LONDON (ShareCast) - Given the tidal wave of speculative money being pulled out of India and other emerging markets, the wonder, if anything, is that the Mumbai market has not fallen further, writes The Times´s Tempus. However, in the short-term Indian shares look deeply vulnerable and vehicles which invest in the sub-continent have been taking a thrashing. Longer-term, nevertheless, prospects remain bright, with strong, well-managed companies, a burgeoning middle class of consumers and workers and myriad under-penetrated markets, from shampoo to cement. "Nimble investors should be ready to buy the moment that the dust appears to be settling. That isn’t yet, however," Tempus adds.

It´s not cheap but after a consistently strong decade shares of marine engineering group James Fisher&Sons deserve a premium rating. The company has pursued a strategy of confining itself to niche waters, nurturing its expertise and then exporting it to fast-growing emerging markets. That drove a 15% improvement in interim profits before tax to £19.4m, while the interim dividend was lifted 10% to 46p. There seems no reason why the strategy, augmented by a string of useful bolt-on acquisitions, should not keep on delivering.

Yes, a possible downturn in the offshore oil and gas industry does pose a threat, given that it generates about 60% of group revenues. However, the firm is less vulnerable than others because it tends to service established, mature fields, not exploration projects — and after the Gulf of Mexico catastrophe, clients are trading up, which plays to Fisher’s strengths. Buy, says Tempus.

Wood Group shares plunged yesterday after the oil service group guided modestly lower on its forecasts for earnings growth at its engineering unit. Management had briefed to expect earnings growth of “around 15%” but now expects a more modest increase of between 10% and 15%. That was due to the fall-out from the recent rail tragedy in Western Canada which killed 47 people. It has also led to companies becoming reluctant to ship oil by rail, hence producing infrastructure bottlenecks and delaying investment decisions by oil and gas outfits in the region.

As well, and regarding the outlook for next year, Wood Group said the expected completion of the Mafumeira Sul project in Angola and the Ichthys development in Australia by the year-end pose “challenges to growth in 2014”. This implies that cuts to consensus forecasts will be seen in the coming days, increasing the group’s earnings multiple. The current 2013 earnings multiple is 13.3, falling to 11.6 next year, with a prospective yield of 1.7% rising to 1.9%. Wood Group has excellent medium-term prospects but the near term outlook is cloudy. The Daily Telegraph´s Questor team thinks that the shares should now be rated a hold.

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AB

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