RAMSEY CROOKALL & CO

MORNING REPORT 4 JANUARY 2011

Big gains in the US overnight and a strong display in Asia this morning have encouraged a rush of buying in London.

Banks are strong led by Royal Bank of Scotland on good economic data coming out of Europe and the US yesterday, while Bank or America's settlement with Fannie Mae and Freddie Mac has eased some concerns over US mortgage liabilities. Barclays and Lloyds are also going well.

Elsewhere, no frills airline easyJet is to exercise its option to take delivery of 15 Airbus A320 aircraft between 2012 and 2014. It has agreed new options over a further 33 A320 aircraft, while 20 of the A319 aircraft which easyJet had contracted to acquire from Airbus have been converted into orders for A320 aircraft.

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.

Desire Petroleum crashed again as it confirmed drilling at its 25/5-1 well on the Dawn/Jacinta prospect in the North Falkland Basin has reached target depth but failed to find any oil.

The rig will now move to Rockhopper Exploration which will drill "one or two wells", subject to regulatory approval, before returning to Desire to drill a well at a location still to be finalised and subject to regulatory approval.

THE FTSE 100 AT 9.40 IS UP 108 @ 6008

THE DOW JONES CLOSED UP 93 @ 11,970

THE NASDAQ COMP CLOSED UP 15 @ 2691

Exchange Rates

GBP – USD 1.56 GBP – EUR 1.16