| Sector |
Mining |
Last closing price
(26/10/2009) (p) |
1262 |
| 52 week High/Low (p) |
1332/170.7 |
| Market Cap (£bn) |
6.93 |
Sector weight age by
Market Cap (%) |
3.17 |
| Average Volume (mn) |
3.1 |
| P/E ratio (TTM) |
13.76 |
Industry P/E
ration (TTM) |
14.11 |
TTM: Trailing Twelve Month
Daily chart (KAZ.L)
Business background and investment rationale
Kazakhmys PLC is an international natural resources company with its main operations in Kazakhstan and the surrounding countries of Central Asia. The company’s principal engagement is copper mining but it also has interests in zinc: silver, gold, power generation and petroleum.
Improvement in production
In the first half of 2009 Kazakhmys increased its copper cathode equivalent production by 8% on the previous period, reaching 170 thousand metric tonnes (kt). The growth was achieved using stockpiled ore and through productivity improvements. Kazakhmys also sold 200kt of copper cathode equivalent and delivered on all of its objectives to exceed production and sales targets. Increased production at several mines, the use of stockpiled material, reductions of inventory, improvements in recovery rates and other efficiencies all contributed to the firm’s strong performance.
Cost control
In light of deteriorating market conditions over the past year, Kazakhmys cost control in the first six months of the year has been above expectations; a testament to operational management’s ability to respond quickly to the challenging environment. Kazakhmys reduced its gross costs by 19% to 143 US cents per pound, compared to 177 US cents per pound in 2008. This sharp reduction was achieved through a mixture of active cost control, lower input prices, higher sales volumes and the 25% devaluation of the tenge (the official currency of the Republic of Kazakhstan in February 2009. By-product credits of $294m resulted in a net cash cost of 76 US cents per pound, which was below the 90 to 120 US cents per pound range that the group set at the start of the year and significantly better than the 116 US cents per pound average for the full year 2008.
Technical outlook
On the daily chart Kazakhmys is trading above the positive trendline and is consolidating between a tight range of 1250.0p and 1300.0p, not making a new high indicating a negative trend is forming in the stock. MACD (moving average convergence/divergence) is positive and 12 day EMA is above 26 day EMA on daily chart, but gap is closing and on a four hour chart 12 day EMA is below 26 day EMA indicate a negative trend has formed. 14 day RSI (relative strength index) has fallen from overbought level 70.0 not making a new high indicating negative trend. Positive DMI (directional moving index) is above negative DMI, and ADX (average directional index) near 26 indicating consolidation. Stock has resistance near 1168.0p and support near 1500.0p.
Trading strategy
The stock can be sold around 1300.0p with a profit target 1150.1p and stop loss of 1365.1p (Hedge position: Long position in spread betting with £1.34 bet per point).
| Sector |
Software & computer services |
Last closing price
(26/10/2009) (p) |
1410 |
| 52 week High/Low (p) |
1687/789.5 |
| Market Cap (£bn) |
3.46 |
Sector weight age by
Market Cap (%) |
15.99 |
| Average Volume (mn) |
2.59 |
| P/E ratio (TTM) |
31.75 |
Industry P/E
ration (TTM) |
5.86 |
TTM: Trailing Twelve Month
Daily chart (AU.L)
Business background and investment rationale
Autonomy Corporation PLC develops and distributes software and is engaged in related support, maintenance and consulting services. Autonomy’s technology underpins applications which are dependent on unstructured information including: call centres, customer relationship management, knowledge management, enterprise portals, enterprise resource planning, online publishing and security applications.
Strong organic growth
In a third quarter statement released in October 2009, Autonomy reported record results with revenues up by 51% to $191.6m. The climb from last year’s $127.1m of revenue was driven by strong organic growth and the Interwoven PLC acquisition in March 2009. Gross profits (adjusted) were up by 40% to $164m from $117.3m in the same period last year. In the third quarter 2009, Autonomy won contracts with Alstom, Arcelor Mittal, American Medical Association, AT&T, Avid, Bank of America, BBC, Butterfields, Boeing, Citi, CVR Energy, Eli Lilly, Fidelity, Hammonds, Ikea, Lockheed Martin, Morgan Stanley, Nikon, Pfizer, Qwest, Sprint, Staples, Target and Wolters Kluwer. The company also picked up significant deals with multiple government, defence and intelligence agencies in the US, UK, European Commission, New Zealand, South Africa and the UAE. The company signed 11 original equipment manufacturer (OEM) deals, including new and extended agreements with Adobe, Kana, Axway and Websense.
Launch of new products
During the third quarter of 2009, Autonomy extended its market leadership by introducing key new and upgraded technologies. These included the launches of:
- IDOL SPE, an $18bn database market into Meaning Based computing.
- The world’s first hosted web landing page solution, enabling online marketers to rapidly build and optimise landing pages in a secure, private cloud.
- The first cloud-based archiving solution tailored for law firms, enabling them to reduce costs and rapidly respond to eDiscovery requests.
- Autonomy's Automatic Spoken Language Identification (ASLI) module, enabling call centres, media organisations and global enterprises to instantly recognise the spoken language in media files and live calls.
Technical outlook
Autonomy has rebounded from its high of 1687.0p and is just trading above positive trendline joining October 2008 low of 789.5p. Stock is also trading below 20 and 50 day EMA indicating negative trend. Momentum oscillator MACD is negative and 12 day EMA is also below 26 day EMA indicating, that it will fall further if it couldn’t hold support level of 1400.0p. 14 day RSI is near 40 and stochastic below 20 indicating negative. Negative DMI is above positive DMI, supporting weakness in stock. Stock has support near 1560.0p and resistance near 1300.0p.
Trading strategy
Stock can be sold near 1450.0p with a profit target of 1282.8p and stop loss of 1522.86p (Hedge position: Long position in spread betting with £1.20 bet per point).
WS Atkins PLC
On the daily chart, WS Atkins hit a stop loss of 592.3p and is trading near an entry point of 624.0p. MACD is negative while 12 day EMA is below 26 day EMA, indicating consolidation and a recent fall in stock. 14 day RSI is near 50 showing some strength in trend. 14 day negative DMI is above 14 day positive but falling and ADX is near 20, both of which indicate consolidation. All positions should be closed for the stock.
Imperial Tobacco Group PLC
Imperial was still trading above 1800.0p last week which indicates trend for the stock is positive. MACD is positive and 12 day EMA has crossed below 26 day EMA which indicates the recent fall from 1856.0p. 14 day RSI is above 50 showing strength in trend. 50 day EMA is still above 200 day EMA supporting an uptrend. 14 day positive DMI is above 14 day negative DMI and ADX is near 20 indicating a constant rise in the stock.. Stock should be a hold reduced profit target of 1850.0p.
Babcock International Group PLC
On the daily chart, Babcock is rebounding towards its recent high of 598.0p indicating that an upside breakout is near. MACD is positive and 12 day EMA still below 26 day EMA with the difference closing up, indicating an uptrend is forming. 14 day RSI is above 50 which indicates strength in trend. Positive DMI is above negative DMI which indicates a positive trend. Stock should be a hold with a profit target of 600.0p.
GlaxoSmithKline PLC
On the daily chart, GlaxoSmithKline is consolidating near 1250.0p after making a high of 1286.0p last week. MACD is positive and 12 day EMA has just crossed below 26 day EMA indicating a recent price fall.14 day RSI is above 50 indicating strength in trend.14 day positive DMI is above 14 day negative DMI and ADX is near 20 indicating consolidation. Looking at the recent fall in the prices stock should be a hold with a reduced profit target of 1300.0p.
Fidessa Group PLC
On the daily chart, Fidessa hit the profit target of 1310.0p after breakout from its upside range of 1200.0p. MACD is positive and 12 day EMA is above 26 day EMA, indicating an uptrend. 14 day RSI is at 75 showing overbought. 14 day positive DMI is above 14 day negative and ADX is near 23 indicating an uptrend. All positions should be closed for the stock.
Bellway PLC
On the daily chart, Bellway is making a downtrend and has fallen back below the key support level of 800.0p. Momentum oscillator MACD is negative and 12 day EMA is below 26 day EMA indicating a negative trend. RSI is near 36 indicating weakness in strength. Stock has resistance at 900.0p and support near 720.0p. Looking at the negative trend, stock should be a hold with a reduced profit target of 800.0p.
Aquarius Platinum Ltd
On the daily chart, Aquarius is consolidating between 290.0p and 300.0p, with a higher low indicating an uptrend. MACD is positive and 12 day EMA is above 26 day EMA, indicating the upside trend is still intact. 14 day RSI is above 50 showing strength in trend. ADX is below 20 indicating consolidation, with 14 day positive DMI above 14 day negative DMI indicating positive trend. Stock is also above 20 day and 50 day EMA which supports strength in trend. Stock should be a hold a reduced profit target of 315.0p.
ARM Holding PLC
On the daily chart, ARM was trading above the key support level of 150.0p and above the trendline joining the October 2008 low, which indicates the long-term positive trend is intact. Momentum oscillator MACD is positive and 12 day EMA is below 26 day EMA indicating the recent fall and consolidation between 150.0p and 160.0p. RSI is near 60 indicating positive a trend. 14 day positive DMI is above 14 day negative DMI and ADX is near 30 indicating an uptrend. Stock should be a hold reduced profit target of 163.0p.
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This report has been issued by CSS Partners LLP (“CSS Partners”). CSS Partners is an appointed representative of Charles Street Securities Europe LLP (“CSS”) which is authorised and regulated by the Financial Services Authority in the UK. It constitutes non-independent “investment research” as contemplated by the FSA Rules and is thus considered a marketing communication. This report was prepared by Kuldeep Bhati who is employed as an analyst at CSS Partners and as such does not conform with the FSA definition of independent investment research and as such is not subject to the rule of not dealing ahead of distribution of the marketing communication and was not prepared in line with the legal requirements for independent communication.
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Risk Factors
There is no certainty that the recommendations will be successful or that they will make money for investors.
There is no certainty that execution prices can be achieved, either in opening or in closing a position.
There is considerable risk operating in equity, futures, options and spread betting markets and investors need to be able to sustain a total loss of capital along with unlimited liability. Potential investors are recommended to consult a financial adviser before entering into such positions.
Regulatory disclosures
In accordance with the Conduct of Business Rules COBS12.4.7R (i) in the preparation of the report the analyst used price and volume charts provided by independent data suppliers and applied technical analysis tools of investment and trading evaluation in arriving at his recommendations, ii) all recommendations made by the analyst are followed up in subsequent reports until the closure of a position, iii) there is no certainty that any recommendation will be successful or that technical analysis should be used exclusively to arrive at investment decisions.
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CSS, CSS Partners and their respective officers, directors, shareholders and /or partners may have a shareholding in the companies reviewed in this report. They will not have access to this report until it is published, except those responsible for compliance issues concerning this report.
The research analyst responsible for the content of this research report certifies that: the views expressed and attributed to the research analyst or analysis in the research report accurately reflect his personal assessment about the subject securities and issuers and/or other subject matter as a appropriate and no part of his compensation was, is or will be, directly or indirectly related to the specific recommendations or views contained in this research report. On a general basis, the efficacy of recommendations is a factor in the performance appraisals of analysts.
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Distribution of recommendations for the period 1st July to 30th September 2009:
| |
% Distribution of recommendations |
No of recommendation |
| Buy |
81% |
21 |
| Hold |
0 |
0 |
| Sell |
19% |
5 |
The first column displays the % distribution of recommendations made by CSS Partners in this Technical Analysis Trading programme and the second column shows the numbers of such recommendation. Neither CSS nor CSS Partners has any investment banking relationships with any of the companies covered in the Technical Analysis Trading Programme, namely the companies in the FTSE 350 index.
Your attention is also directed to the terms of our client agreement with you that covers the provision of this service. To the extent that there is any conflict between the above and the client agreement, the provisions of the above disclaimer will take priority.
