London pre-open: SA President characterises Lonmin actions as insensitive

22nd Aug 2012 07:33

City sources predict the FTSE 100 will open down 37 points from yesterday's close of 5,858, tracking losses in Asia and the US as investors focus on technical factors amid a general lack of direction. To be had in account nonetheless, US PC maker Dell fell 5% in after-hours trading following the release of its latest results. Also expected to weigh on stocks in the open are the latest merchandise trade numbers out of Japan. The country´s external trade deficit rose 517.4bn Yen in July (Consensus: -270bn Yen), due to weakness in exports to the Eurozone and China. The latter fell by 12% versus the previous year.The Federal Reserve will release the minutes of its last rate setting meeting this evening.Speaking on Bloomberg TV South African President Jacob Zuma has characterised Lonmin´s lay-off warning to striking workers as "unfortunate" and "insensitive," although some observers warn over the violent character of some of the country´s unions, which could conceivably be a factor for other companies such as Aquarius Platinum or Implats. That after several dozen workers were killed over the weekend by the country´s security forces. Weakness in commodity markets and industry wide cost pressure resulted in earnings declining at mining giant BHP Billiton. While revenue in the year to the end of June edged up to $72,226m from $71,739m the year before, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) declined 9% to $33,746m from $37,093m the previous year. Underlying EBIT tumbled 14.8% to $27,238m from $31,980m.Construction and infrastructure group Carillion saw revenues fall by over a tenth in the first half but profits were ahead of last year on the back of a continuing improvement in the operating margin. Revenue slipped 12% from £2,453.5m to £2,156.8m in the six months to June 30th, primarily due to the continued re-scaling of UK construction and the timing of project awards in the Middle East, the firm said on Wednesday.FTSE 250 miner Kenmare doubled revenues in the first half and said it expected a significant improvement in production in the latter part of the year. Revenues were up 95% to $109m from $56m the year before, as the company benefitted from price increases and the falling away of legacy contracts. But the firm said first half revenues had been hit by lower production and the carrying forward of a significant amount of ilmenite at 2011 price levels.Analysts at Citigroup have downgraded shares of ENRC to neutral from buy.