Archive forDecember, 2014

BoS raises growth forecast for the country

Bank of Spain (BoS)’s economic bulletin showed the economy is expected to grow 0.6% q-o-q in Q4 2014, taking the annual growth to 1.9% for 2014. Spain’s GDP is forecasted to grow 1.4% in 2014 (previous estimate: 1.3%) and 2.0% in 2015.

UK’s upbeat jobs market may face skill shortage in 2015

According to a survey by Confederation of British Industry, around 50% of the UK businesses are planning to employ more people in 2015. However, due to an impending skill shortage many posts are likely to remain vacant.

12 Deals of Christmas (No.12) – Speculative Buy Caza Oil & Gas (CAZA.L) at 9p

Last Thursday, Caza Oil & Gas (CAZA.L) announced the result of the first development well at the Bone Spring well at the non-operated Marathon Road property and the initial test well on the operated East Marathon Road Property. The 3rd Bone Spring development well has been dug to an approximate depth of 15,625 feet. The production rates under the controlled flowback for the 15OB-1H has improved to 1,928 barrels of oil equivalent (bbloe) in 24 hours, comprising of 1,698 barrels (bbls) of oil and 1.38 million cubic feet (mcf) of gas. Further, data from the 1st and 2nd Bone Spring Sand intervals have also indicated the presence of oil and natural gas. The next horizontal 3rd Bone Spring well is scheduled to commence drilling operations from Q1 2015.

UK firms intend to increase salaries in 2015

According to a survey by the Confederation of British Industry, nearly 43% of the total participating firms expect to hike salaries in proportion to the retail price index during their next pay review, with about 12% firms planning to increase salaries by a higher rate.

GFK consumer confidence declines in December

A GFK survey revealed that the consumer confidence index fell to -4 in December, a 17-month low, from -2 in November. Moreover, the prospects are unlikely to improve in the near future as GfK’s measure of economic optimism index dropped to its lowest level since July 2013.

Challenges and opportunities for the Global economy and markets in 2015

In looking at the prospects for 2015, apart from the understandable obsession with the fall in the price of oil, one longer term consideration stands above all the economic, social and geopolitical factors. Will Central Banks manage to implement the right policies at the right time ? Will the Federal Reserve and the Bank of England, for instance, time correctly raising their interest rates to avoid jeopardising the economic recoveries for which so much sacrifice has been made ? Assuming the recoveries are sustained, will they react too late and have to fight a rearguard action on inflationary pressures? Will Abenomics finally deliver for Japan and will the European Central Bank be ‘allowed’ to add broader monetary support to economies where there seems to be a national lack of political will or courage to implement more robust fiscal measures ? Can China succeed in rebalancing its economy while maintaining a good level of growth?

12 Deals of Christmas (No.11) – Sell Poundland Group (PLND.L) at 320p

The market appears to be convinced that the Poundland (PLND.L) story will run forever. The recent spike in the Group’s share price has taken its rating to some 25x to 26x 2015 earnings – a multiple that suggests the Group operations are both high-quality and defensible, while offering long-term visibility of earnings. The reality is that this is asking just too much.

UK households optimistic about financial prospects

Markit’s Household Finance Index, which gauges households’ overall financial health, declined marginally to 42.7 in December from 42.8 in the previous month. The indictor was above the 2014 average reading and the third highest in the survey’s 71-month history.

Barry Gibb on – 17/12/2014

Beaufort research analyst, Barry Gibb speaking about Poundland Group (PLND.L), Flow Group (FLOW.L), Advanced Oncotherapy (AVO.L), Fox Marble (FOX.L), Smith & Nephew (SN.L) and Kingfisher (KGF.L) on (Source: – 17/12/2014

12 Deals of Christmas (No.10) – Buy Whitbread (WTB.L) at 4,402p

Whitbread (WTB.L) recently released its interim management statement for the 13 weeks to 27th November 2014. Total sales expanded 13.2%, with a like-for-like (LFL) growth of 6.4%. Costa led, with a total sales rise of 17% and 5.2% on an LFL basis. Premier Inn sales increased 15.4% with LFL sales widening by 8.5%. Hotels and restaurant segment too contributed with a growth of 11% in total sales. Year-to-date total sales growth stood at 13% whereas the LFL sales was recorded at 6.7%. Premier Inn reported a year to date rise of 14.9% in total sales and Costa recorded a growth of 16.9%. In the year-to-date, the company installed 623 Costa express machines and opened 2,177 UK rooms.

BoE unveils result of banks’ stress test

The Bank of England (BoE) conducted stress tests to assess the ability of UK’s lenders to survive a financial downturn. The Co-operative Bank failed the test, while five major banks passed the test. However, amongst them, Lloyds Banking Group and the Royal Bank of Scotland were found to be in a risky position.

12 Deals of Christmas (No.9) – Buy Weir Group (WEIR.L) at 1,720p

Weir Group (WEIR.L) is one of the world’s largest engineering companies, employing more than 15,000 people and operating in 70 countries. It focuses on providing engineering solutions to the minerals, oil and gas and power markets. Weir Group manufactures and supplies engineering products and services for mining and minerals processing, power generation, oil and gas production, water supply and other industrial uses including, supply pumps, valves, compressors and turbines. With a market value of £3.7 billion, Weir is a constituent of the FTSE 100 Index on the London Stock Exchange.

David Cameron launches Starter Home scheme

The UK’s Prime Minister David Cameron introduced the Starter Home initiative to help 100,000 first-time home buyers purchase houses at 20% less than the market price from the start of 2015. The houses covered under the scheme would not be allowed for sale at the market price for a specific period to protect buyers’ interests. Moreover, certain charges would be waived for developers associated with the initiative.

12 Deals of Christmas (No.8) – Speculative Buy Blur Group (BLUR.L) at 65p

Blur Group (BLUR.L) shares have been very severely punished over the past 12 months. The recent profit warning (19th November) seemed almost like the final straw. The revenue growth cited previously for 2014 now looks unlikely to appear until the opening months of 2015. Having had confidence wacked one more time, consensus forecasts have been cut across the three prospective years and now suggest that the first realistic opportunity for EBITDA breakeven will not appear until this time next year. So far, so bad!

UK house prices decline in December

Rightmove, a property tracking website, revealed the UK house prices fell 3.3% m-o-m in December following a 1.7% drop in the previous month. However, on y-o-y basis, house prices climbed 7%, lower than an 8.5% rise in November.

EU insists on additional economic reforms in France

European Union (EU) urged the French government to undertake more labour and tax reforms to stimulate economic growth in the country. The report under Macroeconomic Imbalances Procedure (MIP) for countries requiring specific monitoring suggested the current measures were inadequate to correct imbalances that could potentially affect the entire EU region.

12 Deals of Christmas (No.7) – Speculative Buy Rambler Metals & Mining (RMM.L) at 25p

Rambler Metals & Mining (RMM.L) is a copper-gold producer in Newfoundland, Canada – a stable and low risk jurisdiction. The company is cash flow positive with a solid unlevered balance sheet, with CA$8m.

BOE’s Governor suggests future rate hike

The Bank of England (BOE)’s Governor Mark Carney indicated a gradual increase in interest rates despite low inflation. However, he did not reveal any time frame for the rate hike. The BOE expects UK’s economy to expand 3.5% this year.

12 Deals of Christmas (No.6) – Speculative Buy Fox Marble (FOX.L) at 19p

Fox Marble (FOX.L) makes for a compelling investment. The concentration amongst mineral producers forced by international giants over the past 20 years or so has somehow passed the sector of dimensional stone (in this case marble and granite) miners by, to the extent that Fox Marble is presently the only dedicated vehicle quoted on an international stock exchange. Yet worldwide trade is estimated to be worth in excess of US$15bn annually, with an outlook for uninterrupted, long-term demand growth in a stable and progressive pricing environment.

BCC downgrades growth outlook for the UK

British Chambers of Commerce (BCC) cut the 2014 growth projection for the UK to 3% from 3.2% owing to a lower-than-anticipated rise in services, household consumption and exports. The forecasts for 2015 and 2016 were also lowered to 2.6% and 2.4% from 2.8% and 2.5%, respectively.

A little context for the possible extent of the move in the FTSE 100

It is perverse that markets have reacted quite so badly to the disinflationary boost from the oil price drop. Unfortunately, it has badly unsettled investor confidence on other fronts and the current (expected) sell-offs in the FTSE and the S&P 500 indices are the result.

12 Deals of Christmas (No.5) – Buy Countrywide (CWD.L) at 452p

The largest integrated estate agency and property services group in the United Kingdom, Countrywide (CWD.L) provides estate agency and letting services, financial services, agency for land and new homes, auctions, surveying, conveyancing and property management services. It employs around 11,300 people nationwide, working across 1,300 estate agency and lettings offices operating under more than 50 local high street brands, supplemented by 650 mortgage consultants who arranged over £4bn worth of mortgages in 2013. The high street brands include Hampton’s International and John D Wood. Countrywide is listed on the London Stock Exchange and is a constituent of the FTSE 250.

Black Friday discounts boost UK retail sales in November

In November 2014, UK retail sales grew 0.9% y-o-y on a like-for-like basis. Total sales expanded 2.2% y-o-y. Sales in the household appliances, furniture and home categories were particularly strong due to Black Friday promotions.

12 Deals of Christmas (No.4) – Buy db X-trackers NIFTY ETF at 8,953p

The Deutsche Bank CNX NIFTY ETF aims to track the performance of the Top 50 capitalised equities in the Indian stock market. The fund allows low cost exposure to one of the fasting growing emerging economies in the world, from the comfort of a listing on the London Stock Exchange (LSE) priced in Sterling. The ETF is extremely well diversified with 22 sectors accounted for within the Indian economy.

Greek lawmakers approve 2015 budget

Greek lawmakers approved the country’s budget, forecasting almost no deficit for 2015. Of the 300-seat parliament, 155 voted in favour, while 134 voted against the plan. One expressed no view. The budget needs to be formally approved by the European Commission, European Central Bank and International Monetary Fund.

ECB cuts growth forecast for Eurozone

The ECB lowered its 2014 growth forecast for the Eurozone to 0.8% from 0.9% three months earlier. The forecasts for 2015 and 2016 have been slashed to 1% and 1.5% from 1.6% and 1.9%, respectively. The ECB also lowered its inflation target following the sharp fall in oil prices.

Beaufort Securities acts as broker to PCG Entertainment on its Admission to AIM

Beaufort Securities acts as broker to PCG Entertainment on its Admission to AIM (Correction) Beaufort Securities acts as broker to PCG Entertainment (PCGE.L) on its Admission to AIM PCG Entertainment Overview PCG Entertainment Plc (PCGE.L) is a Gibraltar incorporated holding company formed to capitalise on the significant opportunities in the gaming and entertainment industries in […]

12 Deals of Christmas (No.3) – Buy Capita at 1,053p

Capita is well-known as a leading provider of business process management and integrated professional support service solutions, with 64,000 staff across the UK, Europe, South Africa and India. The Company provides an integrated range of services including; customer services, human resource services, software services, systems and strategic support, and property services across the United Kingdom’s public and private sectors. Capita is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

Osborne announces cuts in property taxes, unveils new taxes on multinationals

The Chancellor of the Exchequer George Osborne announced the system of stamp duty on home purchases would be changed from the current flat rate on the entire purchase price to slab rates above a series of thresholds. The changes, which come into effect from midnight, would benefit 98% of all home buyers, he mentioned. Osborne also announced higher levies on multinational companies and abolished air passenger duty for children under 12.

12 Deals of Christmas (No.2) – Speculative Buy Advanced Oncotherapy at 4p

Advanced Oncotherapy yesterday took another important step forward! It announced that its relationship with the SUNY Upstate Medical University Hospital had moved onto a formal, exclusive basis with respect to installing its first prototype LIGHT system in the highly-sought after area of Syracuse, Central New York State. As such, SUNY is set to become the Group’s US hub for research and development, manufacture and treatment using Advanced Oncotherapy’s next generation proton therapy technology for treating cancers. Together they will also develop a clinical training and sales facility on the same site, which could ultimately supply LIGHT machines to all of the Americas. Both parties are driven by a clear objective of delivering innovative and affordable proton therapy solutions to the Central New York area and look forward to seeing this strong partnership bear fruits for the benefits of patients and payors. Indeed, the exceptional level of interest in LIGHT that is now being expressed from all corners of the international medical fraternity, could even present the opportunity for a similar, parallel development elsewhere, most likely in Europe.