UK Manufacturing Growth Eases

Arthi Gupta
01 Oct, 2010
New York City

The UK indexes gained after manufacturing sector growth slackened in September and housing equity injections rose in the second quarter. Irish manufacturing sector contracted in September but retail sales increased in August. BP agreed to pay $15 million fine for environmental violations.

[R]4:15 PM London – The UK indexes gained after manufacturing sector growth slackened in September and housing equity injections rose in the second quarter. Irish manufacturing sector contracted in September but retail sales increased in August. BP agreed to pay $15 million fine for environmental violations.[/R]

The IMF Chief, Strauss-Kahn stated Ireland not in need of European rescue package activation.

In London, FTSE 100 Index traded higher 36.25 or 0.65% to 5,584.87 and the pound edged higher to close at $1.5810. For the week, the FTSE 100 index decreased 0.22%.

The International Monetary Fund Managing Director Dominique Strauss-Kahn said in an interview with a German daily Handelsblatt today that the European rescue fund need not be activated for Ireland.

The report quoted, ""The economic downtrend in Ireland is continuing but the Irish government has already taken a string of solid measures on the fiscal side.""

The Bank of England policy maker Adam Posen said in an interview with the Yorkshire Post that was broadcast on its Web site on Thursday that UK inflation may undershoot the target over the next couple of years.

Reiterating his view that more monetary stimulus is needed to support the economic recovery in the UK, Posen said monetary policy should continue to be aggressive about promoting recovery.

The UK manufacturing sector growth eased to a ten-month low in September as growth in production slowed and rate of increase in new orders remained subdued, according to a survey by Markit Economics released today.

The seasonally adjusted headline Markit/Chartered Institute of Purchasing and Supply purchasing managers'' index fell to 53.4 in September from a revised 53.7 in August. The original PMI reading for August was 54.3.

The Bank of England said in a report today that individuals injected £6.2 billion into housing equity in the second quarter. The negative figure for the first quarter was revised to £5.3 billion from £3.2 billion.

According to a report released by the Markit Economics today, Irish manufacturing sector contracted for the first time in seven months. The seasonally adjusted NCB manufacturing purchasing managers'' index, dropped to 48.4 in September from 51.1 in August. The latest PMI was lowest since February.

The decline in new business led to a further slowdown in the rate of production growth in September to a marginal pace.

Irish retail sales volume on a monthly basis increased a seasonally adjusted 1.1% in August, compared to a 0.4% decline in July, the Central Statistics Office said today. Sales in motor trade rose 5.5% in August from July and climbed 20.4% over a year earlier.

Annually, retail sales volume increased 1.3% in August, compared to a 0.2% fall in July. Excluding motor trades, retail sales declined 1.4% on an annual basis in August.

BP plc agreed to pay a record $15 million fine to resolve environmental violations at its Texas City refinery, the U.S. Department of Justice and Environmental Protection Agency said on Thursday. The settlement addresses violations stemming from two fires that occurred at the refinery in March 2004 and July 2005, and a leak that occurred in August 2005.

During the three incidents, thousands of pounds of flammable and toxic air pollutants were released, each of which forced the surrounding Texas City community to take shelter. The settlement also resolves allegations that BP failed to identify all regulated hazardous air pollutants used at the refinery in plans submitted to the Environmental Protection Agency or EPA.

Furthermore, the company stated that it has pledged certain Gulf of Mexico assets as collateral for the $20 billion Deepwater Horizon Oil Spill Trust which was set up to pay legitimate claims arising from the April 20 incident.

The pledged collateral includes an overriding royalty interest in oil and gas production of BP''s Thunder Horse, Atlantis, Mad Dog, Great White and Mars, Ursa and Na Kika oil and gas assets in the Gulf of Mexico.

Cooper Controls U.K. Ltd. announced the terms of an offer to be made by the company for the entire issued and to be issued share capital of Mount Engineering PLC. Under the terms of the offer, Mount shareholders would receive 82 pence in cash for each Mount share. The offer values the whole of the currently issued share capital of Mount, excluding Treasury Shares at about £19.23 million in aggregate.

Leni Gas & Oil plc said the company with its wholly owned Spain subsidiary entered into a Heads of Agreement with Praxair España, S.L., a Spanish subsidiary of Praxair, Inc. for a nitrogen enhanced oil recovery pilot project in Spain.

Vedanta Resources Plc''s Indian subsidiary, Sterlite Industries (India) Ltd stated the Supreme Court stayed till October 18 the Madras High Court''s order on closure of Sterlite''s copper smelting plant in Tuticorin, Tamil Nadu, India.

Gainers & Losers

Compass Group plc fell 1.23% to 524.00 pence after the global contract foodservice and support services company announced the acquisition of IDA Service A/S by Compass Group Denmark for a cash consideration of DKK148 million.

Helphire Group plc surged 5.56% to 38.00 pence after the company engaged in the provision of non-fault accident management assistance and related services reported fiscal year 2010 revenue declined 2.4% to £304.19 million from £311.72. Profit for the period was £3.62 million or 1.07 pence per share versus a loss of £135.35 million or 68.31 pence per share last year.

Mears Group PLC gained 1.50% to 303.75 pence after the provider of outsourced services to the public and private sectors acquired JL for £2.7 million in initial cash consideration and repayment of £2.1 million of net debt. Mears expects to integrate the business immediately and generate further significant cost and efficiency savings.

Mothercare plc declined 0.48% to 520.50 pence after the parenting and children''s products retailer said it received shareholders approval to buy 25% stake in its Australian franchisee Headline Group Ltd, which operates Mothercare franchises in Australia and New Zealand.

Telecom plus Plc climbed 1.80% to 395.00 pence after the multi-utility supplier in its trading statement said it still expects earnings and pre-tax profits for the six months ended September 30 to be significantly ahead from last year.