RAMSEY CROOKALL & CO

16th November 2012

Morning Report

The FTSE 100 is trading down 0.6%. The US budget negotiations, which begin today, are causing some nervousness while conflict in the Middle East is another reason for some weakness. Meanwhile. Melrose is the biggest faller dropping 13.5% following concerns about the outlook for 2013. Pennon is down 2.6% after warning Thursday that consensus expectations for the Viridor business in 2H are too high.

A red flag has been raised at industrial turnaround specialist Melrose, with the group saying some of its businesses have seen a slow-down in business in recent weeks. The overall weekly rate of order intake in the second half of the year has been 8% lower than the first half , but Melrose said it is too early to tell how this will affect 2013, and in any case the order intake rate is varying on a business by business basis. Shares dropped nearly 14% early on.

Consumer goods giant Reckitt Benckiser fell after it launched a $1.4bn (£882m) counterbid for US nutrition specialist Schiff Nutrition International, with the tender offer beginning today.

Banking peers RBS and Lloyds were making slight gains this morning. A Public Accounts Committee report said today that while the government would look to make a profit for taxpayers on the sale of its stake in the two banks, this may not happen "for many years". It also said that there is a risk that the £66bn invested in RBS and Lloyds "may never be recovered".

Oil titan BP was subdued as investors digested yesterday's late announcement that it has resolved all criminal claims with the Department of Justice in relation to the Gulf of Mexico oil spill disaster in 2010 and will pay the US government $4bn in installments over the next five years. It is also paying the Securities and Exchange Commission $525m over a three-year period.

Rolls-Royce, the global power systems company, has won an order to design and equip two platform supply vessels being built by Jiangsu Eastern Heavy Industries in China.

Engineering giant IMI gained after saying that second-half trading has been in line with expectations so far in spite of some expected weakness in the Fluid Power division.

Mining giant Anglo American rose after announcing that its heavy building materials producing unit Tarmac and French cement group Lafarge are to sell a portfolio of UK construction material operations to steel tycoon Lakshmi Mittal for £272m.



THE FTSE 100 @ 10:00 Down 22 @ 5699

THE DOW JONES closed Down 28 @ 12542

THE NASDAQ Closed Down 9 @ 2836



Exchange Rates

GBP – USD @ 10:00 1.5866

GBP - EURO @ 10:00 1.2461



Gold $/ OZ $1709