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Exel ( 875p

Exel's principal activity is the provision of supply chain management to a wide range of manufacturing and retail industries.

The focus of the group is on providing a superior service offering, combining global freight forwarding and contract logistics.

Recent full-year results were impressive and ahead of consensus. Management has stated that as a result of a reduced acquisition spend, it intends to pursue a sizeable share buy-back programme, which could amount to between 5pc and 10pc of the total share issue and would be earnings enhancing.

With the acquisition of T & B and Fujitsu, Exel has now gained critical mass in contract logistics in its key markets. However, some small bolt on acquisitions can still be expected, primarily in sea freight forwarding.

It is notable that much of Exel's growth came from continental Europe, which increased its share of divisional profits from 22pc to 35pc, whilst organic growth in Asia was slower as capacity constraints remain in this region. But 2005 should see more dedicated air freight services into Asia and we would expect shortages to ease, helping growth.

Therefore, despite the strong performance of the shares so far this year, the 18pc growth in dividend and share buy-back programme provide tangible evidence of management's confidence in the near term outlook and we continue to recommend investment in this company.

Standard Chartered 960p

Although headquartered in London, Standard Chartered is essentially an emerging markets banking and financial services group.

The group serves both consumer and wholesale banking customers with operations in over 50 countries in the developing world, the most important being Hong Kong, Singapore, India, Thailand, Malaysia and the United Arab Emirates.

Additionally, at the turn of the year, the group won control of Korea First Bank to give it a foothold in one of the region's most vibrant economies. Consumer banking generates the majority of profits (55pc), and the group has consolidated its position.

At the current price of 960p, we believe the shares offer good value in a sector that is certainly under pressure on the domestic front through the consumer's exposure to both secured and unsecured debt.

The group is projected to grow earnings consistently over the medium term and although the running yield of 3.1pc is slightly lower than average for the sector, we believe the dividend, which is well covered, will continue to grow at an above average rate.

On top of these sound and improving fundamentals, there is a possibility that the group could attract a bid from an international player looking to assert global ambitions.

By Aidan Dunstan of UBS Laing & Cruickshank
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Publication:The Journal (Newcastle, England)
Date:Mar 14, 2005
Words:433
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