Yesterday's trading: Shares soar in doorstop lender
Emerging markets doorstep lender International Personal Finance must be one of the year's best recovery stories.
Geoff Foster: The fabulous Footsie traded above 5,200 for the first time in more than a year.
The provider of small sum, short-term unsecured loans with terms ranging from six to 24 months, yesterday brought its third-quarter trading statement forward a week because of improved trading conditions in Central Europe.
Hungary has returned to profit and Poland, Czech Republic and Slovakia have performed better than forecast. The shares soared 27.9p, or 15.3%, to 209½p after the board said: 'If the current improving trend continues, the full-year results are likely to be materially ahead of current market expectations.'
Broker WH Ireland upgraded its 2009 full year pre-tax profits estimate by 40% to £55.1m, by 13% to £73.3m for 2010 and by 9% to £90.4m for 2011.
Analyst Keith Ashworth-Lord said that if the fourth-quarter continues the trend, and the group enjoys a strong Christmas period, there is scope for further gains. His target price is 240p.
It was a different story in May. The shares collapsed 43% to a low of 58p on a wave of panic selling following a disastrous warning that profits would be hit by up to £30m following bad debt problems in Hungary.
There were fears IPF would breach its banking covenants. The fabulous Footsie traded above 5,200 for the first time in more than a year. It touched 5,231 before closing 48.3 points higher at 5,210.17.
Fund managers continued to take the view that, with UK interest rates tipped to stay below 2% until 2014 thus keeping savings rates at basement levels, the equity market - currently yielding 4%-plus - is the only place to get a decent return on your money.
News that Philips Electronics had made a profit in the third quarter, against expectations, also helped sentiment ahead of eagerlyawaited quarterly earnings from all the major US banks. JP Morgan Chase reports tomorrow and Goldman Sachs on Thursday.
In anticipation of bullish news, Wall Street advanced 62 points in the early stages. Reports of a pending upbeat circular lifted insurer Old Mutual 4.8p to 109.72p. Hedge fund group Man put on 12.4p to 353¨úp amid continuing talk of a possible bid from BarCap.
Qatari stakebuilding rumours accompanied a 10.8p gain to 462.4p in housebuilding giant Persimmon. Awaiting the outcome of acquisition talks with rival exchange Turquoise, shares of the London Stock Exchange added 25½p at 886½p.
Part-nationalised Lloyds Banking Group, 2.39p down at 91.61p, led the Footsie fallers as fund raising speculation intensified. Dealers heard UBS and Bank of America/Merrill Lynch have been lined up as lead underwriters for a £10bn-plus rights issue which will help slash its reliance on the government's asset protection scheme.
Mobile phone giant Vodafone buzzed 2.05p higher to 134½p on a Deutsche Bank recommendation.
It expects Vodafone to benefit from a late-cycle revenue recovery and receive a boost from forex and mobile data. A KBC Peel Hunt downgrade to hold from buy and 50p cut in the target price to 120p, ahead of tomorrow's annual results, left pubs group Punch Taverns flat at 115.98p, down 5.9p.
The broker forecasts a 39% decline in pre-tax profits to £160m and 54% fall in earnings per share to 36.4p.
Semiconductor company Cyan edged up 0.025p to 2.35p after raising £1.84m via a placing at 2.1p. Cash raised will support the group's capital requirements through to profitabilty-Avisen, the performance managementspecialist, firmed ¾p to 14½p.
Tesco has selected Acorn Systems's Performance Analyzer, which is distributed exclusively in the UK by Avisen, to enhance its financial reporting capability in Tesco Direct.
EMED Mining put on 1¼p to 11¾p after announcing a positive outcome for the Scoping Study assessing the development of the wholly-owned Biely Vrch gold mine in Central Slovakia. Broker Fox Davies Capital's target price is 45p.
Greenland focused miner Angel Mining improved 0.38p to 3¾p. It has secured a new £8m loan facility which should enable the company to get the Nalunaq gold mine in South Greenland into full scale production.
Good results helped Tristel gain 3½p at 54p. The specialist infection and contamination control company lifted full-year pre-tax profits by 5.6% to £1.3m on revenues 14.9% higher at £6.8m. The dividend is raised 9.7% to 1.7p.
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