UK Indexes Slide; Apollo Raises Offer

Arthi Gupta
28 Jul, 2010
New York City

The UK indexes decline after disappointing earnings results. The BoE Governor Mervyn King said normalization of bank rates will take time. Home prices in England and Wales rise in June. Apollo Global raises offer to acquire Brit Insurance to

[R]4:30 PM London – The UK indexes decline after disappointing earnings results. The BoE Governor Mervyn King said normalization of bank rates will take time. Home prices in England and Wales rise in June. Apollo Global raises offer to acquire Brit Insurance to £10.75 a share.[/R]

In London, FTSE 100 Index traded lower 40.42 or 0.75% to 5,325.25 and the pound edged higher to close at $1.5619.

The Bank of England Governor Mervyn King told lawmakers in London today the Monetary Policy Committee is focused on the degree of stimulus required for the economy.

King further emphasized bringing bank rate to more normal levels will take some more time. He added the wider economic problems around the world underline the fact that the recovery and demand, output and employment here in the UK will be sustained.

The British economy is set to grow at a slower pace in the coming years than the government''s projections, according to a report published by the National Institute of Economic and Social Research today.

The think tank raised the UK growth forecast to 1.3% from 1% in April for this year. NIESR sees 0.1% and 0.3% quarterly growth in the third and fourth quarters of 2010.

NIESR further stated inflation is set to stay above the 2% target until 2012 due to the increase in Value Added Tax from early next year.

Home prices in England and Wales rose for the eighth consecutive month in June, according to a report by the Land Registry released today.

Home prices increased 8.4% on an annual basis in June and are now around the same levels they were in the summer of 2006, the agency said. Month-on-month, house prices were up 0.1%. The average value of a home in England and Wales in the month was £166,072.

Brit Insurance Holdings N.V. today confirmed that private equity group Apollo Global Management LLC made a revised proposal to buy it for £10.75 a share in cash. Apollo''s indicative offer price of £10.75 per share includes the 30 pence capital distribution announced today and assumes that the fully diluted ordinary share capital of the company will not exceed 81.6 million ordinary shares.

Gainers & Losers

British American Tobacco Plc slipped 1.10% to 69.98 after the company reported a higher profit for the first half with revenues rising 8% from last year. The company also hiked its interim dividend by 19%.

Invensys plc fell 4.37% to 280.10 pence after the engineering company reported 46% of its rail order book came from new markets.

Rexam PLC fell 3.76% to 327.50 after the consumer packaging company said first half sales declined.