RAMSEY CROOKALL & CO

MORNING REPORT 13th January 2011

The top share index is little changed in early dealings though there are some notable movers in both directions, particularly in the retail sector.

Tesco falls after the snow and ice meant UK like for like sales were weaker than expected and lagged rivals. Like for like sales in the UK for the six weeks to 8 January were up just 0.6% - about half the figure analysts had predicted – and total sales grew 4.2%.Group sales rose 7.6% during the period though, with international sales up 14.2%. Asia leapt 24.2%, led by China and Thailand.

Electrical retailer Dixons is lower after it said wintery weather ahead of Christmas kept some shoppers away, but saw strong trading from Boxing day as customers stocked up on 3D TVs and other must have gadgets ahead of the January VAT rise. The owner of Currys and PC World said sales in the 12 weeks to January 8 were down by 1% from the same period the previous year, or by 2% on a like-for-like basis, excluding the impact of new stores.

Home Retail Group is in demand after it said expects full-year pre-tax profits to come in at the mid-point of its previously guided range of £250m to £275m after both of its brands performed in line with expectations. Sales at the catalogue-based chain Argos fell by 3.2% to £1.861bn in the 18 weeks to 1 January, or by 4.9% on a like-for- like basis, stripping out the benefit of new stores. Kingfisher, the owner of the B&Q chain, climbs in sympathy

Finally, the flooding in Queensland, Australia that has caused widespread disruption to Rio Tinto’s coal operations has also hit its aluminium activities, the mining giant has reported. It said its aluminium arm Rio Tinto Alcan has experienced a force majeure event, impacting the supply of the aluminium from Boyne Smelters near Gladstone

THE FTSE 100 AT 9.30 IS DOWN 17 @ 6034

THE DOW JONES CLOSED UP 83 @ 11,755

THE NASDAQ COMP CLOSED UP 4 @ 2737

Exchange Rates

GBP – USD 1.57 GBP – EUR 1.19

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