UK Indexes Drop; BP and TNK in Russia Disagree

Arthi Gupta
14 Mar, 2011
New York City

The UK indexes dropped as the devastating earthquake in Japan added to a growing list of worries ranging from the Middle East turmoil and European sovereign debt default. BP and TNK-BP talks ended in a stalemate over Rosneft deal.

[R]4:00 PM London – The UK indexes dropped as the devastating earthquake in Japan added to a growing list of worries ranging from the Middle East turmoil and European sovereign debt default. BP and TNK-BP talks ended in a stalemate over Rosneft deal.[/R]

UK stocks edged lower as prices in the resource markets and commodities linked companies declined.

Markets sentiment was weak for the second day in a row as Japan struggled to avoid a meltdown at a number of nuclear plants and more than 1.4 million households struggle without electricity and water.

The sentiment was further weakened after violent protest spreads to Saudi Arabia and Libyan turmoil shows no sign to abate.

In London, FTSE 100 Index declined 53.77 or 0.90% to 5,774.52 and the pound edged higher to close at $1.6130.

Brunei Shell Petroleum Discovers Oil

Brunei Shell Petroleum announced a significant new oil discovery in the coastal waters of the south-east Asian sultanate. The discovery, named Geronggong, is situated in the 3rd Offshore Acreage Area, about 100 kilometers offshore where water depth is about 1,000 meters, the deepest water depth in which BSP discovered hydrocarbons in Bruneian acreage.

Parseq Inks Deal with Lloyds Banking

Parseq plc signed a new multi-million pound outsourcing contract with the Lloyds Banking Group. The deal covers a three-year period and extends Parseq''s relationship with Lloyds significantly; bringing HBOS as a new customer and further securing long-term revenue visibility.

BP and TNK-BP Talks End in Stalemate

BP plc and its Russian joint venture TNK-BP failed to settle their dispute regarding a planned $16 billion deal between BP and Russian state-controlled oil company OAO Rosneft.

The BP-Rosneft deal proposes a share swap that would give Rosneft a 5% stake in BP and allow BP to jointly explore and develop parts of the Russian Arctic with Rosneft. In turn, BP would get 9.5% of Rosneft''s shares in the deal.

The arctic development project comprises three license blocks that were awarded to Rosneft in 2010 and cover about 125,000 square kilometers in a highly prospective area of the South Kara Sea.

Gainers & Losers

Bovis Homes Group Plc gained 2.79% to 441.60 pence after the homebuilder reported revenue advanced 6.1% to £298.64 million from £281.51 million in the previous year. Profit for the period surged 302% to £14.04 million or 10.6 pence per share from £3.49 million or 2.8 pence per share in the previous year, helped by higher volumes and stronger sales prices.

Additionally, the company said it would resume dividend payments.

Brady plc slumped 5.13% to 74.00 pence after the provider of trading, risk management and settlement solutions to the commodity sectors reported fiscal year 2010 sales revenue rose 36% to £11.12 million from £8.19 million a year earlier. Profit for the year declined 54% to £491,000 or 1.62 pence per share compared with £1.06 million or 3.61 pence per share in 2009.

Irish Continental Group Plc rose 0.63% to 17.75 pence after the maritime transport firm full year 2010 revenues grew 0.7% to €262.2 million from €260.5 million in the preceding year. Profit for the year improved 55% to €39.0 million from €25.2 million in the prior year. On a per share basis, earnings were 155.7 euro cents, up from 101.5 euro cents per share a year ago.