RAMSEY CROOKALL & CO

EVENING REPORT 4 JANUARY 2011

Bid speculation added froth to a London stock market playing catch-up with European and US markets that posted strong gains yesterday.

Oil giant BP was boosted by reports that rival Shell looked into making a bid for the company in the wake of last year’s Gulf of Mexico oil spill, which sent BP’s share price plummeting. The higher oil price was also good news for oil stocks.

Silver miner Fresnillo, meanwhile, was wanted on the return of rumours that Mexican business magnate Carlos Slim is running the rule over the company prior to launching a bid.

Gold miner Randgold Resources was a rare faller, however, as investors lose their appetite for gold’s haven qualities.

Elsewhere, banks were strong led by Royal Bank of Scotland, which has been given a boost by Exane BNP Paribas upgrading the stock to its 'outperform' rating. Barclays and Lloyds are also going well.

Cairn Energy has agreed a contract to tie-up two drilling vessels for its 2011 exploration programme offshore Greenland. Subject to approval from the government of Greenland, Cairn intends to drill up to four wells in 2011. Cairn has also entered into a stand-by secured revolving debt facility of $900m that will also provide funding for general corporate purposes.

Finally, construction and engineering group Costain has been awarded a highways contract by Neath Port Talbot County Borough Council. The £59m contract is to construct 4.5 kilometres of dual carriageway access road from the M4 Junction 38 into Port Talbot and the docks, as well as completing the link to Junction 42 on the M4 and West Wales.

THE FTSE 100 CLOSED UP 113 @ 6013

THE DOW JONES AT 4.30 IS UP 8 @ 11,678

THE NASDAQ COMP AT 4.30 IS DOWN 11 @ 2680

Exchange Rates

GBP – USD 1.55 GBP – EUR 1.17`