UK/Euro Financial Market Daily Morning Briefing 21-02-2007

£105,000 profit! spread betting UK shares with the Intelli-Trend system! Click Here to find out more.

London shares up, Alliance & Leicester FY pleases, Anglo American dips

Leading shares were higher this morning with improved full year earnings and an announcement of a 300 mln stg buyback lifting Alliance & Leicester, while Anglo American fell after its buyback plans fell short of estimates, dealers said.
   
At 9.00 am, the FTSE 100 was up 5.9 at 6,418.2, while the broader FTSE 250 was up 28.8 at 11,616.4.
    
Last night, the Dow recovered to finish 19.07 higher at 12,786.64, after falling more than 60 points earlier in the session, as encouraging comments from a Federal Reserve official allowed investors to shrug off disappointment over Home Depot Inc's declining sales.
   
Broader stock indicators also turned higher. The Standard & Poor's 500 index rose 4.14 to 1,459.68, and the Nasdaq composite index climbed 16.73 to 2,513.04.

Over in Asia, Japan's Nikkei closed down 25.91 points at 17,913.21 after the BoJ raised its overnight call rate target to 0.50 pct from 0.25 pct. In Hong Kong the Hang Seng closed its morning session up 67.14 points at 20,635.05.
   
Among early risers, Alliance & Leicester, the UK's eighth-biggest bank, was up 42 pence to 1,108 after saying full year core operating profits rose 7 pct to 585 mln stg, up from 548 mln stg in 2005.
   
The result narrowly beat consensus analyst expectations of 580 mln stg.  Pretax profit rose to 569 mln stg, up 4 pct from 547 mln stg in 2005.
   
The company also said it would launch a 300 mln stg share buyback plan this  year, after being given authorisation to implement the new Basel II capital  requirement regime. In reaction, Dresdner Kleinwort raised its rating to 'add' from 'hold'.
   
The broker said that: "Operational performance is improving from a low base." It told clients. And the broker added that while the group's multiple of 11.2 times 2008 earnings "appears racy", it has included 140 pence for M&A.
   
Renewed M&A talk lifted Imperial Tobacco's shares 60 pence to 2220 after a Spanish business website linked the UK tobacco group with a possible bid from Philip Morris.

Ed Ponsi is back in town - don't miss his FREE evening this Friday...

Just a few places left, click here for details.

According to the El Economista website, Altria's Philip Morris unit has contacted investment banks to find out if Altadis would help the maker of Marlboro cigarettes in a bid for Imperial.
   
Philip Morris would be willing to give up assets such as Imperial's German cigarette unit Reemtsma to the Spanish company because a full bid for the UK group would run into problems with competition authorities, it said.
   
Elsewhere, the decision yesterday by Delaware's insurance commissioner to grant conditional approval to the proposed management buyout and eventual dissolution of Royal&Sun Alliance Insurance Group's US operations helped lift  the insurer's shares 3-1/2 pence to 171-1/2. 
   
In broker driven activity, Barclays rose 5-1/2 pence to 790 after Deutsche Bank raises its price target for the UK high street bank to 890 pence from 850 saying it thought yesterday's outlook statement was encouraging.
   
On the downside, Anglo American slipped 40 to 2,561 after disappointing the market by only announcing an increase in its share buyback program of 3 bln usd versus a market consensus of 4 bln.
   
Profits also just missed estimates with earnings before interest and tax rising 54 pct to a record 9.8 bln usd from 6.376 bln previously, against the consensus forecast of 9.936 bln usd.
   
Merrill Lynch said these 2006 results were below its own expectations and consensus, while the capital return of 3 bln usd is in line with its estimates.
   
The broker added that it believes its earnings forecasts were 5 pct ahead of consensus, so this result is slightly disappointing for the market.
   
In other comment, UBS said with year-end net debt of just 3.3 bln usd, it believes there will be an opportunity for the company to increase its share buyback at the interims.
   
Elsewhere, mining stocks slipped as metal prices eased overnight. Xstrata dipped 7 to 2,492, Rio Tinto eased 13 to 2,887 and BHP fell 8 to 1,081. 
   
On the second line, Croda gained 17-1/2 to 621 after a solid results statement revealing pretax profit before exceptional items rose 7.3 pct to 54.3  mln stg despite high levels of energy and feedstock inflation and adverse  currency movements. 

Trading Emissions
SVS believes this stock has the potential to move over the next four weeks.

Find out why Register for our free research report on Trading Emissions, including expert technical and fundamental analysis:
Short-term trading strategies with SVS Securities PLC. Click Here

Elsewhere George Wimpey rose 5-1/4 to 416-3/4 after reporting full year results which were not quite as bad as expected.
   
The UK housebuilder said group pretax profits came in down 15 pct to 310.2 mln stg, reflecting tough trading conditions in its US business, although group revenue rose 5 pct to 3.15 bln stg with completions up 6 pct to 17,963.
    
Later this morning at 9.30 am, the minutes to the meeting of the Bank of England's Monetary Policy Committee on February 11, when rates were left on hold at 5.25 pct, should give an indication on the degree of divergence of opinion among the body's nine members.
   
Some analysts believe the newest members Tim Besley and Andrew Sentance -- who have proved the most hawkish in recent months -- will have voted for a further rate rise in February to follow up the surprise hike in January, given that annual CPI inflation remains well above the 2.0 pct target.
   
Others believe members will have opted unanimously for no change on the grounds that the data released since January's rate rise has been on the soft side.
   
Elsewhere, the latest industrial trends survey from the Confederation of British Industry is expected to show a small improvement for the manufacturing sector in January, helped by the ongoing strength of the euro zone economy.
   
The total orders balance is expected to improve to -7 pct in February from -9 pct in January.
 
UK Diary of Events

For a diary of key financial and corporate events in the UK today, click here

US Summary

For a summary of US stocks at yesterday's close of trade, click here

Arc, the niche fund management house specialising in small and unlisted companies, launches its 6th HMRC approved EIS Fund. The Fund offers investors attractive tax benefits including 20% Income tax relief, CGT Deferral and IHT exemption, combined with the growth potential of a portfolio of exciting unquoted shares. Click Here

PARIS - Market data at 10.03 am:

Major indices:
   
CAC-40 up 16.98 points at 5,730.43
SBF-80 up 22.80 at 7,127.53
SBF-120 up 12.90 at 4,201.27

Volume: 674 mln eur
28 CAC-40 stocks up
10 CAC-40 stocks down
2 unchanged

Major gainers:
   
Electricite de France, up 0.71 eur or 1.2 pct at 57.81 after posting 2006 net profit of 5.605 bln, ahead of analyst forecasts.
   
TF1, up 0.36 or 1.4 pct at 25.55 and bouncing from declines seen earlier this week, after the broadcaster named a new CEO, Nonce Paolini, while unveiling a 9.9 pct slide in full-year net profit before exceptionals. The earnings were slightly below analyst forecasts, but the broadcaster raised its dividend payout for the first time since 2000, to 0.85 eur per share.
   
Arcelor Mittal, up 0.28 or 0.7 pct at 38.49 and building on strong gains already chalked up earlier this week, after the steelmaker reported full-year EBITDA of 12.16 bln eur, in line with forecasts.
   
Major losers:
   
Schneider Electric, down 1.07 or 1.1 pct at 95.75 as profit-taking followed its release of full-year profit figures that exceeded forecasts; the stock climbed steadily ahead of this morning's earnings release, and is still up by more than 13 pct so far this year.
   
Spir Communication, down 2.57 or 2.2 pct at 116.94 after announcing a deal to merge its French car advertising business with those of Schibsted.
   
France Telecom, down 0.31 or 1.5 pct at 21.14.

...in the most intimate and sophisticated waterfront development in St Lucia. Seven elegant freehold residences set in Rodney Bay. Click Here.

Amsterdam shares AFX at a glance outlook

Forthcoming Events
   
Today
   
Numico Q4 figures, news conference
Heineken FY results, news conference
Hagemeyer FY results, news conference
   
Company News
   
Numico Q4 earnings beat expectations, sees 10-12 pct FY sales growth

Numico Q4 sales 690 mln eur vs restated 539 mln, opg 122 mln eur vs 110 mln

Numico Q4 net 70 mln vs 59 mln

Hagemeyer FY sales, net up on high copper price; lowers outlook for PPS division

Hagemeyer warns of pressure on sales growth from low copper prices, especailly after second quarter of 2007

Heineken FY net in line, beats own guidance; sees 10-13 pct net rise in 2007

Heineken ups dividend to 0.60 eur from 0.40 eur

Arcelor Mittal FY EBITDA in line with guidance; sees in-line Q1 performance
       
Market Sentiment  
   
ABN AMRO added to Merrill Lynch 'Europe 1' list

..at St Lucia's most successful buy to let 5 star resort development. Enjoy the sunset views from your own private roof terrace with pool, whilst sharing in the profitability of this fabulous boutique hotel. Just three magnificent residences remain, for more information click here.

ADVFN Services