Friday tips round-up: Premier Oil, Ashmore

11th Jul 2014 08:59

Things seem to be looking up for oil exploration outfit Premier Oil. Its latest trading statement confirmed that it was on track to hit an average level of production of between 58,000 and 63,000 barrels a day this year. In fact, there is every chance that target will be beat. Under its new Chief Executive, the firm has already managed to dispose of some non-core assets and production from the North Sea Solan field may start within a couple of months. Furthermore, approval has been granted to go ahead with the Catcher field in the North Sea. It goes without saying that in the oil exploration business nothing is ever guaranteed. However, the huge uncertainty over whether Premier will find a partner to help develop the Sea Lion field off Falklands - which could cost a colossal $5.2bn - continues to bedevil shareholders. The stock is a 'cautious buy' says The Times's Tempus.Over the last quarter emerging market specialist fund manager Ashmore has seen bond indices in those geographies rise while currencies stabilised. That helped the shares to bounce 4% after underperforming its industry benchmark by a wide margin in the year-to-date. However, while weakness in the US dollar can be beneficial for the firm, the same cannot be said of strength in sterling, in which its costs are denominated. Hence a recent 5% earnings forecast downgrade from Goldman Sachs for next year. On the upside, there is the firm's shift towards equities and away from its reliance on fixed income, as fees on equity mandates are higher. For now unfortunately the company's reliance in bonds, currencies and yields means that this year's improved performance may last no longer than the low interest rate environment, writes the Financial Times' Lex column. Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.