UK Home Prices Rise; Chloride Group Soars 40%

Mayank Mehta
26 Apr, 2010
New York City

UK stocks closed higher after home prices increased in April and Carphone Warehouse raised its annual outlook again. Bank of Ireland to raise

[R]4:00 PM London, 11:00 AM New York – UK stocks closed higher after home prices increased in April and Carphone Warehouse raised its annual outlook again. Bank of Ireland to raise €3.4 billion. Chloride Group soared 40% after it rejected the takeover approach by Emerson Electric.[/R]

U.K. stocks rose for the second consecutive day boosted by gains in commodity prices and rising earnings expectations.

Bank of Ireland to raise €3.4 billion

Bank of Ireland Plc plans to raise as much as 3.4 billion euros or $4.5 billion to offset real-estate losses. The company aims to sell 500 million euros in shares to a group of institutional investors and an additional 1.9 billion stock in a rights offer, according to a statement released by the Dublin-based lender today.

Ireland’s banks need 31 billion euros in capital after “appalling” lending decisions left the country’s financial system on the brink of collapse, Finance Minister Brian Lenihan said last month.

Bank of Ireland is also offering to exchange some of its Tier 1 and upper Tier 2 bonds at a discount to face value of as much as 42%, the lender said. The capital gain generated by the exchange will be used to bolster the bank’s equity Tier 1 capital.

U.K. House Prices Rise

U.K. home prices rose in April at the slowest pace in three months as the inventory of homes for sale picked up according to data released by Hometrack Ltd.

The average home price increased 0.2% in April from March and gained 1.8% from a year ago month to £158,400 according to Hometrack.

Home prices in London increased 0.6% to £284,900, the largest increase of all ten regions tracked by the survey company.

“Rising unemployment, lack of mortgage funding, public spending cuts and the prospect of tax rises post-election, continue to act as a back-drop to a fragile and increasingly polarised housing market,” Richard Donnell, director of research at Hometrack said in a statement.

Chloride Group Rebuffs Emerson Electric’s Bid

Chloride Group rejected a new £723 million ($1.1 billion) approach from Emerson Electric anticipating a much higher bid from the U.S. industrials group. Emerson had offered 275 pence a share cash, 34% premium to the last closing price on April 22.

Carphone Raises Guidance

Carphone Warehouse Group PLC, the U.K. mobile-phone retailer said it expects strong earnings growth next year after it raised its full-year profit forecast for the third time in six months sending its shares higher.

Greece Financial Woes Continue

German Chancellor Angela Merkel said emergency aid would be withheld for Greece until the country shows it’s got a “sustainable, credible” plan to cut its budget deficit. Germany is expected to make a final decision in “few days.”

Greek bonds plunged today despite Greece’s optimism for activating the aid package co-financed by the euro region and the International Monetary Fund. Nervous investors are increasingly worried that Greece may not be able to meet its obligation of 60 billion euros in the next five years.

In London FTSE 100 Index closed higher 30.20 or 0.53% to 5,753.85 and the pound edged higher to close at $1.544 and to close at €1.159.

Gainers & Losers

Balfour Beatty plc rose 1.3% to 297.00 pence after the international infrastructure group estimated the completion of the sale of interests in two public-private partnerships for £24.1 million.

BP plc rose 0.5% to 643.50 pence and the energy explorer is working on a comprehensive oil well intervention and spill response plan following the April 22 sinking of the Transocean Deepwater Horizon drilling rig 130 miles south-east of New Orleans.

The Carphone Warehouse Group PLC added 2.7% to 200.00 pence after the electronics retailer lifted its annual outlook.

Chloride Group Plc surged 40.7% to 294.10 pence after the power peripherals supplier rebuffed an offer for the company at 275 pence per share in cash from the Emerson Electric Co.

Intertek Group plc fell 1.4% to 1,507.00 pence.

John Menzies plc rose 0.3% to 385.00 pence.

Lancashire Holdings Limited, the insurance company fell 0.4% to 470.00 pence.

LiDCO Group Plc fell 8.1% or $1.92 to $21.58 after the cardiac monitoring equipment manufacturer 2009 revenue rose 20% to £5.4 million from £4.5 million a year ago. Net loss for the year was £1.43 million or 0.87 pence per diluted share compared to net loss of £1.65 million or 1.16 pence per share a year ago.

Lok''n Store Group Plc surged 9.5% or $7.95 to $90.95 after the self-storage firm said first half revenue rose 2% to £5.2 million from £5.1 million a year ago. Net profit for the first half was £61,157 or 0.24 pence per diluted share compared to net loss of £480,162 or 1.92 pence per share a year ago.

Petrofac Limited added 1.4% to 1,197.00 pence after the oilfield support services group confirmed that its offshore engineering & operations business has secured a new contract with Britannia Operator Limited. The contract is worth £35 million over five years with a further five-year extension option for ongoing operations in the central North Sea.

Redrow plc advanced 2.5% to 154.90 pence.

UK Coal plc fell 2.6% to 55.00 pence after the coal miner said 2009 revenue fell 19.5% to £316.0 million from £392.5 million a year ago. Net loss for the year was £127.5 million or 72.9 pence per diluted share compared to net loss of £15.7 million or 10.0 pence per share a year ago.

The Weir Group PLC surged 10.4% to 1,034.00 pence.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 78 increased, 22 declined and 2 were unchanged.

British Sky Broadcasting Group Plc decliners in the FTSE 100 index with a loss of 2.38% followed by losses in Intertek Group Plc of 1.66%, in WPP Plc of 1.96%, in BP Plc of 1.95%, and in Reed Elsevier Plc of 1.47%.

Antofagasta Plc led gainers in the FTSE 100 index with a rise of 6.89% followed by increase in Invensys Plc of 4.33%, in The Royal Bank of Scotland Group Plc of 3.85%, in Eurasian Natural Resources Corporation Plc of 3.79%, and in Kazakhmys Plc of 3.50%.