UK Home Prices Rise; Flybe IPO

Arthi Gupta
10 Dec, 2010
New York City

The UK indexes traded mixed after home prices rose in November. Various home price indexes have shown a diverging picture in the UK real estate market. Irish manufacturing output growth slackened. Flybe Group PLC began trading in London and raised

[R]4:00 PM London – The UK indexes traded mixed after home prices rose in November. Various home price indexes have shown a diverging picture in the UK real estate market. Irish manufacturing output growth slackened. Flybe Group PLC began trading in London and raised £215 million.[/R]

In London, FTSE 100 Index declined 8.12 or 0.12% to 5,799.01 and the pound edged higher to close at $1.5786. For the week, the FTSE 100 index soared 2.3%.

UK Home Prices Climb; Mortgage Lending Drops

The UK home prices increased 0.2% on a monthly basis in November, after recording 0.1% growth in October, data from LSL Property Services/ Acadametrics showed.

Annual increase in home prices slackened to 5.9% in November from 6% in October.

The number of loans approved for home purchases fell 4% in October to 46,000, the Council of Mortgage Lenders said on Friday. Compared to October 2009 mortgage approvals slumped 16%.

Mortgage approvals by value fell 6% on a monthly basis in October to £6.7 billion.

British output price index eased to 3.9% in November compared with a 4% increase in October, the Office for National Statistics said on Friday.

On a monthly basis, output prices rose 0.3% in November, as against the 0.6% rise in October.

UK''s construction output volume increased 3.2% in the three months ended in October compared to the previous three months period, a report by the Office for National Statistics showed on Friday.

There were increases in all new work sectors and in all repair and maintenance sectors with the exception of infrastructure, the statistics office said.

Irish Manufacturing Output Slackens

Ireland''s manufacturing output growth eased to 8.3% on a yearly basis in October, following a 12% growth in September, a report by the Central Statistics Office showed on Friday. A year earlier, manufacturing output was down 2.5%.

On a monthly basis, the seasonally adjusted manufacturing production dropped 5.6% in October, in contrast to 11.1% increase in September.

Industrial output increased 7.8% annually in October, compared to a 10.8% surge in September. On a monthly basis, industrial output slipped 4.8% in October.

British Parliament Approves Fee Hike

The British Parliament on Thursday narrowly approved a controversial bill that hikes university tuition fees in England. The bill was approved by a narrow majority of 21 votes in the House of Commons on Thursday, with 323 members voting in favor of the measure and 302 against.

The measure increases annual tuition fees from the existing £3,290 pounds to a maximum of £9,000 pounds, nearly tripling the cost of a higher education in England. It is expected to come into force in 2012 after getting approved by the House of Lords.

Balfour Beatty Rail Secures Contract

Balfour Beatty Rail secured a five-year contract to carry out track renewal work in partnership with London Underground. The total value of the work to be delivered by the partnership is £220 million, of which around half will be Balfour Beatty''s share.

The works will include the replacement of ballasted track, points and crossings, including all ancillary signaling and drainage works on the Tube network.

Alexander Mining Sells Investment Asset

Alexander Mining plc completed the sale of all of its 1,165,000 shares in Mariana Resources Ltd. for a net consideration of £470,000. The proceeds from the sale will be used for general working capital.

Flybe Prices IPO

Flybe Group PLC, the British airline priced its initial public offering at 295 pence per share, valuing the company around £215 million. The stock trades on the London Stock Exchange under the symbol ""FLYB.L.""

Gainers & Losers

Hunting plc gained 1.01% to 700.00 pence and the oil and gas services explorer issued an update on sale of Gibson Energy.

HSBC Holdings plc fell 0.51% to 663.30 pence after the financial services firm stated that it appointed Samir Assaf as chief executive of its Global Banking and Markets business from January 1. Assaf takes over the role from Stuart Gulliver, who is scheduled to become Group Chief Executive on the same date.

Norcon plc plunged 14.73% to 55.00 pence after the project management and outsourcing services provider in its trading update for the year ending December 31, 2010 said turnover in the second-half year is now expected to be quite similar to the first-half year.

Pantheon Resources Plc surged 9.38% to 22.15 pence after the company engaged in investment in oil and gas exploration said that Kara Farms #1H or KF#1H well is envisioned to spud by the end of January 2011 according to the operator, Vision Gas Resources LLC. The company believes that the Tyler County project offers “enormous potential” for both the company and its shareholders.

Polar Capital Holdings plc increased 3.55% to 146.00 pence after the specialist investment management company reported first-half revenue climbed 77% to £12.07 million from £6.82 million last year. Net profit generated in the period was £1.38 million or 1.71 pence per share, compared to a loss of £0.44 million or 0.59 pence per share in the prior year.

Regal Petroleum plc soared 25.68% to 23.25 pence after the oil and gas explorer confirmed that it is in final-stage discussions to a possible all-cash offer for the company at a price of 24.0 pence per share.

S & U Plc dropped 0.42% to 595.00 pence after the consumer and motor finance provider said in its interim management statement for the period from August 1 to December 9, 2010 that the group continues to trade “in line with market expectations.”

During the period, collections increased by 2% over the same period last year on slightly lower book debt.

Smith & Nephew Plc climbed 0.16% to 637.00 pence after the global medical devices company renewed its debt facilities. The company reduced its $1 billion 5-year term facility to $500 million with effect from December 20.

Wood Group (John) plc rose 1.19% to 491.80 pence after the energy services company said that its business Wood Group GTS has been awarded a five-year gas turbine maintenance agreement by Stadtwerke München, Germany''s largest municipal company supplying gas and electricity to more than one million customers in the Munich area.