RAMSEY CROOKALL & CO April 17th 2012

Morning Report

UK blue chip stocks opened broadly higher on Tuesday morning, as a rebound in the banking sector offset some poorly received trading updates from Burberry and Marks and Spencer.

Barclays, Royal Bank of Scotland and Lloyds were making solid gains early on after a sell-off yesterday on the back of Eurozone concerns.

Underlying revenue growth at luxury brand Burberry eased in the fourth quarter owing to a slowdown in growth at its Wholesale division, which caused shares to drop over 4% early on. Wholesales growth was affected "by the planned shift from wholesale to retail in Saudi Arabia and Spain and further rationalisation of the brand's distribution in the United States and Europe," the company said.

Inventory problems at Marks and Spencer have hit sales in general merchandise (like clothing and homeware) but the tills are still ringing in the company’s food halls. Like-for-like (LFL) sales in the UK were down 0.7% on the first quarter of 2011.

Miners were also lower with Randgold Resources, Fresnillo, Rio Tinto, Xstrata, ENRC and Glencore among the worst performers. Rio Tinto said this morning that production of copper and iron ore fell in the first quarter of 2012 compared with the final three months of last year. Meanwhile, ENRC announced the completion of the acquisition of thermal coal group Shubarkol Komir JSC, which is expected to enhance the company's position as a leading coal producer in Kazakhstan.

Afren thinks it might have struck it big in the Kurdistan region of Iraq with its Simrit-2 exploration well. "The scale of the oil column that has been intersected suggests that the Simrit structure and surrounding prospects elsewhere on the Ain Sifni PSC have the potential to be transformational for Afren", said Osman Shahenshah, Chief Executive.

THE FTSE 100             @ 10:00           Up          35      @      5,701 THE DOW JONES            closed            Up          71     @     12921 THE NASDAQ               closed            Down        22      @      2988

Exchange Rates

GBP – USD       @      10:00                   1.5957 GBP - EURO     @      10:00                   1.2136



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