OILS:
ENI’s second-quarter net income of €1.348 million was higher than market expectations with robust results from the gas and power segment a notable feature. The Italian group could restart a share repurchase programme. Hold.
Shell may merge its Dutch and British holding companies that control 60 per cent and 40 per cent respectively. But Shell must address its poor exploration and production performance. Hold.
At December 31, Premier Oil had 175 million barrels of oil equivalent of booked reserves, and production of 35,000 barrels of oil equivalent a day, but can raise that to 55,000 barrels a day. Hold.
PREMIUM BRANDS & RETAILERS
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It is as good as it gets at Next, but its shares are now priced for perfection. I am selling at £14.92 but will buy again if they fall 20 per cent.
BMW’s record second-quarter profits were up 14.5 per cent at €1,084 billion. The risk of falling sales in the US given the weak dollar is real. But it is well positioned to grow strongly in China and Russia. Hold.
The number of passengers flying to the US and Canada in July rose 12 per cent to 1.98 million and 14.2 million passengers used BAA’s seven UK airports, an 8 per cent rise. Hold.
Tod’s first-half sales rose 12.1 per cent to €194.5 million. Its two core brands in shoes and bags, Tod’s and Hogan, showed 12.2 per cent and 14.3 per cent growth. Hold.
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FINANCIALS:
HSBC’s first-half profit leapt to a record $9.37 billion by courtesy of its US consumer finance arm, Household International, acquired last March for $14.2 billion. HSBC will buy a 19.9 per cent stake in the soon-to-be-floated Bank of Communications for $1.75 billion, its final investment in China in its own name. Hold.
Northern Trust is a well- managed trust bank. But unless there is a sharp fall in oil prices and surge of confidence in corporate earnings growth, niche financial stocks such as this one will lag. I am selling at $39.51.
PHARMACEUTICALS:
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Pfizer has been given regulatory go-ahead in the US to market Lipitor, its cholesterol-lowering drug, as a prevention for heart attacks. Hold.
Eli Lilly has won US regulatory approval for Cymbalta, to treat depression. Analysts predict sales of Cymbalta could peak at $3 billion a year. Hold.
TECHNOLOGY, MEDIA & TELECOMMUNICATIONS:
While Cisco’s high-margin routing and switching businesses make 65 per cent of revenue, total sales growth is likely to be 5 per cent. I am selliing the shares at $20.64.
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WPP raised pre-tax profit 14.8 per cent to £176.3 million and expects this year’s 13.8 per cent operating margin to be 15 per cent in 2005. But a bid for Grey Global, would hit the shares. I am selling at £5.90. We could buy back cheaper.
STELLA SHAMOON