UK Indexes Slip; Record Factory Gate Inflation

Arthi Gupta
11 Mar, 2011
New York City

The UK indexes declined tracking the declines in the European and world markets. The UK factory gate inflation rose to 28-month high in February. BP expanded biofuels business in Brazil. Chevron agreed to sell Pembroke Refinery and certain UK assets to Valero Energy for $1.73 billion.

[R]3:00 PM London – The UK indexes declined tracking the declines in the European and world markets. The UK factory gate inflation rose to 28-month high in February. BP expanded biofuels business in Brazil. Chevron agreed to sell Pembroke Refinery and certain UK assets to Valero Energy for $1.73 billion.[/R]

A massive earthquake, recording 8.9 on the Ritcher''s scale, took place around 2.45 p.m. local time in northeastern Japan, causing large scale destruction. Tsunami warning was released and huge waves, rising as high as 7 meters, have been reported from Shendai city north of Tokyo.

Reports say at least 60 people have been killed and preliminary estimates of various local media suggest the deal toll to rise to hundreds. More than four million homes in Tokyo and surrounding area are without electric power.

About a third of Japan’s electric energy is produced at 55 nuclear power plants.

A tsunami warning has been issued across the Pacific, extending to large parts of the West Coast of the United States, from Alaska to California.

In London, FTSE 100 Index declined 18.73 or 0.32% to 5,826.70 and the pound edged lower to close at $1.5994. For the week, the FTSE 100 Index plummeted 2.77%.

UK Factory Gate Inflation Increases

The UK output price inflation rose to 5.3% in February from 5% in January, according to data from the Office for National Statistics released on Friday.

On a monthly basis, increase in output prices was 0.5% in February as against January''s 1.1% increase.

Between January and February output price rose 0.5% mainly reflecting price rises in petroleum, food and alcohol products.

BP Expands Biofuels Business in Brazil

BP agreed to acquire majority control of Brazilian ethanol and sugar producer Companhia Nacional de Açúcar e Álcool for about $680 million or £421 million.

The acquisition is the oil giant’s biggest ever in the alternative energy sector.

Under the terms of the deal it will take on 83% of CNAA’s shares and 100% of its existing debt. Following the acquisition it will become the operator of two ethanol mills, in Goiás and Minas Gerais states. CNAA is developing a third mill in Minas Gerais.

The acquisition would increase BP''s overall Brazilian production capacity, once CNAA''s assets are fully developed, to around 1.4 billion liters of ethanol equivalent per year or nine million barrels.

Chevron Sells Pembroke Refinery, UK Assets to Valero Energy

Chevron Corp., the second largest U.S. oil company, agreed to sell its Pembroke refinery and other downstream assets in the UK and Ireland to Valero Energy Corp. for a total consideration of $1.73 billion, including $1 billion payment for inventory and other items.

Rolls-Royce Launches Marine Service Centre in Rotterdam

Rolls-Royce Group plc said it opened its newly expanded and modernized Marine Service Centre in the Port of Rotterdam.

The facility, located in Pernis, Rotterdam serves a variety of customers from the commercial and offshore sectors, as well as the Royal Dutch Navy. It can repair and overhaul the full range of Rolls-Royce diesel and gas engines, thrusters, steering gear and propellers.

Brainspark in Deal with Gruppo Bancario Mediterraeo

Brainspark plc said it entered into an agreement with Gruppo Bancario Mediterraneo Holding SpA, or GBM Holding.

Under the agreement, GBM Holding will coordinate a fund raising program in Italy on behalf of Brainspark of up to €10 million.

Gainers & Losers

AGA Rangemaster Group Plc surged 11.48% to 136.00 pence after the home appliances company reported fiscal year 2010 revenues increased 5.8% to £259.1 million from £245 million in the previous year. For the year, profit surged 782% to £15 million or 21.7 pence per share from £1.7 million or 2.5 pence per share in the prior year.

HSBC Holdings plc fell 0.18% to 658.80 pence after the global banking and financial services company said Kane Group would purchase HSBC Insurance Holdings Bermuda Ltd., HSBC Insurance SPC Ltd. and the insurance management business and assets of HSBC Bank (Cayman) Ltd. and HSBC Insurance Agency (USA) Inc. for a total amount of $27.5 million payable in cash.

JD Wetherspoon Plc climbed 0.02% to 431.00 pence after the pub chain operator reported first-half total sales, including new pubs, grew 7.6% to £525.36 million from £488.13 million last year. Like-for-like sales increased 2.3%. Profit for the period declined 9.1% to £22.14 million or 15.9 pence per share from last year''s £24.37 million or 17.5 pence per share.

Marshalls Plc plunged 3.21% to 113.00 pence after the construction materials company reported fiscal year 2010 revenues rose 3.7% to £323.1 million from £311.69 million in the previous year. Profit for the year was £7.35 million or 3.69 pence per share compared to loss of £752,000 pounds or 0.42 pence per share in the prior year.

Royal Bank of Scotland Group plc dropped 0.51% to 42.78 pence after the bank sold the Brighton Hilton Hotel to Topland Group for £39.25 million in cash.