FTSE on track for biggest rise for five weeks, as Aberdeen climbs on bid talk

Discussion in 'Market News' started by Lily, May 20, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Asset management groups lifted by comments from Aberdeen chief executive

    Leading shares have recovered much of the fall seen on Thursday, as worries about a possible US interest rate rise in June recede.

    Mining shares were among the main risers, regaining some lost ground as copper prices moved higher after signs of more demand from key commodities consumer China. Anglo American has added 30.7p to 610p while Glencore is up 5.2p at 133.3p.

    The FTSE-100 has opened with gains of more than 1%, recovering much of Thursday’s losses as commodity prices start forging their way higher once again. That rally we had seen for the US dollar off the back of the prospect of a US rate hike has stalled, whilst supply disruption fears are driving the price of oil, pushing Brent crude to within a whisker of $50 a barrel.

    Following the slightly better than expected third quarter performance we are modestly upgrading our forecasts for Close. Earnings per share moves to 123p this year from 118p and to 122p next year from 119p. Our target price increases from 1565p to 1580p and our recommendation remains buy from our change this morning. We continue to believe that Close will outperform the lenders sub-sector through the cycle.

    As Spectris traditionally delivers most of its sales and profits in the second quarter and (especially) the fourth quarter, it is hard to draw conclusions from trading in the first four months of the year. However, a 4% organic revenue decline is not encouraging and it is worse than our relatively downbeat estimates for the first half and 2016. With guidance unchanged (we assume for profits), the onus is likely to be on aggressive shaping of the cost base and capabilities to deliver a more efficient business. Our estimates, target price and recommendation are under review.

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