Wednesday’s Master Investor Market Report

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Wednesday’s Master Investor Market Report

– The FTSE 100 rose by 22.19 points to 6,950.46 points.
– The FTSE 250 grew by 43.15 points to 18,263.46.
– The FTSE All Share increased by 11.32 points to 3,786.84 points.
– The FTSE AIM All Share finished the day up by 2.73 points at 778.13 points.

The OECD has cut its United States growth forecast for this year from 3.1% to 2% due to the disruptive effects of the strong dollar and unseasonable weather conditions. The organisation also took a more negative stance on the wider global economy in its report, giving it a “B-” grade and saying that it was “muddling through”. The body singled out firms’ unwillingness to invest relative to previous recoveries as a factor in its decision to lower its expectations. Additional worries were raised about Greece, and the lack of resolution to its debt woes could cool any European recovery.

On the subject of Greece, some details have emerged regarding Eurozone creditors’ potential demands as part of the renegotiation of the country’s debt payments. The Financial Times reports that a compromise agreement would require a 1% budget surplus this year and that this requirement would rise to 3.5% by 2018. This is far more lenient than the current programme that would impose the 3% target this year and rise to 4.5% over time, but it is less than many in Athens would have hoped for. It is also worth noting that in the past, the IMF has publicly doubted the country’s ability to meet similar terms.

WH Smith (SMWH) shares rose by 29p to 1,567p following stronger than expected sales in the 13 weeks to 30th May. The results were driven by better trading at its airport and train station outlets, even as high street branches continue to struggle. Hargreaves Lansdown Analyst Keith Bowman said that “WH Smith continues to deliver. The group’s international store numbers are being expanded, with units at Sydney International Airport set to open from August, whilst group wide cost savings are still being squeezed. For now, analyst consensus opinion continues to denote a buy”.

Dixons Carphone (DC.) recorded a 13% increase in UK and Ireland sales for the 17 weeks to 2nd May, leading management to say that pre-tax profits were now expected to exceed the prior guidance. The group’s expansion into Southern Europe still faces difficulties, particularly in Spain, but Greece performed surprisingly well. Canaccord Genuity was positive and said that “robust trading and signs of competitor retreat in the core UK and Nordics consumer electronics bode well as a firm foundation for future growth and the aspiration to double the group’s equity value”. However, the market wasn’t listening and the shares dropped by 4.5p to 474.8p.

Advanced Oncotherapy (AVO) dramatically widened its losses before tax to £6.3 million during 2014 as it closed in on the launch of its LIGHT proton therapy system. Analysts from Westhouse kept the firm’s rating under review, but commented that “we expect that the growing awareness of proton therapy as a treatment for cancer should ensure strong demand for AVO’s LIGHT system given its cost and size advantages”. Shares in Advanced Oncotherapy dropped by 5% to 9.5p.

Shares in computer services outfit RapidCloud International (RCI) crashed 17.7% lower to 37p, after operating profit growth slowed by 34% in 2014 and costs rose substantially. Employee head count was up by 166% after the acquisition of Exxelnet Solutions. WH Ireland said that “we believe the company is strongly positioned for 2015 and beyond, as a result of the strategic decisions made by management during the past year”.

Seeing Machines (SEE) received an order for 750 units of its new fleet-tracking system from Insurance Underwriting Managers in South Africa. The company also reported that it is chasing a number of encouraging sales leads and that it is in talks with a car manufacturer to integrate its technology into passenger models. The shares grew by 0.38p to 4.75p.

Shares in Metminco (MNC) continued to ascend sharply today, rising by 47.76% to 0.5p. The copper explorer’s management released a statement saying that it does not know why the price has risen to this degree and that it is still working to accurately estimate resource levels at the Los Calatos project.

Digital security firm Sophos has revealed that intends to float on the London Stock Exchange in early July. Analysts estimate that the Oxford-based company is worth around £1 billion and suggest that Sophos may find itself in the FTSE250 soon after listing. The company is looking to raise net funds of at least $100 million (£65 million) in order reduce debt levels.

Instrument retailer Gear4Music (G4M) had a promising start to its first day on the AIM market, before being unable to maintain the trading tempo through the mid-afternoon. The business raised £9 million in its IPO, which it intends to use to expand its product range, reduce net debt and open a showroom in London. The shares closed up 0.5p at 143p.

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