FTSE Surges 1.4%, Retail Sales Rise; SABMiller Net Up

Arthi Gupta
18 Nov, 2010
New York City

The UK indexes traded higher after Ireland is negotiating a bailout package with the EU, the ECB and the IMF. The UK public borrowing surpassed expectations, retail sales rose, and gross mortgage lending fell in October. SABMiller net rose on price increases as well as growth in emerging markets.

[R]4:30 PM London – The UK indexes traded higher after Ireland is negotiating a bailout package with the EU, the ECB and the IMF. The UK public borrowing surpassed expectations, retail sales rose, and gross mortgage lending fell in October. SABMiller net rose on price increases as well as growth in emerging markets.[/R]

In London, FTSE 100 Index surged 80.26 or 1.41% to 5,772.82 and the pound edged higher to close at $1.5990.

Ireland Bailout Package

The Irish government is due to begin high level talks with representatives from the European Union, the European Central Bank, and the International Monetary Fund in Dublin today towards resolving the Republic''s fiscal crisis.

The Irish central bank Governor Patrick Honohan said on Thursday that the Republic is likely to get loans worth ""tens of billions"" of euros from the European Union and the International Monetary Fund as talks begin in Dublin.

Speaking to the state broadcaster RTE, Honohan said the Republic will likely have to accept the bailout to rescue the country''s ailing banking sector and to restore confidence. Honohan said he expects the interest rate charged on any loans from the IMF/ECB to be roughly in line with previous IMF loans.

Ireland''s Minister for Communications Eamon Ryan agreed with Honohan''s view. Speaking on RTE radio, Ryan said Ireland may need help from international and European partners to fix the crisis. He asserted that turning to European colleagues for assistance is not a fundamental problem.

UK Public Borrowing Climbs

The UK public finances were slightly worse than expected in October, with the budget deficit hitting the highest level for the month.

The UK''s public sector net borrowing, excluding the effects of financial interventions, totaled £10.3 billion in October, up from £10.1 billion in the same month a year ago, the Office for National Statistics said on Thursday.

Retail Sales Rise

The UK retail sales including automotive fuel rose 0.8% on a monthly basis in October in terms of value, the Office for National Statistics said on Thursday.

On an annual basis, retail sales value climbed 2% in October. Excluding automotive fuel, retail sales value rose 0.5% on a monthly basis and 2.7% on a year earlier in October.

In terms of volume, retail sales including automotive fuel increased 0.5% on a monthly basis, but fell 0.1% annually in October. Excluding, automotive fuel, retail sales volume climbed 0.3% on a monthly basis and 1.2% on an annual basis in October.

Gross Mortgage Lending Falls

The UK gross mortgage lending in October fell 9% from the previous year, the Council of Mortgage Lenders said on Thursday. Lending was estimated at £12.4 billion in October, unchanged from September. This is the lowest October total since 2000.

Manufacturers Forecast Decline in Output

The latest monthly Industrial Trends Survey from the Confederation of British Industry showed today that demand for UK-made goods increased in November but manufacturers see slower growth in output over the coming three months.

Around 21% of manufacturers said that total orders were above normal and 36% said they were below. The resulting balance of negative 15% was notably better than last month''s minus 28%.

Gainers & Losers

Headlam Group Plc fell 2.18% to 314.00 pence after the company which distributes floor coverings in the United Kingdom and Continental Europe, in its interim report said its total group revenue for the ten month period to October 31 increased 0.4% with like-for-like revenue in the UK grew 0.9% and reducing 0.4% for its Continental European businesses.

Irish Continental Group plc dropped 0.65% to €15.20 after the shipping and transport group posted rise in third quarter turnover of €81.2 million compared to €80.6 million last year. Operating profit rose 12% to €19.0 million from €17.0 million year ago.

London Stock Exchange Group plc soared 4.46% to 749.00 pence after the bourse operator reported first-half revenues declined 1.1% to £297.9 million from £301.2 million in the same period last year. Net profit in the period increased 26.2% to £62.2 million or 23 pence per share, from £49.3 million or 18.4 pence per share in the previous year.

Ricardo PLC gained 1.95% to 288.00 pence after the developer of internal combustion engines, transmissions, and vehicles said revenues for the period from June 30 to date were up on last year. Order intake at the end of October was 20% up on the same period last year. The order book at the end of October remained at £101 million, the same level as at the end of June 2010.

SABMiller Plc soared 4.97% to 2,154.00 pence after the brewer reported first-half revenues grew 7% to $9.45 billion from $8.85 billion in the same period last year. Profit in the period rose 15% to $1.12 billion or 70.8 cents per share from $973 million or 62.6 cents per share last year.

The Capita Group Plc plunged 5.33% to 683.50 pence after the provider of professional support service solutions, stated that it performed well in the second-half of 2010 with strong trading despite subdued revenue growth. The company now expects modest turnover growth for 2010 due to ""unusually high degree of revenue attrition,"" and impact of public sector cutback on a few of its trading businesses.

UTV Media plc climbed 0.18% to 140.00 pence after the India based diversified media company in its interim statement covering the period from the beginning of the current financial year, January 1 to date, said during the period overall revenue rose 9% compared to last year.