Global equity markets staged a modest rally during the week, as new set of austerity measures announced by Greece boosted hopes that the European Union would eventually come to its rescue, and positive US jobs and consumer data added to the evidence that the global economic recovery is on the right track.
The Cambridge Index surged 7.5% or 470.6 points to 6,772.8, smartly outperforming the broader US and UK markets, as all of the top ten index heavyweight stocks ended in the black. Index heavyweights Johnson Matthey, Greene King and CSR, all up between 0.9% and 5.4%, featured among the gainers. ARM Holdings soared 14.3%, after Goldman Sachs lifted the price target on the stock. Autonomy, up 9.7%, announced significant innovations across its “Meaning Based Marketing platform”.
Pursuit Dynamics jumped 28.5%, emerging as the top gainer in the Cambridge Index. DS Smith gained 8.2%, after the company announced that trading in the third quarter of financial year 2009-10 has been ahead of management’s recent expectations. Dialight closed 4.0% higher, as the company’s full-year results prompted Canaccord Adams, its broker, to hike its forecast for pre-tax 2010 profits to £8.9 million from £8.4 million, and increase its target price to 310p from 276p. In its preliminary results for the year ended 31 December 2009, the company reported a drop in full-year revenues to £77.3 million from £77.9 million, and in profit before tax to £5.3 million from £5.6 million recorded in the previous year. LPA Group edged up 3.3%, after the company announced that orders taken during the first five months of the current financial year have exceeded the budget by £1.5 million, increasing the order book by £1.1 million to £17.9 million as at February 2010.
Artisan (United Kingdom) plunged 13.1% to 26.5p, becoming the top loser in the Cambridge Index. Xaar slid 6.0%, ahead of its preliminary results scheduled to be released on 17 March 2010. Other prominent losers were Sepura, Phytopharm and Falkland Islands Holdings, all down between 4.7% and 6.6%.
The UK benchmark FTSE 100 Index advanced 4.6% over the week to close at 5,599.8, an 18-month peak, as investors speculated that the worldwide operations of UK blue-chips would shield them from the recent slump in pound sterling caused by political and fiscal uncertainty. Miners made gains on the back of higher base metal prices. Energy stocks also edged up, as oil prices topped $81 per barrel. Banking stocks were in demand, after Standard Chartered reported full-year results in line with market expectations. The FTSE techMARK 100 Index rose 4.6% to 1,856.5, while the FTSE AIM 100 Index climbed 4.2% to 3,158.6.
Markets in the US moved upwards during the week, as a bout of merger & acquisition activity and improving outlook in the consumer sector boosted sentiment. A slew of M&A deals in sectors such as financials, pharmaceuticals and coal spurred investors to increase their exposure to risky assets, while a smaller-than-expected drop of 36,000 in US nonfarm payrolls in February raised expectations that the job market was beginning to thaw. Adding to the positive sentiment in the consumer sector, personal spending rose 0.5% in January, exceeding market consensus, and borrowing by US consumers unexpectedly rose 2.4% in January for the first time in a year. Also, a spate of retailers posted upbeat February retail sales, increasing hopes of a recovery in consumer spending. The Dow Jones Index gained 2.3% to 10,566.2, while the Nasdaq Index rallied 3.9% to 2,326.4.
Index Movers
ARM Holdings PLC
Chip maker, ARM Holdings PLC, soared 14.3% to 232.9p, after Goldman Sachs lifted the price target on the stock, citing benefits to the company’s exports from a weaker pound. The stock also made gains after its US peer, SanDisk, upgraded its first-quarter revenue forecast on the back of strong chip sales.
Artisan (United Kingdom) PLC
House builder and commercial business park developer, Artisan (United Kingdom) PLC, plunged 13.1% to 26.5p, becoming the top loser in the Cambridge Index.
Autonomy Corp. PLC
Autonomy Corp. PLC, an infrastructure software company, added 9.7% to 1678.0p. The company announced significant innovations across its “Meaning Based Marketing platform”, which will enable businesses to understand, act on, and optimise all forms of information.
DS Smith PLC
DS Smith PLC, a manufacturer and distributor of paper and plastic packaging products, gained 8.2% to 125.7p, after the company announced that trading in the third quarter of financial year 2009/10 has been ahead of management’s recent expectations, reflecting better-than-expected sales across both Packaging and Office Products Wholesaling.
The company, in its interim management statement for the period starting 1 November 2009, announced that cash flow generation remained strong and there was no major change to the financial position of the group since the publication of results for the six months to 31 October 2009.
Notwithstanding the uncertainty surrounding the strength of the economic recovery and the need to recover rising input costs, DS Smith expressed confidence in meeting its expectations for the year to April 2010, as its business performance remained encouraging.
The Group plans to announce its preliminary results for the financial year to 30 April 2010 on 24 June 2010.
Falkland Islands Holdings PLC
Falkland Islands Holdings PLC, an international services group operating in the Falkland Islands, shed 4.7% to 410.0p.
Phytopharm PLC
Phytopharm PLC, a pharmaceutical development and functional food company, dropped 6.3% to 11.3p.
Pursuit Dynamics PLC
Pursuit Dynamics PLC, a provider of steam propulsion and pumping technology, jumped 28.5% to 215.5p, emerging as the top gainer in the Cambridge Index.
Sepura PLC
Sepura PLC, a supplier of network-independent Terrestrial Trunked Radio terminals and digital radios, lost 6.6% to 49.5p. In its Long-Term Incentive Plan Award (LITP), the company has awarded its Executive Directors, Mr Gordon Watling and Mr Stephen Mole, 424,528 and 424,528 shares respectively. No consideration was paid for the grant of an LTIP Award.
Tristel PLC
Tristel PLC, a provider of infection control and water treatment products, surged 19.8% to 60.5p.
Xaar PLC
Xaar PLC, a provider of inkjet printing technology, slid 6.0% to 78.5p, ahead of its preliminary results scheduled to be released on 17 March 2010.
The company announced that Robin Williams has been appointed as Non-executive Director with immediate effect.
Other Movers in the Index
ANT PLC, a provider of embedded application software and support services, added 1.7% to 29.5p, after the company announced that its full-year revenues rose 25.6% to £4.7 million from £3.7 million and loss before tax narrowed 38.1% to £0.6 million from £1.0 million recorded in the previous year.
The Board did not recommend the payment of a final dividend.
Chief Executive Officer, Simon Woodward, said “We expect initial roll-out in satellite and cable organisations to commence during the second half of 2010, driving both revenue growth and a general increase in market awareness of the potential of hybrid TV. It expects revenue growth this year to come from license deals signed last year that will enable it to enter the TV market. We’re very confident that the cash position we have is one that will see us through to profitability, but we think 2012 or 2013 is when we should see hard evidence of the growth from our markets”.
CSR PLC, engaged in designing single-chip wireless devices, rose 4.0% to 494.2p. The company announced that Senior Vice President, Mr Ahmet Alpdemir, has exercised the option of 18,525 ordinary shares. Furthermore, the company announced that it has appointed Mr Klaus Buehring as Senior Vice President with effect from 22 February 2010.
Dialight PLC, a provider of electronic lighting and electromagnetic products, closed 4.0% higher at 257.5p, as the company’s full-year results prompted Canaccord Adams, its broker, to hike its forecast for pre-tax 2010 profits from £8.4 million to £8.9 million and increase its target price to 310p from 276p. The broker also maintained its “Buy” rating on the stock.
In its preliminary results for the year ended 31 December 2009, full-year revenues dropped to £77.3 million from £77.9 million and profit before tax declined to £5.3 million from £5.6 million recorded in the previous year.
The Board proposed a second interim dividend of 4.3p per share which will be paid on 1 April 2010.
The company expects 2010 to be a robust year with excellent prospects and is confident about its strategy of focusing on substantial niche markets in ultra efficient lighting and signalling.
Separately, the company, in its AGM, announced that Bill Whiteley has retired as a Director and the company has appointed Bill Ronald and Richard Stuckes as the Non-Executive Directors in place of Bill Whiteley. Moreover, the company announced that Cathy Buckley has resigned as Finance Director, and George Ralph has joined the board as Interim Finance Director.
LPA Group PLC, a provider of electronic and electro mechanical systems, edged up 3.3% to 31.0p, after the company announced that orders taken during the first five months of this financial year exceeded the budget by £1.5 million, increasing the order book by £1.1 million to £17.9 million as at February 2010.
Although Defence and Aerospace business remained weak, LPA mentioned that routine orders for standard products have generally remained buoyant.
The company stated that new orders in this period included £1.2 million of the long anticipated contracts for Inter-car Jumpers and Lighting for the additional Pendolino Cars and Trains for the West Coast Mainline, which would amount almost £2 million.
Minster Pharmaceuticals PLC, a company specialising in developing drugs for the treatment of neurological and psychiatric conditions, remained unchanged at 5.9p. The company announced that, as at 1.00 pm on 4 March 2010, Proximagen had received valid acceptance from Minster Shareholders in respect of 64,929,488 Minster shares, representing approximately 91.26% of the entire issued share capital of Minster. The Offer will remain open until further notice.
Minster has made an application to the London Stock Exchange for the cancellation of the admission to trading on AIM. It is anticipated that the cancellation will take effect on 18 March 2010.
Biotech firm, Vernalis PLC, remained flat at 74.5p. The company announced that it has received valid applications from qualifying shareholders in respect of 10.25 million new Ordinary shares, which represent about 26% of the 39.41 million new Ordinary shares made available under the share placing and open offer to raise approximately £28.5 million. The remaining 29.16 million shares have been placed with certain existing shareholders and priced at 76p per share.
