Market Updates

UK Retail Sales Drop; Mortgage Lending Falls 6%

Arthi Gupta
21 Jan, 2011
New York City

    The UK indexes edged higher tracking the gains in U.S. and Asia. UK retail sales fell more-than-estimated impacted by heavy snowfall and higher prices. Ireland planned to levy tax on bankers'' bonuses. Mouchel rejected Costain''s revised offer and said significantly undervalues the business.

[R]4:00 PM London – The UK indexes edged higher tracking the gains in U.S. and Asia. UK retail sales fell more-than-estimated impacted by heavy snowfall and higher prices. Ireland planned to levy tax on bankers'' bonuses. Mouchel rejected Costain''s revised offer and said significantly undervalues the business.[/R]

In London, FTSE 100 Index gained 62.90 or 1.07% to 5,930.67 and the pound edged higher to close at $1.5984. For the week, the FTSE 100 Index fell 1.21%.

UK Mortgage Lending Declines

The UK mortgage lending remained subdued towards the end of 2010, according to the Bank of England''s latest Trends in Lending publication. The central bank said mortgage approvals fell in December according to data from major UK lenders.

The UK''s gross mortgage lending declined 6% on a monthly basis to £11 billion in December, the Council of Mortgage Lenders said.

Gross lending fell 18% annually in December and the worst number for any December since 2000.

For 2010 as a whole, lending fell 5% to £136.3 billion, as against the £143.3 billion in 2009 and the lowest annual total since 2000.

UK Retail Sales Slide

UK retail sales volume, including automotive fuel decreased 0.8% on a monthly basis in December, following a 0.4% rise in November, the Office for National Statistics said today.

Excluding auto fuel, retail sales fell 0.3% on a monthly basis offsetting last month''s 0.3% rise in December. On a yearly basis, sales rose 1% in December.

Food stores sales decreased 3.4%. The largest increase was in sales at non-specialized stores of 10.2%. Total sales volume for three months to December increased 0.4%.

Ireland Plans to Levy Tax on Bankers’ Bonuses

Ireland''s Finance Minister Brian Lenihan is to push ahead with the plan to impose a 90% tax on bankers'' bonuses, Irish Independent newspaper reported today.

The Financial Bill, to be published later today, gives power to the government to tax Allied Irish Bank officials who are taking legal action for the payment of bonuses promised to them almost two years ago.

The newspaper said AIB faces up to 100 claims after staff from the bank''s capital markets unit filed claims with both the High and Circuit Courts for sums ranging from €3,000 to more than €100,000.

May Gurney Buys Turriff

May Gurney Integrated Services PLC acquired Turriff Group Ltd. for a cash consideration of up to £13.6 million. The transaction is expected to be earnings accretive in the first full year of acquisition.

Under the agreement terms, May Gurney expects to pay initial cash consideration of up to £8.6 million, with a further £5 million payable over three years. In addition, May Gurney is assuming about £9.4 million of debt.

May Gurney stated that the acquisition further strengthens its position in the utilities maintenance market and gains entry to the £2.4 billion support services market.

Mouchel Rejects Costain''s Revised Offer

Costain Group PLC said that it approached the Board of Mouchel on January 19, 2011 with a further enhanced proposal to make a recommended share and cash offer for the entire issued and to be issued share capital of Mouchel.

The proposal represents an increase of about 44.8% over the value of the original proposal by Costain as announced on December 22, 2010.

Mouchel Group plc issued a statement in response to announcement by Costain Group plc related to the revised proposal to make a recommended offer for Mouchel. Mouchel''s board confirmed that it rejected Costain''s proposal on the basis that it significantly undervalues the business.

Petra Diamonds Acquires Finsch Mine

Petra Diamonds Ltd. said that, together with its empowerment consortium, it entered into an agreement to acquire the Finsch diamond mine in South Africa from De Beers Consolidated Mines Ltd., for R1.425 billion or about $210 million. The acquisition is expected to be immediately accretive to Net Asset Value per share and operating cash flow per share for Petra Diamonds.

Gainers & Losers

BAE Systems plc gained 1.92% to 349.80 pence after the defense, security and aerospace company said it entered into a deal to buy, for cash consideration of about $86 million, 91.3% of the outstanding equity of Fairchild Imaging, Inc.

Close Brothers Group Plc rose 0.29% to 854.50 pence after the investment banker said its total funds under management for the five months ended December 31 increased 19% to £8.8 billion from £7.4 billion as at July 31, which reflected market movements and the acquisition of Chartwell Group Ltd.

Dawson International plc plunged 14.29% to 1.50 pence after the luxury textiles business said that overall trading performance for the twelve months to January 1 “is in line with the Board''s expectations.”

While losses in the Home Furnishings division widened due to the significant increase in cotton prices, the performances of both the UK and U.S. Knitwear divisions were ahead of expectations.

Finsbury Food Group plc fell 1.02% to 24.25 pence after the leading manufacturer of cake, bread and morning goods in an update on trading for the first-half of the current financial year, ended January 1, 2011, stated that group revenue grew 6% from the same period last year reversing the decline of the last full year. There were no acquisitions or disposals during the period.

Haynes Publishing Group PLC dropped 1.08% to 230.00 pence after the holding company reported revenue for the six months ended November 30 slipped 2% to £15.70 million from £15.95 million last year. Profit during the period declined 3.1% to £1.85 million from £1.91 million year ago. Earnings per 20 pence share was 11.3 pence versus 11.7 pence last year.

National Grid Plc increased 0.19% to 540.00 pence after the electricity and gas company stated that its New York State utility Niagara Mohawk Power Corp received a verbal decision from the New York Public Service Commission on January 20 in connection with its request for rate increase.

The Commission has said that the company could increase its delivery charges by $112.7 million of which $50 million was approved on a temporary basis, pending the outcome of a review of affiliate service company costs.

Rio Tinto Plc climbed 1.76% to 4,311.50 pence after the miner said that it received unconditional approval from the Australian treasurer to acquire up to 100% of Riversdale Mining Ltd.

The Royal Bank of Scotland Group plc surged 7.61% to 45.40 pence on the media speculation that the financial services group could leave the government''s asset protection plan later in the year, according to the Financial Times.

Annual Returns

Company Ticker 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Earnings

Company Ticker 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008