UK Services Expand to 4-Month High; Net Reserves Improves

Arthi Gupta
03 Nov, 2010
New York City

The UK indexes gained after service sector growth improved unexpectedly and net reserves rose in October. Irish jobless rate fell in October. Rolls-Royce won $200 million order by Tunisair.

[R]4:30 PM London – The UK indexes gained after service sector growth improved unexpectedly and net reserves rose in October. Irish jobless rate fell in October. Rolls-Royce won $200 million order by Tunisair.[/R]

The UK prices at retail stores rose and job market growth eased in October.

In London, FTSE 100 Index traded lower 3.23 or 0.04% to 5,754.50 and the pound edged higher to close at $1.6095.

The British Retail Consortium said on Wednesday that shop prices in the United Kingdom rose 2.2% on year in October, following a 1.9% annual expansion in September. Food prices soared 4.4% on year in October, from 4% in September.

The UK jobs market improved in October, but at the weakest pace in 14 months, according to report on Jobs. Permanent staff placements and temporary/contract staff billings slackened in October, the Recruitment and Employment Confederation and KPMG said in the report.

The UK''s service sector growth unexpectedly improved in October, according to a survey from Markit Economics. The seasonally adjusted Markit/CIPS Purchasing Managers'' Index for the service sector rose to a four-month high of 53.2 in October.

The UK government''s net reserves rose by $657 million in October, bringing the total to $38.117 billion, compared with $37.46 billion recorded in September, according to data released by the HM Treasury today.

Gross reserves totaled $77 billion in October versus $77.11 billion in September, official data showed.

Irish jobless rate continued to stay in double digits in October, but edged down from the figure recorded in September, data released by the Central Statistics Office showed today. The seasonally adjusted standardized unemployment rate was 13.6% in October, versus 13.7% in September. A year ago, the jobless rate was 12.8%.

Rolls-Royce said it won an order worth $200 million at list prices from Tunisair for Trent 700 engines to power three Airbus A330 aircraft. Also, the order includes a long-term service agreement.

Tunisair is a scheduled and charter airline with a network that extends to the main cities of Europe, the Middle East and Africa.

Lloyds Banking Group plc stated that it appointed António Horta-Osório as new Group Chief Executive Officer. He succeeds Eric Daniels, who plans to retire in a year''s time. Horta-Osório will join the company in early 2011 and will take over the role of Chief Executive Officer on March 1, 2011.

Mitsubishi UFJ Financial Group Inc., Japan''s biggest bank, is in talks to buy the project financing business of the UK-based lender Royal Bank of Scotland Group plc for about £4 billion or $6.4 billion, according to media reports on Tuesday.

RBS, Britain''s biggest government-owned bank, has been asked by the government to sell off noncore operations to pay back public funds after receiving £45.5 billion of government funding during the global financial crisis.

Gainers & Losers

Alterian plc plunged 7.61% to 182.00 pence after the company engaged in the design and development of software tools reported first-half revenue climbed 13% to £16.3 million from last year''s £14.43 million. Net loss for the first-half widened 394% to £1.33 million or 2.2 pence per share, compared to a net loss of £269,000 or 0.5 pence per share in the year-ago period.

British Airways PLC fell 0.18% to 272.50 pence after the international scheduled airline said in October traffic, measured in Revenue Passenger Kilometres, rose by 3.9% to 9.9 billion from 9.51 billion last year. Traffic comprised a 4.6% increase in premium traffic and a 3.7% increase in non-premium traffic.

FirstGroup plc declined 0.42% to 403.50 pence after the transport operator reported first-half revenue grew 4.1% to £3.08 billion from £2.96 billion in the same period last year. Profit in the period soared 229% to £61.8 million or 12.7 pence per share, compared to a profit of £18.8 million or 3.9 pence per share last year.

Logica Plc tumbled 3.23% to 128.90 pence after the business and technology service company reported that its third-quarter revenue rose slightly on last year at £863 million. Outsourcing revenue gained 8% year to date to £1,159 million and continued to show good growth in the third quarter with revenue up 7% to £373 million.

Petropavlovsk plc slumped 3.67% to 904.50 pence after the gold miner said total gold production for the third quarter was 138,300 oz, an increase of 12% on the group''s total attributable production for last year. Further, the group lowered its production guidance for full-year 2010.

Ryanair Holdings PLC climbed 0.02% to €4.01 after the discount airline reported October passengers of 7 million, up 14% from 6.2 million last year. Load factor was 85%, same as the prior year.

XL Group plc declined 0.61% to $21.17 after the insurance service provider reported third quarter total revenues rose 8.7% to $1.62 billion, from $1.49 billion in the year-ago quarter. Net income generated in the quarter was $77.5 million or 23 cents per diluted share, compared to a net loss of $11.4 million or 3 cents per share in the prior-year quarter, helped by lower realized losses on investments.