WSJ:UK Summary: Recovery In Metals Prices Boosts FTSE
MARKET NEWS:
FTSE 100 5991.91 +46.95 +0.79%
FTSE 250 12035.36 +68.25 +0.57%
DJ UK Small-Cap TSM Index 3619.66 +21.42 +0.60%
London Stocks Push Ahead, Boosted By Miners
0848 GMT [Dow Jones] FTSE 100 up 0.79%, extending earlier gains as a recovery in metals prices bolsters heavily weighted mining stocks. With gold up $8.00 at $1514.80, Kazakhmys leads the sector with a 2% gain. "A moderate bounce in commodity prices has helped see a turnaround for the FTSE," notes Alastair McCaig of WorldSpreads. Elsewhere, London Stock Exchange adds 3.7% on impressive FY figures. Centrica rises 1.6% after a Deutsche Bank upgrade. Still to come on the data front, U.S. April CPI at 1230 GMT and the University of Michigan confidence survey at 1400 GMT.
TOP STORIES:
European Commission Lowers UK 2011 Growth Forecast
LONDON (Dow Jones)--The European Commission Friday cut its forecast for economic growth in the U.K. in 2011 on weakening prospects for consumer spending.
BP CEO: Exploring Arctic With TNK-BP Still Represents Good Value
ST. GALLEN, Switzerland (Dow Jones)--BP PLC (BP) still sees value in exploring the Russian Arctic with Rosneft (ROSN.RS) through its TNK-BP joint venture rather than alone, Chief Executive Robert Dudley said Friday.
No Recovery Yet For US, Europe - Reckitt CEO
LONDON (Dow Jones)--Global growth in the consumer industry has slowed and talk of recovery in the U.S. and Western Europe is premature, Reckitt Benckiser PLC (RB.LN ) Chief Executive Bart Becht told Dow Jones Newswires.
LSE Operating Profit Up 22%; Files TMX Merger Application
LONDON (Dow Jones)--The London Stock Exchange Group PLC (LSE.LN), which has agreed to tie-up with Canada's TMX Group Inc (X.T), Friday posted a 22% rise in full-year operating profit, and said the pipeline of companies seeking to raise capital in its markets "looks encouraging."
COMPANIES NEWS:
William Hill Shareholders Revolt Over 2010 Pay Awards -Reuters
Holders of a third of U.K. bookmaker William Hill PLC (WMH) shares either opposed or withheld their votes on directors' pay awards for 2010 at the company's annual meeting Thursday, Reuters reported.
TNK-BP Minorities Prepare Law Suit Against BP
MOSCOW (Dow Jones)--A group of minority shareholders in BP PLC's (BP) Russian joint venture TNK-BP Holding (TNBP.RS) said Thursday they have filed court papers in preparation for a lawsuit against the U.K. oil major and TNK-BP.
BHP Billiton Moves Closer To Olympic Dam Mine Expansion
MELBOURNE (Dow Jones)--BHP Billiton Ltd. (BHP) has taken a further step toward expanding its Olympic Dam copper and uranium operation in Australia with one of the world's largest open-pit mines after gaining government approval to release to the public updated plans to meet environmental, social and economic concerns.
ECONOMIC NEWS:
UK 1Q Construction Output Revised To -4.0% QQ
LONDON (Dow Jones)--Output in the U.K.'s construction sector fell less than previously reported in the first quarter of 2011 but still dragged down the country's overall economic growth, official statistics showed Friday.
PRESS REPORT:
Big Banks May Take Hit On Capital Surcharge - FT
The world's biggest banks are likely to be hit by capital surcharges that increase progressively based on a lender's size, how connected it is to other banks and how easily it could be replaced in a crisis, the Financial Times reported on its website, citing global regulators.
ANALYSIS:
HEARD ON THE STREET: BT Group's Demons Are Diminishing
The skeleton in BT Group's closet could be less scary than the market fears. The U.K. telecom company beat market expectations Thursday with full-year earnings of GBP1.5 billion ($2.45 billion). But good news on the company's pension deficit, one of the biggest constraints on its cash flows, was an added bonus. BT's valuation still reflects uncertainty on future pension payments. But as the company's turnaround story continues, its shares could have further to rise.
BROKER COMMENTS:
TNK-BP Minority Hldrs Suit An Unknown Risk For BP
0857 GMT [Dow Jones] A lawsuit being prepared by TNK-BP (TNBP.RS) minority shareholders against BP (BP) "could present a relatively difficult venue for BP if the suit turns out to be serious," says Citi. The suit has not yet been filed so its exact nature isn't known. "Although the investors filing suit are individual residents of the Tyumen region, it is possible they are acting on behalf of larger shareholders or it could be just a nuisance complaint," says Citi analyst Ron Smith. His recommendation on TNK-BP is hold with a $3.27 target for the Moscow listing. That last traded at $2.85. BP shares +0.6% at 446p.
Panmure Nudges Up Aveva Price Target
0847 GMT [Dow Jones] Panmure Gordon nudges up Aveva (AVV.LN) price target to 1573p from 1567p ahead of the company's final results, which it expects to be well received. Says there are three areas in which the company is likely to surprise positively: revenue, dividend and forecasts. "Whilst we have long-standing valuation gripes, investors who have taken the leap have been well rewarded - Aveva shares have outperformed the FTSE All Share by 24.9% in the past 12 months," says Panmure. Keeps the stock at hold. Shares rise 0.4% to 1646p.
RenCap Cuts Petropavlovsk Target Price
0834 GMT [Dow Jones] Renaissance Capital cuts Petropavlovsk (POG.LN) target price to 775p from 1000p on the risks of lower grades, which are "expected to flatten the production profile and raise costs." RenCap cites the recent global derating of gold equities compared with the gold price as another reason for the downgrade. The bank notes the "challenging construction schedule for new processing lines poses a further risk to the company's growth." RenCap reiterates its sell recommendation. Shares trade 2% higher at 830p.
Deutsche Bank Cuts ENRC Price Target
0828 GMT [Dow Jones] Deutsche Bank cuts Eurasian Natural Resources (ENRC.LN) price target to 1460p from 1575p following the company's recent update, which showed rising costs. The company was at pains to highlight the cost pressures and articulated operating cost inflation expectations at the top end of a 15%-20% range, says DB. "While costs will impact earnings, the cash flows from its base operations in Kazakhstan remain very large and with the stock trading below our price target, we maintain our buy recommendation." Shares +1.7% at 854p.
Investec Cuts Keller Price Target
0814 GMT [Dow Jones] Investec Securities cuts Keller (KLR.LN) price target to 630p from 745p following the company's profit warning. "We had assumed that 2010 would represent the low, however yesterday's profit warning revealed that this was not the case." While events such as the Australian floods and political unrest in the MENA region have not helped, the real problem again lies in the US. Investec cuts its '11 EPS estimate by 33% to 38p. Nevertheless, it keeps a buy recommendation, remaining confident that on a two-year view, the 4.8x peak earnings the stock is now trading on offer an attractive opportunity. Shares +0.8% at 533p.
Panmure Cuts Keller Price Target
0812 GMT [Dow Jones] Panmure Gordon cuts Keller (KLR.LN) price target to 500p from 570p following the company's cautious trading update. Market conditions are difficult for the group and are likely to remain so for a while. Panmure cuts its '11 EPS estimate to 37.25p from 54.32p and its '12 EPS estimate to 45.04o from 63.86p. "We believe that the dividend will be maintained, which should provide some share support but, with limited appreciation potential, we maintain our cautious stance." Its recommendation is sell. Shares +0.8% at 533p.
Catlin IMS Shows Disciplined Growth - Peel Hunt
0803 GMT [Dow Jones] Catlin's (CGL.LN) 1Q interim management statement demonstrates "disciplined growth," and the company should be well positioned to take advantage of the improved rating environment going ahead, says Peel Hunt. "Average premium rates across the group were broadly flat; however catastrophe-related business has already seen some rate rises," says the brokerage. Has a buy rating, and a price target of 439p. Shares are up 1.8% at 401p.
