THE ECONOMIC MONITOR

17 September 2010

U.K.
Free Edition

INSIDE THE REPORT MARKETS AT A GLANCE

 Stock recommendations and price targets from top  The FTSE 100 Index declined 31.69, or 0.57 percent, to
brokerage firms 5,508.45 as of, cutting this week’s rally to 0.4 percent.

 Forecasts on Economic Indicators
 Important Events Scheduled on 19, 20 September
Economic Events
 By 1434 GMT, sterling was at $1.5628, up 0.1 percent on
the day but well below an earlier 5-week high of $1.5730.
 At 1315 GMT the December gilt future was 30 ticks up on
the day at 122.64.

 At 1507 GMT, ICE Brent for November fell 40 cents to

 Parliamentary election in Sweden on Sep 19. $78.08. October Brent expired on Wednesday.
 IAEA General Conference 54th session in Austria  Spot gold hit an all-time high of $1,282.75 a troy ounce
 European Medicines Agency (EMA) expert committee to before easing to a bid at $1,276.50 by 1215 GMT.
review the drug's safety

Corporate Events STOCK INDICES

 Allergy Therapeutics, Goldplat, Petra Diamonds final INDEX LAST CHNG % CHNG
results FTSE 100* 5508.45 -31.69 -0.57

FTSE 250* 10440.98 -1.14 -0.01

Breaking News
FTSE 350* 2908.87 -14.54 -0.50

 Centrica raises its stake in Statfjord field FTSE Tech Mark 100* 1933.40 5.57 0.29

FTSE AIM 100* 3498.17 41.80 1.21

 RBS partners with Chinese firm
FTSE All Share* 2850.47 -8.75 -0.31

 3i’s buyout chief leaves the company FTSE Eurofirst 300* 1074.00 -1.90 -0.18
DAX* 6209.76 -39.89 -0.64
 Domino FY 10 sales
CAC 40* 3722.02 -14.28 -0.38
 Mitchells & Butlers agrees to buy Ha Ha Bar Stoxx Europe 50 2537.23 -15.98 -0.63

* CLOSING VALUES
 Cosalt revenue falls

 Caledon receives unsolicited offers CURRENCIES

 Cable comments on migrant limits INDEX LAST PRIOR

Euro (EUR/USD) 1.3039 1.3079

 Immigration limits hurt economy: Minister
U.K. Pound (GBP/USD) 1.5631 1.5629
 OFT initiates price-fixing probe against truck makers Japanese Yen (USD/JPY) 85.77 85.84

All prices are at 11:34 AM EDT

 "Credit" easing a last resort: Posen

 U.S. EPA investigates release of benzene at BP refinery FUTURES

LAST CHANGE

Crude Oil 73.71 -0.86

Natural Gas 4.184 -0.054

Gold, Dec. 1277.7 3.90

Copper (¢), Dec 351.85 2.50

Wheat (¢), Dec. 730.75 11.50

All prices are at 11:24 AM EDT

THE ECONOMIC MONITOR - U.K.

STOCK RECOMMENDATIONS BY BROKERAGE HOUSES

BROKERAGE/COMPANY ACTIONS RATING
Citigroup
Bluebay Raises price target to 370p from 340p --
Standard Chartered Raises price target to 2250p from 2100p Buy
Hargreaves Lansdown Raises to buy from hold Buy
Exane BNP Paribas
Associated British Foods Cuts to neutral from outperform Neutral
Numis
Anite Cuts to hold from add Hold
Bluebay Raises price target to 370p from 340p Add
Toluna Recommends price target of 374p Buy
United Business Media Raises price target to 657p from 638p Hold
Goldman Sachs
Barratt Developments Cuts to neutral from buy Neutral
Bellway Raises to buy from neutral Buy
Bovis Homes Raises price target to 467p from 458p --
Persimmon Cuts price target to 500p from 520p --
Redrow Raises to neutral from sell Neutral
Taylor Wimpey Cuts price target to 42p from 55p --
UBS
GlaxoSmithKline Raises price target to 1650p from 1525p --
J Sainsbury Raises to buy from neutral Buy
Investec
International Quantum Epitaxy Raises price target to 37p from 27p Buy
Natixis
Kingfisher Raises price target to 272p from 257p Buy
Altium
Oxford Instruments Raises price target to 498p from 384p Buy
United Business Media Raises price target to 735p from 655p Buy
KBC Peel Hunt
RAB Capital Cuts to hold from buy Hold
Panmure
United Business Media Raises price target to 750p from 650p Buy
HSBC
BHP Billiton Cuts to neutral from overweight Neutral

Disclaimer: The views and investment tips expressed by investment experts are their own, and not that of IBTimes or its management. We advise users to check with certified experts before
taking any investment decisions.

MARKET PERFORMANCE

FTSE 100

A. Index was sitting just below 5,600 points after a strong advance in
early trading. Miners Kazakhmys, Vedanta and Antofagasta were
going well, but it was engineer Invensys that led the way after
becoming the exclusive supplier of railway signalling to Chinese
rolling stock maker CSR Corporation. FTSE 100 up 55 at 5,596.

B. Only seven stocks were in the red as index resumes its rally after
pausing for breath for a few days. Invensys was the day’s top riser.
FTSE 100 up 55 at 5,596.

C. Index gave up most of its early gains despite a stronger start on

Wall Street. Among the risers were engineer Invensys. Aggreko,
Cable & Wireless Worldwide, Kingfisher, and Sainsbury. FTSE
100 up 12 at 5,553.
THE ECONOMIC MONITOR - U.K.
COMPANY NEWS
Centrica raises its stake in Statfjord field
Natural gas company Centrica, in its strategy to grow and deliver value
from upstream business today announced that it has signed a deal with
A/S Norske Shell and Enterprise Oil Norge for buying its non-
operated interests in the Statfjord field in the Norwegian sector of the
North Sea. Centrica will pay 1.37 billion Norwegian kroner ($225 million)
for the 9.44% equity stake in the field, taking its total stake to 19.13%.
RBS partners with Chinese firm: Sources
Royal Bank of Scotland Group is said to have signed an agreement
with Chinese group Guolian Securities, to start a venture to manage
stock sales in China, according to sources.
RBS has signed a MOU and applied to the China Securities
Regulatory Commission for approval. RBS, based in Edinburgh, would
hold 33 percent of the venture. (See Special Report)
3i’s buyout chief leaves the company
Private equity firm 3i Group disclosed its Buyout head Jonathan
Russell, who had been with the firm for 24 years, would leave as the
company announces that it will combine two of its key divisions. The
company’s buyout team will be combined with its Growth Capital
division.
The company said the two divisions would now be run as a single
private equity unit with a regional approach to investment decisions.
Main divisions will be Private Equity and Infrastructure. Russel, was
responsible for over 5 billion Euros ($6.5 billion) worth of funds.
Domino FY 10 sales ahead of expectations
Domino Printing Sciences reported an increase of 20 percent in
revenue so far in the second half, boosted by strong demand in Asia,
Middle East and South America. The company also said it is ahead of its
expectations for fiscal 2010 and remains cautious on its outlook for
Western Europe and North America.
For the period ended September 16, like-for-like sales rose 16 percent.
For the 10 months at the end of August, revenue increased 18 percent.
Net cash stood at 38.0 million pounds at August-end. Analysts on
average expect a pretax profit of 46.6 million pounds ($72.8 million) on
revenue of 289.3 million pounds for fiscal 2010.
Mitchells & Butlers agrees to buy Ha Ha Bar
U.K. pubs and restaurants group Mitchells & Butlers has approved
acquisition of restaurant chain Ha Ha Bar & Grill for 19.5 million
pounds ($30.4 million). The deal will generate an EBITDA return of 25
percent after a capital expenditure of 8.5 million pounds.
The Ha Ha Bar and Grill restaurants is being sold by Bay Restaurant
Group and will be converted into All Bar One sites, Browns restaurants
and other M&B brands.
Cosalt revenue falls on weak sales,
Cosalt, which provides safety equipment and services for the offshore
oil & gas and marine industries, today announced fall in revenues by 9
percent for the period from May to August. Group’s revenue for the
period was at 32.5 million pounds ($50.78 million), compared with 35.7
million pounds last year.
The marine safety group attributed the fall in revenues to reduction in
clients spending in the North Sea division that affected its volume and
COMPANY NEWS (contd...)
also weak sales of its work wear equipment. The company remains
confident of its future prospects in the long term.
Caledon receives unsolicited offers
Caledon Resources said it was in preliminary talks and has been
approached with an offer. The company, whose key shareholder Polo
Resources had dropped its offer earlier this year, in August said it was
no longer in an offer period.
The company has seen several unsolicited third-party interest in its
business after it engaged RBC Capital Markets to conduct a strategic
review in February last year.
REGULATORY NEWS
Immigration limits hurt economy: Minister
Business Secretary Vince Cable said that Cameron's
Conservatives' decision in May on cutting
immigrations resulting to a loss of thousands of jobs
in investment banking, engineering and
pharmaceuticals and hurting its economic recovery.
Due to the limits, the Companies are moving jobs to
overseas as they are unable to hire key staff. Cable
reluctantly agreed to back an immigration cap as part
of a coalition deal.
OFT initiates price-fixing probe against truck makers
The UK's Office of Fair Trading (OFT) contacted leading truck makers
including Scania, Daimler and MAN as part of a probe into suspected
cartel activity. A Daimler spokesman said the company has been
cooperating with the investigation. The OFT said investigations are at an
early stage and it had not yet determined whether the law was violated
or not. Under OFT rules, companies involved in price-fixing can be fined
up to 10 percent of their annual turnover and executives will be
prosecuted and sentenced to an imprisonment of five years.
"Credit" easing a last resort: Posen
The Bank of England might aim to slash borrowing costs in specific
areas of the economy since its program of buying government
securities prove ineffective in stimulating economic growth, said Adam
Posen, BoE Monetary Policy Committee member. If necessary, the
Bank's next step would be to shift into "heavy-duty credit easing,"
which is targeting specific sectors such as the US did with housing
markets.
U.S. EPA investigates release of benzene at BP refinery
The Environmental Protection Agency said it has started an
investigation into the release of benzene at BP's Texas City, Texas
refinery earlier this year. EPA has requested BP to provide information
regarding the release of chemicals like benzene at the plant between
April 6 and May 16.
THE ECONOMIC MONITOR - U.K.

ECONOMY NEWS ECONOMIC INDICATOR WATCH (contd…)

Debt risk a greatest threat to Europe: FM CML Market Commentary (September)

British finance minister George Osborne said that the greatest threat to Council of Mortgage Lenders will provide market Commentary for the analysis
European economies was a return of sovereign debt risk and that voters in on the U.K. mortgage markets for the month of September at Local/GMT/ET
Britain understood the need to slash state spending. 1230/1130/0730.

The British chancellor said Britain wanted to be an active member of the

European Union but it would fall primarily to the euro zone to aid any of its
BoE Trends in Lending report (September)
members in financial difficulty. With trade unions in Britain warning the public
would not accept unfair welfare cuts, Osborne said the welfare state had become Bank of England will publish its report on latest trends in lending to the U.K.
a way of life for a minority of Britons. economy at Local/GMT/ET 0930/0830/0430.

Job boost at London financial BoE Quarterly Bulletin (Q3)

According to a survey from financial recruitment company Astbury Marsden Bank of England will release its quarterly bulletin for the third quarter at Local/
the London financial sector enjoyed a rise in the number of jobs created last GMT/ET 0001/2301/1901. The Quarterly Bulletin provides regular commentary
month. Astbury Marsden said the number of new City job vacancies created in on market developments and U.K monetary policy operations.
August increased 7 percent month-on-month to 5,031. Astbury Marsden chief
operating officer Mark Cameron said, "Banks are also looking at other parts of
the market, like mortgage-backed securities, that had been dormant but seem CORPORATE RESULTS
to be flickering to life."
DATE - 20/September/2010
COMPANY NAME EVENT
ECONOMIC INDICATOR WATCH
Dods (Tentative) Interim 2010
Monday, September 20, 2010 Ecommerce Alliance (Tentative) Q2 2010

TEG Group Interim 2010

Rightmove Monthly House Price Index (September) Lighthouse Group Interim 2010

Rightmove will announce figures for monthly house price index for the month of Petrel Resources (Tentative) Interim 2010
September at Local/GMT/ET 0001/2301/1901. The index monitors changes in Deltex Medical Group (Tentative) Interim 2010
house prices both annually and monthly, and provides view on the current state
of the property market in England and Wales. MAM Software Group (Tentative) Q4 2010

I S Solutions Interim 2010

Rightmove in August reported a fall of 1.7 percent (£4,091) in average asking
price across the 117,000 new properties added. It was the biggest reduction in Silence Therapeutics Interim 2010
asking prices measured by Rightmove so far this year, after falling 0.6 percent in BTG (Tentative) Q2 2010
July.
Homeserve (Tentative) Trading Update

CML mortgage lending figures (August) Energiser Investments (Tentative) Interim 2010

Allergy Therapeutics Preliminary 2010

Council of Mortgage Lenders will release its mortgage lending figures for the
month of August at Local/GMT/ET 0930/0830/0430. Survey by CML revealed Cascal (Tentative) Q1 2011
mortgage lending remained weak in July. TUI Travel (Tentative) Pre-Close Trading Statement

Energetix Group (Tentative) Interim 2010

There were 56,000 loans for house purchase (worth £8.4 billion) advanced in July,
up from 52,000 (worth £7.7 billion) in June, and from 53,000 (worth £7.3 billion) a Borders & Southern Petroleum (Tentative) Interim 2010
year ago. The 28,000 remortgage loans (worth £3.5 billion) were unchanged
from June and down from 40,000 (worth £4.9 billion) in July 2009. Ceres Power Holdings (Tentative) Preliminary 2010

BoE capital issuance (August) ECONOMIC CALENDAR

Bank of England will release its capital issuance data for the month of August at DATE LST INDICATOR F’CAST PRIOR
Local/GMT/ET 0930/0830/0430. Gross capital issues by U.K. residents totalled
£49.0 billion in July 2010, £8.8 billion higher than in June. Net capital issuance MON 09/20 1400 Money Supply M4 N/A 0.4 %
by U.K. residents totalled £5.7 billion in July 2010, £20.6 billion higher than in TUE 09/21 1400 PSNB, mm GBP N/A 3.17bln
June.
1400 PSNCR, mm GBP N/A -4.13bln
BOE broad money provisional estimates (August) WED 09/22 1400 MPC Vote Outcome N/A 8-1

Bank of England will release provisional estimates of broad money (M4) and 1400 MPC QE Vote Outcome N/A 9-0
credit (M4 Lending) for the month of August at Local/GMT/ET 0930/0830/0430.

Seasonally adjusted provisional figures for July was increased by £9.4 billion
(0.4%), compared with an average monthly increase for the previous six months
of £2.0 billion. The twelve-month growth rate fell, to 2.3% from 3.1% in June. M4
lending decreased by £11.6 billion (0.4%) in July. The twelve-month growth rate
fell to 1.6% from 2.3% in June.
THE ECONOMIC MONITOR - U.K.
MARKET BRIEFING
 U.K. stocks declined, ending the FTSE 100’s weekly rally, as concerns of
Eurozone worries resurfaced and as confidence was stung by data show-
ing U.S consumer sentiment fell to its lowest level in more than a year,
and with banks lower on renewed worries over the euro zone's fiscal
health. The pan-European FTSEurofirst 300 of top shares closed 0.18
percent lower at 1,074.00 points, ending at its lowest closing level in
more than a week. The FTSE 100 Index declined 31.69, or 0.57 percent,
to 5,508.45 as of, cutting this week’s rally to 0.4 percent. Aggreko was
the best performer after Credit Suisse started covering the back-up gen-
erator firm with a neutral recommendation. Invensys has become the
exclusive supplier of railway signalling to Chinese rolling stock maker
CSR Corporation. High copper prices boosted Kazakhmys and Vedanta
Resources. While, financials dominate the fallers with Man Group the
worst performer.
 Sterling cut gains against the dollar, coming off an earlier five-week
high as renewed euro zone sovereign banking sector concerns put risk-
ier currencies and equities back under pressure. As worries about pe-
ripheral euro zone countries resurfaced, the euro turned lower against
the dollar, prompting other riskier currencies, including sterling, to fol-
low suit, and pushing equities off their highs. The euro fell below a seven
-week high against the pound hit on Thursday just above 84.00 pence.
By 1434 GMT, sterling was at $1.5628, up 0.1 percent on the day but well
below an earlier 5-week high of $1.5730 when the dollar fell broadly and
traders reported sterling/dollar demand from Asian sovereigns and a U.S.
bank. The euro was down 0.4 percent at 83.32 pence, pulling away from
the 83.60 pence level, where traders reported an options expiry, and
dipping below its 100-day moving average at 83.50 pence.
 British gilt futures rallied, receiving a modest boost from renewed in-
vestor jitters over Irish government debt and weaker-than-expected U.S.
core inflation data, but they markedly underperformed Bunds. At 1315
GMT the December gilt future was 30 ticks up on the day at 122.64,
reversing earlier losses while Bund futures surged as the cost of insuring
against Irish default hit a record high. Gilt futures hit a session high of
122.83 after the release of U.S. data which showed an unexpected slow-
down in the monthly rate of core consumer price inflation to 0.0 percent
in August from July's 0.1 percent. However, gilts (Treasuries) continued
to underperform Bunds on the day as they were lesser beneficiaries of
Ireland's woes. The December gilt future trailed the equivalent Bund by
40 ticks, and the 10-year gilt/Bund yield spread widened 4 basis points
on the day to a one-week high of more than 70 basis points.
 U.S. crude futures lost further ground, after a poll showed consumer
sentiment soured this month against expectations for a slight improve-
ment from August, stoking more worries about oil demand. The Thom-
son Reuters/University of Michigan Surveys of Consumers showed con-
sumer sentiment fell to 66.6 from 68.9 in the final August reading, ac-
cording to a report released earlier on Friday. The sentiment data
pushed the dollar higher and U.S. equities lower. On the New York Mer-
cantile Exchange at 1439 GMT, October crude was down 88 cents, or
1.18 percent, to $73.69 a barrel, after falling as low as $73.48. It hit a high
of $75.25 earlier. At 1507 GMT, ICE Brent for November fell 40 cents to
$78.08. October Brent expired on Wednesday.
 Gold retreated from record highs, as a firmer dollar tempered the mo-
mentum, although concerns about further quantitative easing in the
United States cushioned prices. Sister-metal silver was supercharged,
benefiting also from gains in prices for industrial metals to test the $21
mark. A break above $21.24 would open the way for prices to hit levels
last seen in October 1980. Spot gold hit an all-time high of $1,282.75 a
troy ounce before easing to a bid at $1,276.50 by 1215 GMT, compared
with $1,272.20 late in New York on Thursday. It has gained more than
$100 or 8.4 percent since the start of August.
NEXT TRADING DAY
Economic Events
Parliamentary election in Sweden on Sep 19.
Unlike the other parliamentary democracies of Europe, Sweden has regularly-
scheduled dates for its general elections – they are held on the third Sunday in
September every four years. On September 19, 2010, all 349 seats in the
unicameral Riksdag are up for election, as are all town and county council seats
around the country.
Voters are allowed to submit postal ballots beginning on September 1, but can
decide to void their postal ballot by appearing in person at their voting station
on Election Day. The total electorate amounts to 7,000,000 voters, and turnout
has averaged around 80 percent for the last 60 years, although has trended
slightly lower since hitting a high of 91.76 percent in 1976.
IAEA General Conference 54th session in Austria
The provisional agenda of the conference includes election of officers and
appointment of the general committee, applications for membership of the
agency, message from the Secretary-General of the United Nations, general
debate and Annual Report for 2009, election of members to the board of
governors and many other.
It will also focus on measures to strengthen international cooperation in nuclear,
radiation, transport and waste safety, implementation of the NPT safeguards
agreement between the agency and the democratic People’s Republic of Korea
and application of IAEA safeguards in the Middle East
European Medicines Agency (EMA) expert committee is all set to review the
drug's safety before finalising its position at its next scheduled meeting (to Sept.
23).
Corporate Events
Allergy Therapeutics, a pharmaceutical company is expected to release its final
result. Company’s full year revenue is expected to increase to £41.36 million, as
compared to £38.55 million in the previous year. Net debt is expected at £2.43
million. Analysts expect a full year loss (pre-amortization) to be at £0.5 per share.
Goldplat, a previous metal producer company is expected to declare its final
results at a profit at £1.1 per share. Company’s full year revenue is also expected
to rise to £11.68 million as compared to £10.3 million a year ago. Net debt and
capital expenditure is expected at £0.9 million and £1.1 million respectively.
Petra Diamonds, an international diamond mining group is expected to declare
its final results. Analysts expect company’s full year profit to be at £0.084 per
share, as compared to a previous loss of £0.5 per share. Company’s full year
revenue is expected to rise steeply to £158.88 million in the current year, from
£69.1 million in the previous year. Net debt will be at £27.65 million, while capital
expenditure at £70.13 million.
This report is produced by
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