UK MARKET TALK ROUNDUP: SHARES GAINING

10th Jun 2010 16:12

Stocks on the rise in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 1512 GMT [Dow Jones] UK mining stocks rally following a newspaper report suggesting that Australian Prime Minister Kevin Rudd plans to announce revisions to the government's 40% mining tax. A trader says that if the news is correct, it would lead to a significant watering down of the tax. Meanwhile, the confirmation of much better than anticipated Chinese export figures for May, which show a rise of 48.5% versus expectations for a 30.2% increase, is also helping. The data have eased fears that a tightening of fiscal policy in China will lead to a slowdown in demand, says a trader. Eurasian Natural Resources +4.5% at 1026p, Xstrata +4.4% at 1003p and Rio Tinto +3.6% at 3261p. ([email protected]) 1147 GMT [Dow Jones] Royal Bank of Scotland nudges up ITV (ITV.LN) price target to 75p from 71p. Thinks the company is the most logical buyer for Five, now that RTL has indicated it is exploring a disposal. RBS says the deal would be highly accretive to ITV's earnings. Estimates 24% potential EPS accretion if a deal went ahead. Admits that regulatory hurdles are meaningful but doesn't see them as being insurmountable. Meanwhile, increases FY advertising growth forecast to 10% from 8%. Lifts '10 EPS forecast to 4.1p from 3.6p and '11 to 5.1p from 4.7p. Keeps at buy. Shares are +3.2% at 54p. ([email protected]) 0959 GMT [Dow Jones] Numis Securities initiates coverage of haulier Wincanton (WIN.LN) with a buy rating and 300p price target. Says fiscal 2010 earnings are in line with expectations and the outlook is positive due largely to cost savings, restructuring and other self-help measures. Says new business sectors like defense and records management should become more material to the group over the medium term. Adds its 6.5% dividend yield is another attraction. Shares +0.9% at 227p ([email protected]) 0927 GMT [Dow Jones] ARM Holdings (ARM.LN) +17% at 321p, surging to the top of the FTSE 100 gainers as traders suggest Apple (APPL) may be preparing to make a bid. However, Panmure Gordon is sceptical. Analyst Nick James says the only reason Apple would buy it would be to deny everybody else access to ARM's processor cores. However, given ARM has an IP licensing model, it has already licensed its current cores for people developing chips which will ship in three-four years time. Thinks the real driver of ARM's stock price strength is growing bullishness on prospects for the 'tablet' market. Thinks this presents a massive opportunity for ARM, although suggests Imagination Technologies (IMG.LN) is as strong, if not stronger here. Has ARM at hold. ARM declines to comment. ([email protected]) 0908 GMT [Dow Jones] Panmure Gordon raises Hays (HAS.LN) to hold from sell, following the recent share price weakness and underperformance of late. Sees just 5% downside to its 92p target price, which remains unchanged, offset by an attractive yield of 6%. Still has some concerns and expects Hays to lag some of its peers in terms of profit recovery. However, thinks that given its commitment to maintain the dividend, investors may view it as an "income stock", which may limit downside risk in the short term. Shares are +1.2% at 98p. ([email protected]) 0831 GMT [Dow Jones] Liberum Capital downgrades ARM Holdings (ARM.LN) to sell from hold with a fair value of 190p. "The stock is trading at 36x our 2010 EPS forecast, which we regard as expensive compared to its long term earnings growth outlook of about 12.6% CAGR," Liberum analysts say. They also believe the semiconductor industry has "entered a downcycle which is likely to be a catalyst for multiple compression and earnings downgrades", but notes "ARM remains one of the best long term investments in semis." ARM +5.8% at 290p. ([email protected]) 0700 GMT [Dow Jones] WH Ireland raises Halfords (HFD.LN) target price to 500p from 490p. Says the company's final results are marginally ahead of expectations, with trading since year-end having remained robust. Says the gross margin increased by 230 basis points to 54.4% as a result of sourcing benefits, sales growth in higher margin categories, increased sales of accessories and fitting services as well as a one month contribution from the higher gross margin Autocentres business. Keeps a market perform rating. Shares flat at 500p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 10, 2010 11:12 ET (15:12 GMT)