Weekly market snapshot.xls

Weekly Market Snapshot
23 July 2010
James Hutson
Stress Test
The FTSE 100 staged a small recovery through the last week up +1.97% to Thursday’s
Adam Sketchley
close. The positive move higher was driven by the miners, with Antofagasta up +11.6% and
Kazakhmys up +10.7%. Government Bonds also produced some positive momentum over
Alex Holbech
the week, with yields broadly declining across the board. Meanwhile, Gold continued its
bearish retracement, with the price of Brent Crude progressing higher. On Friday, despite
Charlotte Watson
UK Q2 GDP coming in at 1.1%, nearly twice market expectations, the UK equity market
continued to trade broadly flat at midday as investors braced themselves for the publication
Tel: 0117 933 0020
of the European bank stress tests results (due out later today). Some 91 European banks
have been tested, and some are expected to fail those capital tests. Recapitalisations of any
failing banks could mean a call on markets, but also on the €750bn EU/IMF fund set up a
Source: DataStream
couple of months ago. Back here in the UK, the recent and severe refinancing of our own
tattered banking sector means little chance of failures here. For our mind, the most
sensible UK bank to play remains HSBC given its broad product array, global reach, solid
capital and liquidity position, and emerging market/Asian exposure.
The week ahead
Key economics - The week gets off to a quiet start, with US Homes sales data on Monday where
consensus expectations are looking for a positive rise of +20K from the previous figure of 300K.
On Tuesday we expect US Consumer Confidence numbers, where consensus expectations are 08-Jul 10-Jul 12-Jul 14-Jul 16-Jul 18-Jul 20-Jul 22-Jul forecasting a moderate decline to 52.0 from 52.9. Economic releases gather momentum onWednesday with German CPI and US Durable Goods figures. On Thursday, we expect the Market Performance (%)
Source: DataStream
release of the GFK Consumer Confidence data before Friday's US GDP and Michigan Sentiment S&P 500
National Grid (NG.L) - The utility company is expected to release an IMS on Tuesday. After the
NIKKEI 225
recent £3.2bn rights issue the company is planning to buy back some €450mn of its short dated MSCI EUROPE
bonds due to its long cash position which should help reduce the redemption burden over the coming years. On valuation, the stock currently trades on a PE of 10.4x and a PEG of 1.5x one year out, with a dividend yield of 7.1%.
Bond Yields
BP (BP.L) - The embattled energy giant is expected to announce Q2 results on Tuesday. The
Source: DataStream
Group recently announced the sale of $7 billion of assets to the Apache Corporation in order to Benchmark UK
provide further funds to meet liabilities caused by the Gulf of Mexico oil spill. Caution surrounds the tropical storm Bonnie and the knock on impact of the temporary suspension of operations in the Gulf region. On valuation, the stock currently trades on a PE of 6.7x and a PEG of 0.4x one year Benchmark US
Benchmark EU
Benchmark JP
Centrica (CNA.L) - The integrated energy company is expected to releases results on Wednesday
IBoxx Corp UK
and forms a core holding within the RD Balanced Model Portfolio. Positive news recently emergedregarding the Upstream business, with an encouraging second appraisal of a Gas well in the North Currency (% change)
Sea. On valuation, the stock currently trades on a PE of 12.8x and a PEG of 1.3x one year out, Source: DataStream
AstraZeneca (AZN.L) - The recently announced Crestor patent litigation victory produced a
positive reaction by investors, helping to drive the share price higher. Broker comments have also been rather positive, focusing on the likely success of ongoing litigation and FDA approval cases.
The pharmaceutical giant has been a recent addition into the RD Balanced Model Portfolio. On Commodities (absolute change)
Source: DataStream
valuation, the stock currently trades on a PE of 8x 2011E with a dividend yield of 4.9%.
Brent, curr ($)
Added to conviction list: National Grid 01/06/2010 444p, BP 09/06/2009 530p, Centrica 09/06/2009 231p, AstraZeneca21/06/2010 3044p Soya bean (c)
VIX (equity volatility)
Source: DataStream
UK Top Risers & Fallers
Source: DataStream
Sub sectors: top 3 risers (1w)
Sub sectors: top 3 fallers (1w)
Corporate Calendar
Source: Thomson
26/07/2010
27/07/2010
Ex Dividend
28/07/2010
29/07/2010
30/07/2010
Economics Calendar
Date
Estimated
26/07/2010
27/07/2010
28/07/2010
29/07/2010
GBP - M4 Money Supply (Final) (Jun) (MoM) GBP - M4 Money Supply (Final) (Jun) (YoY) 30/07/2010
USD - University of Michigan Sentiment (F) (Jul) Source: DataStream
Market Performance (% change)
Source: DataStream
FTSE ALL SHARE
FTSE SMALL CAP
FTSE AIM ALL-SHARE
UK Sector Performance
Absolute performance (£ %)
Relative performance (£ %)
Oil & Gas
Oil Equipment, Services & Distribution Basic Materials
Industrials
Consumer Goods
Health Care
Consumer Services
Telecommunications
Utilities
Financials
Technology
Key: CAGR = Compound Annual Growth Rate, RY = Redemption Yield, PBT = Pre Tax Profit This publication is provided solely to assist clients to make their own investment decisions. It may therefore not be suitable for all recipients and does not constitute a personal recommendation to invest. If you have any doubts as to the suitability
of these investments, you should seek advice from your adviser. The past is not necessarily a guide to future performance. The value of shares and the income from them can fall as well as rise and investors may get back less than they originally
invested. Any tax reliefs referred to are those currently applying. All estimates and prospective figures quoted in this publication are forecast and are not guaranteed. Rowan Dartington, its associate companies and/or their clients, directors and
employees may own or have a position in the securities mentioned herein and may add to or dispose of any such securities. Rowan Dartington is the trading name of Rowan Dartington & Co Limited. Registered in England & Wales No. 2752304 at
Colston Tower, Colston Street, Bristol, BS1 4RD. Rowan Dartington Limited is authorised and regulated by the Financial Services Authority.

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