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  ICAP, Scottish & Southern, Centrica, 3i, Cable & Wireless climb, but FTSE 100 falls on profit taking
Reported by Proactive Investors on Tuesday, 17 November 2009 (on November 17, 2009)
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Overview: the FTSE 100 failed to recover form early losses and ended up in the red despite slight improvements in the financial sector. The blue chip index was weighed down by a weak performance from the mining stocks, which slid as metal prices corrected. The US stock market also contributed, slipping into the red in early trading as investors were reaping profits following the recent rally to send the main indices south. The Dow Jones Industrial Average was down 0.3%, the broader S&P 500 index declined 0.5% and the technology-heavy Nasdaq composite slid 0.4%.
Investment management company Man Group (LSE: EMG) and insurance focused investor Resolution (LSE: RSL) led the fallers with losses of over 4%. Commercial property company British Land (LSE: BLND), platinum miner Lonmin (LSE: LMI) and quality and safety services provider Intertek (LSE: ITRK) followed with 3% declines. Airline British Airways (LSE: BAY), base metals focused miner Xstrata (LSE: XTA) and another property company Land Securities (LSE: LAND).
Interdealer broker ICAP (LSE: IAP) led the blue chips for the whole day with a 3.6% gain. Telecom company Cable & Wireless (LSE: CW) was a distant second with a 2% gain, while energy stocks Scottish & Southern Energy (LSE: SSE) and Centrica (LSE: CNA) advanced 2% and 1.5% respectively.
Commodities
Oil prices fluctuated within a narrow range during the day after rising overnight. December Brent Crude inched higher to US$78.58/barrel, while US light, sweet crude rose to US$78.66/barrel.
Oil and gas stocks were mixed today. Cairn Energy (LSE: CNE) was the top performer among the blue chip energy companies, climbing 1.2%. BG Group (LSE: BG) and Tullow Oil (LSE: TLW) rose marginally, while Petrofac (LSE: PFC) posted a small loss, as did supermajors BP (LSE: BP) and Shell (LSE RDSB).
Midcaps showed more volatility. Heritage Oil (LSE: HOIL) was flat, while Dana Petroleum (SLE: DNX) outperformed the sector with a 3% gain and Dragon Oil (LSE: DGO) lost 4.5% after Emirates National Oil Company said its offer for the company of 455 pence was final.
Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) led the juniors with a 13% rally after reporting a gas discovery in its Voitinel-1 well in Romania.
Most other small caps were in selling mode. Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) was among the leading fallers with a 9% slide, Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) lost 6.7% and Irish oil and gas explorer Petroceltic International (AIM: PCI) shed 4.5%. EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) and North Sea explorers Xcite Energy (AIM: XEL) both lost 3.5%.
Europe focused oil and gas developer Ascent Resources (AIM: AST) was down 3%.
Gold, silver and platinum retreat
Precious metals retreated after rallying on Monday. Gold moved down to US$1,133/oz, silver slid to US$18.23/oz and platinum declined to US$1,433/oz.
All major mining stocks turned negative. Platinum miner Lonmin (LSE: LMI) sank to the bottom of the pile with a 3% slide. Silver miner Fresnillo (LSE: FRES) followed with a 1.2% loss,w hile gold producer Randgold Resources (LSE: RRS) declined marginally.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) lost nearly 2%.
Midcaps also declined. Gold miner Petropavlovsk (LSE: POG) was down 2.6%, while Aquarius Platinum (LSE: AQP) and silver producer Hochschild Mining (LSE: HOC) posted insignificant losses.
Yamana Gold (LSE: YAU) declined marginally.
Some of the junior companies performed strongly today. Commodity asset development company Mercator Gold (AIM: MCR) was in the lead for most of the day, surging 13% after trading 20 million shares for a 1.33% stake in Swiss uranium junior Uranio AG. However, it was later surpassed by Tajikistan operating gold miner Kryso Resources (AIM: KYS), which rallied 18%. Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) and Turkey focused gold miner Ariana Resources (AIM: AAU) also did well, climbing 5% and 3.5% respectively.
Philippines focused Metals Exploration (AIM: MML) emerged as the leading faller, slipping 13%. African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO) also was in decline, sliding 3.5%.
Copper and nickel rise, but miners retreat
Base metals did well today, building on their recent gains with copper and nickel rising to US$3.10/lb and US$7.58/lb respectively, while zinc improved to US$1.02/lb.
Despite the late increase in metal prices, base metals focused stocks failed to par early losses and remained in the red.
Xstrata (LSE: XTA) was at the bottom of the pile with a 2.5% loss, while Rio Tinto (LSE: RIO) and Anglo American (LSE: AAL) followed, shedding 2%.
Antofagasta (LSE: ANTO) and Eurasian Natural Resources (LSE: ENRC) both lost more than 1.5%, while BHP Billiton (LSE: BLT) was down 1%.
Kazakhmys (LSE: KAZ) and Vedanta Resources (LSE: VED) declined marginally.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) managed to stay at the opening level.
South American focused junior miner Herencia Resources (AIM: HER) emerged as the top performers among the juniors, climbing 5%. South Africa operating chrome miner Chromex Mining (AIM: CHX) also improved, tacking on 3%.
Australia focused coking coal producer Caledon Resources (AIM: CDN) and copper and nickel explorer Regency Mines (AIM: RGM) headed in the opposite direction, shedding 4.5% and 3.5% respectively.
Banks, insurance, private equity
The banking sector was in decline today save for part-nationalised Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS), which gained less than 1%.
Barclays (LSE: BARC), HSBC (LSE: HSBA) and Standard Chartered (LSE: STAN) lost 2.5%, 2% and 1.5% respectively.
Insurance stocks also turned negative with the exception of Prudential (LSE: PRU) and RSA Insurance Group (LSE: RSA), which posted small gains.
Legal & General (LSE: LGEN) was the leading faller in the sector with a 2% loss. Old Mutual (LSE: OML) was down 1.5%, while car insurer Admiral Group (LSE: ADM), Aviva (LSE: AV) and Standard Life (LSE: SL) declined marginally.
Private equity group 3i (LSE: III) had its early gains trimmed to 1.6%.
Small Cap Movers
Other notable movers among the small caps included environmental science and technology company Accsys Technologies (AIM: AXS), which slipped 8.2% after reporting declines in first half revenues, while posting a €8 million pre-tax loss after making a profit of €0.2 million a year ago. African Diamonds (AIM: AFD) also retreated, shedding 7%. Machine to machine (M2M) communications specialist Telit Communications (AIM: TCM) did better with a gain of nearly 8%.
Large and Mid Cap News
In an interim management statement, Heritage Oil (LSE: HOIL) said that it’s upcoming ‘high-impact multi-well’ drilling programmes in Kurdistan and Uganda represents its ‘busiest period ever’. During the period, at the company’s only producing asset in Russia, production increased by 83% from the first half, to an average of 422 barrels of oil per day (bopd).
Galway Resources Ltd (TSX-V: GWY) said Prodeco, the Colombian subsidiary of Xstrata PLC (LSE: XTA), has begun drilling the first of 19 holes in the initial drill program at Galway's GALCA coal project.
Turkmenistan operating oil company and FTSE 250 constituent Dragon Oil (LSE: DGO) has announced today that the Emirates National Oil Company Limited LLC (ENOC) has confirmed that the offer price of 455 pence per share for the company is final and will not be increased.
In an interim statement, Barratt Developments Plc (LSE: BDEV) said that the stability in the UK housing market continued into the current trading period, as a result Barratt is achieving its reservation rate target and prices are ahead of budget. Although trading conditions are improved, Barratt CEO Mark Clare said the UK housing market will remain constrained until availability of mortgage finance increases.
In its first half report to 30 September 2009, UK headquartered interdealer broker ICAP plc (IAP.L) declared a ‘resilient performance’ with a 6% increase in Group revenues leading to a 2% increase earnings per share (EPS). The group also announced a 9% increase to the dividend to 5.11 pence per share. A number of analysts upgraded the interdealer broker following the update.
Blackthorn Resources (ASX: BTR) has provided a breakdown of results from the recent Inferred Mineral Resource estimate completed on the Kitumba Anomaly from the Mumbwa JV project in Zambia. Blackthorn currently holds a 60% vested interest in the Mumbwa Iron Oxide Copper-Gold Project, which is being explored with joint venture partner BHP Billiton (LSE: BLT) (40%) for IOCG style mineralisation by targeting anomalies identified from previous airborne FALCON™ geophysical surveys.
Cable and Wireless Plc (LSE: CW.) have revealed the details behind its demerger plans, through a new convertible debt issue and on-going bank negotiations the telecommunication group expects the two independent companies to have ‘sufficient’ financing for three years.
Small Cap News
Shares in Aurelian Oil & Gas (AIM: AUL) rallied 20% this morning after the Eastern Europe focused junior announced its largest discovery to date at the Brodina block in Romania with expected gas in place between 50 and 100 bcf (billion cubic feet) in the shallower sections of the Voitinel-1 well in Romania, which previously hit a dry target.
Earlier today shares in Minerva plc (AIM: MNR) surged after the announcement of a cash offer at fifty pence per share from South African Investor and major shareholder Nathan Kirsh. However following a meeting of the company’s board, Minerva Plc has ‘rejected the unsolicited proposal’. Shares in the Minerva are currently up 33% and were last trading one penny above the proposed offer price.
Healthcare workforce optimisation solutions provider Allocate Software (AIM: ALL) has announced a strategic partnership with special strategic health authority NHS professionals (NHSP) to deliver long-term integrated services to NHS Trusts.
Commodity asset development company Mercator Gold (AIM: MCR) has issued 20 million shares to Suphansa Holdings in exchange for 3 million shares in Swiss uranium miner Uranio AG (FWB: UAI), representing 1.33% of its issued share capital.
Accsys Technologies PLC (AIM: AXS), hard-hit by the economic downturn, reported a drop in revenues for the first half and swung to a pretax loss, but said it is seeing increasing demand for its proprietary Accoya wood and that it is confident that the continued expansion of its global distributor network will pay off
Kalahari Minerals PLC (AIM: KAH) has noted a statement issued by Extract Resources Ltd (TSX, ASX: EXT), in which the Australian group invited interested parties to submit proposals for their potential partnership in the development of the Rossing South uranium deposit at the Husab project in Namibia.
IP commercialisation company Amphion Innovations (AIM: AMP) investment strategy received positive feedback from research house Equity Development, which issued a report on the company, projecting it to post its first ever operating profit in the second half of the year if the current cost control policy continues and some of its portfolio businesses can keep up their strong performance.
Kryso Resources (KYS), the AIM listed gold and base metals exploration and development company with interests in Tajikistan, announced yet another significant uplift in the size of the total JORC compliant resource at the Pakrut Gold Project this morning.
Red Rock Resources PLC (AIM: RRR), the mineral exploration and development company focused on advancing iron ore, manganese and uranium projects in Australia and East Africa, has issued 30,592,592 new ordinary shares to raise £413,000 before expenses.
Red Rock Resources PLC (AIM: RRR) said that pursuant to a private agreement, 29 percent Red Rock shareholder Regency Mines PLC (AIM: RGM) has bought and now owns and controls 4,219,385 shares of Cue Resources Ltd (TSX-V: CUE), having bought the stock at C$0.09 per share for an aggregate C$379,745.
Infineon Technologies (FSE: AFX) entered a licensing agreement with ARM (LSE: ARM, NASDAQ: ARMH), becoming the only ARM partner to have an architecture license specifically for security applications.
Irish oil and gas explorer Petroceltic International (AIM: PCI) has reported successful results from a test of the Objective Devonian F2 formation, where the INE-2 well demonstrated a commercial flow rate.
Leni Gas & Oil PLC (AIM: LGO) said it is launching a winter campaign to re-instate gas handling facilities at the Ayoluengo oilfield in Spain to handle a major increase in gas production that impacted liquids production, and it is near completion of major well interventions and gas export maintenance in the Gulf of Mexico.
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