RAMSEY CROOKALL & CO

MIDDAY REPORT

8 DECEMBER 2010 London has opened lower as a bullish mood in the US following a two-year extension to tax cuts faded by the close last night.

Smith & Nephew is the best performer by some distance, while Royal Dutch Shell is also higher after an upgrade to equal-weight from underweight from Morgan Stanley. The deal to sell a big chunk of the company's stake in Australian exploration group Woodside "indicated a ruthlessness we have not previously seen," the broker said.

Contractor and support services specialist Carillion expects good growth in underlying profits this year despite tough market conditions in the UK. Profit growth should more than offset the effects of selling non-core businesses and stakes in Public Private Partnership (PPP) projects in 2009, which chipped in £17m last time.

Elsewhere, Scottish soft drinks maker AG Barr's quarterly revenue increased 6.4% from the year before and it remains confident of achieving full-year targets. "Current trading remains in line with our expectations despite a very competitive environment," the drinks maker, best known for its Irn Bru and Tizer brands, said.

Kesa Electricals, one of Britain’s largest consumer electronics retailers, raised interim underlying profit by more than half thanks mostly to growth at its French business. The owner of Comet in the UK and Darty France posted an adjusted profit before tax of €25m for the six months ended 31 October, up 52.4% from last year’s €16.4m and at the top of the range of analysts' expectations.

Finally, computer games retailer Game's margins this year will be down by between 1.6-1.9 percentage points due to the ferocious competition in the games and consoles market. Game is also still wary over Christmas trading despite good demand for new blockbuster games and Microsoft's Kinect console.

THE FTSE 100 AT NOON IS DOWN 9 @ 5798

THE DOW JONES CLOSED DOWN 3 @ 11,359

THE NASDAQ COMP CLOSED UP 3 @ 2598

Exchange Rates

GBP – USD 1.57 GBP – EUR 1.19