RAMSEY CROOKALL
2nd August 2011
Morning Report
The FTSE 100 is down 0.4% , coming off initial lows. Although concerns about the health
of global economies and the return of sovereign debt fears are weighing, the banks offer
some support. Barclays is up 0.5% following its 1H results. Peers Standard Chartered and
HSBC are also up 1.5% and 1.4% respectively. On the downside, Hargreaves Lansdown falls
11% on FSA proposals to change investment platform rules.
Barclays is in demand today even though it saw income and profits fall in the half year
to 30 June after the “lacklustre” economic environment hurt income generation in many of
the bank’s major markets. Pre-tax profits for the period fell to £2.64m from £3.94m over
the same period the previous year on total income that slipped to £15.24m from £15.73m.
Fellow banks HSBC, which reported yesterday, Lloyds, due to update on Thursday, RBS (Friday)
and Standard Chartered are also in demand.
Miners are under the pressure though, notably Xstrata, whose profits soared in the half year
to 30 June as continuing growth in emerging Asian economies and the recovery in the West
boosted commodity prices. Operating EBITDA (earnings before interest, tax, depreciation and
amortisation) rose to $5.82bn from $4.49bn over the same period the previous year on revenues
that rose to $16.77bn from $13.6bn.
Soaring precious metals prices boosted profits at Mexican silver and gold miner Fresnillo in
the six months to 30 June. Total revenue rose to $1.056bn (£644.5m) from $605.7m the previous
year, while earnings before interest, depreciation and amortisation (EBITDA) rose to $757m
from $394.3m. But it too is in the red.
THE FTSE 100 at 9:45 Down 26 @ 5747
THE DOW JONES closed Down 10 @ 12132
NASDAQ COM closed Down 11 @ 2744
Exchange Rates
GBP – USD 1.6295
GBP - EURO 1.1470
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