UK Construction Activity Up; Stocks Dip

Arthi Gupta
04 Oct, 2010
New York City

The UK indexes dropped after construction activity rose unexpectedly in September. The Confederation of British Industry urged for stringent rules to prevent industrial strike action. EKF Diagnostics completed acquisition of Quotient Diagnostics. Robert Edwards awarded Nobel for Medicine.

[R]3:00 PM London – The UK indexes dropped after construction activity rose unexpectedly in September. The Confederation of British Industry urged for stringent rules to prevent industrial strike action. EKF Diagnostics completed acquisition of Quotient Diagnostics. Robert Edwards awarded Nobel for Medicine.[/R]

In London, FTSE 100 Index traded higher 2.00 or 0.04% to 5,594.90 and the pound edged higher to close at $1.5858 on the first day of the week where investors are anticipating a flood of economic data in Europe and U.S.

Robert G. Edwards, the British physiologist was awarded the Nobel Prize for Medicine today for his pioneering work in the development of the in-vitro fertilization procedure that led to the birth of world''s first test tube baby.

The Confederation of British Industry urged the government to implement stricter rules to prevent industrial strike action, so that they are only held as a last resort.

The CBI called for the threshold of industrial action to be raised so that strikes can only go ahead if 40% of balloted members vote in favor of action, as well as a majority of those voting. Furthermore, the CBI pointed out that 85% of British private sector employees are not members of a union, and that most of these employees engage directly with staff or their representatives to bring about changes in the workplace.

The New Economics Foundation said British banks'' borrowing requirements are set to double next year to £25 billion a month to plug a growing funding gap and many of them may require more taxpayer money to prop them up. Total of £1.2 trillion of government money had been pumped into banks so far.

The think tank called for urgent reform of the banking sector, warning that Britain is ""on the cusp of a second banking failure.""

The British construction sector unexpectedly rose in September led by the commercial and civil engineering sectors. The Markit / Chartered Institute of Purchasing & Supply construction purchasing managers'' index rose to 53.8 in September from 52.1 in August.

Two of the three construction sub-sectors recorded a rise in activity in September. Commercial and civil engineering activity picked up markedly from August but the residential construction sub-sector recorded a marked fall in activity, ending a 12-month period of growth.

EKF Diagnostics Holdings PLC completed the acquisition of the entire issued share capital of Quotient Diagnostics Ltd. The 15,507,153 new ordinary shares in the company issued to satisfy the initial consideration for Quotient were admitted to trading on AIM.

Gainers & Losers

Animalcare Group plc rose 2.56% to 100.00 pence after the veterinary products supplier annual revenues grew 12.9% to £19.92 million from £17.64 million a year ago, helped by a 15.7% rise in companion animal revenue. Loss for the period was £1.03 million or 5.2 pence per share, versus a profit of £1.04 million or 5.3 pence per share last year. The company declared a 20% higher dividend for the year.

Jubilee Platinum PLC slumped 4.96% to 33.50 pence after the natural resources explorer reported fiscal year 2010 pre-tax loss narrowed 53.3% to £2.23 million, compared to £4.78 million a year ago. Loss for the period narrowed 47% to £2.23 million or 1.35 pence per share from £4.20 million or 3.68 pence per share last year.

Tricorn Group PLC surged 7.69% to 14.00 pence after the company engaged in precision tube manipulation, systems engineering and specialist fittings announced that sales have strengthened throughout the first-half and are expected to be around 40% higher than the previous year. As a result, full-year group profit before tax is expected to be “slightly ahead of market expectations.”

Inmarsat Plc gained 0.22% to 670.00 pence after the satellite telecommunications group’s biggest shareholder, Harbinger Capital Partners LLC confirmed that it is reviewing its options regarding a possible sale of part or all of its shareholding in Inmarsat. The company added that no decision has yet been taken as to any transaction by Harbinger involving the share capital of Inmarsat.

WS Atkins plc dropped 1% to 740.50 pence after the consultancy and support services provider completed the acquisition of The PBSJ Corp. for a cash consideration of $280 million or around £178 million.