose 0.1%, as did the technology heavy NASDAQ composite.
Commodities
il prices inched higher today to recoup some of the losses it suffered last week, when crude prices declined 4% to hit its two month lows on disappointing employment data that came out in the US and concerns over the debt situation in some eurozone countries.
Jobless claims unexpectedly rose in the US last week, which was followed by a non-farm payrolls update from the US Labor Department, which showed a decline of 20,000 for the month of December, while an increase was expected.
In other news, gasoline prices declined to US$2.67 a gallon in the US, according to California based analyst Trilby Lundberg after losing 5.8 cents last week.
March Brent Crude slipped below $70, arriving at US$69.69/barrel, while US light, sweet crude dropped to US$71.20/barrel on the New York Mercantile Exchange.
Supermajors BP (LSE: BP) and Shell (LSE: RDSB) posted small gains, while the rest of the majors slipped into the negative. Cairn Energy (LSE: CNE) and BG Group (LSE: BG) slid to the bottom of the pile with losses of 3%, while Tullow Oil (LSE: TLW) was down 1.1%.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) lost less than 1%.
Most midcaps also turned negative. Melrose was an exception with a 1.8% gain, as were Dragon Oil (LSE: DGO) and Heritage Oil (LSE: HOIL), which rose marginally.
Salamander Energy (LSE: SMDR) led the retreat with a 5% decline. JKX Oil and Gas (LSE: JKX), Dana Petroleum (LSE: DNX) and Soco International (LSE: SIA) followed with losses of 4%, 3% and 2% respectively. Premier Oil (LSE: PMO) also was in decline, shedding 1.5%.
Services companies Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) were down 1% and 2% respectively.
Mongolia-focused Petro Matad Ltd (AIM: MATD) led the juniors with a 13% advance. Most other small caps moved in the same direction as the majors.
Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) and Irish oil and gas exploration company Petroceltic International (AIM: PCI) both slipped 6%. Ukraine focused gas producer, Regal Petroleum (AIM: RPT) followed with a 5% decline, while Africa focused energy company Dominion Petroleum (AIM: DPL) retreated 4.5%.
Gold, silver and platinum recover
Gold was slightly higher today after slipping to US$1,050 from over US$1,100 per ounce last week on European debt worries and stronger US Dollar.
The yellow metal moves inversely to the US Dollar as it is seen as an alternative and riskier investment to the American currency, which has been gaining against the euro due to the persisting concerns over the debt situation in euro zone countries Greece, Spain and Portugal.
The US Dollar gave way today, helping commodities including precious metals to small gains.
Silver and platinum improved to US$15.01/oz and US$1,473/oz respectively.
Major mining stocks posted good gains today, while midcaps were down. Gold miner Randgold Resources (LSE: RRS) led the sector in the FTSE 100 with a 5.5% advance. Silver and gold producer Fresnillo (LSE: FRES) and platinum miner Lonmin (LSE: LMI) followed, climbing 4% and 1.5% respectively.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) declined marginally.
In the FTSE 250, Aquarius Platinum (LSE: AQP) was flat, while gold miner Petropavlovsk (LSE: POG) lost less than 1% and silver producer Hochschild Mining (LSE: HOC) pulled back 1.8%.
Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) performed well, gaining 9%. Commodity asset development company Mercator Gold (AIM: MCR) and Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) followed with gains of 5% and 4.5%, while Africa operating gold and platinum miner Goldplat (AIM: GDP) and Turkey and Ethiopia operating gold miner Stratex International (AIM: STI) gained 4% and 3.5%.
Turkey focused gold miner Ariana Resources (AIM: AAU) and Brazil focused gold miner Horizonte Minerals (AIM: HZM) headed in the opposite direction, shedding about 4%.
Copper and zinc climb
Base metals were mixed as while copper and zinc rose to US$2.87/lb and US$0.90/lb, nickel declined to US$7.72/lb.
Mining stocks were mixed. Xstrata (LSE: XTA) was in the lead with a 1.8% gain. Eurasian Natural Resources (LSE: ENRC) added 1.5% and BHP Billiton (LSE: BLT) tacked on nearly 1%. Anglo American (LSE: AAL) rose marginally, while Kazakhmys (LSE: KAZ) and Rio Tinto (LSE: RIO) were flat and Vedanta resources (LSE: VED) lost 1%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) performed well, rising 1.2%.
Junior base metals focused miner didn’t show much movement today.
Banks, insurers, private equity
Financial stocks were in selling mode today. Part-nationalised Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) were at the bottom of the banking sector with losses of over 2%. Barclays (LSE: BARC) and Standard Chartered (LSE: STAN) were down 1.5% and HSBC (LSE: HSBA) lost less than 1%.
Insurers also turned negative today. Aviva (LSE: AV) and Legal & General (LSE: LGEN) led the retreat, declining 4%. Prudential (LSE: PRU) was down 3%, Old Mutual (LSE: OML) slid 1% and Admiral Group (LSE: ADM) and Standard Life (LSE: SL) declined marginally. RSA Insurance Group (LSE: RSA) was flat.
Private equity group 3i (LSE: III) declined 1.5%.
Small Cap Movers
Other notable movers among the small caps included emerging speciality pharmaceutical company Alliance Pharma (AIM: APH), which rallied 16%, environmental science and technology company Accsys Technologies (AIM: AXS) with a 7.5% gain, bio-pharmaceutical company specialising in the development of differentiated biologicals, vaccines and siRNA delivery Lipoxen (AIM: LPX), which added 6% after securing an EU patent for its polysialic acid technology StimuXen and Seeing Machines (AIM: SEE), which rose 8%.
Large and Mid Cap News
A Lamprell (LSE: LAM) led consortium has received a new contract from a leading oil and gas operator in India. The company’s share of the deal is worth US$39.4 million.
Ultra Electronics (LSE: ULE) has signed a new £120 million bank facility to replace an existing facility of the same size, which was set to mature in November 2010, while the new one will not be due until September 2013.
BSS Group (LSE: BTSM) has announced the acquisition of specialist distributor of below ground drainage and civils equipment UGS Limited for a total consideration of £5.1 million including assumed debt to expand its reach in the drainage market.
Tullow Oil (LSE: TLW) and Heritage Oil Plc (LSE: HOIL) confirmed that Eni SPA has terminated its agreement to purchase Heritage Oil’s interests in Uganda. The initial agreement was made on the 18 December 2009, before Heritage’s JV partner Tullow exercised its pre-emption rights on 26 January 2010 and effectively blocked the deal.
FTSE 100 mining company Anglo American (LSE: AAL) is set to trim its debt after fully subscribing to its entitlement to the rights offer announced by its subsidiary Anglo Platinum, which is aiming to raise US$1.6 billion.
Swiss miner Xstrata (LSE: XTA) announced its preliminary full year results today, saying its H2 profit almost got wiped out, plummeting 97% year-on-year as metal prices declined, though the company responded by delivering cost savings of US$501 million representing a 5% reduction in the operating cost base.
Small Cap News
International oil and gas exploration and production company Elixir Petroleum (ASX: EXR) has expanded its European portfolio with the acquisition of the large Moselle Permit located in the East Paris Basin, onshore North-eastern France.
Seeing Machines (AIM: SEE) today published a newsletter to shareholders to give an update on the development of its key products including the fatigue monitoring system Driver State Sensor (DSS) , which has achieved positive results in trials last year. The company said that the momentum in fleet management is currently shifting to its target market of fleet management systems dealing with driver monitoring.
Xcite Energy (AIM, TSX-V: XEL) has appointed book-runners to conduct an equity placing to finance the development of its Bentley oil field in the North Sea. The company estimates that approximately C$50m is required in total. To facilitate the equity financing the company hired Arbuthnot Securities in the UK and Octagon Capital Corporation and CIBC World Markets in Canada.
Obtala Resources (AIM: OBT) said that alluvial diamond mining has re-commenced on the newly acquired Konoma alluvial diamond operation in Sierra Leone after completing a review and maintenance programme of both the 2Mtpa (million tonnes per annum) dense medium separation (DMS) plant and the earth moving equipment.
Eco City Vehicles (AIM: ECV) has launched an electric prototype of the London-licensed Mercedes Vito taxi, which is exclusively distributed and was developed by the group with manufacturing partner Penso, Mercedes Benz UK and Zytec Automotive.
Payzone (AIM: PAYZ) said it has agreed the terms of a debt and share capital restructuring with the group's banking syndicate and private equity group Duke Street. Receivers are being appointed and the company’s operating subsidiaries are being disposed into a newly formed company, to be controlled by Duke Street. Existing shareholders in Payzone will not have an ongoing interest in the business.
PetroLatina (AIM: PELE) announced an updated resource estimate conducted by Ryder Scott, which put the proved, probable and possible reserves of the company at 11.40 mmboe (million barrels of oil equivalent), which is 55.5% higher than the previous estimate of 7.34 mmboe and is worth US$247 million.
North Sea oil & gas company Ithaca Energy Inc (AIM, TSX-V: IAE) said that the joint venture partners of the Athena project have initiated the oilfield's development. The partners have committed to the purchase of in long-lead equipment worth US$14.85m and a full project team has been commissioned to develop and finalise Athena’s Environmental Statement and Field Development Plan (FDP).
Bio-pharmaceutical contractor Angel Biotechnology (AIM: ABH) has signed a contract with university IP commercialisation company Fusion IP’s (AIM: FIP) latest spin-out company, Progenteq. The company will provide the newly established venture with consultancy and development services as Progenteq develops and commercialises its novel cartilage replacement therapy. The terms of the contract have not been disclosed.
Alliance Pharma (AIM: APH) said it has agreed a significantly earnings enhancing acquisition, buying a portfolio of 18 prescription products. The company has conditionally agreed to acquire certain assets of privately owned Cambridge Laboratories in a deal worth between £14.3m and £16.4m, plus an additional £1.4m for Cambridge’s product inventory.
Plant Impact (AIM: PIM) has announced an exclusive evaluation, development and distribution agreement with Arysta LifeScience Corp covering its InCa, Balance and Cocoa Stress Tolerance products, extending Plant Impact’s territorial coverage from 24 to 52 countries.
Fusion IP (AIM: FIP) has created another new spin-out company from its partnership with Cardiff University. Newly established Progenteq is developing a novel cartilage replacement, using technology developed by Professor Charlie Archer's research group at Cardiff University's School of Biosciences.
Lipoxen plc (AIM: LPX), a bio-pharmaceutical company specialising in the development of differentiated biologicals, vaccines and siRNA delivery, said it has been granted patents for its Polysialylated G-CSF StimuXen proprietary technology in six European territories: the UK, Germany, France, Spain, Italy and Switzerland. The technology aims at protecting the body’s level of white blood cells which is particularly beneficial in chemotherapy patients.
