UK Jobless Claims Fall; Pearson Soars 5.7%

Arthi Gupta
19 Jan, 2011
New York City

The UK indexes dropped after jobless claims fell in December. Irish Prime minister survived vote of confidence. Irish home price index declined in the fourth quarter. The FSA imposed fines of

[R]3:30 PM London – The UK indexes dropped after jobless claims fell in December. Irish Prime minister survived vote of confidence. Irish home price index declined in the fourth quarter. The FSA imposed fines of £7.7 million on Barclays. Pearson soared 5.7% after the company estimated 16% increase in 2010 earnings.[/R]

In London, FTSE 100 Index declined 25.41 or 0.42% to 6,031.04 and the pound edged higher to close at $1.6018.

Irish PM Survives Vote of Confidence

Irish Prime Minister Brian Cowen survived a secret vote of confidence held within his Fianna Fail party on Tuesday.

It is not clear how many votes Cowen secured in Tuesday''s secret confidence vote on his leadership. Cowen requires at least 36 of 71 votes to survive as the party leader. The details of the secret vote will not be released as the ballot papers have been shredded.

UK Jobless Claims Fall

The UK''s claimant count rate remained unchanged at 4.5% in December, the Office for National Statistics said on Wednesday. The people claiming jobseekers'' allowance decreased 4,100 to 1.46 million.

The ILO jobless rate for three months to November was unchanged at 7.9%. The total unemployed increased by 49,000 over the quarter to reach 2.5 million.

UK Leading Index Remains Unchanged

The leading economic index for the UK remained unchanged in November after rising 0.4% in October, the Conference Board said on Wednesday.

The coincident economic index, a measure of current economic activity, edged higher 0.1% in November, after remaining unchanged in October and decreasing 0.1% in September.

Irish Home Price Index Declines

Ireland''s home price index declined 3.5% sequentially in the fourth quarter, versus the 1.3% decline in the previous three months and the 1.7% decrease seen in the second quarter of 2010, according to data compiled by Permanent TSB bank and the Economic and Social Research Institute.

The average price of a home in Ireland decreased to €191,776 in the fourth quarter from €198,689 in the previous quarter and €215,086 in the fourth quarter of last year.

FSA Imposes Fine on Barclays

Barclays Plc was fined £7.7 million on Tuesday by the UK Financial Services Authority for investment advice failures in relation to the sale of two funds. The fine was the largest ever for retail financial products violation. The agency also secured about £60 million from the British company in customer redress.

Barclays sold Aviva''s Global Balanced Income Fund and the Global Cautious Income Fund to 12,331 people with investments totaling £692 million between July 2006 and November 2008. According to the FSA, there were a number of serious failings in the way the funds were sold.

Rolls-Royce Inks Deal with Nuclear Power Delivery

Rolls-Royce signed an agreement to collaborate with the Nuclear Power Delivery UK consortium in its plans to deploy the Westinghouse AP1000 nuclear reactor in the UK.

Under the terms of the agreement, Rolls-Royce will support NPD in the development of proposals for engineering, manufacture and supply of mission critical components for the heart of the nuclear reactor.

Rolls-Royce will also explore the provision of nuclear engineering, technical support and supply chain management expertise to the consortium.

Gainers & Losers

Cambium Global Timberland Ltd. plunged 5.04% to 66.00 pence after the closed-ended investment company reported loss for the six months ended October 31, 2010, compared to a profit last year, affected by higher cost of sales, decrease in fair value of investment property and other operating forestry expenses.

Revenue increased 35% to £0.77 million from £0.57 million last year. Loss for the period was £6.39 million or 6.13 pence per share compared to a profit of £0.44 million or 0.42 pence per share last year.

Gas Turbine Efficiency plc slumped 5.92% to 5.88 pence after the clean technology company confirmed that the sale of its aviation business to Pratt & Whitney, a unit of United Technologies Corp., for a total consideration of $17.1 million was completed on January 19.

Kesa Electricals plc plummeted 8.42% to 138.10 pence after the electrical and electronic items retailer reported a 4% decline in third quarter revenues, on a like-for-like basis, owing to ""difficult market conditions"". However, in euro terms, the revenues rose 0.4%.

JD Wetherspoon plc surged 5.48% to 465.90 pence after the company engaged in the development and management of public houses said that for the first 12 weeks of the second quarter, like-for-like sales grew 3.0%, compared to 1.6% growth in the first quarter. Total sales for the same period rose 8.1%, compared to 7.3% in the first quarter.

Land Securities Group Plc rose 0.43% to 701.50 pence after the real estate investment trust said it maintained high levels of activity in its London and retail portfolios in the third quarter, obtaining some planning consents.

The company further added that it expects to start work on the Atlas development in Glasgow this year.

Pearson plc soared 5.67% to 1,063.00 pence after the publishing house in its January trading update, said it anticipates adjusted earnings of approximately 76 pence per share, up approximately 16% from 65.4 pence in 2009, and ahead of its previous guidance of approximately 72 pence.

The company currently expects to report continuing operating profits for 2010 of approximately £850 million, a headline increase of approximately 20%, compared with £710 million in 2009, excluding Interactive Data, which was sold in July 2010, from both years.