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29th August – Good two-way business leads to flat Footsie

There were buyers and sellers around this morning but no major moves within the blue chips as the FTSE 100 index remained virtually unchanged mid-morning. Financial stocks added to yesterday’s gains with Man Group, Royal Bank of Scotland and Barclays strong, while the resource stocks were a more mixed bag with falls at Kazakhmys, Eurasian Natural Resources and Tullow.

On another busy day for figures, Bradford & Bingley saw an H1 pre-tax loss of £26.7m compared with a profit of £180.4m the year before after it was hit by writedowns and investment losses. Overall arrears rose to 2.29% while losses on bad loans stood at £74.6m as the number of mortgages in arrears in the last three months grew, and the dull response to the accompanying statement suggests more downside for the shares here.

Rightmove did rather better as interim pre-tax profits rose to £19.7m from £12.1m the year before. It said that despite the tough conditions in the UK housing market it would meet market expectations for the year, but we remain sceptical here in view of the high rating and increasing online competition.

Regus shares rose then fell back after it saw H1 profits rise 39% to £74.5m on revenue that increased 23% to £507.5m. It added that whilst it remained alert to the impact of difficult economic conditions, its outlook for the remainder of 2008 remained unchanged, and the shares loo about fair value.

1st September – Opening fall in London but buyers seen nibbling again

Friday’s sharp pullback in the US led to an opening markdown for the FTSE 100 index this morning, but by mid-morning there had been some buying and the index showed a loss of just 40 points. Trading volumes were again fairly low ahead of the closure this afternoon of Wall Street for Labour Day, and leading the fallers was Enterprise Inns which extended last week's falls after a string of broker downgrades to the sector. Whitbread, which also owns several pubs was also down in sympathy.

The London Stock Exchange started to fall again after the Financial Times said over the weekend that it would introduce deep fee cuts and incentives to defend it self against a wave of new entrants in equities trading. Meanwhile, Turquoise, the rival trading platform to the LSE, said it was confident of beating earlier forecasts that it would take a 5 % market share by Christmas, after speaking to The Times.

On the upside, oil stocks edged higher again. Petrofac was a good feature after it together with Mubadala Petroleum Services Company established a United Arab Emirates joint venture, to be called Petrofac Emirates.

2nd September – Market races ahead with housebuilders in focus

It was an exciting morning in London with a dramatic fall in the oil price, sterling moving to new lows, and plans by Gordon Brown to revive the housing market setting the sector alight. The early winners were Taylor Wimpey and Persimmon on the Prime Minister's proposals for a new shared equity scheme and plans for more social housing. Not far behind were British Airways, Easyjet and Carnival after crude oil prices fell to $106. Naturally the oil majors were struggling, as were the miners on a drop in other commodity prices, and the fallers list was headed by Tullow, Xstrata and Anglo American mid-morning.

Elsewhere the spotlight was on results, with Greene King saying that market conditions remained challenging as consumer confidence continued to weaken, though it expected to meet this year's targets. Its retail sales fell by 1.6% like-for-like in the 16 weeks to 24th August, tenancy division profits were down 1.7% while brewing volumes were 3% lower. These figures were reasonably good against a difficult background and the shares rose 5%, but we would not chase the price here.

Hays raised full year profits by 25% to £264m with underlying operating profits up 13%. It said that strong international growth drove the improvement, offsetting weakness in the UK and Australia where demand for temporary placements had flattened and permanent placements were struggling. It’s a hard call in the short term for Hays, as the shares could be a valid longer term recovery play, but there may be further downside in the short term.

3rd September – Shares in London fall after Wall Street reversal

There was a major reversal in New York yesterday, with an early rise running into waves of selling and this looks as though it may be a short term top on the Dow Jones index. Shares in London had been fairly strong in recent sessions, but this morning there was a heavy markdown, not helped by some mixed corporate results, and by mid-morning the FTSE 10 index was down around 60 points.

The big news from the pub sector came from Punch Taverns, which decided not to pay a final dividend to conserve cash. Its plans to convert to a REIT have also been shelved on cost grounds, and it said that the main priority for the use of cash was to support the repayment of the group's convertible bonds. Like-for like sales from its tenanted arm fell 3.4% over the year with a fall of 3.3% at the managed estate. Unsurprisingly, Enterprise Inns and Mitchells & Butlers were also very weak, and it is not too late to go short here.

The big fall in crude oil yesterday saw further pressure on the sector majors, but the beneficiaries of lower oil costs have had another good session, with British Airways and Easyjet again looking good. Another riser is Cable & Wireless after Prudential agreed to take responsibility for just over £1bn of its pension assets and 5,000 scheme members.

In the retailing sector, figures from DSG International were predictably poor, as like-for-like sales dropped 7% in the 16 weeks ended 23rd August 2008. Total group sales rose 4% in sterling terms and fell 2% in local currency. It said that the trading environment remained challenging across Europe with gross margins across the group down 0.75% year on year, and we have to agree with the cautious outlook for the economy and the shares.

4th September - Air of uncertainty around as Footsie oscillates today

Yesterday’s big fall in the FTSE 100 index induced a degree of nervousness into the UK market this morning, but there were buyers around and by mid-morning the index was up around 25 points. There was no real theme to the early winners, with Unilever heading the pack after it named Nestle's Paul Polman as CE Patrick Cescau's replacement. BG Group was not far behind, recovering from a three day mauling on a broker upgrade, and in the same sector, BP rose on newspaper reports that it was expected to sign an agreement aimed at preserving its 50% stake in TNK-BP.

In results, there was some reassurance from Whitbread whose shares had fallen recently as it said like-for-like sales across the group had risen 7% in the 24 weeks to 14th August, with total sales increasing 14.2%. The figures were fairly good, but its statement that it remains vigilant in challenging economic times suggests more difficult trading ahead, so we would not chase the price high despite the early rise.

Own label specialist McBride reported a 30% fall in operating profits to £21.4m for the year despite revenue increasing 18% to £700.9m. The group said it had made a satisfactory start to the new year, but was impacted by higher costs of raw materials, and there seems little to go for in the short term here

Research done by Blue Index, the CFD, Online and Forex Trading Experts

04/09/2008

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