Wednesday tips round-up: Michael Page, IPF, Rio Tinto

17th Apr 2013 06:42

Judging from the trading statements out over the last week or so The Times´s Tempus believes that it is too soon to buy the recruiters. For if those are any indication of the state of the economy then it would seem that any sustained global recovery is still some way away. That holds after yesterday´s statement from Michael Page International and the tell-tale (and commonplace) weakness seen in some Continental European markets and Australia. Add to that the fact that its shares trade at 20 times this year´s earnings and you have the explanation for Tempus´s wariness. It does not need the money but it wishes to diversify its sources of finance. That is why International Personal Finance (IPF) is looking to tap the so far remarkably successful retail bond market launched by the LSE. Critically, the company´s business model seems well adapted to conditions on the ground in the emerging markets in which it operates, mainly in Eastern Europe but also in Mexico. Offering an initially high rate of return and being - at least theoretically - readily tradeable on the LSE, both make these bonds attractive. However, should one not find a buyer at a reasonable price, then losses are to be expected. Nevertheless, the firm also has a solid balance sheet and is expected to keep growing strongly. Even so, bear in mind those caveats, Tempus writes. Rio Tinto´s production update on Tuesday failed to lift investors´ spirits, coming as it did in the aftermath of weak economic data out of China. Then came news of a pit wall collapse at its Bingham Canyon copper mine in Utah, which will have a "significant impact" on its copper production this year. However, The Telegraph´s Questor team continues to be a believer in the massive growth story that is China. Not to be missed either is the fact that Rio is a low cost iron-ore producer, while the group´s new Chief Executive has set demanding targets for 2013, including for cash savings. As well, its Oyu Tolgoi copper mine in Mongolia is expected to start production towards mid-year, which could give the shares a fillip. Questor continues to say buy.Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.