UK Indexes; Home Prices Fall

Arthi Gupta
26 Nov, 2010
New York City

The UK indexes slid on worries that Ireland''s fiscal crisis could spread to other euro-zone countries and home prices declined in October. Irish retail sales rose in October. BP won production sharing contract in Indonesia. Chrysalis agreed to

[R]3:30 PM London – The UK indexes slid on worries that Ireland''s fiscal crisis could spread to other euro-zone countries and home prices declined in October. Irish retail sales rose in October. BP won production sharing contract in Indonesia. Chrysalis agreed to £107 million takeover offer.[/R]

In London, FTSE 100 Index fell 9.66 or 0.18% to 5,689.42 and the pound edged lower to close at $1.5632. For the week, the FTSE 100 index decreased 0.04%.

UK Home Prices Drop

Data from Land Registry showed today that home prices in England and Wales fell in October at the fastest pace since February 2009. According to the data, home prices declined 0.8% on a monthly basis in October, following a 0.2% drop in September. That was the second consecutive decline.

Annually, the home price index climbed 3.4% in October, taking the average property value to £165,505. This increase was slower compared to the 5.2% growth in September. Annual growth slowed for the fifth consecutive month.

Irish Retail Sales Increase

Irish retail sales volume increased a seasonally adjusted 0.5% on a monthly basis in October, as against the 0.7% decline in September, the Central Statistics Office said on Friday.

Sales in motor trade rose 3.3% in October from September and rose 20.4% over a year earlier. Trade in non-specialized stores grew 0.4% on a monthly basis and rose 1.4% annually.

On an annual basis, retail sales volume fell 2% in October, compared to a 0.1% rise in September. A year earlier, retail sales decreased 9.6%.

BP Wins Production Sharing Contract in Indonesia

BP plc confirmed today that it has been awarded a 100% interest in the North Arafura oil and gas production sharing contract in onshore Papua Province. The PSC was signed today in Jakarta.

The North Arafura PSC is located on the coast of the Arafura Sea, 480 kilometers southeast of the BP-operated Tangguh plant, covering an area of just over 5,000 square kilometers. BP expects to commence seismic operations on the block in the near future.

Chrysalis Agrees to BMG Unit''s Offer

Chrysalis Plc, the music company announced that it reached an agreement with Forte Bidco 1 Ltd., for a recommended cash offer for the entire issued and to be issued share capital of Chrysalis for a total value of about £107.4 million. Bidco is a unit of BMG Luxco, a joint venture between media company Bertelsmann and an affiliate of private equity firm Kohlberg Kravis Roberts & Co. L.P.

Under the terms of the deal, Chrysalis shareholders will receive 160 pence in cash for each Chrysalis share held, which represents a 46% premium to the price before talks were confirmed at the start of the month.

Balfour Consents to Eliminate Pension Fund Deficit

Balfour Beatty, the international infrastructure group, announced today that it reached an agreement with the trustees of the Balfour Beatty Pension Fund to eliminate a £375 million funding deficit over eight years.

The result of the triennial funding valuation as at March 31, 2010 has been settled and shows a funding deficit of £375 million on an actuarial basis.

Gainers & Losers

Caffyns plc surged 11.11% to 500.00 pence after the car dealer reported first-half revenue grew 16% to £103.79 million from £89.57 million in the prior-year period. Profit for the period surged 61% to £772,000 or 27.1 pence per share, compared to prior-year''s profit of £479,000 or 16.6 pence per share.

HSBC Holdings Plc fell 0.62% to 652.00 pence and the financial services firm said Paul Thurston will be appointed Chief Executive, Retail Banking and Wealth Management with effect from March 1, 2011.

Leed Petroleum plc plunged 20% to 2.00 pence after the oil and gas explorer reported fiscal year 2010 revenues plummeted 31% to $23.23 million from $33.82 million reported a year ago. Net loss for the year narrowed 2.2% to $18.1 million or 3.5 cents a share, compared to a net loss of $18.5 million or 6.7 cents per share in the prior year.

Millennium & Copthorne Hotels Plc dipped 0.29% to 523.50 pence after the hotel business said that it acquired an additional 40% equity interest in Beijing Fortune Hotel Co., Ltd., that owns and operates the Grand Millennium Hotel Beijing, for a consideration of about £18 million or RMB 189.25 million.

Rio Tinto Plc declined 1.70% to 4,197.00 pence after the British-Australian miner stated that mined copper production for 2010 is expected to be 661,000 tons due to variable grades across the mine lifecycle. The company forecasts the effect of lower grades to continue in 2011, but anticipates a rebound in 2012.

Rugby Estates Plc dropped 0.58% to 342.00 pence after the real estate investment and management company confirmed the amount it will return to shareholders at the start of next year. The firm will pay out the 115 pence in the form of new B and C shares.

Unilever plc dipped 0.05% to 1,842.00 pence after the supplier of consumer goods said it will change the way it reports its results. The company noted that as from the start of fiscal 2011, it will release a quarterly trading statement for first quarter and third quarter instead of publishing full financial results.