UK Indexes Decline; Land Securities, Canary Wharf in JV

Arthi Gupta
19 Oct, 2010
New York City

The UK indexes edged lower after China''s central bank hiked key rates unexpectedly by 25 basis points. The UK manufacturers estimated strong growth in output and export orders in the next three months. Blacks Leisure confirmed preliminary talks regarding possible offer.

[R]4:00 PM London – The UK indexes edged lower after China''s central bank hiked key rates unexpectedly by 25 basis points. The UK manufacturers estimated strong growth in output and export orders in the next three months. Blacks Leisure confirmed preliminary talks regarding possible offer.[/R]

The People''s Bank of China hiked the one-year benchmark deposit rate to 2.50% from 2.25% and the one-year lending rate to 5.56% from 5.31%.

In London, FTSE 100 Index traded lower 26.54 or 0.46% to 5,715.98 and the pound edged lower to close at $1.5730.

The UK manufacturers expect a solid growth in output over the coming three months, according to the Quarterly Industrial Trends Survey from the Confederation of British Industry released today.

Around 32% of manufacturers expect a rise in output volumes, and 14% a fall, giving a balance of positive 18%. This follows a figure of plus 9% for the last three months. Looking ahead to the next quarter, the volume of total new orders is expected to grow to a balance of positive 12%, similar to the plus 11% recorded for the past three months.

The current total order book balance fell to minus 28 in October from around minus 16 in July.

BP plc said that safety would be the only criterion for rewarding employee performance in its operating business for the fourth quarter, the Wall Street Journal reported Tuesday, citing an internal memo.

BP''s new Chief Executive, Bob Dudley, announced the decision in an e-mail issued to the company''s staff members on Monday. In the memo, Dudley reportedly said that the only factor for judging performance in the 2010 fourth quarter would be ""each business''s progress in reducing operational risks and achieving excellent safety and compliance standards.""

Land Securities Group plc, the real estate investment trust formed a 50-50 joint venture with Canary Wharf Group Plc to develop 20 Fenchurch Street, London EC3. The completion of the project is anticipated in the second quarter of 2014. The joint venture, named the 20 Fenchurch Street Limited Partnership will construct the project under a staged program and the total development cost is expected to be £500 million.

Blacks Leisure Group PLC''s board confirmed that it is in preliminary discussions with several parties regarding either a possible offer for the company or an offer to acquire certain of the company''s trading activities and related assets. There is no certainty that any formal offers will be forthcoming or as to the terms on which any such offer might be made.

Anglo American plc announced a Mineral Resource estimate for the West Wall copper project in central Chile''s Valparaíso Region. Anglo American and Xstrata Copper each have a 50% interest in the mining company which holds the project, West Wall SCM. The estimated Inferred Resource for the project''s Lagunillas deposit, based on 57 drill holes, amounts to 750 million tons at a grade of 0.54% copper and 0.01% molybdenum, containing 4.0 million tons of copper using a 0.3% copper cut-off grade. The Mineral Resource also contains estimated average grades for gold of 0.05 grams per ton.

Endeavour International Corp. said it closed on the sale of its Cygnus asset to Bayerngas UK Ltd., the UK oil and gas subsidiary of Bayerngas Norge AS, for a cash consideration of $110 million.

Gainers & Losers

Autonomy Corp. plc gained 1.83% to 1,445.00 pence after the enterprise software company reported third quarter revenues rose 10% to $210.56 million from $191.61 million last year. Net profit in the quarter, on IFRS basis grew 22% to $44.83 million or 18 cents per share, compared to net profit of $36.77 million or 15 cents per share the year-ago quarter.

Bellway plc slumped 5.74% to 567.00 pence after the home builder posted a profit in fiscal 2010. Profit for the year was £35.81 million, as against a loss of £27.44 million last year. Earnings per share were 29.6 pence, versus loss of 23.9 pence a year ago.

The Group sold 4,595 homes in the year, up 5% over last year''s sales of 4,380, at an average selling price of £163,175, versus £154,005 a year ago.

Bunzl plc declined 1.10% to 763.50 pence after the distribution and outsourcing company stated in an interim management statement that third quarter grew 6% from last year and that overall trading is in line with expectations set out in August.

Kewill Systems PLC dropped 0.25% to 101.75 pence after the software firm said the overall trading performance for the first-half of the financial year has been in line with the board''s expectations. In an update on trading for the six months ended September 30, the company said Kewill has continued to secure new customer contracts and successfully cross-sell products between regions.

Whitbread Plc increased 1.83% to 1,724.00 pence after the hotel and restaurant group reported first-half total revenues gained 14.5% to £805.4 million, from £703.3 million recorded a year ago. On a like-for-like basis, group sales rose 7.8%. Net profit in the period profit surged 58% to £116.4 million or 66.10 pence per share, compared with net profit of £73.6 million or 42.27 pence per share last year.