RAMSEY CROOKALL & CO

EVENING REPORT

26 NOVEMBER 2010

After briefly dipping below 5600 this morning FTSE 100 more or less halved its losses over the lunchtime session, though heavy falls are still being sustained by miners and banks.

Portugal is currently going down the path trodden by Ireland and denying it is in need of a bail-out and, as with Ireland, the market is clearly sceptical. Bond yields in Portugal and other debt-plagued eurozone countries such as Ireland and Spain continued to climb amid worries over their ability to repay debts.

Miners retreat in line with metal prices with India’s Vedanta and South American copper group Antofagasta among the worst hit. Press speculation that China may take more steps next year to cool down its economy has made investors even less disposed to invest in mining stocks. Banks are more concerned about the euro-zone problems than Korea or China; Royal Bank of Scotland, Lloyds and Barclays are all sharply lower.

Demand for some metals will double over the next 15-20 years and Rio Tinto, already “very well positioned” to take advantage, is spending billions on expansion just to make sure.

Elsewhere, BT is higher after announcing that it has sold part of its stake in the Indian IT Group Tech Mahindra. It also benefits from an upbeat broker note from Exane BNP Paribas, which lifts its price target on BT by 20% to 265p.

BowLeven, meanwhile, is is to raise about £70m through a placing of up to 22m new shares, some 11% of the amount currently outstanding, to fund further drilling on its prospects in Cameroon.

Finally, Chrysalis, the record company founded by current chairman Chris Wright in the late 60s, has been bought by German media giant Bertelsmann and private equity group Kohlberg Kravis Roberts (KKR). It’s agreed to a figure of 160p a share in cash worth £107.4m, a 46% premium to the price before talks were confirmed at the start of the month.

THE FTSE 100 AT CLOSED DOWN 30 @ 5668

THE DOW JONES AT 4.30 DOWN 95 @ 11,091

THE NASDAQ COMP AT 4.30 DOWN 5 @ 2537

Exchange Rates

GBP – USD 1.559 GBP – EUR 1.179