STOCKS NEWS UK-Vectura up on Novartis' respiratory drugs

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08:15GMT 21Oct2010
Vectura up on Novartis' respiratory drugs

Shares in inhaled drug specialist Vectura rise 5.9 percent to after its partner Novartis says it expects the chronic obstructive pulmonary disease (COPD) products NVA237 and QVA149 to launch in 2012 and 2013, respectively

KBC Peel Hunt analyst Paul Cuddon says the Novartis update on its respiratory programme bodes well for Vectura.

'Vectura stands to receive up to $375 million in development and commercial milestones on these two drugs, which could begin from 2011 (year-ending March 2012),' he says.

Vectura also says it received a milestone payment of 600,000 euros from Sandoz, the generics division of Novartis, for VR632, a combination therapy for asthma/COPD.

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07:47GMT 21Oct2010
Eaga falls as UK gov cuts fuel scheme

Shares in Eaga drop more than 11 percent, hit by UK government plans to phase out the Warm Front scheme, removing a key visible income stream for Eaga and prompting KBC Peel Hunt to downgrade its rating to 'hold' from 'buy'.

KBC Peel Hunt cuts its earnings per share forecasts on the British energy efficiency firm by around 5 percent for 2011 and by around 15 percent for 2012.

The broker says it also reviewed its valuation 'on the grounds that some sort of restructuring of the group will likely be necessary'.

'Whilst the balance sheet remains strong and will help them through the transition to a certain extent, we can't see a catalyst for recovery or rerating in the short term.'

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07:47GMT 21Oct2010
Britvic rises on strong growth

Shares of Britvic rise 4.4 percent to 491 pence after the soft drinks maker says its 52-week revenue grew 14.6 percent on higher volumes, and it expects to meet market estimates in 2010, prompting Altium to upgrade its rating to 'buy' from 'hold'.

'Britvic and indeed the UK soft drinks market have proven to be resilient during the recession,' Altium analyst Wayne Brown says.

'The share price performance has been weak and we feel that at current levels the shares offer good value,' says Brown, who has a target price of 550 pence on the stock.

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07:44GMT 210ct2010
Tullow Oil down after dry well news

Shares in Tullow Oil shed 3.2 percent, the second top FTSE 100 faller, after the oil explorer says its Onyina-1 exploration well, offshore Ghana, proved unsuccessful, prompting Oriel Securities to downgrade its rating on the stock.

'Although an exploration prospect, this was one of the most highly anticipated wells in this year's programme targeting high-impact, medium-risk volumes in proven acreage offshore Ghana,' Oriel says in note.

The broker says that, alongside Teak, Onyina-1 it was one of the few remaining undrilled large prospects on the company's deepwater Ghanaian licences and unrisked it would have been worth around 130 pence a share to Tullow.

'This result is a blow to sentiment and while breaking the deadlock in Uganda in the near-term will be helpful, the rating now looks stretched even taking this into account,' Oriel adds cutting its rating to 'reduce' from 'hold'.

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07:44GMT 21Oct2010
Afren rises on Nigeria oil field deal

Afren gains 7.4 percent, making the Africa-focused oil and gas firm the biggest riser on Britain's mid-cap index, after its Nigerian unit buys a stake in an oil field from oil majors including Royal Dutch Shell and Total.

'Afren's long gestating 'big deal' has finally arrived and it delivers on every level: reserves, exploration upside and major production growth,' says Arbuthnot analyst Dougie Youngson, who adds the deal is 'transformational'.

The broker, who has a 'strong buy' rating on the stock, says that he expects this to be the first of several similar transactions and he plans to revise his target price following the deal.

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07:42GMT 21Oct2010
UK small caps down 0.2 pct at the open

The FTSE Small Cap index slips 0.2 percent in early deals, lagging a flat performance on the FTSE 100, while the FTSE 250 dips 0.1 percent.

British energy efficiency firm Eaga drops more than 11 percent, hit by UK government plans to cut spending on a fuel scheme by more than it was expecting, prompting KBC Peel Hunt to downgrade its rating to 'hold' from 'buy'.

Struggling British nightclub operator Luminar rises more than 11 percent after the company says recent trading has improved and it is in the process of finalising a new banking facility.

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07:14GMT 21Oct2010
Michael Page, Hays fall on GS downgrade

Shares in UK recruiters Michael Page and Hays each shed 2.8 percent, topping the FTSE 250 fallers list, after Goldman Sachs cuts its rating on both firms to 'neutral' from 'buy'.

Commenting on Michael Page, Goldman Sachs says in a note: 'We see limited short-term upside to our revised price target (up to 502.10 pence from 495 pence), reflecting a lack of catalysts and net fees growth broadly in line with our expectations.'

'Medium term, however, we still prefer specialist staffers over generalists.'

The broker says its downgrade on Hays 'reflects recent strong performance and a lack of short-term catalysts'.

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