RAMSEY CROOKALL & CO  22nd June 2012

Morning Report

European stocks slumped on Friday as a fresh round of bank downgrades sent the financial sector lower and resource firms dropped as oil prices continued to fall sharply.

Credit ratings agency Moody's has downgraded 15 major banks and financial instiutions, including the major lenders on Britain's High Street. Royal Bank of Scotland (RBS), Barclays, Lloyds and HSBC all got the downgrade treatment as the agency completed its review of the global banking sector. Barclays' rating was downgraded by two notches while the ratings of the others were ratcheted down by one level.

Spain’s banks will need €51-62bn euros in additional capital in a worst case scenario, according to the independent consultants Oliver Wyman and Roland Berger hired by the government to perform a new round of stress tests on its financial sector.

Losses in the banking sector were only modest despite the mass bank downgrade by Moody's. RBS fell slightly after saying it disagreed with the ratings change, saying the change is "backward-looking and does not give adequate credit for the substantial improvements the group has made to its balance sheet, funding and risk profile." HSBC and Barclays were also n the red.

Oil services stocks and oil producers dropped on the back of falling crude prices: Petrofac, Tullow Oil and BG Group were suffering heavy losses. Meanwhile, mining groups Vedanta, ENRC, Kazakhmys, Fresnillo and Randgold were also lower as metals prices declined.

BHP Billiton was out of favour after giving the go-ahead to a massive investment on its coal operations in New South Wales, Australia. The group is spending US$845m to sustain operations at Illawarra Coal by establishing a replacement mining area at the Appin Mine.

Property company London and Stamford fell after buying a stake in a residential block adjacent to the Chelsea Barracks development in south-west London.

UK bookmaker William Hill edged higher after being granted non-restricted gaming licences by the the Nevada Gaming Commission, clearing the way for the company to start operating in the USA.

THE FTSE 100              @ 10:00        Down        50       @      5,516 THE DOW JONES            closed          Down        250     @     12573 THE NASDAQ               closed          Down        71       @      2859 Exchange Rates GBP – USD        @      10:00              1.5620 GBP - EURO      @      10:00              1.2444