View from the City: Brokers' reports

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Northern Foods

Ominous. ING Barings abandoned its buy recommendation on Northern Foods this week (to a hold) and told clients that "ahead of the trading statement due at the end of January, we are getting a few cautious noises from the company". Apparently, it sounds as if the peak pre-Christmas sales week for Northern's range of ready meals and upmarket treats came later than in other years. This could have resulted in production inefficiencies and extra overtime costs.

Oxford GlycoSciences

Goldman Sachs was this week predicting that buyers of Oxford GlycoSciences could expect to make 20 per cent on their investment within nine months. The broker's confidence stemmed from a new agreement between OGS and its existing drug firm partners to develop a raft of products to tackle breast cancer. The first is to enter clinical trials in a year or so. Goldman Sachs reckons regulatory approvals for Vevesca, the treatment for Gaucher's disease that is OGS's lead product, should boost the shares around the middle of the year.

William Morrison Supermarkets

CSFB says William Morrison is unique in UK food retailing, a double-digit growth story with a strong management and an exemplary track record. Although petrol sales were down over Christmas, CSFB estimates the group may, in fact, have made more money out of motorists, and there has also been good news on fresh food, where little stock went to waste over the holidays.

Majestic Wine

Teather & Greenwood is tipping the wine warehouse group Majestic Wine, whose newly acquired French business has been racing ahead. There is no shortage of growth in the UK, either, says the broker. "It is difficult for a specialist high-street operator to match the range and availability of a Majestic Wine warehouse. There is every reason, therefore, to suppose that it should be able to retain a high proportion of the customers who have defected from competitors."

Cordiant Communications

The advertising firm Cordiant's presence in Korea could provide opportunities this year, ING Barings predicts. Hyundai, Cordiant's largest client, is likely to be among many local firms increasing marketing spending around the World Cup. ING has upped its rating on Cordiant to a buy. A cautiously optimistic trading statement from Aegis, the media buying group, suggested that the global advertising marketplace is showing tentative signs of increased activity.

Orange

This week, Lehman Brothers was again telling clients to buy shares in Orange, the mobile phone group. The investment case was exemplified, the Lehman analysts said, by particularly strong subscriber figures in France. Orange is likely to benefit further in France from a reduction in competition, because the third-generation mobile phone licence process is likely to leave a three-player environment.

s.foley@independent.co.uk

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