Dumping China for India?
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*** What are the hoteliers up to?
*** No move for interest rates...
*** Make the most of India...your investmentdestination...what happens this Valentine's Day...andmore.. ------------------- What's a golf course worth these days? Well, nearly£200m if you happen to be the lucky owner of theWarwickshire Belfry golfing venue. Hotel chain De Vereyesterday said it's to sell off its golf course and hotel and return cash to its shareholders.
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It's no wonder, then, that De Vere's share price shot upover 12% yesterday. It closed 62p up at 563p atop themid-cap 250 index. In fact, the hotel sector enjoyed goodgains on Thursday, trading 1% up. And has now gained over120% following its bull-run of the past two years.
Hilton Group also added 3% yesterday, to close as a topblue chip gainer on Thursday. Investors enjoyed news thatbroker Deutsche Bank upgraded the stock to a 'buy', addingthat 'substantial levels of cash' would be returned toshareholders as earnings start their recovery. Millennium &Copthorne Hotels gained 3% in sympathy to close at 389p.
De Vere's surge on Thursday could not save the FTSE250from slipping 2 points lower. It fell 0.03%, to close at7,345. Blue chips, however, remained strong, trading 9points up to close at 5,000. That's the first time in overtwo and a half years that the index has closed above the5,000-level. The All Share index also added 0.2%, to closeat 2,513.
Chemicals group ICI surged 12% after releasing betterthan expected results. According to the group, profitsincreased by 10% in the fourth quarter, with pre-taxprofits just short of £100m. Good results, traders saidyesterday, but were they worth the huge leap in the shareprice?
'A 12% rise does seem a bit excessive,' one trader toldReuters yesterday, 'It seems as though the hedge funds wererunning short positions. All of a sudden they're running into close them but it could all be different tomorrow.'
GlaxoSmithKline on Thursday said its profits rose 8% toover £6bn but no thanks to its drug-sales. Instead thepharmaceuticals group, hit hard by competition and a weakUS dollar, made its profits through cost-cutting. Accordingto Glaxo, even one of its best-sellers, its anti-depressantPaxil IR, saw a 50% fall in sales, following heightenedcompetition.
GSK closed 0.3% in the black, despite the lacklustreresults. Less luck for rival Shire Pharmaceuticals, whichtumbled 10% on Thursday. The fall followed news that Canadasuspended the drug group's attention deficit drug, AdderallXR, after a number of deaths were linked to the drug. Shireclosed 64p down at 577p &nbs ------------------ Mervyn King and his Monetary Policy Committee leftinterest rates untouched for the sixth straight monthyesterday. Following a two-day sit-down, the MPC kept ratesat 4.75% - while waiting for more economic news to tiprates one way or the other.
As things stand at the moment, the National Institute forEconomic and Social Research (NIESR) reckons that it is'desirable' for the economy to see further interest ratehikes. But Mr Market continued his staunch defiance as10-year gilts fell 2 basis point to 4.5%. Gilts aretraditionally seen as an indicator for future benchmarkrate movement.
And analysts will now anxiously await the MPC's inflationreport due out next Wednesday. While the inflation rateis low at the moment, should the MPC forecast a steadyinflation uptrend for the next few months, rates could bein store for more hikes.
And over in India, the benchmark Sensex index iscurrently trading around all-time highs. Although the indexinched 15 points lower yesterday, to close at 6,577, it iscurrently just shy of its unbeaten December record of over6,600.
In fact, Simon Wilson says in the latest MoneyWeek,there's good reason to choose India even above China as aninvestment destination. Not least because of the country'sfavourable demographic profile. Although India houses morethan 1bn people, around 600m are under the age of 25.
India also has a greater capacity for technologicalinnovation than China, and then there's the Western-styledemocratic systems present in India...yet not in China.
So how can you make the most of India's growth potential?Well, there are a number of funds available, such as theFidelty India Focus fund. Aberdeen also offers aconcentrated fund of around 25 stocks set to profit fromthe country's market performance called the AberdeenIndia Opportunities fund.
Also take a look at JP Morgan Fleming's Indian Securitiestrust a fund that has surged 134% over the last threeyears.
There are more Indian fund opportunities...more on waysto minimise your tax bill...and much more on why theanalysts reckon the oil sector deserves a closer look...inthe latest MoneyWeek.
Also: what the average American man will spend on hispartner on Valentine's Day on Monday...
Until then, have a relaxing weekend, Heather D'AltoMoney Mornin
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