Smith & Nephew stays on its feet
SHARES of Smith & Nephew were surprisingly steady on their feet at a flat 618p despite growing concerns about the replacement hip market. It follows news that 50,000 patients with ‘metal-on-metal’ hip replacements face increased checks amid fears they may cause a series of health problems.
Coming hard on the heels of the Medicines and Healthcare Products Regulatory Agency alert to the NHS on a wide range of implants, the British Medical Journal and the BBC yesterday said failing metal- on-metal hip replacements may harm more people than leaking breast implants made in France.
The joint BMJ and BBC report said hundreds of thousands worldwide may have been exposed to high levels of toxic cobalt and chromium ions that can seep into tissues and destroy muscle and bone, leaving some patients with long-term disability.
In the UK, 65,000 metal-on-metal implant operations have taken place since 2003.
S&N is Europe’s biggest maker of artificial hips and knees and needs any such controversy like a hole in the head. Last November it missed profit expectations, blaming disappointing margins in its key orthapaedics division. Patients were unwilling in the current economic climate to take the time off work to get a new hip or knee fitted.
Continuing its strong rally from a recent 52-week low of 9.5p, struggling UK holiday group Thomas Cook touched 29.75p before closing a sunny 5.25p higher at 28.25p. Early talk of a possible bid from rival TUI Travel (0.3p dearer at 198p) was discounted as dealers said it would never clear Competition Commission rules.
Thomas Cook reported an increased firstquarter loss of £91m and is still looking for a chief executive but the firm says an appointment should be made by the end of March.
Elsewhere, Federal Reserve chairman Ben Bernanke slammed world stockmarkets into reverse with some cautious comments in his semi-annual monetary policy testimony to Congress. His warning that the US jobs market remains far from normal and may require the Fed to launch more stimulus measures had fund managers trousering profits.
The Footsie, which had touched 5944.75 after the European Central Bank lent a further €529bn in three year loans to 800 eurozone banks, retreated to close 56.4 points lower at 5,871.51, while the FTSE 250 shed 79.63 points to 11,449.52.
Wall Street, which had closed above 13,000 on Tuesday for the first time since May 2008, lost an initial 23 point gain to trade 53 points lower on Bernanke’s comments. Earlier buyers had responded to news that US Gross Domestic Product had grown at a 3pc annual rate, logging the fastest gain since the second-quarter of 2010.
As the gold price took a hammering towards the close, Rio Tinto fell 146.5p to 3584p and Randgold Resources 210p to 7200p. BHP Billiton declined 82p to 2037.5p.
In the dog-house since the negative Indian Supreme Court ruling on its deferred sales tax benefits, Essar Energy declined 8.5p further to 104.9p. Credit Suisse downgraded to neutral from outperform and slashed its target price to 155p from 435p. The broker says it still offers a strong growth and long-term cash generation profile, but the market needs clarity on short-term finance and progress on negotiations with the state government.
Rumours of a pending lucrative contract helped support services group Capita add 16p to 767.25p.
Door step lender International Personal Finance jumped 23.5p to 247.5p after reporting record 2011 profits. Pre-tax earnings rose 9pc to £100.5m, driven by 9pc growth in customer numbers and 12pc growth in credit issued.the dividend is lifted 13pc to 7.1p.
Reflecting the improving UK housing market and its recent impressive annual results, property website Rightmove soared 86p more to a record 1446p. Online gaming firm Sportingbet fell 4p to 38p after posting a first-half loss of £7.2m compared with a profit of £19.6m last year, as the euro crisis kept punters on the sidelines. Sportingbet’s second and third biggest markets are Greece and Spain. Say no more.
Bears bit lumps out of Snacktime after the vending machines group warned results for the year to end-march 2012 will be materially below market expectations. The shares crashed to 36p before recovering to close 5.5p cheaper at 42p.
OPG Power Ventures, which owns and operates power stations in India, closed flat at 38.5p but should soon spark into life. A big seller has been cleared.
Cluff Gold eased 3.12p to 98.38p despite releasing encouraging drilling results for the Baomahun project in Sierra Leone. The results form the base for a resource update due by April 2012.Oriel’s target price is 126p. ÷ SOFTWARE minnow Imaginatik rose 0.12p, or 31pc, to 0.49p after announcing the signing of a new annual contract with a leading provider of healthcare services and medical research in the US. It comprises of an initial start-up phase worth about £76,000 in the current year and is followed by an ongoing annual contract worth £95,000 per year, with Imaginatik supplying its innovation software platform.