RAMSEY CROOKALL & CO 17th October 2012

      Morning Report

The FTSE 100 trades up, remaining just higher and showing little reaction to surprisingly upbeat UK employment data. The unemployment rate fell to a 15-month low in the three months to August, while the number of people in work rose to the highest level on record.

The Royal Bank of Scotland is set to leave the government insurance scheme that was set up at the height of the financial crisis to protect the company from collapse. Analysts said this could pave the way for RBS to be sold back into the private sector. It is currently 82%-owned by the UK taxpayer after receiving a £45bn bailout in 2008.

Anglo-Australian mining giant BHP Billiton saw iron ore output rise year-on-year in the third quarter, but fall from the previous quarter's production levels as a result of the planned shut-down associated with the Inner Harbour expansion project in Western Australia. Iron ore production was up 1% year-on-year but down 3% quarter-on-quarter to 39.8m tonnes.

Xstrata, the Switzerland-based miner which looks set to merge with commodities trader Glencore, said volumes of thermal coal, zinc and lead in concentrate and zinc metal in the third quarter increased year-on-year. Volumes of copper and nickel declined, however.

Diageo is in talks to buy a stake of about 20% in Vijay Mallya's in a deal that would give it management control of the Indian distiller, said two people with knowledge of the matter, Bloomberg News reports. Diageo would buy new shares in United Spirits and also purchase part of Mallya's 28% stake, said the people, who asked not to be identified as the process is private. Diageo would get the right to appoint United Spirits's Chief Executive Officer and other key managers, while Mallya is expected to remain Chairman, they said.

Cable & Wireless Communications, already in talks with the Bahrain Telecommunications Company (Batelco) about a possible sale of its Monaco & Islands business unit, has confirmed that it is also in talks regarding a potential sale of its business in Macau. Responding to recent press speculation, the international mobile communications networks operator confirmed it is in discussions with CITIC Telecom International Holdings Limited regarding a potential sale of its 51% shareholding in Companhia de Telecomunicações de Macau (CTM). CITIC is a 20% shareholder in CTM.

Financier Nat Rothschild is 'completely, 100 per cent wrong' about the controversial deal that could end the feud at Indonesian mining firm Bumi, according to the firm's Deputy Chairman. Rothschild resigned from the board of Bumi on Monday, saying he had lost confidence in the management's ability to stand up for investors.

THE FTSE 100             @ 10:00         Up       7        @       5877 THE DOW JONES            closed          Up       127      @     13551 THE NASDAQ               closed          Up       36      @      3101













Exchange Rates GBP – USD        @       10:00                    1.6148 GBP - EURO      @       10:00                    1.2329

Gold USD/Oz                              $1,747