FTSE in-depth: Centamin looks for Midas touch

By Geoff Foster for MailOnline
Updated: 02:55 EDT, 7 April 2011

Now that the dust has settled, a party including 11 City number crunchers are tomorrow attending a visit to Centamin Egypt's Sukari gold project in the eastern desert of Egypt.

They will see for the very first time the new underground development and hopes that the feedback should be bullish helped Centamin's shares advance to 150p before closing 7.4p better at 146.15p.

The stock collapsed from a January level of 175p to a low of 116.75p on mistaken fears that Mubarak's demise in Egypt would put a block on gold exports for the remainder of 2011 and could hit exports from its Sukari mine.

Sukari is located about 750 miles from Cairo in the Eastern Desert of Egypt.

Broker Oriel Securities will be on the trip and expects the rescheduled tour originally planned for the end of January will reassure investors and make abundantly clear that the stock has been heavily oversold.

Centamin recently commented that mining operations were unaffected by the recent political changes in Egypt and that it is still on track to produce 250-290 ounces of gold in 2011 at a competitively low cash cost of $450 ounces compared to the industry average of $585 ounces.

Oriel's Charles Cooper's short-term target price is 206p.

Closer to home, the Footsie rallied 34.07 points to 6,041.13 on expectations that the Bank of England will today leave UK interest rates unchanged at 0.5%.

The European Central Bank, on the other hand, is expected to hike rates by 0.25% to 1.25%. Wall Street rose 31 points in the early stages.

Better-than-expected fourth-quarter sales helped Marks & Spencer climb 20.4p to 360.75p and resuscitate the High Street.

Rival fashion retailer Next rose 65p to 2095.5p in sympathy, while Debenhams added 2.15p at 62.975p.

Beale, the 129-year-old Dorset-based department store chain in which entrepreneur Andrew Perloff owns 29.7%, dipped 1.25p to 29p following news of the reverse takeover of 19 department stores from the Anglia Regional Co-Operative Society.

Barclays advanced 8.05p to 294.64p on a Canaccord Genuity recommendation and target price of 330p. The broker reckons that regulatory uncertainty for the UK bank and others is likely to drop on publication of the interim Independent Commission on Banking report on Monday with the ring-fencing of retail operations already discounted.

Part nationalised banks Lloyds Banking Group added 2.34p at 61.21p and Royal Bank of Scotland 1.11p at 42.658p on hopes that the report will be a lot less onerous than feared.

TUI Travel moved up 5.9p to 236.59p after Citigroup upgraded to hold from sell. Punters have been loading up with stock this week amid revived speculation that TUI AG, which has a controlling interest in the Thomson Holidays and First Choice operator, could soon buy the remaining shares it does not already own in the group.

Persistent speculative buying on talk of a bid from privately-owned conglomerate Fosun International helped Coal of Africa touch 93p and close 4.25p better at 90.25p.

Online gaming firm Sportingbet eased 0.5p to 51.5p but Liberum Capital says the de-rating has gone far enough.

Despite the termination of bid talks with Unibet, the broker says there is still significant value inherent in the company's Australian business. It will generate close to £10m profits in 2011 with active customer growth of 91% and revenue growth of 56% in the first-half of the year.

XP Power, one of the leading developers and manufacturers of critical power control components to the electronics industry, surged 66p to 1829p following a bullish trading update.

Trading in the first quarter has continued to be strong and group revenues in the three months to end-March, grew by 37% over the same period in 2010.

Buyers chased mobile solutions company Globo, which has been growing strongly in the international mobile apps market, a further 2.88p higher to 24.88p ahead of annual results on April 19. The stock has soared over 40% since the end of March.

Ascent Resources edged up 0.25p to 5.38p. It recently raised £17m to develop its Slovenian gas project and it has around 20 other onshore, predominantly gas projects across Europe including Italy, Switzerland and The Netherlands.

Engineering group 600 closed flat at 33.75p following a £1.76m placing at 30.5p a pop. The cash proceeds will be used to finance working capital and investment in its Polish factory.

FinnCap's 12 month target price is 42p as the group is seeing a strong turnaround in trading with Poland pivotal in the company's plans to increase margins and stimulate sales growth prospects.