Questor share Tip: Reed Elsevier is optimistic on 2011

While revenues were more or less unchanged at £ 6 06bn last year, the absence of write-downs - 177 m £ last time - and greatly reduced costs of restructuring saw all year profits Bond 77pc 768 m £ before tax.

At the time, analysts acknowledged the focus of Reed to the conduct of operational performance improvement. Further positive news came from Erik Engstrom, Chief Executive since the end of 2009, saying that the greater part of the Group of the restructuring programme are now completed. However, some analysts were downbeat, citing a worrying decline in the group legal and professional firms.

"The markets of the group be controlled pressure end-cycle on multi-year subscriptions, while Reed would give no indication where he expects legal margins to recover" said Numis. "" we do not consider as dear Reed 12 times earnings, but neither see catalysts in the short-term performance of the price part of the disk. ""

Other concerns came yesterday from Bernstein Research, concerned about the potential performance of science and technology from Elsevier in 2012. They emphasize the pressures encountered by academic institutions around the world: "while the evidence summary of the changes in the funding of academic libraries is still rudimentary, anecdotal evidence suggests that academic and research libraries are still affected by budget additional pieces in 2011." We believe that, overall, Elsevier revenues will increase 1pc in 2pc annually in the best of cases, well below the history at the rate of growth FP6 5MC. »

High-growth areas include enterprise risk, while the Group has accelerated the launch of new exhibits in the high-growth markets and sectors. And with more, Mr Engstrom includes the companies after the arm of Elsevier.

An other potential upside is that the chance of the group could possibly consider the sale of its exhibitions. There is certainly interest.

View the original article here

The FTSE could produce a positive surprise for brave investors in 2012

 Even the most bullish forecasters predict just a modest rise for the benchmark FTSE 100 index in 2012. Photo: GETTY

The domestically focused FTSE 250 fared even worse, falling 12.6pc over the 12 months as austerity measures and crumbling consumer confidence hit hard.

But will investors do any better in 2012? Will the UK's equity markets bounce back this year and compensate beleaguered investors for a dismal 2011?

The background noise is hardly encouraging. As my colleague Ambrose Evans Pritchard eloquently sets out, there is no quick or easy solution to the eurozone crisis - which has the potential to send London's equity markets spiralling back towards their 2009 lows of 3,600.

London managed to detach itself from the eurozone gloom last year. The FTSE performed relatively well, when compared to Germany's DAX which ended the year down more than 15pc and the French CAC which lost almost 18pc over 2011.

But could London really shrug off the exit of a peripheral euro member or even the collapse of the single currency that so many economists and politicians now predict?

Then there is the small matter of China: can the country's apparatchiks really engineer a soft landing for the over-heated economy? The latest economic data suggests it will be difficult to tackle inflation (and the property bubble driving it) without stalling economic growth.

The US could also throw London markets off course. Yes, election years have historically been good for stock markets. And we have seen more positive economics data in recent months, with fewer job losses and tentative signs of recovery in the US housing market, but few would bet on a smooth road to recovery from here.

Closer to home the prospects for the UK economy look bleak. Capital Economics is one of a number of economists that expect the UK to slip back into recession this year as the economy contracts by 0.5pc and unemployment rises above 3m.

It is hardly the best background for a market rally – so perhaps its not surprising that many expect the FTSE 100 to end 2012 even lower than it closed last year.

Even the most bullish forecasters predict just a modest rise for the benchmark FTSE 100 index in 2012. It is hard enough to find a serious commentator who predicts that the FTSE 100 will breach the 6,000 mark, let alone the 7,000-plus forecasts of only a few years ago.

Yet despite all the doom at 5,566.77 the FTSE 100 looks to be trading at historically cheap levels on a variety of measures – not least its dividend yield.

The blue chip index is yielding almost 3.5pc - double the meagre 1.75pc interest that can be earned in a National Savings account. With little prospect of interest rates rising in 2012 surely - argue the bulls - savers will be tempted to switch some of their savings into the market.

Markets have, of course, a record of catching out even the most experienced forecasters. Shortly before the 1929 stock market crash the respected economist, Irving Fisher, predicted: "Stock prices have reached what looks like a permanently high plateau."

So could the bearish forecaster be left red faced? The FTSE 100 undoubtedly has the potential to surprise on the upside this year – but you'd have to be very brave (and optimistic) to bet on it doing so.

There is however one sure-fire buy signal. Alex, the star of our daily cartoon strip. The investment banker has only been fired twice in his illustrious near-25 year career.

Both departures marked the bottom of the equity market.

View the original article here

Tom Stevenson: Income, not growth, is once again the main driver of returns

I looked for companies, usually small ones, with the potential to increase their earnings quickly and recommended buying them if that growth was not already "in the price".

It was a fairly mechanical process, which involved comparing the valuation of a company's shares with its profits growth to arrive at a measure we called the PEG, standing for Price Earnings Growth. Basically, a low PEG was good, achieved via high growth or a low valuation or a combination of the two.

You don't read much about PEGs these days for the simple reason that while cheap valuations are 10 a penny, high growth is a great deal scarcer.

The growth that we had got used to during the 1980s and 1990s was – to a larger degree than we thought at the time – a product of progressively cheaper money, consequently rising house prices and ever-increasing debt. That world has disappeared and with it, for the time being, the environment in which anyone would think seriously about launching a publication such as Investing for Growth.

The world investors find themselves in today is very different, at least in the developed world. A low-growth environment in which rapidly rising earnings are the exception. It is a world that investors before the 1980s would easily recognise, one in which income, not growth, is the principal driver of returns.

When investors come to expect double-digit capital gains each year, it is unsurprising that they are uninterested in the extra few percentage points of return chipped in by a company's dividend. It's nice to have, no more. But those kinds of super-charged returns have in recent years been rapidly wiped out by similar-sized falls so that the net gain after a so-called "lost decade" has been negligible.

Over very long periods, almost all the gains from investing in the stock market can be attributed to the reinvestment of dividends. We forgot this in the Investing for Growth years.

Something else we forgot during the low volatility years of what has been called the Great Moderation is that dividend income is a great deal more stable and predictable than economic growth, company profits and so share prices. Company bosses will do almost anything to avoid cutting their dividend because they tend to pay for it with their jobs.

Another thing we are going to have to get used to in our low growth but volatile world is persistently low interest rates. This environment of paltry returns from both cash and government bonds is another reason why investors are going to become increasingly attracted to companies able to offer a high and sustainable income.

For as long as inflation is still a problem, equity income also provides one of the few ways of generating a real return in excess of the cost of living.

The generation of that high and sustainable income is furthermore an indication of a company's quality. It is no coincidence that some of the most attractive dividend yields are currently being paid by the big multinational companies that are also most exposed to the places in the world where there is actually still some decent growth, the emerging markets.

Dividend income, unlike that from fixed interest securities like bonds, tends to grow over time. For the past 50 years or so that has meant investors have been prepared to accept a lower ongoing yield. But today many blue-chip companies are paying a higher yield on their shares than their bonds. High and growing income is a powerful combination.

With the developed world's baby boomers edging towards retirement, the demand for income-generating investments can only increase. If I were looking to relaunch that newsletter today, I can't help thinking it would be called Investing for Income.

Tom Stevenson is an investment director at Fidelity Worldwide Investment. The views expressed are his own. He tweets at
@tomstevenson63

View the original article here

Products: Markets are reluctant to sparkling diamond prices

"Diamonds international auction record price in 2010 illustrates the growing trend among the HNWIs in the world to see large diamonds as an investment alternative safe and strong growth," said the report. "The current request at the top of range of the market seems to be in large part of the Russia and the Middle East, but demand from Chinese and other investors in the Asia-Pacific is also growing rapidly," she added.

Diamonds are considered easy means for the transportation of wealth because they are small and precious.

This trend makes sense that a high proportion of the increase in the HNWI between 2007 and 2010 was in the Middle East. The number of super rich in the region increased by 10 4pc, wealth report, said, with only Africa, given the greater growth, 11 1pc for three years.

The number of super rich grew by 8 FP6 in the United States in the period and 6 3pc in Europe.

However, although sharp rises in prices could cause some of the world to think twice about splashes, HNWI there is no doubt that prices are likely to remain high for some time - or even to reach much higher levels.

Supply remains very tight. According to a study of the Canada (RBC) Royal Bank, the world's supply of rough diamonds decreases since 2006, reflecting aging of some larger mines of the world and a lack of significant new production being match up to.

"Partly the scarcity of new projects reflects a surplus of diamonds in the 1990s, which discouraged exploration and the recent financial crisis that saw the recovery of exploration budgets significantly, so that even the majors have been trimming expenses of exploration," said Des Kilalea of RBC. "De Beers, for example, used to pass about 100 m $-150$ m (62 m £-£ 93 m) annually on exploration and development and password now less than a third, with $43.". 3 M in 2010 on the programmes in Angola, Botswana, Canada, India, South Africa, "noted."

The demand for diamonds is likely to continue to strengthen, fueled by the gentrification of Asia and the growing prosperity in the Middle East. Traditional markets such as the United States and the UK will also retrieve.

According to de Beers estimates, there was a significant change in the market of the diamond between 2000 and 2010.

At the turn of the century, the United States market represents sales of diamond jewellery 48pc, but this tomb to 38pc by 2010. India represents a statistically insignificant proportion of sales in 2000 - but by 2010, it absorbed 10pc sales.

RBC expects that China will be on 20pc of the world market over the next five to seven years, until of 11pc in 2010. According to De Beers, the diamond jewelry India demand increased 31pc last year and China increased by 25pc.

Therefore, although there are fears that prices will decline the request, the Outlook for diamond producers examines overall enough sparkling.

Products have flourished across in the last week, as the Greek vote for risky mode active austerity measures.

"The Greek"Yes"vote brought sighs of relief and risk reinvigorated the feeling of the market through various asset classes." The vote had wind of precious of refuge, but has been largely good for industrial metals, said Nick Moore RBS.

Base metals were the big winners, with experts saying that copper and aluminum should see the price increases this year. Copper acquired 3pc after the vote Greek and is now $9 400 tonne.

"Now that the worst of the uncertainty surrounding the Greece has been dispelled, market participants should begin to focus on the fundamentals again."

"Copper has always the fundamental best of all metals, and we see the price remaining well supported," according to Commerzbank analysts.

However, poor manufacturing data of China introduced a break for the rally Friday base metals.

The weakness of the dollar, which makes products cheaper for holders of other currencies, provided support. But figures showing Index (PMI Purchasing Managers China ') for June fell to 52 in may 50.9 dampened optimism earlier in the week.

The price of oil has been volatile since the international agency energy said it would release 60 million barrels of reserves for emergency on the market.

The price of crude oil Brent fell from $ 114 to $ 108 after the move, designed to dampen prices. It thereafter up to $112 and then fell $2 Friday at a little under $ 110 per barrel.

Analysts said the sharp fall in US stocks as major reasons why oil prices ended the week higher.

View the original article here

Protests forced the Bank of the Egypt and the closure of the market

Within a week, which saw investors nervous scramble gold, a hole from traditional bolt in times of uncertainty, Hisham Ramez also told Reuters Central Bank reserves were strong at $36bn, banks were liquids and any capital by foreign investor flight "hot money" would be short-lived.

The Egypt has endured for five days of often violent demonstrations with people on the streets, demanding the resignation of President Hosni Mubarak, which imposes a dusk to dawn curfew and ordered tanks in the streets to restore order.

Ramez said banks close on Sunday, adding: "it is just a precaution until banks are ready to start work on Monday."

He did not comment disorders.

Market stock of the Egypt, which dropped by 16pc in two days after the unrest erupted, is also closed Sunday. The Egyptian pound dropped to bottom of six years.

"It is obvious that the Central Bank was concerned an important Bank panics and foretelling on what they expect to happen in the coming days." It is a close to paralysis, said John Sfakianakis, an economist at the Saudi Fransi-Credit Agricole Bank.

Ramez said that while there might be a short-lived capital flight, the Central Bank and other banks Egyptians were in a position of strength and he was comfortable with reservations.

"All accounts are safe." Liquidity is here. Banks are liquid. Customer accounts are safe. Everything is in order. "We have no problem", he said.

"We're ready." "Our reserves are very strong," he said, adding that the Bank had not intervened, the currency market last week.

We're very comfortable"with reserves, he said.

Asked about the possible risk of capital flight, he said: "perhaps for a short period for foreign investors, for the"hot money", Yes. I think that things will soon be in order. »

View the original article here

Questor share Tip: Wm Morrison offers a fascinating history of growth

Supermarket chain focused on the Yorkshire Morrisons published the results of the exercise last week. Profit before tax in the year to January 30 increased 858 m £ 874 million pounds on sales of £ 16 5bn. Debt fell from 924 m £ 817 million to £.

The company has one of the strongest balance sheets in the sector. Almost 90pc of its properties are free, which means that it is much rich. Last week, the company said that it will return £ billion to shareholders and is committed to increasing its dividend at least 10pc for the next three years.

In addition to solid foundations, history of growth of the retailer seem persuasive. Morrisons supermarket is fourth in the United Kingdom, which is not a great place to be.

However, Dalton Philips, its CEO, energetic, is inciting the plans for growth on several fronts. Morrisons will launch a small chain of convenience stores along the M62 corridor and was purchasing dotcom businesses it seeks to move in internet shopping.

Last week she paid 32 million pounds sterling for a 10pc set in the site Web of New York FreshDirect, an eccentric but probably useful travel. He is also playing with addition of non-food product lines to its lines (including speaking them to George Davies, founder of the next, on the design of a line of clothing).

Remains 7 m UK households without easy access to a Morrisons, which means that there is great potential for new stores.

Morrisons trades on a 2012-2013 coefficient of 9.8 times. This is lower than its rivals. With a market capitalization of £ 7 5.3, it is second retailer listed in the United Kingdom after Tesco.

Surprisingly, it is useful as Marks & Spencer, Dixons and Ocado combined.

Paste the actions in your basket.

View the original article here

Prudential "spectacular" leads FTSE 100

A US Government report showing oil provides an increase in the last week and expectations that the OPEC countries are set to increase production to offset the loss of production in Libya, helped shares in the airline.

International Airlines Group (AIG), the company created from the merger of British Airways and Iberia, develop 4 to 232.6 p. Analysts said good results from Cathay Pacific has also acted as a positive indicator for the whole of the air transport sector.

While it may be good news for those of us Jet for fun in the Sun, he did not help oil producers. BP has fallen 8.75-485 p, as tullow Oil fell 47 percent to £ 14.13 to lead the losers of the FTSE 100.

Tullow fell after he did not meet the expectations of analysts despite an increase in 360pc in profits before tax declaration. The city was expecting profits of approximately 192 m $, but the company succeeded 152 m $.

Analysts also fear that Tullow is still awaiting final approval to start a project of $billion in Uganda. "We are at the stage now where all the main points have been agreed so we are just finalizing the documentation," said Chief Executive Aidan Heavey.

Phil Corbett, an analyst with RBS, said: "there is no precise timetable [to receive the approval of the Government of Uganda] which may be one of the reasons why the sharesfell." They were also disappointed on their results as well. »

Tobacco stocks were under pressure after the Government announced that it will force all retailers to keep cigarettes under the counter in April 2015.

british american tobacco, which makes cigarettes Dunhill and Lucky Strike, was second to bottom place in the FTSE 100, down 70½p at £ 24,36. The company is one of a string of companies to go ex-dividende on Wednesday.

"We are disappointed that Government did not properly into account the views of the tens of thousands of small retailers across the country who are concerned about the shop expensive refits, losing trade to large supermarkets and the black market."especially in a context of economic slowdown "said a spokesman of the bat.

However, Imperial tobacco, which collects a fifth of its revenue, to the United Kingdom saw its shares reach £ 19.78 66 p. The company, which Lambert & Butler, Embassy and John Player among its brands, had come under pressure earlier in the week when rumours of the hard-hitting proposals arrived to light.

Rolls-Royce WINS 19 p 619.5 after the aircraft engine manufacturer and Daimler, the German car manufacturer, announced joint plans to bid MD €3 (£ 2. 7bn) for the German manufacturer of engine and turbo Tognum.

Howard Wheeldon, a strategist at BCG partner, said: "Rolls-Royce is very rich at this time." "We wanted to see an acquisition and it is a logic".

Guy Brown, an Evo Securities analyst, said the agreement would be "further consolidate" Rolls position in the marine and energy markets.

Overall, the index FTSE 100 closed 37.46 points to 5,937.3. The FTSE 250 lost 13.32 points 11,730.2 points.

Restaurant Group was the highest place among the midcaps after the company behind the Frankie & Benny chains, Garfunkels and Chiquito reported increased 12pc year-round adjusted 56 m operating profits of £. It also pleased investors by announcing a rebound in the new year sale following disruption of snow in December.

John Beaumont, an analyst with Matrix Group, said: "we see the Group of decent restaurants as a quality with brands, well managed and, with the non-high street exhibition, it allows to avoid the fiercest competition. The shares closed up 26.3-306 p.

Yule catto was the biggest loser FTSE 250 after the rubber gloves manufacturer warned it's to be pressed by rising prices of raw materials, notably oil. James Tetly, Brewin Dolphin analyst, said: "the majority of the raw materials of Yule is in some way linked oil, and the recent escalation in the price of oil is therefore a concern".

The shares dropped 18.7 to 209 p despite the company, which was founded by Andrew Yule of Calcutta in 1863, better than expected profits of the reporting year. Profit before taxes reached £ 57. 8 m, compared to £ 7. 1 m in 2009.

Hargreaves lansdown has had a good last flourish in the FTSE 250 before his promotion to the index of trader in the quarterly reshuffle which comes into force Monday.

Shares of the company, founded and still 52pc owned by founders Peter Hargreaves and Stephen Lansdown, closed until 21 to 635 p after the strong demand of tracker Fund. Traders believe that trader trackers will be forced to buy all 9 m shares of the company closely.

ITV and wood Group, who are also promoted, has won 1 to 91 percent and lost 11½ to 655 p, respectively.

Bunzl, Alliance Trust and African Barrick Gold, societies relegated the bluechips in the midcaps, has acquired 10 to 734 p, 1.1 lost to 358 p and lost 12 to 535½p.

hansen Transmissions, up to 1.3-43 p, McBride, down from 0.7 to 140 p and Sportingbet, down 0.5 to 46.6 p p, are all to be relegated from the FTSE 250.

View the original article here