London midday: Miners keep Footsie ahead

22nd May 2009 12:05

Footsie has made progress helped by a Goldman Sachs upgrade of mining stocks though buyers in other areas are thin on the ground ahead of the bank holiday weekend.Goldman Sachs foresees capacity restraints affecting iron ore and copper production by 2011. 'In contrast, nickel and aluminium do not appear likely to reach capacity constraints until 2017,' the US bank believes.Anglo American is its conviction buy in the sector, having upgraded the stock from 'neutral' to 'buy'. Kazakhmys and Vedanta have similarly been upgraded.Rio Tinto is up on reports in Australia that there may be changes to the deal with Chinalco to appease both regulators and major shareholders. It has been upgraded by Goldman Sachs to 'neutral' from 'sell' while the bank's 'buy' rating on Xstrata is maintained. The day's big faller is British Airways after pre-tax losses came in more than £100m higher than forecasts. It posted a pre-tax loss of £401m, compared with a profit of £922m over the previous year. Revenue climbed to £8.99bn from £8.76bn.The airline said it will focus on cutting capacity and keeping a lid on costs after weak economic conditions and high fuel costs sent the airline tumbling into the red in the year to March 31. Volatile market conditions have prompted management to withdraw its previous revenue guidance for the current financial year Royal Bank of Scotland has appointed Standard Life chief executive Sir Sandy Crombie as its senior independent director. Sir Sandy, who joins in June, is one of three non-executives RBS agreed to appoint over the next three months as part of its bail-out by the UK government.Pub group and real ale brewer Marston's reported a 21% drop in half-year pre-tax profit but said it is encouraged by the modest improvement in trading since mid-February. The interim dividend has been maintained, meaning the shares are currently yielding more than 8% if the final divi is also maintained.PR firm Next Fifteen Communications has ceased takeover talks with Huntsworth and Chime Communications. Property firm Brixton is in discussions with 'a small number of parties' after receiving approaches about a possible offer for the firm. One of the suitors has been confirmed as rival Segro, which is interested in an all-share merger.Elsewhere in the sector, shopping centre developer Liberty International said acceptances for its 95.2m share open offer were 77%.Cash machine advertising specialist i-design expects losses for the year to be ahead of last year after the delay of two banking contracts.