UK Trade Deficit Narrows; Prudential Net Surges 112%

Arthi Gupta
09 Mar, 2011
New York City

The UK indexes slid after trade deficit narrowed, shop price inflation increased, and job growth accelerated. Rolls-Royce won order from Cathay Pacific for Trent 700 engines. Prudential and Tullow net surge.

[R]3:00 PM London – The UK indexes slid after trade deficit narrowed, shop price inflation increased, and job growth accelerated. Rolls-Royce won order from Cathay Pacific for Trent 700 engines. Prudential and Tullow net surge.[/R]

Stocks in Europe and UK edged lower as crude oil prices and gold traded higher and unrest in Libya was in focus. Today also marks the second anniversary of the bull market that has seen the U.S. indexes nearly double since March 9, 2008.

In London, FTSE 100 Index declined 2.96 or 0.33% to 5,955.09 and the pound edged higher to close at $1.6213.

UK Trade Deficit Narrows

The UK trade deficit in goods and services decreased to £3.0 billion in January compared to a deficit of £5.5 billion in December. The goods deficit increased to £7.1 billion in January from £9.7 billion in December. Exports rose £1.3 billion and imports decreased £1.3 billion.

UK Shop Price Inflation Increases

British shop inflation rose to its highest since November 2008 after January''s sales tax hike, data from the British Retail Consortium showed today.

The BRC-Nielsen shop price index increased 2.7% annually in February from the 2.5% rise in January.

According to BRC, food price inflation fell to 4.5% in February from 4.6% in January. Non-food inflation rose to 1.6% in February from 1.3% in January, its highest level in 9 months.

British Job Growth Accelerates

Permanent as well as temporary appointments in Britain accelerated in February, Report on Jobs said today.

Permanent staff placements grew at the sharpest rate in ten months, while temporary staff billings recorded its greatest rise since May 2007, the Recruitment and Employment Confederation and KPMG said in the report.

Irish Consumer Sentiment Improves

The KBC Ireland/ESRI Consumer Sentiment Index increased to 50.3 in February from 48.7 in January, according to a survey conducted by KBC Ireland and the Economic and Social Research Institute released yesterday. The February reading is the highest since September last year.

Rolls-Royce Wins Order from Cathay Pacific

Rolls-Royce Group plc said it won an order from Cathay Pacific for Trent 700 engines to power 15 Airbus A330 aircraft. The contract includes a TotalCare long-term service agreement.

Separately, Daimler and Rolls-Royce have confirmed they intend to take over German-listed engineer Tognum through a tender offer by a joint venture company.

Daimler and Rolls-Royce will offer Tognum shareholders €24 per share in cash or approximately €3.2 billion, about 30% above Friday’s closing price. Daimler currently owns 28.4% of Tognum.

Tognum said its management board will review the offer made by a joint venture between Daimler and Rolls-Royce.

Gainers & Losers

BP Plc fell 0.71% to $47.81 and the oil giant’s chief executive Bob Dudley on Tuesday apologized for last year''s oil spill disaster in the Gulf of Mexico. Speaking at the CERA Week Conference in Houston, Dudley assured the audience that the company would never forget 2010.

Costain Group PLC gained 1.94% to 263.00 pence after the civil engineering contractor said it has been granted, in joint venture with Skanska, a contract for advance civil engineering works at Bond Street, London.

DCC plc rose 0.52% to €23.20 after Irish diversified investments group and holding company said it acquired 100% of the share capital of Advent Data Ltd. based on an enterprise value of €24.2 million or £20.8 million, inclusive of average net debt of €7.2 million or £6.2 million.

F&C Asset Management plc dropped 2.63% to 83.25 pence after the asset management company said fiscal year 2010 net revenue increased 8% to £243.2 million from £225.1 million pounds last year. Total loss for the year was £13.4 million pounds or 3.31 pence per share compared to a profit of £18.7 million pounds or 3.19 pence per share last year.

Interserve Plc climbed 1.43% to 249.00 pence after the builder and maintenance provider stated full-year 2010 revenue decreased 2.1% to £1.87 billion from £1.91 billion in the previous year. Profit for the year declined 28% to £49.7 million or 38.5 pence per share versus £68.7 million or 53.7 pence per share in the prior year.

Further, Interserve''s directors recommended a final dividend for the year of 12.4 pence, to bring the total for the year to 18.0 pence, an increase of 3% over last year.

Lloyds Banking Group plc dipped 1.01% to 60.90 pence after the financial services group said Archie Kane, Group Executive Director for Insurance and Scotland, intents to retire from the Group. Following his retirement, the Insurance division will be managed in two separate divisions in future, the company added.

Prudential Plc surged 4.48% to 746.00 pence after the insurer reported fiscal year 2010 total revenue, net of reinsurance fell 1% to £47.65 billion versus £48.10 billion a year ago.

On IFRS basis, profit for the year increased 112% to £1.43 billion from £676 million last year. Earnings per share grew to 56.6 pence from 27 pence a year ago.

Tullow Oil Plc dropped 2.53% to 1,423.00 pence after the oil and gas explorer said fiscal year 2010 sales revenue increased 19% to $1.09 billion from $915.9 million in the prior year, benefiting from higher oil prices. Profit for the year surged 114% to $54.0 million or 6.1 cents per share from $25.2 million or 3.1 cents per share last year.