May 22 (Bloomberg) — China is yet to establish a solid foundation for a recovery in industrial production, the Ministry of Industry and Information Technology said.

The ministry cited faltering export demand, “serious” overcapacity in industries such as steel, and falling company profitability, in a report posted on its Web site today.

Output growth may accelerate to 8 percent this quarter as stimulus spending takes effect and exceed 10 percent for the second half, the ministry said. That compares with a 7.3 percent gain in April and 5.1 percent growth in the first quarter.

A quarter of industrial companies posted losses in the first quarter, and 21 of 39 industries tracked by the ministry said profits worsened for the three months through March 31 from the first two months of this year, the report said.

The nation’s 72 big and medium-sized steelmakers posted 5.2 billion yuan ($760 million) in combined losses in the four months through April on falling prices and oversupply, the ministry said. About 40 percent of primary aluminum remains idle, it said.

Further to its earlier announcement in which SEGRO stated that it “reserves the
right to introduce other forms of consideration,” SEGRO wishes to clarify that
it “reserves the right to vary the form of consideration.”

Following a review of further advice received in relation to Brixton’s unsecured
bonds, the Board of Brixton wishes to clarify that the gearing covenants will be
tested on the basis of the net assets published in the half-year results. The
Board of Brixton remains focused on mitigating the risk of any covenant breach.

The Board of Brixton continues to progress its options to provide the Group with
additional financial flexibility. These options include a restructuring of the
Company’s debt arrangements, a potential equity raising and further asset
disposals.

London-based Mountgrange blamed the collapse on banks – particularly HBOS – scaling back their involvement in commercial property lending. Lloyds Banking Group, which now owns HBOS, said it could not comment because of confidentiality agreements.

The Caltongate scheme – which involved building a five-star hotel, homes and shops close to Waverley station – was opposed by heritage groups because it adjoins Edinburgh’s historic Royal Mile.

Mountgrange, established nine years ago by two well-known property developers, Manish Chande and Martin Myers, was also redeveloping land previously occupied by the Chrysler factory at Linwood, near Paisley, and was behind the Springfield Park retail development at Maidstone in Kent.

Given the revelations about a possible rights issue, coupled with a slight miss on the forecasts, we expect the shares to come under pressure today.

Refinancing concerns have abated, with $4.7bn in
new financing secured plus $1.8bn cash proceeds
from selling AngloGold shares this year. We
forecast year-end net debt/EBITDA for 2009
(including De Beers) at a reasonable 1.9x.

We address cash burn and refinancing concerns
at De Beers and Anglo Platinum, which we believe
have been overplayed.

We explore the possibility of an all-share offer
from Xstrata for Anglo as the surprise M&A event
of the year (see unsubstantiated press
speculation, Financial Times, 19 May

We have decided not to issue any new guidance for the half year or the full year because of the difficulty in forecasting revenues.
We anticipate that there will be some additional offset from fuel costs and we will deliver further cost reductions from capacity and other cost saving measures to mitigate the revenue deterioration

 Iberia merger announcement still a few months away — In note 21 of the
accounts, BA states that the merger will take several months to conclude.
Unusually, there is no mention of the Iberia merger in the main body of the
press release, which suggests it is not top of the agenda. We already expect the
merger to be delayed until the individual companies complete their crisis
restructurings and until the pension deficit and remedies are known later this
year.

“Meanwhile, the insurance sector continues to thrive claiming more than a quarter of the total top ten trades (27%) excluding banking trades. Aviva accounted for more than half of all the top ten insurance sector trades (53%) after reaching a payout deal on two of its UK life funds. However, the funds’ one million policyholders stand to receive around half of the amount they had expected under the new orphan assets deal. The insurance giant is celebrating a recent upgrade from ratings agency Moody’s to Aa3 with an A1 on its guaranteed senior debt based on its strong franchises and good quality corporate bond portfolio.

* New Competent Persons Report
* 8 oil prospects included – total P50 1 billion barrels recoverable
* Well 14/5-1A now classified by RPS Energy as a gas discovery
* Contingent Gas Resource declared
* Rig market continues to improve

Rockhopper Exploration plc (“Rockhopper”) (AIM: RKH) the North Falkland Basin
oil and gas explorer, is pleased to update shareholders with regard to ongoing
activities in its exploration licences.

A new Competent Persons Report compiled by RPS Energy (the “CPR”), the first
update since the time of admission to AIM in 2005, has been received.