RAMSEY CROOKALL & CO 21 September 2012

Morning Report

The FTSE 100 trades up 0.5% at 5881.21, edging higher after data showed UK public sector net borrowing was lower than expected in August, although the figures still suggest borrowing is on course to overshoot the official target. Miners remain the biggest gainers. Glencore is up amid news that an announcement on the deal with Xstrata could be made as early as next Friday. There are no further data points due on either side of the Atlantic so it's expected to be a fairly quiet session.

The Sage Group has acquired EBS Empresa Brasileira de Sistemas, a provider of accounting, business management and tax software in Brazil. The acquisition will cost the group up to £10.6m, including a performance related sum of £1.8m. The Home Affairs Committee, the group of MPs investigating G4S's failure to fulfil all of its Olympic Games contractual requirements, has called on the security firm to waive its fee. "G4S should waive its £57m management fee and also compensate its staff and prospective staff who it treated in a cavalier fashion," the damning report says. G4S has already revealed that it expects to swallow a £50m-or-so loss on the contract. The committee's verdict seems to have been widely priced in by the market, judging by the muted share price reaction.

Property company British land has offloaded seven food stores to institutional investors. The company sold the gaggle of supermarkets at prices in line with March valuations to raise £118m, of which British Land's share is £62m. The stores were sold at net initial yields of between 4.95% and 5.7%.

HMV, the retailer which left it too late to move away from its dependency on selling CDs, DVDs and books in their physical forms. The group saw like-for-like sales decline 11.6% year-on-year in the 20 weeks to September 15th.  Including the impact of previously announced store closures, total group sales declined by 14.8%.

The price of oil is back on the rise. The most widely traded futures contract for Brent crude is up 73 cents to $110.76 a barrel.

With investors regaining their appetite for risk, gilts are spurned. The yield on the benchmark 10-year gilt is up to 1.83% from 1.80% overnight. Yields move inversely to prices.

THE FTSE 100             @ 10:00        Up         29       @      5883 THE DOW JONES            closed         Up         18       @     13596 THE NASDAQ               closed         Down       6        @      3175

Exchange Rates GBP – USD        @       10:00                  1.6305 GBP - EURO      @       10:00                  1.2506