Another poor week as recession fears increase

11^th January - Jittery start in London follows mixed overseas markets

Although the US was strong towards the close yesterday, Far Eastern markets fell again and the nervousness has carried through to London with the FTSE 100 index down 16 points mid-morning.  There were some signs of value investors as property stocks and housebuilders rose, With Persimmon,
Land Securities and British Land among the leaders.  At the bottom end, multinational consumer groups have been with Unilever, Diageo and SABMiller lower on concern about the dollar following the Fed's commitment yesterday to cut rates.

In other news, Bovis said it anticipated pre-tax profits for the 2007 financial year to be broadly in line with forecasts, despite the volume of legal completions for 2007 falling by 193.  Rightmove forecast revenue for the full year would be in the region of £56.7m, up by around 69% on 2006.  Rolls-Royce said it would cut its workforce by 2,300, with managerial, professional and clerical staff feeling the brunt of the cull.  Taylor Nelson reported a good performance across the group in 2007, with underlying revenue growth for the group overall expected to be over 5%.  It added that although the macro economic outlook for 2008 was uncertain, levels of new business activity going into the year were good.  Findel achieved record sales up 23% and said all divisions contributed to the increase, with the home shopping division continuing to make excellent progress.  Paragon slumped on news it was to launch a 25 for 1 rights issue, fully underwritten by UBS, to raise £287m before expenses, in effect, a 90% discount to the current market price.  VT Group said that talks concerning its proposed tie-up with defence giant BAE Systems were at a very advanced stage amid speculation the deal might fall through.

14^th January - An early fall on the FTSE 100 index saw buying interest in the retailers on hopes this week's long list of announcements from the sector could be better than feared on a busy day for reports.  Debenhams rose on press talk over the weekend that trading had been solid over Christmas.  In the same sector, N Brown announced a 14% rise in sales despite the postal strike and said it was well placed for the next financial year.  JJB Sports said that over the 6 weeks to 6^th January 2008 total revenue rose 2.5%, which included a similar increase in like-for-like revenue, but margins were approximately 400 basis points lower than in the same six week period last year.  Ted Baker reported a strong performance from its retail division in H2 resulting in a 14% increase in sales for the period 12^th August 2007 to 24^th December 2007, compared to the same period last year, on a 7.2% increase in average retail square footage.  Properties and construction stocks also saw interest with Balfour Beatty anticipating that 2007's results would be at the top end of current expectations.  H2 trading in all parts of the group had been strong and there were good settlements on some completed projects.

Elsewhere, IG Group posted a 60% rise in H1 underlying earnings adding it continued to trade strongly, boosted by volatile financial markets.  Forth Ports rose on confirmation that Australian investment group Babcock & Brown's European Infrastructure Fund had acquired 19.6% with its affiliates owning a further 0.8%.  Aga Foodservice fell after indicating it expected full-year pre-tax profits of over £26m after a satisfactory 2007.  Finally, CODA received a bid approach worth 205p per share cash from rival software house Unit 4 Agresso.

15^th January - Tesco statement disappoints and Footsie falls away

After a steady start, the FTSE 100 index ran into more selling to stand 66 points down mid-morning as investors expressed disappointment with Tesco's Christmas trading.  It announced a 3.1% rise in underlying like-for-like sales in the UK for the six weeks to 5^th January, below expectations, although overall group sales increased by 12.8%, higher than Q3, with international sales up 26.9%, and the shares were down 2% after some early volatility.  Also reporting was Debenhams, with sales in the four weeks to 5^th January 2008 up by 4.4% with like-for-like sales up by 2.2%.  It said the performance of the Designers at Debenhams brands was particularly pleasing and contributed to the overall market share gains achieved in the last few months.  Its shares were also down, as were those of Burberry, which saw Q3 sales up 26%, with retail sales up 14% and like-for-like retail sales up by 6%. It added that sales were modestly behind plan, with proportionally more inventory sold during the sale period.  Finally in the retailers, Game said it expected full-year pre-tax profits of not less than £73m, up from previous forecasts, as it posted a 31.9% rise in like-for-like sales over the Christmas period.

Elsewhere, Taylor Wimpey said it expected to hit full year profit expectations this year despite decreased buyer confidence in the last six months in both the UK and US.  Market conditions in the UK were subdued in H2, and the year-end order book was down to £1.06bn from £1.32bn.  Northern Foods' trading in the key Christmas period was in line with forecasts and it expected pre-tax profit to achieve market consensus for the full year.  Northern Rock dropped as its EGM began in Newcastle.  Venture Production said daily oil production for 2007 declined but said higher commodity prices would largely offset the lower production, and the shares dropped 9%.

16^th January - Footsie down again on downbeat housing market report

Shares in London fell away again at the open after the sharp drops in worldwide equity markets and on the back after a report from RICS that showed that 49.1% more surveyors found that house prices fell last month than saw them rise.  Most of the big moves followed corporate news, with Northern Rock down to new lows on the imminent prospect it will become a department of the Treasury Office whatever shareholders RAB Capital and SRM might say.  Punch Taverns was down 7% following comments that trading over the last eight weeks had been more subdued with declining consumer confidence coinciding with the impact of the smoking ban.  Another faller was Experian which said that organic revenue growth slowed to 2% in the three months to December, reflecting the impact of the credit crunch on financial services customers.  It is launching an $80m annual cost saving programme that will mean a one-off cost of $100m.  Rio Tinto dropped even though it claimed that 2007 set annual production records for iron ore, bauxite, alumina, aluminium, refined gold, and refined copper on a like-for-like basis.  In Q4, refined copper production rose 65%, though mined copper declined 14%.

Elsewhere, C&C forecast that earnings per share for the fiscal year 2007/08 would be at the lower end of the range of market forecasts.  Revenue for the year to end February 2008 was down by about 10% and operating profit margins had dropped by about 10% as cider sales in the UK continued to struggle.  Woolworths reported an 11.2% increase in total sales for the 49 weeks to 12^th January with full year profit tipped to be better than last year, but it was also concerned about the underlying level of consumer confidence during 2008.  Clinton Cards saw group like-for-like sales rise by 2.5% in the five weeks to 24^th December.

17^th January - Good trading statements spur on Footsie to early gain