RAMSEY CROOKALL & CO

MIDDAY REPORT 11th January 2011

UK blue chips have raced away this morning led by the banks as the government caved in on the issue of bonuses.

As a trade-off for no additional taxes on the expected £7bn of UK bonuses this year, the banks are in talks to raise their business lending by 10%, or £20bn, to £200bn. Shares in Barclays, HSBC, Lloyds and RBS are all sharply higher.

Elsewhere, Marks and Spencer saw group sales rise 4% in the final quarter of 2010. Like for like (LFL) UK sales were up 2.8%, with general merchandise sales up 3.8% and food sales 1.8% higher. M&S estimates the snow trimmed about 1% off food sales and 3% off general merchandise. Earnings guidance for the current financial year remains unchanged. Market consensus is for £723m on sales of £9.77bn.

US shopping mall giant Simon Property has dropped its indicative bid for Capital Shopping Centres but will still vote against the 'deeply unattractive' acquisition of Manchester's Trafford Centre. Simon had proposed a bid of 425p per share for the shopping centre group, but this was conditional on being given access to the books. After the CSC board repeatedly refused this, Simon says it had no option but to withdraw. The Takeover Panel had given it a deadline of until 12 January to make an offer.

Finally, Arm Holdings is going well again after a bout of profit taking after its ground-breaking deal with Microsoft last week. Wolseley is also going well.

THE FTSE 100 AT NOON IS UP 76 @ 6033

THE DOW JONES CLOSED DOWN 37 @ 11,637

THE NASDAQ COMP CLOSED UP 15 @ 2707

Exchange Rates

GBP – USD 1.55 GBP – EUR 1.20

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