RAMSEY CROOKALL & CO

MORNING REPORT

26 OCTOBER 2010

The FTSE 100 has run into light selling as the earnings season hits a brief lull before the heavyweights start to appear at the end of the week.

The boom in mobile devices using ARM Holdings’ intellectual property was largely responsible for a sharp rise in the chip designer’s third quarter profits. Revenue in the third quarter rose 34% to £100.4m from £75.2m in the corresponding period of last year. In dollar terms, revenue rose 29%.

Cairn Energy is also down as it failed to find a commercial discovery in its first round of Greenland driling. "The T8-1 and T4-1 wells did not result in commercial discoveries; consequently the well costs, including all associated demobilisation and other costs, of $185m are forecast to be written off," the firm said today.

Banks are doing well despite fierce criticism from Bank of England governor Mervyn King over the credit crunch and a warning that much more equity will be necessary to build up their capital bases. Lloyds and Royal Bank of Scotland are both higher.

Elsewhere, the UK's second biggest cinema chain Cineworld posted a 8.5% increase in revenue in the 42 weeks to 21 October after the summer's strong 3D film lineup.

Finally, bus and train group Go-Ahead's chief executive Keith Ludeman is to retire after 15 years with the company to be replaced by David Brown, currently TFL's Managing Director, Surface Transport. The group added that trading in the period to end October has been robust and it has not changed its expectations for the full year to 2 July 2011.

THE FTSE 100 AT 9.30 IS DOWN 38 @ 5713 THE DOW JONES CLOSED UP 31 @ 11,164 THE NASDAQ COMP CLOSED UP 11 @ 2490

Exchange Rates

GBP – USD 1. 57

GBP – EUR 1. 12 ??

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