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Rss Today on Proactive AU

2014-03-12

All Ords sell-off, tempered by bargain-hunting in mining sector

 
Investors jumped back into iron ore on bargain hunting today, with the gold sector also outperforming as the yellow metal continues to climb. When it comes to industrials, there were red arrows across the board from banks, to retailers and financials. Ukraine and China are adding to investor concerns.  ASF Group has continued its bull run.
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Rss Today on Proactive UK

2014-03-12

Broker round-up: Rio Tinto, BHP Billiton, William Hill, Barclays, Hummingbird ...

 
A hammering for copper prices overnight in China has put the spotlight firmly back on the mining majors, with stick to quality the message at the moment. Iron ore prices have also been under the cosh as Chinese banks have reduced their lending to steel mills as pressure on the heavy polluters grows, forcing them to run down stocks of core and coking coal. US broker Jefferies notes that some iron ore and copper in China is used as collateral for loans, with the borrowed funds then allocated to investments that have been expected to generate high returns. With prices for these commodities now falling, borrowers have reportedly been forced to sell this collateral to repay loans. It argues that that at least some of the recent weakness is also a function of a buyer's strike due to tight credit coinciding with increased supply of some important commodities, including iron ore and copper. Some of this recent weakness in commodity markets is likely transitory and Jefferies says it is an opportunity to build a position in high quality  miners such as Rio Tinto (LON:RIO) and BHP Billiton (LON:BLT), but avoid highly leveraged, high risk miners. Leisure analysts at the US broker, meanwhile, suggest bookmaker William Hill (LON:WMH) has the potential to double its share price over the next three years. Online growth should drive underlying double-digit compounding growth both on a domestic and international basis, it says, while the point of consumption (POC) tax is a major catalyst for online gorillas like William Hill to grab further market share. “Under our Blue Sky scenario for FY17E, we target 800p per share. By then William Hill's online businesses will likely generate over 65% of group’s underlying earning [EBITDA], similar to Paddy Power today. The Blue Sky valuation is well supported by other more highly rated online businesses.” Buy says Jefferies. Online clothing group N Brown (LON:BWNG) has continually to improve the appeal of its clothing offer to appeal to a wider UK and increasingly global audience, argues UBS. But the size 16-18 women's clothing market is the stomping ground of some of the industry heavyweights, such as M&S, Next and Debenhams, and this move away from Brown’s differentiated, core niche increases the risk.  The question, says UBS, remains whether N Brown's fashion credentials will hold up and if there will be a leakage of credit income.  UBS expects a decline in gross margin in 2015 and 2016 and has downgraded its rating to ‘sell’ and lowered its price target to 535p. 'Buy' Barclays (LON:BARC) and Lloyds Banking (LON:LLOY) out of the UK banks, suggests Societe Generale.  Barclays would likely be the biggest beneficiary of a UK corporate banking revival, but it should be more positive for the share price than the potential EPS upgrade implies. Lloyds also has more upside in both the margin and the share price, says the French broker, though RBS (LON:RBS) is rated a hold.  “RBS is about to begin a significant restructuring and long-term returns are likely lower than Barclays or Lloyds.” The latest upgrade to Hummingbird Resources' (LON:HUM) Tuzon deposit in Liberia has impressed Cantor Fitzgerald.  Asa Bridle, an analyst at Cantor, said that backed by the rising gold price, the revised total resource at US$1,500/oz would imply an enterprise value of US$130m or 143p/share including cash. “The 2.1Moz resource in the new US$1,200/oz estimate at Tuzon alone and balance sheet cash equates to 80p/s.” The broker, who has a ‘buy’ stance, raised his target price to 80p from 68p. City firm Cenkos urges investors to sit tight as the success of the Statpro's (LON:SOG) cloud strategy should become increasingly evident over the next 12 months. This should boost profits into next year and drive a re-rating of the company’s share price, which has been relatively flat at around 86p over the past year, the broker insisted. “We reach a sum of the parts valuation of c180p as investors begin to price in the Group’s leadership in asset management data analytics,” said analyst Andy Bryant, who urges clients to buy the shares. Frontier Mining's (LON:FML) asset sale - of its Naimanjal licence in Kazakhstan - represents an "excellent" alternative source of funds to debt, reckons broker RFC Ambrian. On Monday, the copper miner saw its shares surge as it agreed to dispose of subsidiary FML Kazakhstan, which holds Naimanjal, to Union Transnationale Miniere for US$30mln.
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Rss Today on Proactive US

2014-03-12

Wall Street to see red on China worries; Tesla business model in focus

 
U.S. stock futures were pointing lower on Wednesday after a rough session in Asia today and losses at home yesterday, with markets focused on concerns about China's economy, despite the plunge in exports data already being a few days old.
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