8th Aug 2016 09:47
LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Monday.
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FTSE 100 - WINNERS
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Barclays, up 3.8%. The bank was upgraded to Outperform from Neutral by Exane BNP.
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FTSE 100 - LOSERS
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Fresnillo, down 1.2% and Randgold Resources, down 1.1%. The gold miners were down on the lower spot gold price, quoted at USD1,331.40 per ounce compared to USD1,338.55 at the London equities close Friday. "Gold has sold right back to its end-July levels as a risk-on attitude and stronger USD weigh on precious metals prices. A break below USD1,331 could see further declines to the July lows of USD1,310 while a breakout above the 20-day moving average is required to kick start any recovery rally," Accendo Markets analyst Augustin Eden said.
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FTSE 250 - WINNERS
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Vesuvius, up 5.8%. The metal flow engineering firm was raised to Hold from Sell by Investec. The broker said Vesuvius is performing better than expected within challenging markets. "Vesuvius is doing a good job of balancing the opposing forces, investing to reduce costs and generate longer-term growth," Investec said.
Serco Group, up 3.4%. Numis upgraded the outsourcer to Hold From Reduce. Last Thursday, Serco upgraded its profit and revenue guidance for 2016 for a second time, benefiting from currency movements and from better-than-expected outcomes to contract negotiations. "Bidding momentum is growing, but the pipeline remains below the level required to grow revenues. We think further EPS upgrades are likely over the next 18 months, and this should sustain the share price," the broker said.
Crest Nicholson Holdings, up 3.3%. The housebuilder was initiated with a Buy rating by UBS, The Swiss bank said the group is "a stand-out in the sector", and its shares offer an "attractive" dividend yield.
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FTSE 250 - LOSERS
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McCarthy & Stone, down 1.7%. UBS started coverage on the retirement housebuilder with a Sell rating, saying its premium valuation is unjustified. The Swiss bank said the stock trades at a 30% premium to the sector and sees the potential for de-rating in the share price. "We expect the shares to be under pressure over the next 12 months as we think the UK housing market will slow down and see 60% downside to consensus' EPS for 2018," UBS said.
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MAIN MARKET AND AIM - WINNERS
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Melrose Industries, up 14% at 758.25 pence. The industrial group said the "window shop period" in regard to its reverse takeover proposal for Nortek expired without Nortek having received a superior proposal. As such, Melrose expects the deal to complete at the end of August and is now taking steps to implement its rights issue in relation to the deal. Melrose struck the USD1.44 billion deal to acquire the US manufacturing firm in early July, backing the acquisition with a fully-underwritten rights issue of 12 new shares at 95.00 pence per share for each 1 existing share, raising a total of GBP1.61 billion. Due to the size of the deal, the acquisition will constitute a reverse takeover, meaning Melrose's shares in the premium segment of London's Main Market will be cancelled after completion. Following this, Melrose will re-apply for a premium listing as soon as is practicable.
BMR Group, up 10%. The Zambia-focused minerals processing company confirmed it has signed an offtake and purchase agreement to provide funding for the construction of the plant to be built at the Kabwe mine in Zambia, penning the deal with African Compass International. BMR unveiled African Compass International, a private South African group within the natural resource sector, has agreed to buy lead and zinc of a specified quality from Kabwe over a minimum of five years. The offtake agreement will formally start within six months of the plant, which is yet to be constructed, being commissioned. BMR believes the offtake deal will generate a minimum of USD750,000 in revenue per month.
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MAIN MARKET AND AIM - LOSERS
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Aureus Mining, down 15%. The miner said it plans to review the company's cost base following the suspension of the tailings facility at the New Liberty gold mine earlier this year which caused its production costs to soar. The miner also warned it still needs further funding. Aureus received approval from authorities in June to restart operations at the processing plant located at the New Liberty gold mine in Liberia more than six weeks after being suspended following a leak at the tailings facility. Aureus revealed its cash costs rose substantially because of the suspension. Operating cash costs were averaging USD1,253 per ounce prior to the suspension but rose to USD1,660 during the suspension whilst the all-in-sustaining cash cost soared to USD1,894 per ounce. Aureus also said it is "undercapitalised to deliver to its full potential" and is likely to require further funding for capital investment activities to deliver improvements in operational performance.
Nanoco Group, down 5.7%. The quantum dot maker said it remains confident of achieving progress in commercialising its technologies in its current financial year, though it expects to report a decline in revenue for its recently ended year. The group said its revenue in the year to end-July was GBP1.9 million, lower than the GBP2.0 million it reported for the previous year, but in line with the company's expectations. It had cash of GBP14.4 million on its balance sheet at the end of July, compared to GBP18.3 million at the end of January. Nanoco said it had made "substantial progress" and achieved a number of commercial, technological and organisational milestones during the year.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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