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Short-term equity worries keep nervous investors on their toes
The doubts began to set in this week as to the sustainability of the recent market rally.
Taking a three-to-five-year view, one can see the value in equities, but on a short-term view – given the already sharp recovery which has been seen – investors seem to be becoming increasingly nervous.
However, the week's early concerns were somewhat abated by a strong showing from UK equities on Friday.
On Thursday, Sheffield-based SIG provided an example of the jitters which were hitting the market as the company announced – in a trading update – that both prices and volumes had been lower in the first quarter, and it predicted that full-year pre-tax profit would be at the lower end of analyst's estimates.
In this unforgiving market, the shares were marked down by more than 20 per cent on the day.
Cazenove compounded the woes of the company, downgrading the shares from Outperform to In-Line because of expectations of declining gross margins, weaker volumes and increasing debt.
On Friday, UBS cut their price target to 100p from 130p.
Industrial engineering firm MS International announce,d on Wednesday, that its diversity is helping it weather the global recession.
The Doncaster business said that while pre-tax profits for the year to the start of May dipped 7 per cent, to 4.92m, its defence division bailed out its struggling forgings and petrol forecourt businesses, which have been hit in the current difficult market conditions.
The defence division grew revenues 25 per cent over the year, winning sales with overseas shipyards and the Ministry of Defence.
MSI said that while it is hopeful of an upturn, it is planning for a tough year ahead.
Support services company Spice is beefing up its board with the appointment of two non-executive directors.
The Leeds-based company has appointed Martin Towers, a former finance director at Yorkshire Water's parent company, Kelda, and Julie Baddeley, a non-executive director of Greggs, Camelot Group and the Department of Health.
Mr Towers will assume the chairmanship of the group's risk committee and will become a member of the audit committee.
Ms Baddeley has held non-executive roles at Yorkshire Building Society, ComputerLand, and the BOC Group.
Separately, John Taylor, non- executive and deputy chairman of Spice, has announced his intention to retire.
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Saturday 11 February 2012
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