UK Home Prices Surge; RBC to Acquire BlueBay

123jump.com Staff
18 Oct, 2010
New York City

The UK indexes gained after home prices surged 3.1% in October. The CEBR forecasted the BoE will expand bond buying program by

[R]4:30 PM London – The UK indexes gained after home prices surged 3.1% in October. The CEBR forecasted the BoE will expand bond buying program by £100 billion. BP agreed to sell Venezuela and Vietnam businesses to TNK-BP for $1.8 billion. Royal Bank of Canada agreed to acquire BlueBay agreed for $1.5 billion.[/R]

In London, FTSE 100 Index traded higher 42.08 or 0.74% to 5,745.45 and the pound edged lower to close at $1.5899.

House prices in England and Wales rose markedly in October, latest industry figures showed on Monday.

Property Web site Rightmove said asking prices for English and Welsh homes increased 3.1% in October on a monthly basis, following the 1.1% decrease in September. The average asking price rose over £7,000 in October from September to a little over £236,800.

On an annual basis, asking prices rose 2.9% in October as against 2.6% in September.

The UK economy is likely to slow heading into the winter months but should stave off a double-dip recession, according to the latest Ernst & Young Item Club quarterly forecast. The Item Club estimates the British economy will grow 1.4% this year and 2.2% in 2011.

However, the think tank forecast the British housing market to fall back into recession towards the end of the year, while the outlook for households and consumers is ""bleak.""

The Chancellor of the Exchequer George Osborne told BBC''s Andrew Marr Show on Sunday that two weeks'' deadline for the UK banks to sign a code of conduct regarding their tax dealings has been announced.

He said authorities will put pressure on those banks who refused to sign up. ""Tax evasion is totally unacceptable at a time like this"" Osborne said. ""It is unacceptable at the best of times; it is immoral at times like these.""

In yet another report, a group of 35 leaders of the biggest businesses in Britain have supported Chancellor George Osborne''s deficit reduction program ahead of the coalition government''s Spending Review.

The chiefs of Kingfisher, Microsoft U.K., and Marks & Spencer were among those who wrote in an open letter to the Telegraph newspaper that it would be a mistake to water down the strict austerity program already set out by Osborne in his budget.

British employers are taking a cautious approach to hiring in the year ahead and are concerned about maintaining staff morale as employees face another year of pay restraint, results of a survey by the Confederation of British Industry and Harvey Nash revealed today.

The survey that covered 330 UK employers revealed that 23% of firms are planning targeted recruitment, while 21% plan to add staff in some parts of the business and reduce numbers elsewhere.

The Bank of England will expand its stimulus by an additional £100 billion and retain its base rate unchanged at 0.5% till late 2012 to support recovery, the Centre for Economics and Business Research said on Sunday.

BP Plc agreed to sell its upstream businesses and associated interests in Venezuela and Vietnam to TNK-BP, Russia''s third largest oil company for $1.8 billion in cash. The sale will help the company to pay for the oil spill in the Gulf of Mexico.

The agreement includes BP''s interests in the Petroperijá, Boquerón and PetroMonagas joint ventures in Venezuela as well as BP''s 35% operating interest in the Lan Tay and Lan Do gas fields and associated pipeline and power generation interests in Vietnam.

BlueBay Asset Management Plc reached an agreement to be acquired by Royal Bank of Canada for approximately £963 million or C$1.56 billion.

Under the terms of the deal, BlueBay shareholders will be entitled to receive 485 pence in cash for each share. In addition, shareholders on the register at November 5 will be entitled to receive a proposed dividend of 7.5 pence per share for fiscal year ended on June 30.

The deal is part of RBC''s key priority to accelerate its growth in the Wealth Management division, including RBC Global Asset Management.

Nando''s Group Holdings Ltd., the restaurant operator said its offer for UK-based restaurant chain Clapham House Group Plc is wholly unconditional in all respects, as it received valid acceptances in respect of, a total of 32.88 million Clapham House shares, representing around 80.10% of the company as of October 15, being the first closing date of the offer.

Gainers & Losers

Gulf Keystone Petroleum Ltd. surged 8.71% to 156.00 pence after the oil and gas explorer said it raised through Mirabaud Securities LLP gross proceeds of £109,239,200 through the sale of 78 million new common shares at a price of 140 pence per share.

The company intends to use the net proceeds for contracting a third Gulf Keystone operated deep drilling rig, in addition to the Weatherford 842 and AOS Discoverer-1 rigs, drilling of previously delayed Shaikan-2 and Shaikan-4 wells and for other general purposes.

Lok''n Store Group Plc slumped 3.12% to 124.00 pence after the self-storage company reported fiscal year 2010 revenue rose 4.1% to £10.42 million from £10.01 million a year ago. Profit for the year was £0.22 million or 0.88 pence per share compared to a loss of £0.60 million or 2.39 pence per share last year.

Lombard Risk Management plc soared 10.91% to 4.57 pence after the provider of risk management systems said first-half revenue increased 35% to £5.80 million from £4.31 million last year. Profit for the period attributable to ordinary shareholders and profit before taxation amounted to £0.15 million compared to a loss of £0.81 million a year ago. Earnings per share totaled 0.07 pence compared to loss per share of 0.60 pence last year.

SABMiller plc gained 0.83% to 2.076.50 pence after the brewer reported first-half lager volumes grew 1% from last year on an organic basis, while volume performance remained mixed across key countries. Soft drinks volumes improved 2% from last year.

Vertu Motors Plc increased 15.43% to 32.32 pence after the automobile retailing company said first-half revenue increased 25% to £501.52 million from £401.34 million last year. Profit for the period rose 78% to £3.63 million or 1.83 pence per share compared to £2.04 million or 1.35 pence per share last year.