Get 40% Off
🔥 This hedge fund gained 26.16% in the last month. Get their top stocks with our free stock ideas tool.See stock ideas

Red Carpet For China’s Xi; Timid Gains In FTSE And Pound

Published 10/20/2015, 05:52 AM
Updated 04/25/2018, 04:10 AM
GBP/USD
-
UK100
-
BHP
-
AAL
-
CL
-
GLEN
-
RACE
-

The UK is giving a royal welcome to Chinese President Xi as the visit could lead to an additional £30 billion investment deal (on top of £14bn secured last year), create over 4000 jobs and also help UK exporters to expand their client base to a sizeable 1.5 billion people economy. Such a deal would take some pressure off the UK’s exporters, mainly concerned about a strengthening pound over the past months, and help improving the UK’s trade terms.

A stronger pound is the price to pay for lower deficit. Cable is testing 1.55 mark in early London trading. Trend and momentum indicators point on the upside. As long as the pound remains above the critical 1.5355 versus the US dollar (Fib 38.2% retrace on Sep 30 – Oct 15 rise), there is potential for extension of the bullish trend to 1.5608/15 (Fib minor 23.6% retrace / weekly target) then 1.5659 (Sep 18th high).

FTSE made an enthusiastic start in London, but rapidly lost conviction as losses in UK miners painted the market in red. Glencore (L:GLEN) (-2.32%), BHP (N:BHP) (-1.92%) and Anglo American (L:AAL) (-1.90%) are leading losses in London.

Anglo American will release its third quarter production update on Thursday and the fall in diamond production in the previous quarter could well weigh on Anglo’s second half revenues, after having grasped a decent 16% margin in the first half of the year. A deterioration in the revenue margin will interfere with management’s aggressive dividend policy and drag Anglo’s shares lower. Anglo’s adjusted EPS estimate has dropped by 6.70% over the past four weeks, and the stock price pared two-thirds of October gains already and one-third of brokers are positioned on the sell side. At 15 year lows, the company shares may well be undervalued. The twelve month average target price is £815p.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Chic! Ferrari goes public in New York

Retail traders love brands and admittedly Ferraro (N:RACE) is a glamourous and exclusive name to have in an investment portfolio.

Ferrari shares will be traded on the New York Stock Exchange from Wednesday and are expected to be priced in the range of $48-52.

Given the speculation around this IPO, investors are perhaps ready to rush in to buy Ferrari shares. If having a blazing-red Ferrari is a dream for many of us, owning the shares of the company could not be a major hesitation.

Hence, the price could well rise above the upper target range of $52.

After all, Ferrari is a luxury brand and we wouldn’t be surprised to see investors ready to pay the high price to acquire its exclusive shares.

Saudi runs out of fuel

Oil eases to $46 as Iran deal is getting close to a deal with Western nations.

Saudi Arabia is losing its breath in its fight for market share through cheap oil prices. The fact that Saudi delayed its payment to its creditors brings up the possibility of an agreement with other oil producers to constrict production and let the prices surge toward at least to $70-80 levels.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.