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Additional	Information
Market:	ASX
Sector:	Media
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News:	Latest news
Web Site:	Proactive Investors Australia
Other Articles:	04-01-201030-12-200924-12-2009

FTSE 100 rallies on better than expected CIPS index update and mortgage approval data, US futures up

Overview: the FTSE 100 was bullish today, standing 0.8% above the opening level by mid afternoon, driven by gains in the mining sector as metal prices increased.

Investors were also encouraged by today’s update from the Chartered Institute of Purchasing & Supply (CIPS), whose activity index climbed from 51.8 in November to 54.1 in December, which was higher than expected. The sentiment was further strengthened by mortgage data provided by the Bank of England, showing a rise in mortgage approvals from 57,718 in October to more than 60,000 in November, also beating expectations.

Bank RBS (LSE: RBS) and oil and gas producer Cairn Energy (LSE: CNE) led the blue chips with gains of 6.5%. Other notable risers included medical devices manufacturer Smith & Nephew (LSE: SN), which rose 4%, Home Retail Group (LSE: HOME) and software developer Sage Group (LSE: SGE), which both added 3%.

Commercial property companies were correcting after posting good gains in the last day of trading before the New Year holiday break. Hammerson (LSE: HMSO) and British Land (LSE: BLND) emerged as the heaviest fallers in the index with losses of 3.5%, while Land Securities Group (LSE: LAND) slid 3% and Liberty International (LSE: LII) shed 1.3%. Other notable fallers included hospitality group Whitbread (LSE: WTB), Imperial Tobacco Group (LSE: IMT) and packaging group Rexam (LSE: REX), which all lost 1%.

Stock index futures were higher in the US on indications that the Fed will keep the current low interest rates unchanged for the foreseeable future. The Dow Jones Industrial Average is projected to open 0.5% higher, while futures for the broader S&P 500 index and the technology heavy NASDAQ composite rose marginally. Investors will be looking to the Institute for Supply Management’s (ISM) December index, which is due out today with expectations of an increase to 54 from 53.6 in November.

Commodities

Crude futures for February delivery rose today, eclipsing the US$80/barrel mark in anticipation of a continued economic recovery and higher energy demand in 2010. Benchmark crude for February closed at US$79.36/barrel on Thursday before the New Year break and cleared the US$80/barrel mark on the New York Mercantile Exchange (NYMEX) today before rallying to US$81/barrel by midmorning London time.

Oil and gas stocks responded positively to the increase in prices as all sector majors posted gains in the morning.
Cairn Energy (LSE: CNE) took the lead, advancing 5.5%, while BG Group (LSE: BG) followed with a 1.4% gain.

Supermajors BP (LSE: BP) and Shell (LSE: RDSB) added 1%, as did another FTSE 100 constituent Tullow Oil (LSE: TLW).

Oil and gas services company Amec (LSE: AMEC) did well, climbing 1.5%, while peer Petrofac (LSE: PFC) rose marginally.

Salamander Energy (LSE: SMDR) was the top performer among the midcaps with a gain of nearly 4%. Fellow FTSE 250 energy producer Heritage Oil (LSE: HOIL) also added more than 3.5%, while Dana Petroleum (LSE: DNX) and Premier Oil (LSE: PMO) climbed 2.5%, JKX Oil and Gas (LSE: JKX) and Soco International (LSE: SIA) improved 1.3%, while another midcap Dragon Oil (LSE: DGO) posted a marginal gain.

Midcap service companies did well with Wellstream Holdings (LSE: WSM) and John Wood Group (LSE: WG) tacking on 5.5% and 2% respectively.

Kazakhstan operating Max Petroleum (LSE: MXP) led the small caps with a 12% surge. Ukraine focused gas producer, Regal Petroleum (AIM: RPT) followed with a 6.5% climb, while EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) and US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) gained 5% and 3% respectively.

Irish oil and gas exploration company Petroceltic International (AIM: PCI) headed in the opposite direction, shedding 8% on no news.

Gold, silver and platinum rise to boost miners

Gold was on the rise today, with spot prices rising to US$1,115/oz as the US Dollar Index, which measures the greenback’s value against a basket of currencies, declined 0.4%.

Other precious metals moved along with silver and platinum advancing to US$17.13/oz and US$1,497/oz respectively.

Precious metal focused mining stocks were bullish today, making for attractive buying target for investors due to higher prices. Platinum producer Lonmin (LSE: LMI) led the sector in the FTSE 100 with a 3.5% climb, while gold miner Randgold Resources (LSE: RRS) followed with a 1.8% gain and silver miner Fresnillo (LSE: FRES) rose marginally.

In the FTSE 250, gold miner Petropavlovsk (LSE: POG) rallied 6.5% for the lead, while Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) advanced 4.6% and 2.1% respectively.

Small caps generally moved with the sector, posting good gains. Brazil focused gold miner Horizonte Minerals (AIM: HZM) surged 10% to emerge as one of the top performers among junior companies. Copper and gold miner EMED Mining (AIM: EMED) and Tajikistan operating gold miner Kryso Resources (AIM: KYS) both added more than 8%, while Turkey focused gold miner Ariana Resources (AIM: AAU) moved up 7.5%, Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) climbed 6% and Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) and Philippines focused gold producer Medusa Mining (AIM&ASX: MML) added 4%.

Iran focused gold explorer Persian Gold (AIM: PNG) and Uzbekistan focused gold miner Oxus Gold (AIM: OXS) headed in the opposite direction, sliding 5% and 4.5%.

Copper and nickel climb

Base metals also improved as copper and nickel advanced to US$3.38/lb and US$8.53/lb, while zinc reached US$1.17/lb.

Base metals focused stocks did well today with Xstrata (LSE: XTA) taking the lead with 3.5% gain, while Eurasian Natural Resources (LSE: ENRC) and Kazakhmys (LSE: KAZ) followed, tacking on more than 3%. Vedanta Resources (LSE: VED) advanced 2.8%, Antofagasta (LSE: ANTO) added 2.3%, while Anglo American (LSE: AAL) and BHP Billiton (LSE: BLT) climbed 2% and 1.5% respectively. Rio Tinto (LSE: RIO) rose marginally.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) added nearly 3%.

Russia focused copper and nickel miner Amur Minerals (AIM: AMC) led the small caps with an 8.5% gain. Cement operator Prosperity Mineral Holdings (AIM: PMHL) added 5%.

Mineral sands producer Kenmare Resources (LSE: KMR) and copper and nickel explorer Regency Mines (AIM: RGM) declined 9% and 5% respectively.

Banks, insurance, private equity

Royal Bank of Scotland (LSE: RBS) led the banking sector with a 7% climb after the sale of its subsidiary RBS Pakistan fell through. Another part-nationalised bank Lloyds (LSE: LLOY) gained 2.5%, while Barclays (LSE: BARC), HSBC (LSE: HSBA) and Standard Chartered (LSE: STAN) all tacked on 1.2%.

Insurers were in selling mode today. Standard Life (LSE: SL) led the retreat with a 3% loss. Legal & General (LSE: LGEN) slid 2.3%, while Aviva (LSE: AV) declined 1.6% and Admiral Group (LSE: ADM) was down 1%. Prudential (LSE: PRU) and RSA Insurance Group (LSE: RSA) lost less than 1%.

Old Mutual (LSE: OML) went against the tide with a 1.3% advance.

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

Small Cap Movers

Other notable movers among the small caps included electrical components producer and supplier Cinpart (AIM: CINP) and biopharmaceutical company Lipoxen (AIM: LPX) with gains of 4.5% and 6.5% as well as Africa focused investor Lonrho (AIM: LONR) and novel pesticides and plant nutritional products developer Plant Impact (AIM: PIM), which advanced 6.5% and 11% respectively.

Large and Mid Cap News

Cairn Energy PLC (LSE: CNE) said it has secured a second drilling rig for its exploration programme in the Disko West area, offshore Western Greenland, in the first half of 2010.

Security services company G4S (LSE: GFS) has acquired 100% of Nuclear Security Services Corporation from its founder Inge Collins for US$22 million in cash on an enterprise value basis.

Royal Bank of Scotland (LSE: RBS) said today that the agreed sale of its Pakistani subsidiary RBS Pakistan to MCB Bank Limited has lapsed after the sides failed to secure the necessary regulatory approvals, thus failing to close the transaction by the 31 December deadline.

Infrastructure software developer and FTSE 100 constituent Autonomy Corporation (LSE: AU) said that the Italian retail division of Unicredit Group has deployed Autonomy Optimost’s Multivariable Testing (MVT) product to increase the number of account applications on its websites, having managed to lift conversions on four different bank account applications by up to 12.8%.

Small Cap News

Forte Energy (AIM: FTE) has significantly expanded its planned RC (reverse circulation) drilling programme at its wholly owned Bir Moghrein uranium project in Mauritania amid continued encouraging results from the ongoing exploration programme, also expecting a maiden JORC compliant uranium resource for its other uranium project Bir En Nar in Q1 2010.

Immunodiagnostic Systems Holdings (AIM: IDH) said that Technogenetics s.r.l., with which it has an original equipment manufacturer manufacturing and supply agreement, has signed a five year distribution deal with A.Menarini Diagnostics covering Europe for its automated test system IDS-iSYS branded as Zenit RA, together with a panel of 21 tests for the diagnostics of autoimmune diseases.

Industry- focused recruitment and outsourced HR services provider Staffline Group PLC (AIM: STAF) confirmed that earnings for the full year will be in line with upwardly revised market expectations.

Cement plant operator Prosperity Minerals Holdings (AIM: PMHL) provided further details relating to its recent sale of a Chinese cement business Upper Value Investments Limited for £300 million to TCC international Holdings (HKG: 1136), also disclosing financial information for the target company.

Solo Oil (AIM: SOLO) said that the first well on the Ruvuma PSA (production sharing agreement) in Tanzania, Likonde-1,  is due to be spudded on 7 January and be drilled to 3,200 metres, with drilling time estimated at two months.

Broker Fox-Davies Capital reiterated its ‘buy’ recommendation for Minera IRL (AIM: MIRL), while upping the target price to £0.90 from £0.63 after the Latin American precious metal miner reported on the results of the initial scoping study of the Ollachea gold mine in mid-November, which is now complete, along with September quarterly production figures.

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