FTSE Declines 2.3%; Close Brothers Net Slumps

Arthi Gupta
15 Mar, 2011
New York City

The UK indexes slid after reports of radiation leakage from Japanese nuclear plants dragged commodities stocks. The UK leading index rose and home prices eased in January. Serco Group agreed to buy The Listening Company.

[R]4:00 PM London – The UK indexes slid after reports of radiation leakage from Japanese nuclear plants dragged commodities stocks. The UK leading index rose and home prices eased in January. Serco Group agreed to buy The Listening Company.[/R]

Panic selling in Tokyo after more explosions at the Fukushima Dai-ichi nuclear plant spread to London in early trading. Japan''s Nikkei plunged more than 10% to a 2-year low with the political turmoil in the Middle East adding to investors’ woes.

In London, FTSE 100 Index declined 131.63 or 2.27% to 5,645.18 and the pound edged lower to close at $1.6004.

Fitch Affirms UK''s AAA Rating

Fitch Ratings on Monday affirmed UK''s AAA ratings with stable outlook.

Fitch said in its research notes that the UK''s deficit reduction plan is credible and the forthcoming budget is expected to reaffirm the government''s commitment to the path of deficit reduction, as set out in the June 2010 budget.

Rating agencies views are generally considered a lagging indicator and are not as important as once considered before the financial crisis. Fitch, Moody’s and S&P views on sovereign debts are also increasingly questioned by independent market analysts after they missed the debt debacle at Greece and Ireland.

UK Leading Index Rises

The Conference Board leading indicator for the UK rose 0.4% to 103 in January compared to a 0.6% increase to 102.6 in December. Five of the seven components made positive contributions to the index in January.

The coincident index rose 0.2% to 102.9 in January after stagnating at 102.7 in December.

UK Home Prices Ease

The UK home prices rose 0.5% annually to £208,552 in January compared to a 3.8% increase in December, the Department of Communities and Local Government said on Tuesday.

On a seasonally adjusted monthly basis, home prices fell 1.4% in January after a 0.5% increase in December. Average prices increased in England, but fell in Wales, Scotland and Northern Ireland.

Serco Group Acquires The Listening Company

Serco Group plc acquired The Listening Company, a UK based provider of outsourced customer contact centre services to both private and public sector organizations, for an initial cash consideration of £42.1 million which includes the repayment of £16.4 million of debt.

In addition, contingent payments of up to £13.8 million are payable, conditional on the financial performance in the two-year period from March 1 to the end of February 2013.

Gainers & Losers

Air Partner plc slumped 3.92% to 490.00 pence after the aviation company reported revenue for half-year to January 31 climbed 36.4% to £130.9 million from £95.92 million in the previous year. Profit for the period was £2 million or 19.4 pence per share compared to the loss of £1.29 million or 12.6 pence per share last year.

Close Brothers Group Plc fell 3.02% to 834.50 pence after the financial services group reported first-half profit slumped 68.3% to £14.6 million or 9.9 pence per share from £46.1 million or 31.7 pence per share in the prior-year period. Net interest income grew 19.5% to £112.2 million from last year''s £93.9 million.

Collins Stewart plc slumped 3.71% to 84.25 pence after the independent financial advisory group reported fiscal year 2010 revenue rose 16% to £215.7 million from £186.4 million in the prior year. Profit for the year grew 9% to £14.6 million or 5.8 pence per share from £13.4 million or 5.4 pence per share a year before.

Dealogic (Holdings) PLC dropped 2.65% to 275.00 pence after the provider of business software to the global investment banking industry reported fiscal year 2010 revenue increased 11.6% to $103.55 million from $92.78 million in the prior year. Profit for the year grew 2.7% to $25.26 million or 38.1 cents per share from $24.59 million or 32.1 cents per share a year before.

eXpansys Plc surged 8.37% to 2.85 pence after the online technology retailer signed a nationwide SIM card distribution agreement in the U.S. with T-Mobile.

Mears Group Plc plummeted 7.04% to 280.75 pence after the social housing repairs and maintenance provider reported fiscal year 2010 sales revenue increased 11.4% to 523.94 million pounds versus 470.15 million pounds a year ago. Net profit for the year climbed 6% to 14.76 million pounds or 16.57 pence per share compared to 13.96 million pounds or 17.94 pence per share last year.

PartyGaming Plc decreased 3.11% to 171.50 pence after the online gaming company said merger between the company and bwin Interactive Entertainment AG is scheduled to complete on March 31, subject to the formal approval from the Supreme Court in Gibraltar. On December 23 both the companies announced merger plan to create online gaming group.

Royal Dutch Shell plc dipped 1.23% to 2,094.00 pence after the oil giant set a production target for 2014, up around 12% from 2010, and said it expects $100 billion of net capital investment for 2011-14.

In a strategy update, the company said it is on track to deliver its targets by 2012.