UK Indexes Soar; Man Group Net Falls

Arthi Gupta, Mayank Mehta and Sanjay Barot
27 May, 2010
New York City

UK stocks surged tracking gains in Europe and the U.S. after China denied media speculation that it may cut its holdings of European government bonds. U.K. retailers expect sales to fall in June. Weir Group, Mitsubishi Heavy Industries sign cooperation agreement.

[R]4:00 PM London, 11:00 AM New York – UK stocks surged tracking gains in Europe and the U.S. after China denied media speculation that it may cut its holdings of European government bonds. U.K. retailers expect sales to fall in June. Weir Group, Mitsubishi Heavy Industries sign cooperation agreement.[/R]

UK stocks gain after China denied a report that it was reviewing its holdings in euro-zone sovereign bonds. UK retailers expect sales to fall in June. The Weir Group PLC signs a cooperation agreement. Man Group Plc said net declined.

In London, FTSE 100 index soared 153.56 or 3.05% to 5,191.64 and the pound edged higher to close at $1.448 and to close at €1.181.

U.K. retailers expect another fall in sales in June, according to the quarterly Distributive Trades Survey published by the Confederation of British Industry.

The volume of sales on the high street during the last month was lower than a year ago, the report showed today. Further, the survey showed that price inflation continued to rise.

China''s State Administration of Foreign Exchange quelled rumors that it will be selling its stake in euro-bonds and reiterated that it remains a long term investor in Europe.

China''s State Administration of Foreign Exchange, issued a clarification about its reserve strategy today saying that it has no plans to conduct a review of its holdings of euro-bonds and that it views the region as among the most important for investing its $2.5 trillion stockpile.

The statement appears to rebut a Financial Times report on Wednesday that the regulator was discussing plans with foreign bankers in Beijing to diversify some of its estimated $630 billion in euro-bonds, amid concerns over the recent crisis surrounding sovereign debt.

SAFE said it views the euro-zone as ""one of the most important investment markets"" and as a key component in its strategy to hold diversified investments for the long term.

It also said it was confident the euro-zone would see its way through recent difficulties.

The Weir Group PLC said it signed a cooperation agreement with Mitsubishi Heavy Industries Ltd., to jointly develop activities in the UK nuclear reactor market under the brand WEIR-MHI.

Under the joint cooperation agreement, MHI will design and manufacture nuclear pumps for nuclear power generation, as well as pumping equipment across the ''conventional island'' of a nuclear power plant. Weir will provide project management, installation and commissioning and after sales, and will also be responsible for the implementation of site health, safety and environmental systems.

The primary focus of the agreement is on the UK nuclear new build market, however the joint cooperation may extend to other locations on an agreed basis.

Man Group plc, the alternative investment management business reported a decline in profit for fiscal 2010, as the assets under management dropped about 16% from last year. However, adjusted earnings per share and pre-tax profit exceeded the company''s own projections issued two months ago.

The company issued cautious outlook and said ''''expectations for 2011 remain measured.''''

Gainers & Losers

Alliance Pharma plc, the specialty pharmaceutical company closed unchanged at 155.00 pence.

Cobham plc, the defense and commercial aerospace equipment maker rose 1.2% to 228.70 pence.

Daily Mail and General Trust PLC fell 0.9% to 468.10 pence after the media group said first half revenues fell 10% to £957.7 million from £1.06 billion a year ago. Net profit for the first half was £92.7 million or 24.3 pence per diluted share compared to net loss of £172.9 million or 45.9 pence per share a year ago.

Ferrexpo plc, the iron ore miner rose 5.7% to 250.00 pence.

JJB Sports plc fell 3.7% to 19.50 pence after the sports retailer said fiscal year 2010 revenues fell 42.5% to £372.5 million from £647.8 million a year ago. Net loss for the year was £54.6 million or 14.39 pence per diluted share compared to net loss of £167.6 million or 59.14 pence per share a year ago.

Man Group Plc rose 8.0% to 232.60 pence. The investment management company said fiscal year 2010 revenues fell 46% to $1.35 billion from $2.49 billion a year ago. Net profit for the year fell 11.5% to $445 million or 24.8 cents per diluted share compared to net profit of $503 million or 28.4 cents per share a year ago.

PayPoint plc surged 14.6% to 271.25 pence. The cash and Internet payments company said fiscal year 2010 revenues fell 12.4% to £196.6 million from £224.35 million a year ago. Net profit for the year fell 7% to £22.1 million or 32.7 pence per diluted share compared to net profit of £23.8 million or 35.3 pence per share a year ago.

Tate & Lyle PLC fell 2.1% to 419.00 pence after the sugar producer said fiscal year 2010 revenues fell 1% to £3.51 billion from £3.55 billion a year ago. Net profit for the year fell 77% to £15 million or 3.3 pence per diluted share compared to net profit of £65 million or 14.1 pence per share a year ago.

QinetiQ Group plc surged 11.6% to 129.90 pence after the defense technology firm said fiscal year 2010 revenues rose 0.6% to £1.63 billion from £1.62 billion a year ago. Net loss for the year was £63.3 million or 9.7 pence per diluted share compared to net profit of £93.6 million or 14.3 pence per share a year ago.

The Weir Group PLC rose 1.7% to 900 pence.

Xchanging plc rose 2.3% to 179.80 pence after the outsourcing specialist announced that it has been awarded a multi-year claims processing contract renewal with one of the largest rental car companies in North America.