UK Mortgage Lending Rises; Grafton Advances

Arthi Gupta
31 Aug, 2010
New York City

The UK indexes slid after consumer confidence rose in August. The UK M4 money supply growth eased, mortgage approvals rose and lending fell in July. Endeavour International agreed to sell Cygnus asset for $110 million.

[R]4:30 PM London – The UK indexes slid after consumer confidence rose in August. The UK M4 money supply growth eased, mortgage approvals rose and lending fell in July. Endeavour International agreed to sell Cygnus asset for $110 million.[/R]

In London, FTSE 100 Index traded higher 11.08 or 0.2% to 5,213.62 and the pound edged lower to close at $1.5406.

Consumer sentiment in the United Kingdom rose unexpectedly in August for the first time in six months, according to results of a survey released today.

The Consumer Confidence Index increased to minus 18 from minus 22 in July, market research group GfK NOP said.

The Bank of England reported today that the UK M4 money supply increased 2.3% year-on-year in July as against the 3.1% increase in June. Month-on-month, growth rose to 0.4% in July from 0.1% in June. The central bank confirmed the initial estimate released on August 19.

The number of mortgages approved in the UK rose in July compared to June, according to official figures released today.

The Bank of England said a total of 48,722 mortgages were approved during July versus 48,562 approved in June. Total net lending to individuals rose £0.3 billion, up 0.8% from a year ago.

Net lending secured on dwellings increased £0.1 billion compared to an increase of £0.5 billion in June.

Gross mortgage lending by mutual societies rose 11% month-on-month to £2 billion in July, the Building Societies Association said today.

Mortgage approvals in July amounted to £1.9 billion, unchanged from June. Net lending by mutual societies was negative £379 million compared to negative £432 million in June.

Endeavour International Corp. announced the signing of an agreement to sell its Cygnus asset in the Southern Gas Basin of the United Kingdom sector of the North Sea to Bayerngas UK Ltd., the UK oil and gas unit of Bayergas Norge AS, for a cash consideration of $110 million.

The company said it would use the proceeds from this sale to focus on its Rochelle and Bacchus development projects in the UK North Sea and onshore Haynesville shale gas play in the U.S.

HSBC Holdings Plc announced the completion of the sale of its remaining U.S. consumer finance auto loan run-off portfolio to Santander Consumer USA Inc. The total consideration is around $3.56 billion in cash, subject to post completion adjustments, and SC USA would also assume about $431 million of debt.

The carrying value of the loans at June 30, 2010 was $4.3 billion. SC USA previously acquired HSBC''s auto finance loan servicing platform and $1 billion in loan receivables in March 2010.

AstraZeneca Plc announced that MedImmune, its biologics unit received a second complete response letter on motavizumab from the U.S. Food and Drug Administration.

Gainers & Losers

Afren Plc declined 2.13% to 98.85 pence after the independent oil and gas explorer reported first-half profit of $50.72 million or 5.2 cents per share for the period, compared to a loss of $38.53 million or 7.3 cents per share in the six months of the prior year. Turnover increased 38.4% to $214.75 million from $155.16 million in the comparable period.

British Polythene Industries Plc dropped 1.32% to 224.00 pence after the manufacturer of polythene products stated first-half total sales rose 13% to £260.8 million from £231.4 million last year. Net profit in the period surged 67% to £10.2 million or 38.25 pence per share as against net profit of £6.1 million or 23.12 pence per share in the prior-year period.

Bunzl plc rose 1.28% to 711.00 pence after the distribution and outsourcing company reported first-half revenue grew 2.6% to £2.35 billion from £2.29 billion in the prior-year period. Net profit in the period rose 7% to £69.6 million, or 21.5 pence per share, compared with net profit of £65.1 million or 20.3 pence per share a year ago.

Grafton Group plc surged 4.94% to €2.68 after the builders’ materials and home improvement retailer revenue dropped 1.1% to €978.69 million from €989.95 million in the year ago period. Net profit in the period surged 280% to €12.88 million or 5.55 euro cents per share compared to net profit of €3.39 million or 1.47 euro cents per share in the prior year.

Shed Media Plc fell 0.39% to 113.06 pence after the television production company reported first-half revenues grew 27% to £59.04 million from £46.47 million in the previous year. Net profit in the period climbed 44% to £4.03 million or 4.64 pence per share compared to net profit of £2.80 million or 3.21 pence per share last year.