RAMSEY CROOKALL & CO

MORNING REPORT 1 MARCH 2011

Overnight gains on Wall Street and an improvement in Asia this morning have propelled London higher first thing Tuesday. Copper miners Antofagasta and Kazakhmys are the best performers so far.

CD and computer games retailer HMV has issued another profits warning and begun talks with its banks about a new lending facility as it expects to breach some of its covenant tests when they are next tested.

Business has remained “challenging” since the company issued its last warning in January and profit before tax and exceptional items for the year to April is now expected to be “moderately below” the £45m forecast by analysts.

Elsewhere, banking giant Barclays is to buy the UK credit card assets of Egg, the online bank owned by Citigroup. The acquired business has around 1.15m credit card accounts with some £2.3bn of gross receivables.

Record gold and silver production coupled with soaring metal prices more than doubled Mexican miner Fresnillo’s profits last year to over $1bn. Pre-tax profits in 2010 soared from $457m to $1.02bn on revenues of $1.47bn, up 73% on an adjusted basis. "By 2018, Fresnillo will be able to produce 65m ounces of silver and over 400,000 ounces of gold annually,” chairman Alberto Baillères said.

Finally, aerospace and vehicles engineer GKN bounced back into the black last year as all divisions bar aerospace saw good sales growth. Profits came in at £345m in 2010, a near £400m swing from losses of £54m the previous year. Sales rose by 20% to £5.1bn and by 22% on an underlying basis.

THE FTSE 100 AT 9.45 IS DOWN 26 @ 6020

THE DOW JONES CLOSED UP 5 @ 12,226

THE NASDAQ COMP CLOSED UP 1 @ 2782

Exchange Rates

GBP – USD 1.6304 GBP - EURO 1.1796