London afternoon: Footsie in the blue

2nd Dec 2009 14:52

Though banks are still looking sickly, Footsie has struggled into positive territory on the back of a strong mining sector.Royal Bank of Scotland (RBS) remains the biggest faller among blue-chips, with lingering concerns about its exposure to Dubai World's debt now overshadowed by with newspaper reports suggesting that the government has insisted on setting guidelines for bonus payments within the bank. Investors fear that a politically motivated bonus scheme could prompt talent to leave the bank, undermining its competitive position.Swiss bank Credit Suisse has added to the UK banking sector's woes by claiming that all UK banks are overpriced, even after the hammering they have taken in the last two weeks. Credit Suisse advises against holding any UK bank but for those who insist on having exposure to the sector it reckons Barclays is the one to pick.Also undermining Footsie's performance are some big hitters going ex-dividend today. They include National Grid, Severn Trent, LSE and AB Foods.In a buoyant mining sector that sees ENRC and Kazakhmys going well, India-focused miner Vedanta gets an additional lift from a 'buy' recommendation by Goldman Sachs. Anglo American, however, is downgraded to 'neutral' by the US bank. Lonmin, meanwhile, is raised to 'buy' by Investec, which also upgrades its price target for FTSE 250 miner Aquarius Platinum. Broker comment also lifts mobile phone networks giant Vodafone and oilfield services group Amec. Credit Suisse has upped its Vodafone target price from 150p to 160p while Evolution Securities has upgraded Amec from 'add' to 'buy'.Newcastle-based accountancy software firm Sage upped its dividend and said conditions have stabilised in the second half. The total dividend has been increased by 3% to 7.43p per share (2008: 7.21p per share). The group said the rise is reflecting the strength of cash flows and its robust business performance.In corporate news, Irish budget airline Aer Lingus is closing down loss-making routes and will start making compulsory redundancies after failing to reach a deal with the unions over cost savings. The carrier said it had "narrowed the gap" with most union groups, but had met stiff opposition from unions representing pilots and cabin crew.Stockbroker and fund manager Brewin Dolphin saw profits slide in the year to September 27 after one of the most tumultuous periods for the financial services industry. Pre-tax profits fell to £21.9m from £32m, even as total income climbed to £212.3m from £206.5m.Rival Numis slumped to a loss of over £10m last year as write-downs on its investment portfolio and fewer company listings took their toll. Legal & General has announced the appointment of John Stewart as non-executive chairman of the insurer in succession to Sir Rob Margetts. Stewart will become chairman-designate from 1 January 2010.Business publisher Informa gives back some of the gains it made yesterday in the wake of the news that it has scrapped merger talks with German publisher Springer.Carillion said the City of Toronto has appointed Carillion Canada as construction manager for the revitalisation of the City's Union Station, a 5-year project valued at around £360m. Regeneration developments around the 2012 Olympics site helped Telford Homes, which builds homes in East London, buck the general gloom in the housebuilding sector to post a surge in profits. In the six months to September 30, Telford posted a rise in pre-tax profits to £6.5m from £0.3m on revenues that climbed to £85.9m from £35.6m. The strong results prompted it to reinstate its dividend payment at 0.75p.Shares in Catalyst Media jumped after the investor in betting technology posted a nearly ten-fold rise in profits.