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CFD Traders DiaryNasty news from Tate & Lyle23/1/2007
There
was a shock in store this morning for holders of Tate & Lyle, where the end
of last week saw vague rumours of a bid at around 1000p a share. Tate said that pre-tax profit is likely to be
modestly below current market expectations following poor demand for its key
product Sucralose. Sales and profits of
Sucralose, which was previously seen as a fast growing part of the business,
will for the year to next March only modestly exceed the prior year due to a
slower than anticipated acceleration of uptake from major customers, it warned.
The overall effect will be to reduce
expected group profit below the market consensus, and the shares were down a
hefty 15% at 610p mid-morning.
The FTSE 100 index was actually just trading above parity as the mining sector
rallied with big hitters Rio Tinto
and BHP
Billiton all
seeing buying on firmer metal prices. The other big winner was Wolseley, which for
the second day shrugged off yesterday’s news on US job losses.
This morning’s eagerly awaited Competition Commission report on the big
supermarkets stressed it would not punish grocers, though it was concerned that
Tesco or any other supermarket might get into such a strong position that no
other retailer could compete effectively. The verdict was seen as not as severe as
expected, and Tesco, Sainsbury and Wm Morrison were little changed.
Shire Pharmaceuticals rose as it
agreed to license the North American rights to HIV drug SPD754 to Australian
biotech Avexa for US$10m. In addition to
the upfront payment, Shire will receive development and sales related
milestones and royalties, plus 8m Avexa shares, bringing its holding in the
group to just over 8%. WH Smith reported total like-for-like
sales fell by 6% for the 20 weeks to 20 January, though it says it delivered a
good profit performance in line with expectations. Logica
CMG reported that its margins increased in 2006 and it was likely to
deliver improved profitability over the year.
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