RAMSEY CROOKALL & CO

EVENING REPORT

29 SEPTEMBER 2010

Leading shares remain mixed but with a lower bias as investors continue to fret over European debt issues.

Debt-stricken Ireland is the focus of attention again. The rating agency Standard & Poors says the price of bailing out nationalised bank Anglo Irish could exceed $47bn. Royal Bank of Scotland, HSBC and Lloyds are all weaker on the day.

Vedanta Resources is the worst performing blue-chip after an Indian court ruled that the mining giant’s copper smelting plant at Tuticorin, South India, must close. A writ petition challenging the environmental clearance and building of the smelter was originally filed in the high court of Madras in 1996-98, but a ruling in 1999 allowed the plant to operate at its rated capacity.

Counterbalancing this, BP is going well on a safety initiative. A new safety division with “sweeping powers to oversee and audit the company's operations around the world” will be set up and run by Mark Bly, current head of safety and operations.

Elsewhere, Rolls-Royce, the aero engine developer, gets a lift from Morgan Stanley, which has upgraded the stock from “equal weight” to “overweight” and hoisted the target price to 720p from 580p. The shares are 21p higher at 612p.

And, sticking with the aeroplane theme, British Airways has finally signed its well-flagged transatlantic ticketing and revenue share agreement with American Airlines and merger partner Iberia. It starts in October and is worth a combined $7bn in annual revenues.

Finally, volumes traded through the London Stock Exchange have slowed recently in conditions described as variable. Average UK daily shares traded increased 9% year-on-year to £5bn in the five months to August, though trading volumes since June have been much lower, the LSE said.

THE FTSE 100 CLOSED DOWN 9 @ 5569

THE DOW JONES AT 4.30 IS UP 27 @ 10,830

THE NASDAQ COMP AT 4.30 IS UP 7 @ 2371

Exchange Rates

GBP – USD 1. 58 GBP – EUR 1. 16

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