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Market:	ASX
Sector:	Media
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Web Site:	Proactive Investors Australia
Other Articles:	11-08-201006-08-201005-08-2010

Cadbury, Lonmin, Lloyds and Smiths Group lead FTSE 100 rally as blue chips hit new 2009 highs

Overview: most of the big moves on the leaderboard today had to do with M&A news and speculation.

The news was dominated by American food giant Kraft’s £10.6 billion takeover proposal for British confectionery maker Cadbury (LSE: CBRY), which promptly turned down the bid, saying it undervalued the company. Kraft, which owns a number of major confectionery brands, including the Toblerone chocolate and Oreo cookies, is now expected to come back with an improved bid for Cadbury, whose stock spiked about 38% on the news, reaching 785p per share, eclipsing the offered 745p.

Cadbury was followed by blue chip platinum producer Lonmin (LSE: LMI), also rumoured to be an M&A target in the making as another major miner Xstrata (LSE: XTA) is reportedly working on finalizing the takeover of the company. Xstrata already holds a 25% stake in Lonmin, ruling out any rivalling bids for the platinum producer.

The trend became yet more apparent later, when engineering firm Smiths Group (LSE: SMIN), which is regularly rumoured to be the takeover target of US pharmaceutical companies, also made it to the top, climbing 4.1%.

Telecom companies Cable & Wireless (LSE: CW) and BT Group (LSE: BT) also showed up among the leaders, both advancing around 4%, as did investment management business Man Group (LSE: EMG).

Today’s big gainers, primarily Cadbury, helped the UK’s blue chip index tack on 80 points, reaching new 2009 highs.

With the exception of Thomson Reuters (LSE: TRIL) which emerged as the leading faller among the blue chips with a 1.7% slump, no company declined more than 1%.

Specialty biopharmaceutical company Shire (LSE: SHP) and insurer Friends Provident (LSE: FP) were among the leading fallers with declines of 0.8%. Another insurer Standard Life (LSE: SL) also shed less than 1%.

FTSE 250

The mid tier index added about 150 points today, led by Whitbread (LSE: WTB) and yellow pages phone directory publisher Yell Group (LSE: YELL), which rallied 18% and 10% respectively. Retailing group Sports Direct International (LSE: SPD) also was in demand, tacking on 10%.

The fallers were led by Restaurant Group (LSE: RTN) with a 4% loss and pork products group Cranswick (LSE: CWK), which shed about 3%. Scottish milk supplier Robert Wiseman (LSE: RWD) also made it to the top three, sliding 3.2%.

Commodities

Key benchmarks continued improving during the day. US light crude was just above US$68/barrel, while Brent Crude rose to US$67.3/barrel.

Most oil and gas stocks basked in the sun today, bolstered by higher prices.

British Petroleum (LSE: BP) and fellow supermajor Shell (LSE: RDSB) didn’t move by much as BP declined marginally, while Shell tacked on less than 1%. Petrofac (LSE: PFC) declined less than 1%.

BG Group (LSE: BG) added 1%, improving to 1,018p per share, while fellow FTSE 100 constituent Cairn Energy (LSE: CNE) rose 2% and Tullow Oil was up 3%.

Sector peers from FTSE 250 also remained on positive ground on Monday. Dana Petroleum (LSE: DNX) and Heritage Oil (LSE: HOIL) both posted gains of less than 1%, while Dragon Oil (LSE: DGO) added 1%.

Juniors didn’t show much movement on Monday.

Latin American focused Gold Oil (LSE: GOO) extended gains to 10%, while Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) rose 4.5%. US focused energy producer Nighthawk Energy (AIM: HAWK) and fellow oil and gas explorer Dominion Petroleum Ltd (AIM: DOPL) also basked in the sun, with each adding over 3%.

Precious metals miners climb as prices hold steady

Gold remained high, holding on to last week’s gains while other precious metals also rose.

Gold was at US$995/ounce, while Silver held steady at US$16.28/ounce. Platinum improved to US$1,258/ounce.
Miners traded well as metal prices remained high.

Platinum miners were once again in the lead as blue chip Lonmin (LSE: LMI) climbed 4.3% on the aforementioned takeover speculation, while midcap Aquarius Platinum (LSE: AQP) rose 1.1%.

Gold miners also were in the black, yet with smaller gains. Randgold Resources (LSE: RRS) tacked on about 1.7%, while mid tier gold producer Peter Hambro Mining (LSE: POG) shed less than 1%. Yamana Gold (LSE: YAU) rose marginally.

Silver producer Fresnillo recovered from early losses, gaining about 1%. Mid tier silver miner Hochschild Mining (LSE: HOC) outperformed its sector peer, climbing 3.7%.

Specialty platinum firm Johnson Matthey (LSE: JMAT) added 1.3% on top of Friday’s gains.

Juniors once again were able to put up good gains.

Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) soared over 100% on expectations that it will announce uncovered diamond deposits worth £1.5 billion. Fellow diamond producer Firestone Diamonds (AIM: FDI), which operates in South Africa and Botswana, jumped almost 10% in sympathy.

Uzbekistan focused gold miner Oxus Gold (AIM: OXS) also performed well, rallying 10%.

Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) also impressed, hiking 25%.

African operating gold and platinum recovery specialist Goldplat (AIM: GDP) followed, climbing 12%.

Philippines focused gold producer Medusa Mining (AIM&ASX: MML), which released its full year results today, and another Philippines operating miner Metals Exploration (AIM: MTL), rose 6% and 8.3% respectively.

Precious metal explorer, Mariana Resources (AIM & PLUS: MARL), rose over 10% after confirming it had commenced drilling at its wholly owned Dos Calandrias gold-silver project in Argentina.

Turkey focused gold miner Ariana Resources (AIM: AAU) went against the tide, sliding almost 6%.

Base metal miners rise

Base metals prices were at roughly the same level as in the morning. Copper fluctuated around US$2.86/pound, while Nickel held steady at US$8.10/pound, and Zinc remained at US$0.86/pound.

Almost all major base metals miners added about 2% today.

Copper miners Kazakhmys (LSE: KAZ) and Antofagasta (LSE: ANTO) both tacked on over 2%. The world’s largest miner BHP Billiton (LSE: BLT) improved 2.5%.  Xstrata (LSE: XTA), which is reportedly looking to take over Lonmin, advanced 2.3% to 852p per share.

Rio Tinto (LSE: RIO) rose 2%, while Vedanta resources tacked on 2.7%.

Anglo American (LSE: AAL) lagged behind with a gain of 1%.

Juniors generally did well.

Zinc producer Connemara Mining (AIM: CON) was in the lead, rallying over 19%. Tunisia focused metal miner Maghreb Minerals (AIM: MMS) followed with an 11% climb.

Botswana operating nickel and copper miner Discovery Metals (AIM: DME) also basked in the sun, adding over 9.5%.

Coking and thermal coal producer New World Resources (LSE: NWR) and Metals Exploration PLC (AIM: MTL) climbed 7% and 8% respectively.

Mineral sands producer Kenmare Resources (LSE: KMR), South Africa operating chrome miner Chromex Mining (AIM: CHX) and laterite nickel specialist European Nickel (AIM: ENK) went against the tide, sliding about 5-6% each.

Banks, insurance, private equity

Banking stocks made some progress in the morning, while insurers were mixed.
Lloyds (LSE: LLOY) was among the leading risers in the blue chip index with a 4.6% improvement, while fellow partly nationalised banking group Royal Bank of Scotland (LSE: RBS) rose 1.6%.
Barclays (LSE: BARC) improved 2.5%, while HSBC (LSE: HSBA) tacked on just 1%. Standard Chartered (LSE: STAN) was flat.

Insurers Legal and General (LSE: LGEN) and RSA Insurance Group (LSE: RSA) outperformed their peers, climbing about 3.5% each. Old Mutual (LSE: OML) followed with a 2.5% gain.

Aviva (LSE: AV) and Prudential (LSE: PRU) upped their value 2% and 1% respectively.

Friends Provident (LSE: FP) also rose 1%, but Standard Life (LSE: SL) ended the day with losses.

Private Equity group 3i (LSE: III) added 1.6%.

Large and Mid Cap News

Kraft Foods Inc (NYSE: KFT) said Cadbury PLC (LSE: CBRY) has rejected a bid for the company valuing the confectionery maker at £10.2 billion, adding it hopes to engage with the board of Cadbury on a constructive basis with the goal of consummating a recommended transaction.

Shares in Philippines focused gold producer Medusa Mining (AIM&ASX: MML) were in demand this morning after the Australian miner released its full year report, saying its revenues doubled as output and resource inventory increased, positioning Medusa for further growth.

Associated British Foods PLC (LSE: ABF) said trading in the second half has been strong and it expects “some progress in adjusted earnings for the full year” to September 12 2009.

Pubs, hotels and restaurants group Whitbread PLC (LSE: WTB) reported a 2.4 percent rise in sales for the 24 weeks to August 13 2009 from the same period a year earlier, however, on a like-for-like basis, sales were down 2.6 percent year-on-year.

Kier Group PLC (LSE: KIE) said it signed a contract with North Tyneside Council to repair and maintain its social housing stock and other council-owned property for an initial ten-year term. The contract has a potential value of over £600 million which could increase as the contract is extendable for a further five years.

Small Cap News

Business process automation software group Kofax PLC (LSE: KFX) said it has acquired 170 Systems Inc, a provider of financial process automation software, for $32.9 million in cash.

Coastal Energy Co (TSX-V: CEN, AIM: CEO), an independent exploration and production company with assets in Thailand, said the Phu Kheng-1 exploration well on Block L27/43 in north-eastern Thailand has reached total depth and has been suspended pending a hydraulic fracturing stimulation and test.

Shares in Kopane Diamonds (AIM: KDD) exploded this morning, jumping over 100%, after several press reports suggested the company is about to announce a significant resource statement for its ‘Main Pipe’ kimberlite in Lesotho, Southern Africa.

Brady PLC (AIM: BRY), provider of trading, risk management and settlement software to the metals and commodities sectors, announced rising sales and profits for the first half to June 30 2009, and said it is confident of meeting company expectations for the full year and remains well placed for future growth.

Ramco Energy PLC (AIM: ROS) is selling its oil and gas operations and will focus solely on its offshore wind energy activities, reflected in the proposed name change to SeaEnergy PLC with a new AIM code of ‘SEA’.

Specialty pharma company Sinclair Pharma (AIM: SPH) said today it had issued £2.3 million worth of convertible unsecured loan notes to a leading institutional investor to strengthen balance sheet and fund further organic growth.

Shares in Sabien Technology Group PLC (AIM: SNT) leapt 25% today following the announcement of a strategic partnership with Balfour Beatty Workplace for Sabien’s patented M2G ‘intelligent gas boiler control’ products.

AIM listed AOI Medical (AIM: AOI) shares rose more than 10% after the company said its Ascendx™ system is on track to obtaining FDA approval, after successfully completing enrolment for a sixty (60) patient clinical trial.

Amphion Innovations PLC (AIM: AMP) investee company Myconostica Ltd announced it attracted £1.7 million in the first close of its series D investment round.

Regal Petroleum (AIM:RPT) has announced the successful spudding of their Ukrainian SV-61 development well. SV-61 is the third 'new generation' well to be spudded on the Company's Ukrainian licences using the new 2,000 bhp, top-drive.

Goals Soccer Centres plc (AIM:GOAL) announced positive interim results  for the 6 months ended 30 June 2009. The AIM listed operator of 5-a-side soccer centres across the UK, Goal Soccer currently operates 33 centres and has a pipeline in excess of 40 new development sites.

NetPlay TV plc (AIM: NPT) continued its recent pace of contract wins for its interactive TV gaming products this morning, announcing that it had signed a five year broadcast deal with Five. Five is wholly owned by RTL Group, one of the world's largest media businesses.

Kalahari Minerals PLC (AIM: KAH) confirmed it raised a further £10 million following the receipt of irrevocable commitments to subscribe for secured convertible loan notes.

Metals Exploration PLC (AIM: MTL) said resource drilling for the definitive feasibility study (DFS) for the Runruno gold-molybdenum project in the Philippines is ahead of target, with over 45,000 metres of the planned 65,000 metre programme for 2009 already complete.

South American focused mineral exploration and development company Minera IRL (LSE: MIRL) announced today it has reached a joint venture agreement with Collingwood Peru S.A.C. to explore the Veca exploration lease in central Peru, adding another South American project to its portfolio.

Precious metal explorer, Mariana Resources (AIM & PLUS: MARL) confirmed that drilling had commenced at its 100% owned Dos Calandrias epithermal gold-silver project.  The project it situated within the Deseado Massif in Santa Cruz Proviince, Southern Argentina.

Cohort Plc (AIM:CHRT) has announced that its wholly-owned subsidiary, Systems Engineering & Assessment Ltd  (SEA), has been selected as the preferred bidder to supply the External Communication System (ECS) for the Royal Navy’s ASTUTE Boat 4.

Plant Impact (AIM: PIM), a developer of technologies that improve crop productivity, announced today it has appointed a new Scientific Advisory Board (SAB) to add more commercial development experience and expertise to the decision making processes within the company.

Merchant Securities plc (AIM:MERC), have announced the acquisition of privately owned Cavendish Young Ltd. The deal consists of an initial payment of £65,000 with agreed deferred payments of up to £1.3m subject to the group’s performance between now and 2014. Specifically the terms relate to the future profitability of Cavendish Young and the amount of funds which come under the discretionary management of the Group.

Horizonte Minerals PLC (AIM: HZM) reported results for the first half to end-June 2009, saying it has made “excellent progress during the last six months despite difficult market conditions”.

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