London afternoon: Mixed views on banks

15th Mar 2010 14:33

Miners continue to be a drag on the blue-chip index as copper prices fall back, but the Footsie's decline remains a leisurely one.Leading the mining sector down is Xstrata with rumours doing the rounds in the City that the Anglo-Swiss company is mulling a rights issue. Speculation is also hovering over Vedanta, where the word on the street is that the Indian miner is contemplating demerging its aluminium division.On the subject of aluminium Rio Tinto has been cleared by an internal Chinese investigation of wrong doing over the collapse of its proposed tie-up with aluminium group Chinalco. The investigation instead blamed naivety, poor PR and soaring metal prices for the breakdown of the deal. Distribution and outsourcing group Bunzl has bought Switzerland-based consumable products supplier Weita Holding for an undisclosed sum. In 2009, the Swiss company's revenue was SFr.70.9m while at the end of the year the company had gross assets worth SFr.47m.Broker coverage provides some interest. Centrica moves higher after expectations of strong growth in the UK and the US prompted Nomura to raise its rating on the British Gas owner to 370p from 340p. Telecoms leviathan BT is better after Citigroup upgraded the stock from 'hold' to 'buy' and hiked its price target from 145p to 150p in the belief that the negative reaction to the group's recent results was overdone.Meanwhile, Bank of America Merrill Lynch thinks things at part-nationalised lender Royal Bank of Scotland (RBS) are not as bleak as they are often painted, while Deutsche Bank is also a fan and thinks the shares could go as high as 50p.Seymour Pierce demurs, however, and has issued a research note recommending its clients ditch RBS as well as Lloyds Banking and Barclays.Elsewhere in the financial sector life assurance giant Standard Life has bought intermediary support services provider threesixty for an undisclosed sum.Investment trust giant Witan's investment performance beat its benchmark index in 2009 after calling the bottom of the market a month early in February. The Trust achieved 25.9% total return in net asset value in 2009, versus a 24.5% return from the company's benchmark measurement. The total dividend for 2009 is 10.5p, up from 10.2p the year before.Sensor and electronic components firm TT Electronics has been hit hard by the recession, but put in a "creditable" performance in 2009 and has continued a better fourth quarter performance into the new year.French Connection said it will close the majority of its loss making operations in the US and sell its Nicole Farhi brand. The changes, which include exiting the Japanese market, are part of a restructuring of the business aimed at returning it to profitability, it said in a company statement. West End retailer Liberty has agreed a £41.5m sale and lease back of its world famous Regent Street store. The freehold of the 125,000 sq ft shop, officially on Great Marlborough Street, London W1, has been sold to Sirosa Liberty Limited.Composting and energy plant operator TEG Group has concluded a four-year contract with local authorities in Essex to process co-mingled food and garden waste. Property adviser DTZ said it's still on track to report full year earnings in line with market expectations and expects £70m of cost savings for the year. Property investment group Raven Russia is lower, however, even after it narrowed full year losses and said it well positioned to provide solid returns. For the year ended 31 December 2009 the group posted a pre-tax loss of $148.3m compared with a $189.4m loss a year earlier.Shares in Kurdistan-focused oil and gas explorer Gulf Keystone fell back after the company announced a discounted share placing. Gulf Keystone raised in the region of £16m through the placing of 20.92m shares at 76.5p.