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09:38GMT 04112009
Oil company Afren up on move to LSE's main market
Shares in AIM-listed oil and gas company Afren Plc rise 10 percent, after the company says it expects to move up to the London Stock Exchange's main market in early December and that it has bought a 40 percent interest and technical operatorship in OPL 310, a block in offshore Nigeria.
The block is next to the Aje field which has recently been declared commercial, Morgan Stanley says in a note. Wednesday's share price rise adds to gains on Tuesday when Afren said it had positive results from the Ebok-5 well in Nigeria.
'Following on from the positive update on the Ebok (Nigeria) appraisal and development yesterday, confirmation of the proposed admission to the LSE main board highlights the momentum behind the growth story at Afren,' Morgan Stanley says.
At current valuations the listing would put Afren into the FTSE 250. Nomura raises its share price target on Afren to 110 pence from 97 pence and rates the stock, which is trading at 95.5 pence at 0932 GMT, a 'buy'.
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09:35GMT 04Nov2009
Pace up; expects to meet FY estimates
Shares in Pace add 1.6 percent after the British set-top box maker says it is on track to meet its full-year targets, which prompts Seymour Pierce to upgrade the stock to 'buy' from 'hold'.
'We now see the re-rating story coming through as Pace delivers on its promises,' the broker says in a note, while raising its target price to 270 pence from 240 pence.
Altium Securities maintains its 'buy' rating and 'ahead of consensus' forecasts on Pace and says 'the current valuation of just over 8 times fails to capture either the attractive fundamentals and potential for further margin-driven earnings upgrades over the next 18 months'.
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09:26GMT 04Nov2009
Diageo, Pernod weak on Barcap
Shares in European drinks firms Diageo and Pernod Ricard both shed 0.9 percent as Barclays Capital starts coverage on the stocks with 'underweight' ratings and the sector with a 'negative' view.
Barcap says the golden era of growth in the U.S. Spirit market is unlikely to return as the key drivers have moderated and companies may need to reinvest in marketing into the upturn following a period of lower marketing and heavy price promotion.
The broker says there is continuing pressure on price and mix and further volatility in inventories may lead to a more muted rebound from destocking than the market anticipates.
'Taking these together, the industry is unlikely to return to its previous attractive organic growth rates and is unlikely to regain its premium valuation,' Barcap says.
The broker says Diageo is the most exposed to structural slowing in the United States, with about 40 percent of its profit growth generated from there in the past three years, and with European markets already weak, it does not think emerging markets can drive fast enough growth to justify a re-rating.
Barcap says Pernod will benefit from recovery in Asia but adds that market earnings forecasts for the French firm are too high.
The broker also starts coverage on Remy Cointreau with an 'equal-weight' rating as the firm's leverage to recovery in Asia and its niche position in a consolidating industry should underpin its premium valuation. Remy shares in Paris gain 0.3 percent.
Barcap has a target price of 950 pence on Diageo, 53.90 eur on Pernod, and 33.45 eur on Remy.
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09:21GMT 04Nov2009
Wetherspoon up on refinancing, divi hopes
Shares in JD Wetherspoon gain 2.6 percent after the pubs group says it expects to complete a refinancing of its debt by March next year, raising hopes it will resume dividend payments and overshadowing a slowing in the rate of its sales growth.
Wetherspoon said it will start formal talks with lenders before the end of the year over the refinancing of a 435 million pound facility due to expire in December 2010.
'They should be completed well ahead of prelims in September 2010, making Wetherspoon the first pubco to restore its dividend,' says analyst Paul Hickman of KBC Peel Hunt.
Wetherspoon reports like-for-like sales growth of 0.3 percent in the first quarter to Oct. 25, below the 1.2 percent growth seen in the first six weeks of the period and over the previous year.
'Although this lower LFL increase may look disappointing, Wetherspoon has proved its value-driven strength in the recession to date,' Hickman says.
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09:16GMT 04Nov2009
Aviva up on surplus increases
Shares in UK insurer Aviva climb 7.2 percent, topping the FTSE 100 leaderboard, after it posts an increase in surplus capital of 3.7 billion pounds ($6.09 billion) in its third-quarter trading update amd as investors shrug off a dip in sales.
'The shares are inexpensive (and) with capital off the table as an issue and with positive operating leverage should volumes return,' Morgan Stanley says in a note. It maintains its 'equal weight' on the stock.
Aviva says the insurance group directive surplus -- an FSA regulatory measure which calculates surplus capital within the group -- will increase further once it includes the 0.4 billion pounds from the sale of its Australia business.
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