Yesterday’s trading: Renesola has lost its shine
Hello, is anyone there? The silence from the financial PR advisers to Renesola was deafening as the former AIM go-go stock hit the market with yet more bad news.
In February, when the shares soared spectacularly to 639p from August's flotation price of 79p, telephones were ringing constantly and bullish emails were flying all over the place as its PR lauded the performance.
Yesterday, nothing. Funny that, because shares of the Shanghai-based maker of solar cells out of old computers crashed to 240p before closing 110p lower at 260p on hefty turnover of 7.1m after it said second quarter production figures had missed forecasts.
Renesola downgraded (again) its 2007 guidance of 150 megawatts of production output to between 120 and 125 megawatts.
It blamed delays in the delivery of crucibles for its new multi-crystalline furnaces which have put back the start date of full multi-crystalline production. Full-year profits will obviously take a knock.
All very technical, but acutely disappointing for punters who had chased the blue in recent months.
For a short time it was the biggest Chinese company on AIM. As far as many investors are now concerned, the sun ain't gonna shine any more for Renesola.
There were plenty other winners among the minnows. PRs definitely waxed lyrical about CODA, as the shares climbed 19¼p to 178½p following a batch of broker recommendations ahead of the launch on September 11 of its Neon core accounting package.
Numis upgraded to buy from hold and said Neon could accelerate growth from Publicity given to an Ofcom report that 40% of the UK population now takes bundled telecoms products, rising to 52% for broadband consumers where the best discounts can be found in combination with other products, helped Telecom Plus buzz 8¼p higher to 171¼p.
Analyst Andrew Darley at KBC Peel Hunt says TP still provides the only combined package to include gas and electricity, making it a better proposition than nPower.
Back among the big boys, Bank of America's decision to invest a cool £1bn into Countrywide Financial, America's largest US mortgage lender, helped reassure investors around the globe and raised expectations that perhaps the sub-prime problem will now be contained.
Hopes were also skyscraper-high that the Fed will slash US interest rates by 50 basis points on September 18, if not before.
Following overnight strength of Asian markets, the Footsie jumped 91.2 points at the outset but drifted lower on lack of follow through support to finish only 0.9 points better at 6196.9.
It was its fifth consecutive closing gain and the premier index has now rallied an impressive 5.8%, or 338 points, from last Thursday's low since the credit crisis kicked off. Up 267 at best, the FTSE 250 closed 35 points up at 10,945.7.
Northern Rock lost more than 20% in the first two weeks of August after creditors cut access to short-term debt markets and raised concerns that higher borrowing costs would mash the mortgage bank's profits.
Rumours have since been rife that a bidder will now knock on the door of its Newcastle-upon-Tyne headquarters.
As the shares raced up to 775½p on continued takeover speculation, both ING and HSBC (9½p off at 897½p) denied any interest. The close was still 29p higher at 757p.
Heavily sold earlier this week on the back of last week's disappointing performance of its flagship AHL fund, hedge fund Man Group recovered 8½p to 490p following kind words from Barclays Wealth.
It said that unlike other hedge funds, Man's main funds boast a long track record. With that in mind, we should not be too concerned about the performance of a single fund for a single week. The market pays undue attention to the numbers.
Elsewhere, Electra Private Equity jumped 111p to 1651p after completing the refinancing of Allflex Holdings, the world's leading manufacturer and distributor of visual and electronic animal identification tags. Electra receives cash proceeds of £39m plus a stake in the new company valued at around £57m.
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