RAMSEY CROOKALL & CO EVENING REPORT

9 SEPTEMBER 2010

Mining stocks continue to drive the market’s advance, despite metal prices falling back as concerns grow about the Chinese authorities’ determination to cool off the economy, with the latest report from the People’s Republic suggesting that the government is set to introduce measures to curb property price inflation.

Xstrata, Vedanta, Rio Tinto, BHP Billiton and Lonmin are the stand-outs in the sector. None of them can match the gains of chip designer ARM, however, which has risen sharply for the second day in succession on rumours that Korean manufacturing giant Samsung’s new Orion chip uses ARM’s Mali graphics processing unit (GPU) rather than intellectual property developed by Imagination Technologies. ARM shares are 14p higher at 402p.

In contrast, it has not been a great day for retailers, so far, with Morrisons, Home Retail and HMV all in the doghouse after trading updates. Supermarket Morrisons posted profits broadly in line with expectations for the six months to August. It also unveiled a move into the convenience store market as new chief executive Dalton Philips makes his mark on the company. The shares fell back in early dealings, but have trimmed losses after new chief executive Dalton Philips impressed analysts at the results presentation.

Home products retailer Home Retail Group disappointed the market with its prediction that unless Christmas is a cracker this year profits are likely to be in the bottom half of the range of analysts’ estimates.

And music and DVD retailer HMV fell sharply, albeit after strong gains yesterday as it posted a 10.6% decline in first quarter sales as potential customers were distracted by the World Cup. The group, which is struggling to compete with internet rivals and supermarkets, said UK & Ireland like for like sales in the 19 weeks ended 4 September 2010 fell 14.9%. Fellow computer games seller Game Group has also fallen in sympathy.

Finally, higher house prices helped home builder Redrow move back into profit in the year to June 30, but the outlook remains uncertain. The company posted a pre-tax profit of £0.7m against a loss of £44.2m the previous year, as revenues jumped to £396.9m from £301.8m.

THE FTSE 100 CLOSED UP 56 @ 5486

THE DOW JONES AT 4.30 IS UP 69 @ 10,456

THE NASDAQ COMP AT 4.30 IS UP 11 @ 2240

Exchange Rates

GBP – USD 1. 5446 GBP – EUR 1. 2141