UK Indexes Gain; Turbo Power Plummets

Arthi Gupta
13 Aug, 2010
New York City

The UK indexes gained a fraction after construction industry expanded. The increase in the construction spending may boost second quarter GDP. Aviva rebuffed RSA Insurance''s $7.8 billion offer for general insurance business. BP agreed to pay $50.6 million fine for Texas oil refinery explosion.

[R]4:30 PM London – The UK indexes gained a fraction after construction industry expanded. The increase in the construction spending may boost second quarter GDP. Aviva rebuffed RSA Insurance''s $7.8 billion offer for general insurance business. BP agreed to pay $50.6 million fine for Texas oil refinery explosion.[/R]

In London, FTSE 100 Index traded higher 22.25 or 0.42% to 5,289.69 and the pound edged higher to close at $1.5609.

Britain''s construction output between April and June was revised upwards today, with the Office for National Statistics suggesting the revision could add 0.1 percentage points to the UK economy''s 1.1% expansion during the period.

Construction output boomed 8.6% compared to the March quarter, as the sector recovered from poor weather in the first months of the year.

New work rose by 9.8% and repair & maintenance rose by 6.6%. The total volume of construction output in the second quarter rose by 9.1% compared to the same quarter in 2009.

The upgrade could boost UK''s second quarter GDP by a tenth of a percentage point, according to a spokesman of the ONS.

Aviva PLC rejected a $7.8 billion offer from rival RSA Insurance Group Plc to buy the firm’s general insurance operations.

RSA made the approach last month in a letter from Chairman John Napier to Aviva Chairman, Lord Sharman.

BP plc agreed to pay a record $50.6 million fine for failing to correct safety hazards at its Texas City oil refinery after a disastrous explosion in 2005 killed 15 workers and injured 170 others, the U.S. Occupational Safety and Health Administration said on Thursday.

In addition, BP Products North America Inc. and the U.S. Occupational Safety and Health Administration reached a settlement to resolve 270 of the 709 citations that OSHA issued to BP at its Texas City refinery in October 2009. In these citations, OSHA alleged that BP failed to meet obligations set forth in a 2005 agreement with OSHA.

The explosion at the Texas refinery was found to have resulted due to safety violations by BP. After the disaster, BP paid a $21.3 million fine in 2005. But OSHA said that in a follow-up investigation in 2009, it found that BP had still not met its commitments.

BP further agreed to establish a liaison between its North American and London boards of directors and OSHA, which will allow the agency to raise compliance problems at the highest level.

Gainers & Losers

Alpha Pyrenees Trust Limited soared 3.74% to 27.75 pence after the closed-ended investment company reported first half pre-tax profit of £0.12 million compared with a loss of £20.52 million last year. Earnings per share for the half year were 0.1 pence versus a loss of 17.5 pence in the previous year. Net rental income for the period slipped 5.9% to £9.77 million from £10.38 million in the earlier year period.

Clinical Computing Plc tumbled 5.88% to 2.00 pence after the company engaged in development, distribution and support of computer software for the healthcare and project management markets said total revenue for the first half fell marginally to £1.52 million from £1.53 million in the previous year.

Net profit for the period declined 6,7% to £144,185, lower than £154,550 a year ago. On a per share basis, earnings were flat at 0.1 pence for the latest period as well as for the prior year.

Norcon Plc gained 3.73% to 75.72 pence after the provider of project management and outsourcing services said it estimates revenue for the first half of 2010 to be within about 5% of its expectations, and margins for the full year to be consistent with prior years.

Rurelec Plc gained 2.98% to 12.10 pence after the company that generates electricity in South America secured agreement from the holders of £2.5 million of the unsecured 12% convertible loan notes for an amendment to the original issue terms which assists in the current refinancing of its Argentine power generation business, Energia del Sur S.A.

Turbo Power Systems Inc. plummeted 8.57% to 0.800 pence after the high speed motors and generators manufacturer reported second quarter revenue grew 28% to £2.39 million from £1.88 million in the comparable quarter a year ago. Net loss in the quarter widened 1224% to £3.10 million or 0.6 pence per share from £234 thousand or 0.1 pence per share in the previous year.

Watermark Global Plc fell 1.33% to 0.370 pence after the company acting as project manager for the treatment of acid mine drainage announced that Dirk Kotze, chief financial officer of Watermark Global and Western Utilities Corp. (Pty) Ltd, a wholly-owned subsidiary of Watermark, would resign from both positions in order to pursue other business opportunities.