FTSE Gains; UK Net Reserves Rise

Arthi Gupta, Mayank Mehta and Sanjay Barot
03 Jun, 2010
New York City

UK indexes gain on positive economic data and earnings momentum. UK house price index rises 0.5% month-on-month and service sector expands for a thirteenth consecutive month in May.

[R]4:00 PM London, 11:00 AM New York – UK indexes gain on positive economic data and earnings momentum. UK house price index rises 0.5% month-on-month and service sector expands for a thirteenth consecutive month in May.[/R]

UK net reserves rise in May. Johnson Matthey Plc quarterly net declines and Kingfisher plc sales remain flat.

ARM, IBM and allies announce the formation of Linaro, a not-for-profit open source software engineering company.

In London FTSE 100 Index closed higher 74.27 or 1.44% to 5,225.59 and the pound edged higher to close at $1.468 and to close at €1.197.

The average price of a property in the UK is less than 10% below the peak recorded in October 2007, the Nationwide Building Society said today.

The house price index rose 0.5% month-on-month in May, following a revised 1.1% rise in April. The average price of a UK property increased 12.2% to £169,162 in May from £167,802 in April. On an annual basis, the pace of growth eased to 9.8% from 10.5%.

British service sector expanded for a thirteenth consecutive month in May, according to a survey data released by the Markit Economics today.

The headline seasonally adjusted business activity index recorded 55.4 in May, slightly higher than April''s 55.3.

UK''s net reserves rose $731 million to $34.36 billion in May, according to figures released by the HM Treasury today. Net reserves amounted to $33.62 billion at the end of April. Gross reserves increased to $71.81 billion from April''s $71.13 billion.

The Bank of England''s net holdings of foreign currency and gold fell by $3.05 million in May, bringing the end-May total to negative $0.92 million compared with $2.13 million at end-April.

UK-based chip designer ARM Holdings Plc. announced the formation of Linaro, a not-for-profit open source software engineering company, in alliance with technology companies Freescale Semiconductor Inc., International Business Machines Corp., Samsung Electronics, ST-Ericsson and Texas Instruments Inc.

ARM said Linaro will provide new resources and industry alignment for open source software developers using Linux on the semiconductor System-on-Chips (SoCs). Linaro will work with Linux distributions to create regular releases of optimized tools and foundation software that can be used widely by the industry, increasing compatibility across semiconductors from multiple suppliers.

Linaro''s base of software and tools will be applicable to a wide range of markets, helping reduce time-to-market for products such as smart phones, tablets, digital televisions, automotive entertainment and enterprise equipment.

The company''s first release is planned for November 2010.

Prudential Plc confirms termination of its agreement with American International Group, Inc. for its combination with AIA Group.

BP Plc agrees to fund U.S. government''s plan for the construction of six sections of the Louisiana barrier islands.

Gainers & Losers

Aveva Group Plc rose 1.5% to 1,197.00 pence after the engineering software maker today announced the acquisition of a Danish company, Logimatic Software A/S for cash consideration of approximately £12.8 million funded from existing cash resources.

Helical Bar plc rose 2.3% to 300.80 pence. The commercial property company said fiscal year 2010 revenues fell 17.6% to £67.4 million from £81.8 million a year ago. Net profit for the year was £9.6 million or 9.1 pence per diluted share compared to net loss of £53.6 million or 56.6 pence per share a year ago.

Johnson Matthey Plc rose 1.5% to 1,579.00 pence after the specialty chemicals company said fiscal year 2010 revenues were flat at £7.8 billion. Net profit for the year fell 6% to £164.2 million or 77.3 pence per diluted share compared to net profit of £174.1 million or 82.1 pence per share a year ago.

Kingfisher plc rose 2.4% to 229.20 pence. The home improvement retailer reported first quarter sales fell 1.8% in like-for-like sales. Total sales in the 13 weeks ended May 1 were flat on a reported basis and fell 0.2% in constant currency terms.

McKay Securities PLC rose 3.3% to 153.00 pence. The commercial property investment company said fiscal year 2010 net rental income fell 17% to £15.6 million from £18.7 million a year ago. Net profit for the year was £15.4 million or 33.17 pence per diluted share compared to net loss of £100.9 million or 220.26 pence per share a year ago.

Quintain Estates and Development plc fell 2.4% to 49.00 pence after the property company said fiscal year 2010 revenues fell 14% to £56.9 million from £66.0 million a year ago. Net loss for the year was to £8.2 million compared to net loss of £106.2 million a year ago.

The Royal Bank of Scotland Group plc, the banking and financial services group rose 2.4% to 46.24 pence.

Severfield-Rowen Plc, the structural steel supplier rose 0.5% to 242.25 pence.

Synergy Health plc, a provider of sterilisation services to hospitals said fiscal year 2010 revenues rose 4.5% to £286.4 million from £274.1 million a year ago. Net profit for the year rose 75% to £22.0 million or 39.90 pence per diluted share compared to net profit of £12.6 million or 23.14 pence per share a year ago.

Xstrata PLC rose 2.8% to 1,020.50 pence after the diversified mining company has suspended A$586 million of expenditure to develop both the A$6 billion Wandoan thermal coal project and a A$600 million project to extend the life of the Ernest Henry copper mine, with immediate effect.

Young & Co.’s Brewery, Plc rose 5.6% to 549.32 pence after the operator of managed pubs said fiscal year 2010 revenues rose 1% to £127.5 million from £126.1 million a year ago. Net profit for the year rose 495% to £12.5 million or 26.00 pence per diluted share compared to net profit of £2.1 million or 4.33 pence per share a year ago.