RAMSEY CROOKALL & CO

EVENING REPORT

20 OCTOBER 2010

Shares turned south over the lunchtime session though it is difficult to ascribe the losses to the impact of the Comprehensive Spending Review, much of which was widely as expected.

Mining stocks did their bit to counteract the effects of FTSE 100 stalwarts BAE Systems, Smiths Group and British Sky Broadcasting trading in ex-dividend form today.

Rio Tinto has earmarked another US$3.1bn (£2bn) for its Pilbara operations, doubling new investment there just days after the company scrapped its iron ore joint venture with BHP Billiton. The mining giant, which is chipping in $2.1bn (£1.3bn) of its own money, said the move will increase annual infrastructure capacity to 283 million tonnes during 2013.

Logistics group Stobart has cut its profit expectations for this year to the bottom of the market’s range and is wary over prospects for 2011. "We have slightly reduced our full year profit expectations as a result of reduced spend by Network Rail and increased overall finance costs," it said.

Another company lowering expectations was Hansen Transmissions, the wind turbine gearbox designer. The company has downgraded its total revenue guidance for the full year (fiscal 2011), and is now expecting turnover to be 10% lower than in fiscal 2010; previously the company had guided towards growth of between 5% and 10%.

Finally, Sports Direct, owner of Sports World stores and the Slazenger and Dunlop brands, continued along the recovery trail in the July to September quarter but warned that the early part of 2011 looks like it will be “extremely challenging” for all retailers in the UK.

THE FTSE 100 CLOSED UP 25 @ 5728

THE DOW JONES AT 4.30 IS UP 130 @ 11,108

THE NASDAQ COMP AT 4.30 IS UP 20 @ 2457

Exchange Rates

GBP – USD 1. 5849

GBP – EUR 1. 1349 ??

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