Greencore: The Irish food group announced today that it does not intend to make a revised offer for UK company, Northern Foods plc.
The two companies had announced a merger plans last November, but Northern
Foods withdrew its support in favour of a cash offer from businessman Ranjit
Tullow Oil: The London-listed company reported today a big rise in
2010 profits, boosted by higher oil and gas prices.
Goodbody analyst, Gerry Hennigan, commented - - "Tullow’s FY10 results released this morning were marginally below our expectations, the main variations over our forecasts being higher cost of sales. PBT, as a result, came in at $151.9m, compared to our estimate of $160.8m and a consensus forecast of $192.3m, resulting in adj. EPS of 23.5c v our expectation of 23.8c. A final dividend of 4.0p was declared directly in line with that issued last year.
Guidance in terms of FY11 production (86 - 92 kbopd) has been maintained with gross production from Jubilee currently given as 69.0 kbopd. The target of gross Jubilee production of 120 kbopd is now expected to be achieved within five months, rather than mid-year. In terms of audited reserves, the total resource base at the end of 2010, adjusted for the planned farm-down in Uganda, is estimated to be 869 mmboe compared to 893.6 mmboe at the end of 2009.
Results aside, the primary points of interest in the statement relate to: (i) commentary regarding the planned farm-down in Uganda; (ii) drilling results from the Muscovite prospect in the Dutch sector of the North Sea (30% risked contribution to NAV of 0.2p), which has been plugged and abandoned; and (iii) portfolio management. Amid expectations of an agreement being reached with the Ugandan Government, nothing conclusive is outlined in the statement, though an MoU is being finalised. In terms of portfolio management Tullow has relinquished Block 1/06 in Angola on commercial grounds and withdrawn from the DRC.
On the exploration front, specific mention is given to the forthcoming South American campaign, which has already commenced with the spudding of the Zaedyus prospect (10% risked contribution to NAV of 6.6p) on March 7th. Beyond that, forecast activity largely reflects recent statements, though updated guidance on scheduled activity and gross prospect volumes in the results presentation will warrant attention. With forecast adjustments for FY11 likely to be at the margin and, as yet, limited incremental newsflow elsewhere, we see few organic catalysts in the statement this morning to move the share price."
Gerard Lyons, chief Economist & Head of Research at Standard Chartered explains why higher interest rates in Western economies will not be able to mitigate the impact of high oil prices:
DCC: Sercom acquires Advent Data; DCC announced today the acquisition
of Advent Data Limited, a distributor of electronic office supplies to a broad
range of resellers, retailers, and e-retailers in the UK.
Economic View: Record bond yields put pressure on European policymakers; Goodbody chief economist, Dermot O’Leary, comments - - "Lack of pro-active policy-making has been a key theme of the crisis in the euro-area over the past twelve months or so. Instead of getting ahead of events, events have actually triggered policy actions, with the best example being the decisions made over a weekend at the height of the Greek crisis last May.
We had some confidence at the beginning of the year that this was starting to change, but once again the sense of urgency evaporated with the 'successful' bond auctions in Portugal and Spain in January. At that time, the European Commission was pushing for a final solution to be reached in early February, but this was rebuked by Germany in particular which then imposed the deadline of the EU summit at the end of March.
That is still the deadline and from the point of view of urgency, the fact that bond yields in peripheral countries continue to remain close to all-time highs can be seen as a positive development, as it will force further action to be taken and not delayed any further. Yesterday, Greek ten-year yields rose to a record 12.9%, the Portuguese ten-year stands at 7.7%, while Ireland stands at 9.5%. All rates are unsustainable. Only one is relevant from a current funding perspective – Portugal.
Portugal has refused to request aid as yet, and will issue a September 2013 bond this morning, where the current market yield stands at 6.4%, well above the rate Ireland is paying on 7.5 year maturity funding. Unless something radical is agreed in two weeks time, Portugal will be the next to request aid, especially given it has a large redemption in April. From an Irish perspective, one would be concerned that the banking crisis would have to deepen before a change of course in relation to the rehabilitation of that sector. We hope we are wrong, but don’t believe that the current prescription is the right one and further European support will be necessary."
The sparring on spending between Democrats and Republicans is getting the federal budget nowhere. Insight with Rep. Paul Ryan, (R-WI):
UK trade deficit expected to narrow: Davy economist, Conall Mac Coille, comments: "Today's release of trade data for the UK is expected to show that the trade deficit narrowed to £4.0bn in January from £4.8bn in December and at a broadly similar level to £3.95bn in November. So the widening of the trade deficit in December is expected to be temporary. A rise in aircraft orders, probably brought forward due to the introduction of the tax rise in January, pushed up UK imports in December but should have a temporary impact on the UK trade deficit. Also, in January 2010, the impact of the snow appeared to have a temporary negative impact on the UK trade deficit. So there may be a similar effect this year.
A sharp decline in the UK trade deficit in January is likely. But even if the trade deficit falls to £3.7bn, lower than the market's expectation, the bigger picture is that the UK is still not receiving a positive contribution to growth from net trade. Both the Bank of England's and the Treasury's projections for UK GDP growth in 2011 are conditional on a positive contribution from net trade. If these expectations continue to be disappointed, the outlook for both monetary and fiscal policy may change.
Today also sees the release of German industrial production data. In December, German industrial production fell by 1.5% on the month, and this decline is expected to be reversed in today's data for January. The market expects a rise of 1.7% month-on-month, leaving the annual growth rate at 11.1%. Yesterday's German factory orders data showed a stronger bounce back in orders than expected, which could indicate that the risk to the market's expectation for industrial production in January lies on the upside."
In New York Tuesday, the Dow rose 104 points or 1.03% to 12,214.
The S&P 500 added 0.89% and the Nasdaq advanced 0.73%.
The MSCI Asia Pacific Index of shares inched up 0.1% Wednesday.
Japan's Nikkei 225 rose 0.61%; China's Shanghai Composite added 0.07%; Australia's S&P/ASX 200 Index slid 0.84% and the Bombay Stock Exchange's Sensex index rose 0.07% .
In Europe, the Dow Jones Stoxx 600 is up 0.10% in early trading Wednesday.
The ISEQ has fallen 0.47% in Dublin.
CRH is down 1.2%; there has been no trading in Greencore's shares; Aer Lingus is up 1.79%.
FBD fell 3.87%.
The euro is trading at $1.3869 and at £0.8583.
For live currency updates, check the right-hand column of the Finfacts home page.
The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.
The BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index averaged 59% lower in 2009 than a year earlier.
On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 0.537%, to 1,700 points, Bloomberg report.
On Friday July16th, the BDI rose 20 points or 1.12% to 1,700 to break the 35-session losing streak.
On Tuesday this week, the BDI rose 42 points or 3.04% to 1,424.
The Financial Times reported
earlier in January, that Australia’s flooding and fears of ship oversupply has
pushed down a gauge of the cost of hiring ships to carry coal, iron ore and
other dry bulk by nearly half since October to the lowest level since the
aftermath of the financial crisis. The Baltic Dry index, the widely watched
measure of dry bulk charter rates, fell to 1,453, nearly half the 2,784 peak
reached on October 27, 2010.
margin between the US benchmark WTI (West Texas Intermediate) used on the New
York Mercantile Exchange and Brent is almost $9.
The spot price of an oz of gold is trading in New York at $1,425.40, down $3.50 from Tuesday's close.
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