RAMSEY CROOKALL & CO 2nd July 2012

Evening Report

The FTSE 100 ends 1.2% higher at 5640.64. UK PMI manufacturing data for June, which came in better than expected but still below the key 50 level signaling contraction, adds weight to the view that the BOE will announce further asset purchases Thursday.

Shares in Aviva leapt following reports which emerged over the weekend which are saying the insurance giant is set to sell or wind down between 10 and 15 of its 58 businesses.

Barclays, the bank which last week was given a £290m fine for manipulating interbank lending rates, was another high riser today after revealing that its Chairman Macrus Agius has resigned. After numerous calls for CEO Bob Diamond to follow in Agius's footsteps, Investec analyst Ian Gordon said this morning that investors should "back Bob" and take advantage of the stock's recent underperformance.

Royal Bank of Scotland (RBS) was flat after Oriel Securities downgraded its rating on the stock to 'hold'. It was revealed at the weekend that the bank had sacked several traders last year over the alleged manipulation of LIBOR.

Serco, the international services company, rose after it signed an agreement to dispose of most of its operations in Germany in a transaction with the local management team.

Oil and gas group SOCO International surged after entering into a 'conditional' agreement with Lizeroux Oil & Gas to acquire the 20% minority interest in SOCO Vietnam that the group does not already own.

Insurance group Catlin fell after Jefferies downgraded the stock as part of its review into the European insurance industry: "With Catlin now close to our price target, we downgrade to 'hold' also noting higher end US windstorm exposure and a broadly untouched reinsurance deductible."

Glencore International is prepared to walk away from a $65 billion merger with Xstrata rather than be forced into overpaying for the deal, reports the Sunday Telegraph.

THE FTSE 100             closed           Up         69    @      5,640 THE DOW JONES            @ 17:00          Down       57    @     12822 THE NASDAQ               @ 17:00         Flat        @      2935 Exchange Rates GBP – USD        @      17:00         1.5679 GBP - EURO      @      17:00         1.2459