UK Indexes Climb; Home Purchase Loan Approvals Fall

Arthi Gupta
26 Jan, 2011
New York City

The UK indexes rose after the Bank of England policy makers split on rates. The UK home purchase loan approvals declined in December. Irish trade surplus increased in November. WPP increased stake in Mindshare South Africa.

[R]3:00 PM London – The UK indexes rose after the Bank of England policy makers split on rates. The UK home purchase loan approvals declined in December. Irish trade surplus increased in November. WPP increased stake in Mindshare South Africa.[/R]

In London, FTSE 100 Index gained 56.30 or 0.95% to 5,972.83 and the pound edged higher to close at $1.5847.

BoE Policy Makers Split On Rates

The Bank of England policy makers left the key interest rate unchanged and maintained the size of quantitative easing at £200 billion by a split vote in January, the minutes of the Monetary Policy Committee meeting showed today. The meeting was held on January 12 and 13.

Six members including Governor Mervyn King voted to retain the key rate at 0.5% and to maintain the size of asset purchase program at £200 billion.

Andrew Sentance and Martin Weale sought a quarter point hike in the key rate and to maintain the size of the asset purchase program at £200 billion. Adam Posen preferred to maintain the rate at 0.5% and to increase the size of quantitative easing by £50 billion to £250 billion.

UK Home Purchase Loan Approvals Decline

The number of loans approved for home purchase in the UK decreased to 28,726 in December from 29,696 in November, the British Bankers'' Association said.

In terms of value, home purchase loans amounted to £4.1 billion in December compared to November''s £4.4 billion.

The number of remortgage approvals dropped to 24,466 in December from 26,444 in the November. Their value came down to £3.2 billion from £3.3 billion.

Irish Trade Surplus Rises

Ireland''s seasonally adjusted trade surplus rose marginally to €4.06 billion in November from €4.05 billion in October, latest data released by the Central Statistics Office showed today.

Exports and imports fell 1% on a monthly basis in November.

WPP Increases Stake in Mindshare South Africa

WPP Plc agreed to increase its stake in Mindshare South Africa (Pty) Limited from Ogilvy South Africa (Pty) Limited. Mindshare, a media buying and planning operation within South Africa, will now form part of the GroupM network of companies within South Africa.

FSA Imposes Fine on Barclays

The Financial Services Authority slapped Barclays with a £1.12 million fine. The FSA said that for over eight years, between December 1, 2001 and December 29, 2009, Barclays Capital failing to segregate client money maturing from its sterling money market deposits on an intra-day basis.

The size of the amounts involved rose from £6 million in 2002 to £387 million in 2009. The highest amount held in the account and at risk at any one time was £752 million.

Gainers & Losers

A.G. BARR plc gained 2.60% to 1,105.00 pence after the soft drinks manufacturer, in a pre-close trading update, stated that total sales in the final quarter will be around 5% ahead of the prior year, giving a full year like for like growth of around 10%.

Amlin plc fell 0.51% to 393.20 pence after the specialist insurance and reinsurance underwriting company said its wholly owned subsidiary, Amlin Corporate Services Ltd. completed the acquisition of J R Clare Underwriting Agencies Ltd. from John Clare.

Brewin Dolphin Holdings plc slumped 3.27% to 162.50 pence after the stockbroker and fund manager said income for the first, 14 week, quarter to December 31 is £65.9 million, 15.9% higher than the 13 week period to December 25, 2009.

Cookson Group plc climbed 1.82% to 644.00 pence after the materials science company said that it anticipates revenue for the year ended December 31, 2010, of about £2.5 billion and trading profit of around £250 million.

Renishaw plc surged 18.35% to 1,580.00 pence after the engineering company stated first-half revenue surged 75% to £129.34 million compared with £73.85 million in the comparable period. Profit during the period rose 383% to £28.675 million or 39.0 pence per share from £5.94 million or 7.8 pence per share in the prior-year period.

Sage Group Plc advanced 2.65% to 290.80 pence after the business management software provider said that its trading in the first quarter has been consistent with “management expectations.”

Net debt as of December 31, 2010 was £187.0 million compared to £219.8 million at September 30, 2010, reflecting continued strong cash generation.

WH Smith Plc edged higher 0.29% to 480.80 pence after the retail company in its trading update for the 8 weeks and the 21 weeks to 22 January 2011, said that the overall performance for the period was in line with expectations, with gross margin ahead of plan and costs tightly controlled.

Group total sales fell 4% with like for like sales down 5% for the 21 weeks. Like-for-like sales for the 8 and 21 weeks were down 7% and 6% respectively; excluding entertainment, comparable sales were down 3% for both periods.