UK Production Forecasted to Rise; Ireland Unveils Budget

Arthi Gupta
08 Dec, 2010
New York City

The UK indexes traded sideways after shop price inflation dropped and job placements rose at the fastest pace in November. The Irish Finance Minister Brian Lenihan unveiled a tough austerity budget. Smith & Nephew soared 6.5% on takeover speculations.

[R]4:00 PM London – The UK indexes traded sideways after shop price inflation dropped and job placements rose at the fastest pace in November. The Irish Finance Minister Brian Lenihan unveiled a tough austerity budget. Smith & Nephew soared 6.5% on takeover speculations.[/R]

In London, FTSE 100 Index declined 24.04 or 0.40% to 5,784.13 and the pound edged higher to close at $1.5804.

Irish Finance Minister Brian Lenihan unveiled tough austerity budget in the country''s lower house of parliament on Tuesday, insisting that the €6-billion package of spending cuts and tax hikes outlined in his budget was a ""substantial down-payment on the journey back to economic health.""

Lenihan told lawmakers in the lower house of Irish Parliament, or Dáil, that the harsh measures outlined in his budget are aimed at bringing the country''s huge budget deficit from the 32% of GDP this year to below the EU-permitted level of 3% by 2015.

UK Shop Price Index Falls

The British Retail Consortium reported that its shop price index declined to 2.0% in November from 2.2% in October.

Food price inflation declined to 4.0% in October from the September reading of 4.4%. Non-food inflation declined to 0.9% in October from 1.1% in September.

The Recruitment and Employment Confederation-KPMG Report on Jobs said both permanent placements and temp billings in the UK rose at the fastest pace in November.

Demand for staff continued to rise with a marked increase in overall job vacancies.

British manufacturers expect production to rise solidly in the next three months on the back of strengthening demand at home and abroad, according to the results of the latest monthly industrial trends survey conducted by the Confederation of British Industry.

The CBI said 32% of manufacturers foresee a rise in output in the coming quarter, and 19% a fall. The resulting balance of 13%, a marked improvement on November''s expectation of a balance of 4%.

Gainers & Losers

Micro Focus International Plc surged 6.17% to 380.20 pence after the provider of enterprise application management solutions reported first-half revenue increased 8.7% to $215.58 million from last year''s $198.39 million. Profit in the period soared 92% to $56.43 million or 26.27 cents per share from $29.32 million or 13.74 cents per share in the previous year.

Smith & Nephew Plc, the medical technology company soared 6.51% to 646.50 pence following speculation that a group of private equity companies are making an offer for the company.

Reports indicate that the company is being approached by a US-based private equity consortium with a £7.1 billion or $11.2 billion, or £8 a share acquisition offer, which is about 32% above yesterday''s closing price of its shares.

Stagecoach Group Plc fell 0.47% to 214.00 pence after the public transport operator reported first-half revenues grew 5% to £1.13 billion from £1.08 billion in the same period last year. Profit for the period surged 72% to £104.5 million or 14.4 pence per share from £60.6 million or 8.4 pence per share in the prior year.

Terrace Hill Group plc increased 15.07% to 21.00 pence after the company engaged in property investment, development and trading reported revenue for the eleven months ended September 30, 2010 rose 6% to £30.75 million from £29.06 million last year. Profit generated in the period was £5.56 million or 2.64 pence per share, compared to a loss of £23.52 million or 11.15 pence per share a year ago.

The Game Group Plc plunged 5.88% to 68.00 pence after the investment holding company issued interim management statement relating to the period to December 4.

For the 44 weeks to December 4, total Group sales were down by 8.8%. Comparable sales for the same period declined 7.9%. In UK and Ireland, total sales were down 14.7% and comparable sales were down 12.2%. In international business, total sales were up 1.2% and comparable sales were down 5%.

WPP Plc dropped 0.20% to 762.50 pence after the communications and marketing services company agreed to acquire US-based Marketing Direct, Inc or MDI through KBM Group, part of the Wunderman network.