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Market:	ASX
Sector:	Media
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Web Site:	Proactive Investors Australia
Other Articles:	04-01-201030-12-200924-12-2009

British Airways, Severn Trent, Cairn Energy and Marks & Spencer help FTSE 100 trim losses

Overview: the FTSE 100 remained in the red throughout the day, but was able to cut its losses to about 0.5% in late afternoon as Wall Street rose after a mixed start, while mining and energy stocks remained weak due to declines in oil and metal prices. The banking sector also remained weak as the market was gauging the possible impact from last week's decision by Dubai's state owned investment and asset management conglomerate Dubai World to call for a delay in the repayment of its multi-billion dollar debt.

Insurer Legal & General (LSE: LGEN) emerged as the biggest faller among the blue chips, sliding 4.5% as part-nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) has their losses slightly trimmed.

Property companies Liberty International (LSE: LII) and British Land (LSE: BLND) also were in decline with both shedding more than 2.5%. Engineering firm Invensys (LSE: ISYS) joined in with a loss of nearly 3%.

Oil and gas company Cairn Energy (LSE: CNE), which bought Dyas BV’s 9.99% stake in subsidiary Capricorn today, led the index with a 1.7% climb. Other high profile risers included catered Compass Group (LSE: CPG), tour operator TUI Travel (LSE: TT), clothing retailer Marks & Spencer (LSE: MKS) and airline British Airways (LSE: BAY), all of which tacked on more than 1% to make it to the leaderboard.

The US stock market was off to a mixed start today with the main indices fluctuating within a broad range around the opening level. The Dow Jones Industrial Average stood 0.1% in the black after slipping into the red. The broader S&P 500 index also recovered from a negative start, rising 0.2%, while the technology heavy Nasdaq composite failed to get out of the red, sitting 0.15% below the opening level at midmorning.

Commodities

Oil prices slightly declined as January Brent Crude slid to US$77.09/barrel, while US light, sweet crude for January delivery dropped below US$76/barrel.

Oil and gas stocks were mixed today. BG Group (LSE: BG) was at the bottom of the pile with a 1.7% decline, while supermajors BP (LSE: BP) and Shell (LSE: RDSB) both shed 1.2%. Other FTSE 100 constituents did better with Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) posting marginal gains, while Cairn Energy (LSE: CNE), which announced the acquisition of the 9.99% interest Dyas BV held in its subsidiary Capricorn, led the sector with a 1.5% advance.

Midcaps didn’t show much movement today. While Heritage Oil (LSE: HOIL) lost 1%, peers Dragon Oil (LSE: DGO) and Dana Petroleum (LSE: DNX) were flat.

Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) led the juniors, rising 6.6% to 108.5 pence after announcing the purchase of 2 million shares at 94 pence per share by it’s non-executive director.

Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) followed, climbing 3.3%.

Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) and Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) were in selling mode, shedding 7% and 5.5% respectively, while Iraq operating Irish oil company Petrel Resources (AIM: PET) and Irish oil and gas exploration company Petroceltic International (AIM: PCI) followed with losses of over 3%.

Miners weaken as gold and silver slide

Precious metals inched lower today with gold sliding to US$1,167/oz, while silver and platinum declined to US$18.13/oz and US$1,437/oz respectively.

All FTSE 100 miners were in decline today. Silver miner Fresnillo (LSE: FRES) was at the bottom of the pile with a 1.6% drop, while platinum producer Lonmin (LSE: LMI) and gold miner Randgold Resources (LSE: RRS) lost about 1%.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) went against the tide, rising marginally.

Midcaps were mixed as while gold miner Petropavlovsk (LSE: POG) slid 1.8%, silver producer Hochschild Mining (LSE: HOC) was flat and Aquarius Platinum (LSE: AQP) added 1.2%.

Tajikistan operating gold miner Kryso Resources (AIM: KYS) led the small caps, advancing 12%, while Australian gold and copper prospector Solomon Gold (AIM: SOLG) followed with a 9.5% climb. Australian gold and copper prospector Solomon Gold (AIM: SOLG) added 6.7%, while Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) and Philippines focused gold producer Medusa Mining (AIM&ASX: MML) rose 6% and 5% respectively.

Argentina focused gold explorer Patagonia Gold (AIM: PGD) and Africa focused gold miner Pan African Resources (AIM: PAF) tacked on 4% and 3.5% respectively.

Turkey focused gold miner Ariana Resources (AIM: AAU) and Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) headed in the opposite direction, sliding 7% and 6% respectively.

Base metals mixed

Base metals were mixed as while copper fluctuated around US$3.10/lb, nickel slid to US$7.23/lb and zinc climbed to US$1.01/lb.

Base metals focused stocks did not show much movement today and were mixed. While Kazakhmys (LSE: KAZ), Rio Tinto (LSE: RIO), Vedanta Resources (LSE: VED) and Xstrata (LSE: XTA) all shed about 1%, Anglo American (LSE: AAL) advanced 1%, Antofagasta (LSE: ANTO) posted a marginal gain and BHP Billiton (LSE: BLT) and Eurasian Natural Resources (LSE: ENRC) were flat.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) was in selling mode today, shedding 4%.

Cement operator Prosperity Mineral Holdings (AIM: PMHL) led the market, soaring 36% after agreeing to sell the entire share capital of Upper Value Investments Limited to TCC International Holdings Limited for £312 million.

Iron ore focused investor Red Rock Resources (AIM: RRR) and Tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) also rose, climbing 7% and 5% respectively.

Russia focused copper and nickel miner Amur Minerals (AIM: AMC) and Philippines operating nickel miner Rusina Mining (ASX: RML; AIM: RMLA) both slipped 4%.

Banks, insurance, private equity

All major banking stocks were in decline today, with the sole exception of HSBC (LSE: HSBA), which added 1%.

Part-nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) were the biggest fallers in the sector, declining 4% and 3% respectively. Standard Chartered (LSE: STAN) slid 1%, while Barclays (LSE: BARC) posted a marginal loss.

Insurance stocks also switched to selling mode today with the exception of Old Mutual (AIM: OML), which was little changed by the end of the day.

Legal & General (LSE: LGEN) sank to the bottom of the pile with a 3.5% loss, while Standard Life (LSE: SL) and Prudential (LSE: PRU) moved down 2% and 1% respectively. Aviva (LSE: AV) and RSA Insurance Group (LSE: RSA) both slid 1.5%.

Car insurer Admiral Group (LSE: ADM) kept its losses to a minimum.

Private equity group 3i (LSE: III) declined marginally.

Small Cap Movers

Drug discovery and development group Immupharma (AIM: IMM) tumbled 12%.

Virtual queuing systems for theme parks and major attractions specialist, Lo-Q (AIM: LOQ), which released a trading update for the first ten months of the year this morning, rose 6%. Healthcare workforce optimisation solutions provider Allocate Software (AIM: ALL) also was in demand, adding 4%.

Large and Mid Cap News

FTSE 100 oil and gas producer, Cairn Energy (LSE: CNE) (‘Cairn’) announced it will take full ownership and control of its exploration subsidiary, Capricorn Oil. Cairn will acquire the 9.99% stake from Dyas BV (‘Dyas’’) in return for 1.8 million shares, certain interests Albania and Tunisia and a small proportion of cash. The overall deal value is said to be $95 million.

Reports from Namibia suggest, perhaps hardly surprisingly, that mining giant Rio Tinto (ASX & LSE: RIO) is very keen to purchase the Rossing South project from Australian explorer, Extract Resources (ASX & TSX: EXT) and develop it in conjunction with its existing major mining operation some 7 km to the north.

Aerospace and defence systems manufacturer and FTSE 100 constituent BAE Systems (LSE: BA) has entered into a joint venture (JV) agreement with Mahindra & Mahindra Limited to create a land systems focused India-based company. The new entity is expected to be established in the first half of 2010.

FTSE 250 oil and gas engineering company, Lamprell (LSE: LAM) announced this morning that it had agreed to receive a combined cash and equity final payment for the BassDrill Alpha drill barge. The final payment is due in December, and represents a $23 million writedown on the original price agreed between Lamprell and BassDrill Alpha Limited.

UK outsourcing group, Xchanging plc (LSE: XCH) revealed a new strategic alliance with ‘absence management’ specialists FirstCare. The partnership sees the pooling of services between the two support management service groups to offer both integrated and unbundled services.

Small Cap News

An announcement from China focused cement manufacturer and iron ore trader, Prosperity Minerals, (AIM: PMHL) that it has entered into a Memorandum of Understanding to sell a subsidiary which holds various cement interests for £312 million, appears to be very positive news for the Company. The would-be acquirer is Hong Kong listed cement company TCC International Holdings (HKG: 1136).

Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) reported that its non-executive director Jeremy Asher has purchased 2 million shares in the company representing 0.41% of its issued share capital at an average price of 94 pence per share through Asher Family Trust owned company Agile Energy.

Hanson Westhouse has started coverage of Noble Investments PLC (AIM: NBL) with a 'buy' rating, plus a 132 pence price target using its Discounted Cash Flow calculation which represents a significant upside to the current price level of 96.5p.

Westhouse Securities retained its bullish stance on Horizonte Minerals (AIM: HZM) after the Brazil focused gold miner announced positive results from metallurgical testwork it completed on its Lontra nickel project in the Araguaia belt in Brazil, repeating that the stock was “significantly undervalued” as it was still trading at a 50% discount to the broker’s unchanged target price of 14 pence.

Perth headquartered charter airline, SkyWest Airlines (LSE: SKYW) announced its secondary listing on the Australian Stock Exchange will begin trading on the 7th December under the provisional listing code of ‘SXR’.

Meridian Petroleum (AIM: MRP) which is planning to change its name to President Petroleum as part of  a corporate restructuring and rebranding initiative, announced that a recent open offer had received strong demand from existing shareholders.

Virtual queuing systems for theme parks and major attractions specialist, Lo-Q (AIM: LOQ), confirmed this morning that trading in the first 10 months (to 31 October 2009) was in line with market expectations despite a number of unique challenges during the period.

African Medical Investments (AMI; AIM: AMEI), which is looking to capitalise on the growing demand for quality medical services in Africa, whose middle class is undergoing rapid expansion, has updated the market on its progress in the six months to 31 August 2009, announcing increases in patient numbers and plans for further “aggressive” expansion, fuelled by the recently secured funding from a US hedge fund.

Middle East, Africa and US operating oil and gas company Sterling Energy (AIM: SEY) has sold its US assets for US$90 million, which will enable the company to repay all of its bank debt and improve its cash balance.

Solomon Gold PLC (AIM: SOLG) plans to start a thorough exploration of Fauro Island in the north of Solomon Islands for gold copper porphyries and large scale epithermal gold ore bodies after it was granted a three-year prospecting licence for the tenement covering a 70 square kilometres area.

Central China Goldfields (AIM: GGG) said Obtala Resources (AIM: OBT) has bought 1.75 million more shares in the company, raising its holding to 28.25 million shares, or 15.41 percent of the capital.

British pub group, Mitchells and Butlers (LSE: MAB) complained to the Takeover and Mergers Panel claiming a number of its large shareholders are attempting to take control of the board. In a statement, Mitchells and Butlers said the actions of the Piedmont Investment Group (‘Piedmont’) threaten to undermine the independence and effectiveness of the Board ‘to advance the interests of a small group of shareholders’.

Jupiter Mines (ASX:JMS) has announced further high-grade magnetite intersections from the Mt Ida prospect, part of the company’s Central Yilgarn Iron Project in Western Australia. Red Rock Resources (AIM: RRR) has a 27% stake in Jupiter Mines.

Stratex International PLC (AIM: STI) made a significant new gold discovery in the Afar Region in northern Ethiopia and was granted a three year Exclusive Exploration Licence (EEL) over 1,579 square kilometres around the discovery.

South America focused gold exploration and development mining junior, Patagonia Gold, (AIM: PGD) (“Patagonia”) confirmed this morning that new legislation recently passed in the Province of Santa Cruz, Argentina, to create an "Area of Special Interest for Mining” encompassed its Lomada de Leiva, Cap Oeste and La Manchuria Projects.

Ukraine focused gas producer, Regal Petroleum (AIM: RPT) has provided an update from its Mekhediviska-Golotvshinska (MEX-GOL) and Svyrydivske gas and condensate fields in Ukraine, where the company is currently drilling a series of new generation wells with two Saipem-operated Lewco 2000hp rigs, seeking to establish additional production from the projects.

EMED Mining Public Ltd (AIM: EMED) said independent experts have commenced the due diligence investigations for certifying the company's operating and rehabilitation plans as part of the regulatory approval process required for the restart of the Rio Tinto copper mine in Spain’s Andalucia province.

Wireless communications developer, Telit Communications (AIM: TCM) announced that it had entered into an agreement with Astaire Securities to raise £5.3 million before expenses by placing 26.5 million shares at 20 pence per share. The placing price represents a 17.6% premium to the mid-market share price at the close of trading last Friday (27 November).

South American based explorer Mariana Resources (AIM: MARL) has secured an option to acquire the remaining 30% interest in the Santa Cruz JV (joint venture) from IAMGOLD Corporation, which would give it full ownership of the project.

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