Commodities, Stocks Rise in UK

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

The UK indexes soar after China

[R]4:30 PM London – The UK indexes soar after China’s decision to lift the peg of its currency against the U.S. UK home price inflation slows in June. Hagens Berman Sobol Shapiro reaches $103 million settlement with Astra Zeneca. Xchanging agrees to buy Data Integration.[/R]

Mining and metal stocks advance following China''s decision to let its currency Yuan gain against the dollar.

In London FTSE 100 Index traded higher 35.33 or 0.67% to 5,286.17 and the pound edged higher to close at $1.485 and to close at €1.198.

The People’s Bank of China said on Saturday that it would make the yuan, which has been tied to the dollar for about two years, more flexible, but it dismissed the idea of an instant revaluation, noting it is already near fair value.

China''s central bank on Sunday said that it intends to keep the yuan ""basically stable"" and is not planning an immediate one-off revaluation of the currency. The comments come a day after the bank announced that it had decided to reform the exchange rate and make it more flexible.

""At present there is no basis for major exchange rate fluctuations,"" the People''s Bank of China said on its website. ""The yuan will not undergo a one-off revaluation, serving market supply and demand will continue to act as a base, and adjustments will be made with reference to a basket of currencies.""

The Chinese move to gradually let the yuan appreciate from the 6.83 peg to the dollar will help curb inflation and asset bubbles and may boost inflows into emerging markets, according to analysts.

One Chinese yuan bought $0.147 this morning, also the most since 2008.

Home price inflation in England and Wales slowed in June compared to May, latest figures show. The slowdown in price growth was due to a sharp increase in the number of properties coming on to the market following the abolition of Home Information Packs.

Property Web site Rightmove said today that asking prices for English and Welsh homes grew 0.3% month-on-month in June, following the 0.7% increase in the previous month. The average asking price rose to £237,767 in June from £237,134 a month ago.

BP Plc announced that the cost of its oil cleanup has risen to $2 billion. Over the weekend, an in-house report crafted by the firm showed a worst-case scenario of 100,000 barrels of oil spilling into the Gulf of Mexico on a daily basis.

Chief Executive Tony Hayward has been replaced last week as the point man for the day-to-day response to the gulf oil disaster.

Hagens Berman Sobol Shapiro, the class-action law firm reached a $103 million settlement with Astra Zeneca on behalf of consumers and third party purchasers. Astra Zeneca agreed to pay $103 million in two different but related settlements stemming from claims brought by HBBS.

The proposed settlement provides $13 million for two classes of plaintiffs: third-party payers who paid some or all of their insured''s Medicare co-insurance for Zoladex and/or Pulmicort Respules in Massachusetts, and a second class that includes consumers and third-party payers who paid cash or a co-pay for these AZ drugs outside of Medicare in Massachusetts. The settlement also provides $90 million to class members in the US outside Massachusetts who purchased these drugs and fit the same class descriptions.

The company noted that the settlements follow a trial of Massachusetts''s claims resulting in a verdict for the Massachusetts plaintiffs in November 2007.

Xchanging plc said today that it agreed to acquire Data Integration Ltd., a provider of networking, security and communication technology.

The acquisition consideration will be paid in cash over two years through a combination of a guaranteed payment of £6.5 million and an earn-out of up to £2.5 million, contingent upon the acquired business delivering operating profit targets. DI reported revenues of £14.5 million for the year ending in March.

Commenting on the acquisition, David Andrews, CEO of Xchanging said, ""We see an exciting future for us together as BPO services are increasingly delivered through cloud computing-based technologies. Xchanging and DI have already created this electronic managed service for claims handling with the London insurance market - a leading example of the power of new generation technologies in business processing.""

Gainers & Losers

Balfour Beatty plc rose 1.3% to 255.50 pence after the international infrastructure group announced today that it has been appointed as preferred bidder by Derby City Council for their £231 million Building Schools for the Future program.

BHP Billiton plc, the diversified natural resources company rose 4.3% to 2,024.00 pence.

BP Plc fell 3.5% to 344.80 pence.

Domino Printing Sciences plc rose 1.9% to 474.00 pence after the coding and printing solutions provider said first half revenues rose 16.5% to £144.8 million from £124.3 million a year ago. Net profit for the first half rose 132% to £16.7 million or 15.32 pence per diluted share compared to net profit of £7.2 million or 6.69 pence per share a year ago.

GW Pharmaceuticals plc fell 2.1% to 138.00 pence after the pharmaceutical company today announced the UK launch of Sativex, its oromucosal spray for the treatment of spasticity due to Multiple Sclerosis.

Hammerson PLC increased 1.5% to 365.50 pence after the real estate investment trust that owns 25% of Battery Retail Park in Birmingham has acquired the remaining 75% from its partner TIAA-CREF for a consideration, including costs, of £49.5 million.

HSBC Infrastructure Company Limited, the infrastructure investment company fell 0.6% to 116.90 pence.

Kewill plc traded unchanged at 118.00 pence after the software firm said fiscal year 2010 revenues rose 6% to £56.3 million from £53.3 million a year ago. Net profit for the year rose 133% to £3.5 million or 4.0 pence per diluted share compared to net profit of £1.5 million or 1.8 pence per share a year ago.

Shed Media Plc, the television production company increased 7.6% to 84.00 pence.

Xchanging plc rose 2.0% to 211.20 pence after the global business processors agreed to acquire Data Integration Ltd., one of the UK''s leading networking, security and communication technology providers.