UK MARKET TALK ROUNDUP: BROKERS COMMENTS

21st Jul 2010 07:54

Broker comments in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 0654 GMT [Dow Jones] Land Securities Group (LAND.LN) is "delivering as you like to see in the current market," says JPMorgan. Has three main points: the company confirms the start of Trinity Leeds Shopping Center development, which is welcome; it delivers on targets, including progress on its development pipeline, sales and acquisitions, and "exactly what you would like to see in this type of environment; and Land Securities maintained its medium-term recovery outlook. Has neutral rating, with a target price of 765p. Shares closed at 581p. ([email protected]) 0652 GMT [Dow Jones] Piper Jaffray upgrades Anite (AIE.LN) to neutral from underweight, and lifts the price target to 41p from 28p. Says the company's FY '10 results are ahead of expectations, and it is building a strong position in 4G/long-term evolution (LTE) in its wireless division. Says FY '11 will likely continue to be 2H weighted, but thinks the risk profile is changing. Says, "with clear signals that Anite is well positioned to gain a strong market position in 4G/LTE we feel the risk profile is shifting on Anite." Shares closed on Tuesday at 38.8p. ([email protected]) 0652 GMT [Dow Jones] Morgan Stanley initiates Aggreko (AGK.LN) at equalweight with a 1600p target. Says Aggreko is a high quality business with significant long-term growth potential, and offers exposure to the trend of a global shortfall in power generation. However, "the downside risks cannot be ignored, namely, new competition and political upset in the IPP business, and further cyclical pressures in the local division." Says the risk-reward is too balanced for a buy rating. Shares closed at 1540p Tuesday. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] 0650 GMT [Dow Jones] Land Securities' (LAND.LN) first-quarter update is "reasonably upbeat," says an analyst at Evolution Securities. There are "no surprises and basically decent progress." The analyst adds that Land Securities has a very large City and West End development program, is bullish on the London office cycle and that both void rate and units in administration continue to fall, which is good. Still, he says he prefers rival British Land. (BLND.LN). Add rating on Land Securities, 630p target. Shares closed Tuesday at 581p. ([email protected]) 0649 GMT [Dow Jones] HSI rises tad more vs midday, +0.8% at 20,416.51, bolstered by gains in U.S. stocks overnight, also as A-shares reverse losses with Shanghai Composite last +0.5%. Senior broker at Emperor Securities says A-shares' momentum "looks strong," notes A-shares led global equity market correction (peaked at roughly 3,500 in August 2009, earlier this month fell to near 2,300). "If A-shares have indeed bottomed out, which is a big if, then Hong Kong should track A-shares to move higher." Most blue chips higher, led by New World Development (0017.HK) +3.7% at HK$13.06, after Morgan Stanley starts stock at Overweight with HK$18 target; China Resources Power (0836.HK) +3.1% at HK$17.06. Market volume remains unexciting though at HK$33.56 billion. ([email protected]) 0647 GMT [Dow Jones]--Russia's severe drought and the "near certainty" of a poor grain harvest this fall will accentuate inflation risk for the country, Alfa Bank says. Raises its year-end inflation target to 7.5% from 7.0%. Higher inflation also lowers the possibility of further rate cuts from Russia's central bank, Alfa says. ([email protected]) 0643 GMT [Dow Jones] China posts on-year, on-month declines in June refined copper imports due to arbitrage opportunities remaining closed for most of 2Q, says Shanghai Cifco Futures analyst Wang Zhouyi; adds copper consumers undergoing destocking after massive amount accumulated last year given "operation rates at cable and wire makers were pretty high--around 85%." Says imports may recover a bit in July, August on reopening of profitable arbitrage window between Shanghai, London. China's refined copper imports in June down 44% on-year, down 24% on month to 211,957 tons, while 1H imports down 13% on-year at 1.56 million tons, customs data say. ([email protected]) 0643 GMT [Dow Jones] Bunds are down Wednesday as stocks are expected to open higher, scuttling demand for safe-haven government bonds. The market is also preparing for an EUR4B auction of 30-year bunds later in the session, although there is no economic release of note in the euro zone. "With no key economic data today, the market will continue to track the 2Q earnings season along with rumours relating to Friday's stress tests. With Bernanke's testimony only due after the European market close, bund activity may be quiet today," says WestLB. September bunds are down 0.25 at 128.65 and the 10-year bund is down at 103.11 to yield 2.64%. ([email protected]) 0639 GMT [Dow Jones] September bunds are down 0.25 at 128.65 and WestLB says the lows at 128.58 and 128.42 guard against a move towards key support at 128.18. Resistance is pegged at 129.14, 129.27 and 129.54. ([email protected]) 0636 GMT [Dow Jones] ASIAN SUMMARY: Regional markets mostly modestly higher after Wall Street gains Tuesday; S&P/ASX +0.2%, HSI +0.8%, Shanghai Composite +0.5%, Kospi +0.7%, Sensex +0.7%, NZX-50 +0.3%; but Nikkei down 0.2%, STI down 0.2%, Taiex down 0.1%. In forex markets, JPY up before Fed Chairman Bernanke's testimony to Congress later in day on expectations remarks may indicate monetary easing from Fed to come. USD/JPY at 87.20 vs 87.38 late NY Tuesday, EUR/JPY at 112.50 vs 112.60; EUR/USD at 1.2904 vs 1.2887. BOJ Deputy Gov. Hirohide Yamaguchi said both upside, downside risks to Japan's economy grew over past 3 months, but kept BOJ's standard optimistic view on domestic economy. Using some of China's foreign-exchange reserves to support overseas investments or lending good option given risks of relying heavily on USD assets, Li Ruogu, chairman of Export-Import Bank of China and former deputy PBOC governor, said in China Business News interview published Wednesday. China would allow CNY to fall vs USD if necessary to support exports, Zhou Qiren, recently appointed PBOC adviser, said in interview with Japanese newspaper Asahi Shimbun. Thailand June trade surplus at $2.32 billion after exports +46.3% on-year at record $18.04 billion; prompts Commerce Ministry to upgrade full-year export growth target to 19% just few weeks after raising earlier projection of 14% to 17%. Leading index of Australian economy for next 3-9 months +6.7% annualized in May vs April's +7.5%, according to Westpac Banking and Melbourne University's Institute of Applied Economic & Social Research. Spot gold at $1,188.40/oz, down $3.80 vs NY close. September Nymex crude oil futures up 3 cents at $77.61/bbl. ([email protected]) 0634 GMT [Dow Jones] Bank of Thailand's Monetary Policy Committee set to serve up another 25 bp rate hike in late August after Commerce Ministry unveils strong export data for June, says HSBC economist Wellian Wiranto; says by destination, exports remain broad-based, with shipments to Japan rising almost 50% on-year, with U.S., Europe-bound goods clocking up 37%-38% on-year growth. "While we expect a slower period to be setting in for exports - not just for Thailand but for the rest of the region too - it is worth emphasizing that we do not see an extremely sharp slowdown in exports growth," he says. Reckons strength of economy may also warrant another rate increase by MPC in October. ([email protected]) 0628 GMT [Dow Jones] HK short-selling volume down 18.7% at HK$1.145 billion at interval, 3.8% of market's total volume vs 4.7% Tuesday's half-day, indicating bears reluctant to add positions as HSI extends gains (+0.6% midday). Angang Steel (0347.HK) leads with HK$84.57 million, then A50 (2823.HK) with HK$72.25 million, Sun Hung Kai Properties (0016.HK) with HK$52.79 million, China Life (2628.HK) with HK$48.73 million and HSBC (0005.HK) with HK$47.19 million. ([email protected]) 0617 GMT [Dow Jones] Taiwan government bonds end higher in response to short squeeze while ample liquidity supports some off-the-run paper, new 20-year bond, which starts when-issued trade tomorrow, says local bank trader. 5-year bond yield takes out 1-year moving average support of 0.94%, ends at near 4-month low of 0.9314% vs 0.9472% Tuesday; tipped in 0.91%-0.95% band tomorrow. 10-year yield ends down at 2-week low of 1.3988%; current 20-year yield ends down at 1.8018% vs 1.8210%, lowest since Dec. 2008. Another local brokerage trader tips 20-year bond to rise as insurers expected to buy; yield likely in 1.7800%-1.8100% range in when-issued trade. ([email protected]) 0604 GMT [Dow Jones] S&P/ASX 200 remains tied to offshore markets, despite the revamp, earlier this month, of the proposed mining tax, after concern about the tax triggered underperformance in May. Northern hemisphere summer holidays appear to be compounding the lack of interest in Australian equities before the earnings period fires up next month. Political uncertainty is another factor, ahead of the federal election on Aug. 21. "The Australian market is at the mercy of global leads at the moment," says IG Markets strategist Ben Potter. "I think you will see that continue before earnings season. I'm not overly bullish at the moment. I think the market is just going to plod along until the back end of this year." But S&P/ASX 200 has found late support above 4400.0, as Shanghai Composite has risen 0.7% to 2545.0 breaking above its 50-day moving average, currently at 2540.0, for the first time in 3 months. ([email protected]) (MORE TO FOLLOW) Dow Jones Newswires July 21, 2010 02:54 ET (06:54 GMT)