It’s been another week where the FTSE 100 and Dow Jones have made small but steady upward gains, with the FTSE up 0.7% for the week (40pts) and the Dow up 0.7% for the week (75pts). The main news to come out this week has again been on the economy side rather than the company side, with the main drivers being bullish US labour figures and the fact that reports from two surveys showed that commodity orders from the Chinese manufacturing sector were on the up. Nevertheless there still was some interesting news to come out from the company side this week. To start, Daily Mail & General Trust (LON:DMGT) released a trading update stating that their half year results should show a significant improvement for the group, with profitability improving thanks to a turnaround in their consumer newspaper business where advertising has picked up strongly. This report comes not far on the back of their rival Trinity Mirror (LON:TNI) releasing a similar statement, showing that the advertising sector as a whole may in fact be on the road to recovery.
The next big piece of news from the company front came from BHP Billiton (LON:BLT) (the world No. 3 iron ore producer), who with Vale (the world No. 1 iron ore producer) agreed a new quarterly pricing system with the Japanese steel makers for iron ore. The significance of this is that it is thought that iron miners have lost out on over $20bn in profits due to the current annualised system as the volatility due to demand for iron ore has pushed the price up, which the miners missed out on due to the fixed pricing system. With this new system this should all change, as it should allow the miners to get a more what they would call fair price (closer to the spot market price), but it should also still give the steel makers some price security. It must be noted that this new method is not a foregone conclusion yet as Rio Tinto (LON:RIO) (the world No. 2 iron producer) has yet to move from the current annualised system to the quarterly, though they do hope to move over later in the year. The Vale chief, who until recently still backed the annualised system, changed his mind as a result of the…
