Top ten trades
Wednesday 22 February 2012 (until noon)
Source: TD Direct Investing

TD Direct Investing view:

'Gulf Keystone accounts for a massive 47.8 per cent of the top ten buys and 29.2 per cent of the top ten sells after announcing it intends to step up from the AIM market to a premium listing on the official list of the London Stock Exchange.

'Cove Energy accounts for 11.4 per cent after Royal Dutch Shell has made an agreed £992.4 million bid for the Mozambique-focused company.'

BUY
1. Gulf Keystone Petroleum, 47.8 per cent
2. Xcite Energy, 14.1 per cent
3. Tesco, 9.3 per cent
4. Range Resources, 6.0 per cent
5. Barclays, 4.9 per cent
6. Royal Bank of Scotland, 4.3 per cent
7. Bowleven, 4.0 per cent
8. Lloyds Banking Group, 3.6 per cent
9. Vodafone Group, 3.3 per cent
10. Asian Citrus Holdings, 2.6 per cent

SELL
1. Gulf Keystone Petroleum, 29.2 per cent
2. Xcite Energy, 14.6 per cent
3. Cove Energy, 11.4 per cent
4. Lloyds Banking Group, 8.6 per cent
5. Royal Bank of Scotland Group, 8.1 per cent
6. Barratt Developments, 7.4 per cent
7. Range Resources, 7.2 per cent
8. Ophir Energy, 4.6 per cent
9= Bowleven, 4.4 per cent
9= Afren, 4.4 per cent

The top ten Buys and Sells should not be taken as a recommendation to buy or sell any particular bond or stock, and it is not intended to offer any form of advice. Instead it is simply an indication of the general buying and selling trends amongst some TD Direct Investing customers, observed during the period stated.

According to figures from the Financial Services Authority (FSA), the largest monthly payout was in December, when £441 million was awarded to PPI customers.

In total, £1.9 billion redress was paid out by banks to customers last year.

The regulatory body said that 16 unnamed firms, accounting for the majority of PPI complaints, had provided their redress data for publication.

PPI was sold to consumers on the basis that it would cover debt repayments if they were ever out of work.

However, the industry was found to have mis-sold the insurance policies when it was revealed that some customers would not have been eligible to make a claim had they needed to.

Companies shelled out £215 million in compensation between January and June 2011 to customers that had complained about how they were sold PPI.

Despite the increase in the amount paid out towards the end of 2011, Richard Lloyd, executive director at consumer champion Which?, said the £1.9 billion is less than a quarter of what lenders expected to refund.

‘Too many people are still finding the claims process too lengthy, the banks must streamline the process to make it easier for people to claim,’ Lloyd added.

Which? pointed out that the end of the legal process in May last year, which saw the High Court dismiss legal challenges to the FSA’s PPI measures, should have seen companies deal with the complaints in the second half of 2011.

The FSA has received more than 1.5 million complaints about PPI since it took over regulation of PPI in 2005, it revealed last year.

The construction firm saw the growth come mainly through its housebuilding division, where revenues nearly doubled to £277 million and an increase in profit margins from 6.5 per cent to 11 per cent delivered a 254 per cent profit jump to £35 million.

The construction division did not fare so well, with a modest rise in revenues offset by a decrease in profit margins, which kept operating profit level at £10.9 million.

In light of the huge profit growth, the company has decided to increase its dividend per share from 4.5p to 9p.

Investors reacted positively to the profits and dividend increase, with shares in Galliford Try currently trading up 7.78 per cent at 540p at 12.30pm.

The company, which built the retractable roof over Centre Court at Wimbledon in 2009, had put in place a three year plan to substantially increase profits from its housebuilding division in September 2009.

Chief executive Greg Fitzgerald commented, ‘The group is confident that it is on track to deliver all the objectives of its three year housebuilding expansion plan during the current financial year, with our southern biased business performing strongly despite the general economic uncertainty.

‘The housing market has remained resilient and we are encouraged by the continued strength of the market during the first seven weeks of 2012.’

Fitzgerald explained that the company would follow up its housebuilding expansion by concentrating on the south of England.

‘This approach is expected to deliver revenue and profit growth and support an enhanced dividend and a progressive dividend policy going forward,’ he said.

The strong performance was driven by a 13 per cent rise in underlying profit in its beverage can business.

The packaging maker also announced its intention to sell its underperforming personal care division after it dragged down the profits on its plastic packaging business, and analysts estimate the sale could raise £350 million.

The firm, which makes cans for PepsiCo and Red Bull, as well as food and medical packaging, also saw a 22 per cent drop in its net debt to £1.3 billion and celebrated by raising its total dividend 20 per cent to 14.4p.

Rexam is currently leading the FTSE 100 risers off the back of its results, trading up 3.51 per cent at 397.9p at 11.55am.

Graham Chipchase, Rexam's chief executive, commented, ‘We are delighted with the continued progress of the business in 2011.

‘Our strong profit growth was achieved by a better-than-expected performance in our beverage cans business, primarily in Europe, and a continued focus on cost management.’

Chipchase indicated that the company held a cautious outlook for 2012, warning that a key product in its healthcare division was set to come off patent and that the company faced other cost challenges.

He added, ‘The volume environment for beverage cans remains robust, but we do not anticipate any turnaround in the performance of plastic packaging in the near term.

‘Overall, we expect 2012 to be another year of progress as we continue to focus on cash, costs and return on capital employed.’

The Luxembourg-domiciled fund, which launched on 31 January 2012, will invest in global government bonds, using a ‘fundamental framework’ to determine an issuer’s ability and willingness to honour its debt obligations.

In doing so, the fund will make no distinction between developed and emerging market sovereign borrowers, according to Pictet.

The asset manager has positioned the fund as an alternative to other bond strategies that rely on traditional market-cap weighted fixed income benchmarks, which it claimed suffer from ‘a number of structural flaws’.

‘A conventional debt-weighted index forces investors to buy the bonds of sovereigns that borrow the most, irrespective of whether that debt burden is sustainable over the long term,’ Pictet said in a statement.

The firm added that this also limits currency diversification.

Sebastian Eisinger, head of fixed income, commented, ‘As an alternative or as a substitute to traditional investing, investors should start by analysing the fundamentals.

‘Only then will they be able to reduce the risks and maximise the opportunities that are emerging in this period of rapid change for the world economy.’

Lead manager Benhaim is co-head of global and regional bonds at the group and has been managing its World Government Bonds fund since January 2009.

The wealth management group revealed that profit before tax on an IFRS basis jumped 30 per cent, from £84.2 million in 2010.

As the group includes a UK life assurance company, it incurs tax on behalf of policyholders. The IFRS (International Financial Reporting Standards) result is reported gross of both policyholder and shareholder tax.

However, overall pre-tax profit plummeted to £21.3 million, down from £161.9 million in 2010, figures showed.

In the year to 31 December 2011 the group saw new business profit soar 13 per cent to £246 million, compared to £217.8 million the previous year.

Chief executive David Bellamy (pictured) said that the 10 per cent rise in net inflows of funds to £3.3 billion took funds under management to £28.5 billion last year, up 6 per cent on 2010 when funds under management totalled £27 billion.

Bellamy explained that the increase in funds under management had enabled the group to grow dividends by 33 per cent in each of the last two years.

St James’s Place has proposed a final dividend of 4.8p, up 21 per cent on the 2010 dividend of 3.975p, and a full-year dividend of 8.0p, compared to 6.0p the prior year.

Bellamy commented that it had been a record year for the company in terms of new business, operating profit and funds under management.

‘This performance, in market conditions that were far from helpful, is a testament to the strength of the partnership and the breadth of our investment proposition,’ he added.

Bellamy said he was confident that the group would continue to achieve its more than 15 per cent per annum targets over the long term.

BlackRock announced that Little, who is director and portfolio manager on its UK equity team, would be taking over as sole manager with effect from 1 March 2012.

The management shake-up follows a period of underperformance for the UK fund, which sits in the IMA UK All Companies sector and has been under Lyttleton’s management since September 2001.

Over one year, the fund has returned investors just £874 on an initial £1,000 investment, and over five years the amount returned is £893 based on £1,000 invested, meaning that it is in the bottom quartile in both periods, according to FE Trustnet.

Little joined Lyttleton on the fund in 2011, having managed UK equity mandates for the company’s institutional clients for more than seven years.

BlackRock confirmed that Lyttleton would continue to manage its UK Dynamic fund and co-manage its UK Absolute Alpha fund alongside Nick Osborne.

Tony Stenning, head of UK retail at BlackRock, said, ‘Nick’s appointment to sole manager is a reflection of his strong track record of managing UK equity mandates and the importance of the core offering in the BlackRock UK equity product range.

‘He has a long track record of success and a strong reputation amongst the investor community for his stockpicking talent and with Nick as sole manager we are able to continue to provide a broad and diverse range of product solutions that meet our clients’ needs,’ Stenning added.

Earlier this month, Lyttleton was warned that the clock was ticking for his UK Absolute Alpha fund, having reported a one-year loss of 7 per cent.

Hargreaves Lansdown has already removed the fund from its Wealth 150 list of recommended funds and expressed disappointment at its performance last year.

The investment adviser, in its biannual 'Spot the Dog' report of open-ended funds, has identified 44 so-called ‘dog’ funds that have underperformed their benchmarks by at least 10 per cent cumulatively over three years.

The numbers have dropped from the August 2011 report, which saw 94 funds, managing £13.78 billion, in the doghouse.

Scottish Widows won the dubious honour of topping the ‘dog assets under management’ table, with four funds severely underperforming, managing a total of £2.28 billion, a quarter of all Scottish Widows' assets.

The underperforming funds were the Scottish Widows Global Select Growth, SWIP UK Income, Scottish Widows UK Growth and Scottish Widows UK Equity High Income.

The Bestinvest report covers only a small selection of funds, ignoring insurance, offshore, institutional and pension funds, funds with no three-year track record, the fixed interest, property and absolute return sectors, as well as several specialist sectors such as fund of funds and multi-manager.

Other large ‘dog’ funds were the £1.19 billion M&G Dividend fund, the £1.17 billion Schroder UK Mid 250 fund and the £730 million Standard Life UK Equity High Income fund.

Adrian Lowcock, senior investment adviser at Bestinvest, commented, ‘The overall value of assets invested in “dog” funds has fallen from its high in 2011. The report now excludes the last six months of 2008 when financial markets froze.

‘Unfortunately there are still some managers who have not woken up to the new market conditions.’

Lowcock added, ‘Charges remain a key concern to investors and, with "dog" fund managers taking home £133 million a year, nearly £400 million over the three years of underperformance, it is hardly surprising investors are concerned about fees.

‘Investors simply can’t afford to leave their precious savings languishing in "dog" funds and wait for the fund managers to do something about it.’

The wealth manager reported that profits were up in the year to 31 December 2011, on £30.1 million the previous year, while basic earnings per share increased 34 per cent to 66.7p from 49.8p in 2010.

In its trading statement, Rathbones revealed that funds under management rose to £15.85 billion last year, up 1.4 per cent from £15.63 billion at 31 December 2010.

The total net annual growth rate of funds under management for Rathbone Investment Management was 8 per cent in 2011, down from 10 per cent in 2010.

This comprised £0.31 billion of acquired inflows, compared to £0.60 billion in 2010, and £0.79 billion of net organic growth, against £0.64 billion in 2010.

The underlying net organic growth rate was equal with the previous year at 5 per cent.

Underlying net operating income in Rathbone Investment Management ended the year up 13 per cent to £135.1 million, from £119.8 million a year earlier, excluding gains on disposal of financial securities of £1.1 million in 2011.

Chief executive of Rathbone Brothers Andy Pomfret (pictured) said the company had achieved an increase in profits despite ‘often difficult market conditions’.

He added that Rathbones remained optimistic about the prospects for 2012 after the UK equity market ended last year on a ‘more positive note’.

‘There is no doubt that the uncertainties over Europe persist but these are balanced by indications that the world economy continues to grow and some developed economies are showing small signs of improvement, particularly the USA.’

Pomfret continued, ‘We are seeing signs of underlying cost inflation but we will continue to invest in and grow our business.’

The board has recommended a final dividend of 29p for 2011, up from 28p in 2010, making a total of 46p for the year.