UK Home Prices Up 0.8%; Rolls Royce, Supergroup, easyJet Rise

Nigel Thomas
04 Feb, 2011
New York City

UK stocks closed higher and two separate reports indicated diverging views on the real estate market. Halifax survey indicated prices rose 0.8% in January and Knight Frank estimated decline in residential land prices in the year. Supergroup, Rolls Royce, French Connection and easyJet closed higher.

[R]5:00 PM London – UK stocks closed higher and two separate reports indicated diverging views on the real estate market. Halifax survey indicated prices rose 0.8% in January and Knight Frank estimated decline in residential land prices in the year. Supergroup, Rolls Royce, French Connection and William Morrison closed higher.[/R]

FTSE 100 index increased 12.11 or 0.4% to 5,995.45 and the UK pound traded at $1.5991.

UK home prices in January increased 0.8% to 164,173 pounds from December and fell 2.5% a year ago month. The survey conducted by Halifax noted that the price increase was driven by fewer homes on the market and sustained demand at the entry level homes.

In another survey published by Knight Frank LLP stated that residential land prices may decline as much as 10% in the year as banks begin selling distressed properties.

Urban land prices increased 8% in the last quarter from a year ago but declined 1% from the third quarter. The real estate consultant also estimated that prices have declined 40% from the peak in 2007.

European leaders may meet as early as March to tackle competitive issues hobbling the region. German Chancellor Angela Merkel and French President Nicolas Sarkozy called a meeting of leaders.

The joint proposal by two leaders was described as a “pact for competitiveness” by the two leaders and bureaucrats stressed that it was only a proposal and not a directive to other leaders.

Merkel has been in the past been a reluctant leader in pushing for economic convergence in the region and stayed away from the supporting reforms in the early phase of financial crisis but is now focused on developing a consensus in the region.

French officials said that the meeting could be delayed as late as the scheduled meeting of EU 27 nations.

Merkel and Sarkozy proposal focuses on developing a harmonized tax structure so that in the future one country, like Ireland, cannot attract companies in the region to avoid taxes elsewhere, to eliminate wage indexation to inflation and to rationalize rules for bank lending.

Stock Movers

Dairy Crest declined 11% or 4.70 pence to 375.90 pence after the cheese and butter maker said that nine month sales for continuing business was unchanged and full year profit will be in line with management expectations.

Rolls-Royce Group increased 3.50 pence to 641.50 pence after it won the order to sell 20 million of engines to propel ferries to a Norway based Torghatten Nord.

easyJet gained 6.20 pence to 385.50 pence after the budget carrier said January passenger count increased 19.1% to 3.74 million and load factor increased to 79.3% from 78.9%.

French Connection Group soared 12.75 pence to 81.75 pence after it indicated net for the full year ending in Jan rose to £6.8 million from £1 million a year ago.

Supergroup soared 183.00 pence to 1,713 pence after the company said it agreed to acquire its Benelux and France franchise CNC Collections from its owner Loc Clement for €40 million.