London pre-open: FTSE to rise following clean Obama re-election

7th Nov 2012 07:27

City sources predict the FTSE 100 will open up 22 points from yesterday's close of 5,885, boosted by the news of a clear win by Barack Obama in the US presidential elections last night. Strong gains were seen on the Dow Jones Industrial Average in the US last night, which closed 134 points higher on indications that Obama would be re-elected.Today's formal international economic announcements include US consumer credit, US crude oil inventories, EU retail sales and German industrial production.Investors, however, will likely be concentrating on the outcome of the US elections and this evening´s vote in Athens on the government´s new austerity meaasures. In company news, production by gold miner Randgold Resources in the third quarter fell back from the preceding quarter's record levels as the company suffered grid power supply problems at its Tongon mine and processed lower grades at Gounkoto. Production of 204,475 ounces of gold was down from the second quarter's 210,534 ounces, but up from 182,362 ounces in the corresponding period of 2011. The total cash cost per ounce was $737, up from $703 in the preceding quarter, but down from $747 the year before.Emerging markets shone in the third quarter at finance house Old Mutual as the group continued its transition away from selling traditional life assurance products to unit trusts. Funds under management (FUM) at the end of September stood at £263.3bn versus £254.3bn at the end of June. Net client cash flow was negative during the quarter, easing by £0.5bn.Luxury brand Burberry is looking optimistic about its new fragrance and beauty division which is to start operating next year; however, the restructuring left a big dent in the group's reported bottom line in the first half. Adjusted profit before tax (PBT) gained 6% to £173m during the six months to September 30th, up 7% on a reported basis. Seymour Pierce was forecasting a figure closer to £165m.Questor in The Telegraph writes that recycled packaging group DS Smith confirmed yesterday that it continues to see "substantial" year-on-year earnings per share (EPS) growth following its purchase of SCA Packaging earlier this year. The recycled packaging group is focusing on servicing fast-moving consumer goods (FMCG) companies across Europe. This means Smith has a lot of euro exposure after buying Swedish company SCA for €1.6bn (£1.3bn)in January. This prompted a share price fall earlier in the year but these fears were significantly overdone and its shares have soared in the second half. Even after recent gains, the shares are now trading on an April 2013 earnings multiple of 12.8 falling to 10 next year. This is not overly stretched. "They were last tipped as a buy at 154½p in July and the shares remain a hold."