UK Indexes Up; Ireland Struggles with Finance Bill

Arthi Gupta
24 Jan, 2011
New York City

The UK indexes gained after household finance index fell in January. Ireland struggled to pass finance bill that includes strict loan agreement with the EU agencies. Standard Chartered agreed to buy Singapore-based GE Money. Northern Foods accepted

[R]4:00 PM London – The UK indexes gained after household finance index fell in January. Ireland struggled to pass finance bill that includes strict loan agreement with the EU agencies. Standard Chartered agreed to buy Singapore-based GE Money. Northern Foods accepted £342 million cash offer from BH Acquisitions.[/R]

Ireland’s Prime Minister Brian Cowen resigned as leader of the Fianna Fail and the Green Party withdrew from the coalition government causing political upheaval.

Finance Minister Brian Lenihan is to meet with representatives of the other parties to formulate a timetable for the country’s budget fueling speculation that the finance bill will now be passed sooner rather than later.

The head of the Independent Banking Commission are contemplating stricter capital rules and possible separation of the retail and investment bank arms.

In London, FTSE 100 Index gained 26.02 or 0.45% to 5,922.42 and the pound edged lower to close at $1.5968.

UK Household Finance Index Drops

British household finances deteriorated at the fastest pace since April 2009, reflecting high inflation and unfavorable labor market conditions.

The household finance index dropped to a 20-month low of 36.1 in January from 39.9 in December. Around 34% of households reported a deterioration in their current finances, compared to 6% saw an improvement.

Majority of households said their current cost of living continued to increase in January and their inflation expectations hit a new survey high. Only 2% reported a decrease in current cost of living.

Standard Chartered Buys GE Money

Standard Chartered Bank signed an agreement to acquire GE Money Pte Ltd, a wholly owned unit of GE Capital that specializes in auto and personal loans in Singapore. The gross assets of the underlying business being acquired were S$2.35 billion or $1.81 billion as at December 31, 2009.

According to a report published by The Wall Street Journal, the deal value varies between S$850 million and S$900 million.

Northern Foods Accepts BH Acquisitions Offer

Boparan Holdings Ltd. and Northern Foods plc said that they reached agreement on the terms of a recommended cash offer to be made by BH Acquisitions for the entire issued ordinary share capital of Northern Foods, not already owned by BH Acquisitions or any of its associates.

BH Acquisitions is a wholly-owned subsidiary of Boparan Holdings and has been specifically incorporated for the purpose of making the offer.

Northern Foods shareholders will receive 73 pence in cash for each Northern Foods share. The offer values Northern Foods'' existing issued share capital at about £342 million.

De La Rue Rejects Improved Offer

De La Rue Plc rejected the revised proposal of François-Charles Oberthur Fiduciaire S.A. for a price of 935 pence per Rue share. The board of De La Rue believes that Oberthur continues to undervalue significantly its strong fundamentals and long-term prospects.

In December, De La Rue had received a £750 million offer from Oberthur Technologies, a France-based privately-owned printer.

Gainers & Losers

All Leisure group plc plunged 6.38% to 44.00 pence after the cruise operator said fiscal year 2010 revenue rose 12.3% to £82.61 million from £73.59 million a year earlier. Loss for the financial year was £2.07 million or 3.4 pence per share versus a profit of £2.71 million or 4.4 pence per share in the previous year.

Image Scan Holdings slumped 5.33% to 2.13 pence after the 3D and 2D x-ray imaging firm announced it had signed a £750,000 contract for the supply of an x-ray inspection system for use within a large UK nuclear facility.

Nexus Management Plc plummeted 5.56% to 0.34 pence after the provider of information technology solutions to small-medium sized businesses stated fiscal year 2010 revenue increased 16% to £5.85 million from £5.06 million last year. Loss during the period narrowed 78% to £0.99 million or 0.0946 pence per share from £4.56 million or 0.504 pence per share last year.

Premier Foods plc fell 1.57% to 22.00 pence after the company engaged in food manufacturing, processing and distribution said that it reached an agreement with Exponent Private Equity and Intermediate Capital Group to sell its Meat-free business, for an aggregate consideration of £205 million, on a debt free and cash free basis.

Redhall Group plc surged 5.57% to 161.00 pence after the engineering support services company said it signed a deal with HSBC to provide a total of £25 million in banking facilities.