UK Home Price Inflation Eases; GDP Growth Slackens

Arthi Gupta
08 Oct, 2010
New York City

The UK indexes slid after GDP growth slackened in the third quarter. The UK producer prices rose and home price inflation eased in September. Sempra and RBS agreed to sell its commodities trading venture to JPMorgan for $220 million.

[R]3:30 PM London – The UK indexes slid after GDP growth slackened in the third quarter. The UK producer prices rose and home price inflation eased in September. Sempra and RBS agreed to sell its commodities trading venture to JPMorgan for $220 million.[/R]

In London, FTSE 100 Index traded lower 17.28 or 0.31% to 5,643.67 and the pound edged higher to close at $1.5943. For the week, the FTSE 100 index increased 0.9%. The pound edged higher ahead of finance leaders meeting in Washington this weekend.

Talks are expected to focus on the future direction of the dollar and international imbalances.

The UK economy grew 0.5% sequentially during the three month ending September, slower than the revised 0.6% growth recorded during the June to August period, the National Institute of Economic and Social Research said today.

The UK output price index rose 4.4% annually in September, compared with a 4.7% gain in August, the Office for National Statistics reported today.

On a monthly basis, input prices rose 0.7% in September, compared to the 0.1% growth in August. Annually, input prices rose 9.5% in September compared to an increase of 8.7% in August.

The UK home prices increased at a slower pace in September, according to data from LSL Property Services/Acadametrics published today.

Average home prices rose 0.2% in September to £223,965, after recording a 0.3% monthly increase in August. Annual growth in home prices also slowed in September to 7% from 8.3% in August.

Homes sold in September increased 11.4% from a year ago month to 66,000, around 3.4% more than in August.

The UK volume of construction output for three months to August rose 7.8%. New work increased 8.7% and private commercial and industrial gained 14.9% and 14.7% respectively.

Vodafone Global Enterprise, a business within Vodafone Group Plc announced the acquisitions of two telecom expense management companies, namely Quickcomm and TnT Expense Management.

The value of the gross assets acquired is $6.9 million for Quickcomm and $2.8 million for TnT Expense Management.

The Royal Bank of Scotland Group plc said that RBS Sempra Commodities, its joint venture with Sempra Energy agreed to sell substantial assets of its commodities trading North American Power and Gas business lines to J.P. Morgan Energy Ventures Corporation. The deal is expected to be completed in the fourth quarter of 2010.

The transaction would see JPMorgan acquire these net assets for consideration of $220 million in cash based on the June 30 balance sheet, of which RBS'' partnership allocation under the JV is approximately 51%, i.e. $112 million.

Gresham House plc, the security and property investor agreed to buy a additional 10% shareholding in Memorial Holdings Ltd. for £1.71 million. With this acquisition, Gresham will hold 15% of the share capital of Memorial.

Gainers & Losers

Afren Plc fell 0.26% to 114.20 pence after the independent energy explorer completed the acquisition of Black Marlin Energy Holdings Ltd. The total issued share capital of Afren plc pursuant to the acquisition will be 968.16 million ordinary voting shares.

Grainger plc rose 0.18% to 109.00 pence after the property trading and developer in its trading update said for the twelve-month period to September 30, it expects normal sales from its UK residential and retirement solutions portfolios to amount to £110 million. Investment sales and sales of other assets such as agricultural holdings will be approximately £40 million.

Praesepe plc declined 2.22% to 6.60 pence after the investment holding company reported first-half revenue surged 174% to £15.74 million from £5.74 million in the year-ago period. Loss in the period widened 393% to £2.1 million or 0.73 pence per share, as against a loss £426,000 or 0.21 pence per share last year, reflecting higher exceptional costs and IFRS 2 share based payment charges.

Speedy Hire Plc dropped 2.20% to 22.25 pence after the provider of equipment rental and support services in its trading update said total second quarter group turnover is expected to be approximately £5 million higher than in the first quarter.