UK MARKET TALK ROUNDUP: BROKERS COMMENTS -3-

22nd Jun 2010 10:02

0611 GMT [Dow Jones] PREVIEW: New Zealand's 1Q current account deficit expected to narrow, may record surplus as boosted by improvement in trade balance, according to economists. According to median forecast from Dow Jones poll of 9 economists, 1Q current account deficit at NZ$250 million vs NZ$3.57 billion in 4Q; deficit in 12 months to Mar. 31 expected at NZ$5.03 billion, 2.7% of GDP, vs NZ$5.47 billion in previous quarter. BNZ economist Craig Ebert says 1Q balance could be close to flat due to "seasonally high exports and seasonally low imports." ANZ Bank senior markets economist Khoon Goh says deficit likely to widen from now on "improving corporate profitability, rising borrowing costs and the strengthening in demand." ([email protected]) 0609 GMT [Dow Jones] Stronger Aussie bond prices today reflect overreaction to yesterday's announcement China will allow greater flexibility for yuan, says Rory Robertson, interest rate strategist with Macquarie. Aussie 3-year recently up 6 ticks at 95.06, 10-year up 4 ticks at 94.585. "The Chinese announcement produced a very upbeat knee-jerk reaction in risk markets around the world and a down move in risk-free markets, but it has been quickly unwound today. Look at the bounce in U.S. equity markets yesterday, that lasted about an hour," says Robertson, who notes China announcement was already in the works "for a while." ([email protected]) 0657 GMT [Dow Jones] Whitbread's (WTB.LN) first-quarter performance is strong, says Credit Suisse. Premier Inn's sales growth of 10.5% beats expectations of a 7% rise, CS says. "Greater visibility on margins will likely only come at the 1H stage but we expect consensus numbers to increase today," CS says. Outperform rating, 1812p target. Shares closed Monday at 1478p. ([email protected]) 0650 GMT [Dow Jones] Chemring Group's (CHG.LN) 1H earnings are slightly below forecasts, says Execution Noble, with the operating profit at GBP52M versus the brokerage's forecast of GBP56M and revenues of GBP256M versus expectations of GBP259M. Says this leads to 1H EPS growth of 10%, compared with Execution's and consensus FY forecast of 20% EPS growth. But says the interim dividend increase of 21% should be seen as a sign of confidence. Given the brokerage's negative view of the outlook for calendar year '11, and with the stock still not far from its all time highs, maintains sell rating. Shares closed Monday at 3310p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 22, 2010 05:02 ET (09:02 GMT)