European indices picked up the torch from their Asian counterparts to start the week in the green this morning, after weekend negotiations saw a deal agreed to avoid the collapse of the Cypriot banking system. Full details of the agreed terms remain sketchy, but it appears likely that savers with less than E100k on deposit will be protected – though the fact that such a decision had to be made at all shows how far we have fallen…
Financials have responded positively to the bailout deal, and leading the UK blue chip index early on are Aberdeen Asset Management who announced a big bump in assets under management – up 10% since the end of 2012 as inflows of new client money hit £3.5bn in the last two months. JP Morgan have taken a positive view of the stock’s medium term prospects, recommending that their clients take an overweight position with a price target of 532p.
Also edging higher are sector peers Schroders, up around 3% after being upgraded to ‘Buy’ at both Canaccord and RBC Capital Markets as the brokers take a bullish view of the fund manager’s Cazenove acquisition. Both firms site a 2400p price target.
Engineers Kentz are also forging their way higher as traders send the share better bid on news of improved full year revenues that fed a strong rise in pre-tax profits. CEO Christian Brown commented that the future outlook for the firm continues to be positive, with a strong order book heading into 2013.
Continuing their phenomenal recovery are travel group Thomas Cook, who see their stock over 6% higher on positive comments from JP Morgan, who added their weight to the recent rally with a 140p near-term price target. Given the 500% rally in the last five months, there is a feeling amongst some that the horse may already be out of the stable door…
A quiet day on the macro calendar may give way to afternoon speculation over the exact terms of the Cypriot package, though pre-market numbers from Dollar General may focus the minds of traders with an interest in the retail space.
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