Interactive Investor Articles http://personalfinance.iii.co.uk Syndicates the latest Interactive Investor Articles via RSS 2.0. Unysen RSS Feed Generator - v2.0206 Interactive Investor What's in store today... Fiona Bond Debenhams heads up the list of companies taking to the floor today. See what else the corporate calender has in store. Debenhams (DEB).
 
The FTSE 250 listed group has focused on improving profit margins throughout 2009 and this looks to have been a successful exercise. The group recently spread its wings with new stores in Vietnam and the acquisition of six department stores in Denmark.
 
Andrew Wade, analyst at Numis, commented: "We expect Debenhams pre-close update to be a bit of a non-event, given that the Christmas update covered 18 weeks and the final eight weeks are a low volume period.

Bearing this in mind, and supported by the solid trading trends in apparel, we would expect the first half outturn to be broadly in line with the Christmas trading update - like for like sales close to flat and full year profit before tax consensus of £138 million will be unlikely to move far."
 
Next up is security group G4S (GFS), which is on track to deliver a healthy set of full-year figures. The group gave the market some indication of how it would fare after posting a 12% rise in earnings for the first nine months of 2009 thanks to a new government contracts.

For more on G4S try out our new iBall TV episode on the company
 
Panmure Gordon (PMR) expects the group to post £380 million in pre-tax profits as new markets and government business help it stave off a drop within its commercial security division.
 
And now for those with an interest in commodities, both First Quantum Minerals (FQM) and Gem Diamonds (GEMD) are set for the stage.
 
Africa-focused First Quantum will release its final results on Tuesday, but with copper production levels for 2009 already in the public domain, investors real focus will fall upon cost control and growth projects.
 
Analysts predict an 18% year-on-year increase in pre-tax profits to $760 million.
 
Meanwhile, global diamond producer Gem Diamonds said in its fourth quarter update that rough diamond prices were on the rise and it was in prime position to take advantage of the recovery. It will be interesting to see if tomorrow's final results reflect this earlier statement. 
 
Events are fairly subdued on the economic front with only the UK house prices from the Department of Communities and Local Government hitting the public domain.
 
On the continent, eurozone consumer price index figures should attract some attention, while the US contends with the Federal Open Market Committee interest rate decision.

Tuesday 16 March

Results

(Finals) Ablon, Alpha Bank GDR, Amphion Innovations, Axis-Shield, Cello Group, Dealogic, Fairpoint  Group, First Quantum Minerals, Hellenic Carriers, KBC Advanced Technologies, Kenmore European Industrial Fund, Wellstream Holdings, Win, Work Group
(Interims) Air Partners, Asian Citrus, Brooks Macdonald, Close Brothers Group

Trading Update

Debenhams

AGMs

All Leisure Group, BlackRock Commodities Income, THB Group, Wynnstay Group ]]> Markets Tue, 16 Mar 2010 00:00:00 GMT http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091647&section=Markets http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091647&section=Markets Fiona Bond's Commodcast Fiona Bond Interactive Investor's Fiona Bond rounds up the week in the commodities markets and gives investors pointers for the coming week.  
Gold was arguably the week's biggest victim, shedding 2.6% - marking its largest weekly fall since mid January. It managed to gain some ground on Monday, as a new report warned credit ratings of major economies could come under pressure if the economic recovery fails to pick up.
 
However, analysts believe a further drop in gold's value is on the horizon.
 
In contrast, oil shot to $83 a barrel last Wednesday, but came under pressure on Monday as investors grew anxious that demand levels are failing to keep speed with the recent price rally.
 
With OPEC set to gather on Wednesday, and the UK and US both gearing up to release economic data, the ups and downs look far from over.

Click on the 'play' button below to listen to Fiona's podcast. ]]> Spread Betting Mon, 15 Mar 2010 16:36:00 GMT http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091641&section=SpreadBetting http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091641&section=SpreadBetting UK's triple A rating 'secure for now' Rhian Nicholson The US and UK government were today breathing a massive sigh after credit rating agency Moody's said the countries' prized AAA ratings are safe - for the time being.
Its latest quarterly report found debt levels at the four biggest governments with an AAA rating - the UK, US, Germany and France - remain at manageable levels.

This was a vote of confidence in the UK and US governments' abilities to repair their balance sheets and turnaround their public finances.

However, these two were found to be the most stretched financially; the UK is set to borrow the equivalent of 12.8% of GDP this financial year - more than Greece while the US budget deficit is set to work out around 10% of the economy.

Moody's sovereign risk group said governments like the UK faced a "delicate balancing act" in terms of the timing of the tax raises and spending cuts they need to get their finances back on track.

If they make the cuts too soon, it could set back the economic recovery and hurt their ability to raise taxes. However, they also risk "testing the patience of the market" if they hold off making the cuts for too long.

Arnaud Mares, senior vice president in Moody's sovereign risk group, says: "Given the heightened market tensions surrounding sovereign debt, the ability of triple-A governments to anchor fiscal expectations - such as through the provision of detailed consolidation programmes or the introduction of formal rules - will be key to avoiding the risks associated with postponing fiscal consolidation."

However, some financial experts believe the UK remains highly vulnerable.

Bank of England member Kate Barker has warned that the economy could shrink again but a double-dip recession is unlikely.

She predicts another quarter of falling GDP this year. "It's possible we will have a quarter when GDP falls, but I don't think it will be a double-dip. I would be surprised if we go back to recession but I think the recovery will be bumpy and fragile," she says.

Andrew Cole at Barings Asset Management also says that there is a slightly higher risk of the UK falling back into recession than there was a few weeks ago.

Things could turn particularly nasty if post UK election hung Parliament fails to come to grips with the budget deficit, and markets force a Greek style retrenchment on the country. 

However, he believes the UK will most likely stage a modest recovery but with greater vulnerabilities than the US or the core of Europe. ]]> Markets Mon, 15 Mar 2010 15:58:00 GMT http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091629&section=Markets http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091629&section=Markets Stock to Watch: RAB Special Situations Edmond Jackson Although he doesn't usually look at investment companies, Edmond Jackson argues any tradable security can have 'value' and 'event' appeal. And on such criteria he sees RAB Special Situations Company as a hedge fund worth following. This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Although I don't usually look at investment companies, any tradable security can have 'value' and 'event' appeal. On such criteria, RAB Special Situations Company (RSS) is currently a special situation in itself.

This resources-oriented hedge fund managed by RAB Capital (RAB) has a part AIM listing and seeks to exploit a perceived super-cycle in commodities - based on developing countries' demand versus limited supply sources.

It is interesting to follow - even if you tend to invest in shares directly - because this investment theme remains so relevant. Oil, coal and gold pose central questions for portfolio choice and weightings and RSS offers vicarious experience in its company updates via the Regulatory News Service.

There are two specific reasons currently making RSS a 'value' and 'event' play - a material discount to net asset value (NAV) and a buyback programme for up to 15% of the company's shares in issue. The value case also involves longer-term issues such as the stability of growth in China, which need watching carefully.

As for value, at 36p offered (and it may be possible to get inside the 34-36p spread) the shares trade at a 19% discount to their end-February net asset value of 44.4p. Actually, discounts are a common feature among investment companies explaining why flotations may be sweetened by 'free' warrants - lest the shares slip to a discount from NAV.

Warrants transfer an aspect of long-term value to warrant holders and are traded in their own market - although both the RSS 'A' and B' warrants were relatively short-term and have expired.

After an exceptional record of growth, RSS shares are down about three-quarters in value since the small cap mining share boom expired in 2008. RSS had strongly preferred this sector as a means to maximise capital growth, often taking unquoted stakes prior to flotations. But with this game largely over and risk aversion setting in, the discount to NAV had breached 55% at the trough of the bear market.

It was also not helped by diversifications into Northern Rock and a motor racing start-up, which became write-offs. At the start of 2009, more than 70% of the fund's value was held in unlisted securities, but this has 'improved' in the manager's words to about 29% just recently. It looks fair to assume that if the trough of recession is past then write-downs should be too.

The buyback programme was announced on 8 March, to start immediately and involving a maximum £3.35 million to be spent. This may not sound a lot although RSS is capitalised at £28.2 million and so it is material in context. The fund has a larger unlisted dimension so is not small like the market cap implies.

Last week it was interesting how the shares edged up from about 33p to 35p mid price as 704,146 shares were repurchased at 32.5p (this being announced on 9 March). The initial announcement invited potential sellers to contact the company broker, so it is not as if a market squeeze is likely - nor would that be in RSS's interest, to hike the price against itself. Yet it is logical to enhance intrinsic value per share in this risk-free way and it should improve market value too.

So there is an interesting blend of 'value' and 'event' issues offering interest for traders and investors alike. On a long-term view you need confidence in the case for resources and a portfolio requiring such exposure.

For example, in the 2 March RSS update, it was pointed out that oil demand in 'the New World' (China, India etc) is now significantly outstripping that of the 'Old World' (the US, Japan and Western Europe) for the first time, and so New World demand will be key. Furthermore, "this trend is even greater in the demand for industrial metals given the level of infrastructure investment in the developing world." Such a mismatch in trends is likely to mean volatility in asset prices along the way.

If stock-picking then you are engaging a high level of company specific risk holding say a few oil, coal and mining shares (although this can be mitigated if they are mid to large-cap firms with a spread of producing interests).

Perhaps like me, you have experienced higher portfolio volatility with this approach; sometimes the long-term gains justify it but there can also be frustration. Considering RSS's track record, diversification can still mean substantial downside risk if you buy into volatile industries as the cycle is turning down.

Furthermore, RSS is a focused fund among high-risk industries: the ten largest holdings represent 48% of NAV. Falkland Oil & Gas (FOGL) recently represented 20% of the fund's NAV after rising 17% in January, so you need to be comfortable with the drilling campaign there.

Yet there is also a risk that if you do not have some exposure to commodities (and by implication 'the New World') then an equity portfolio could underperform relatively if weighted in typical Western firms. It is a tricky balance to strike, witness the vigorous debate on whether to invest in Fidelity's new China fund; who knows how stable Chinese growth will prove?

Despite these uncertainties, the case for RSS looks interesting right now. The macro trend driving many of its equity values looks overall favourable; there remains a material discount to NAV; its shares are out of favour yet the manager has done plenty to restructure the portfolio and write-downs look to be in the past after the 2008 debacle; and as part of the tidy-up a share buyback programme is being implemented. ]]> Share Dealing Mon, 15 Mar 2010 15:39:00 GMT http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091623&section=ShareDealing http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091623&section=ShareDealing Second fraudster master list found Rhian Nicholson The Financial Services Authority and City of London Police have found a second boiler room "master list" which contains the personal details of 1,000 investors.
This lists the names and phone numbers of around 750 people along with the names and addresses of a further 250.

The list, which is used by fraudsters to target investors and sell them worthless shares, was discovered as part of Operation WARN.   

In February, the FSA and police discovered a master list with the names of around 10,000 investors, some with addresses and phone numbers.

Scammers work for unauthorised, overseas-based companies with bogus UK addresses and phone lines routed abroad.

They usually contact people by telephone and use high pressure sales tactics to con investors into buying non-tradable, overpriced or even non-existent shares.

Investors who are duped into parting with their cash are not eligible for the financial complaints and compensation schemes.

Jonathan Phelan, head of the unauthorised business department at the FSA, said: "This is the second master list we have obtained in as many months. Our sources indicate that the list is a new one and still in use by the fraudsters, so by contacting people on it we hope to cut these boiler rooms off at the pass.

"Raising awareness of this type of fraud through publicity is one of the best tools we have to prevent people getting involved and losing their money. Legitimate share dealers and brokers will not normally cold call people offering to buy or sell shares, so if you get one of these calls - just hang up and report it.

"The key message remains: if it sounds too good to be true, it almost certainly is."

Anyone offered shares should check to ensure the company selling them is registered with the FSA. They should then call the company back using the details on the watchdog's website to verify their identity.

The FSA and City of London Police have launched a new secure consumer helpline on 0845 602 2185. ]]> Markets Mon, 15 Mar 2010 12:26:00 GMT http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091607&section=Markets http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=10091607&section=Markets