UK Indexes Rise; Irish Industrial Production, Construction Drops

Arthi Gupta
11 Apr, 2011
New York City

The UK indexes traded higher after banking stocks rose after the independent commission did not recommend breaking large banks. Irish industrial production and construction dropped. BHP Billiton completed its $10 billion stock buyback program.

[R]4:00 PM London – The UK indexes traded higher after banking stocks rose after the independent commission did not recommend breaking large banks. Irish industrial production and construction dropped. BHP Billiton completed its $10 billion stock buyback program.[/R]

In London, FTSE 100 Index gained 2.03 or 0.03% to 6,058.17 and the pound edged higher to close at $1.6390.

Commission Urges UK Banks to Raise Capital

The Independent Commission on Banking on Monday recommended banks in the United Kingdom to hold more equity in relation to assets to achieve greater loss-absorbency and to ring-fence their retail banking activities.

In its interim report, the Commission said the retail banking subsidiaries of the universal banks should hold core Tier 1 capital of at least 10%.

The Commission urged the Lloyds Banking Group to substantially enhance its divestment. Lloyds Banking Group which is already in the process of selling 600 branches could be forced to sell more, according to an interim report published by UK''s Independent Commission on Banking.

The final report is due on September.

Irish Industrial Production, Construction Drop

Ireland''s industrial production dropped an unadjusted 0.3% annually in February after a 3.4% gain in January, according to official data released today. That was the first decline since last April. Manufacturing output increased 0.2% in February compared to January''s 3.9% growth.

On a monthly basis, industrial output dropped a seasonally adjusted 2.4% in February, which was the first decline in four months. In January, production edged up 0.1%. Manufacturing also declined 2.3% in February after January''s 0.2% growth.

Ireland''s construction sector contracted at a faster pace in March, mainly due to decline in new orders, data from a survey conducted by Ulster Bank and Markit Economics showed on Monday.

The construction purchasing managers’ index declined to 46.1 in March from 47.8 in February.

Citigroup Tower on Sale

The 45-storey Citigroup Tower in Canary Wharf, London, has been put up for sale for more than £1 billion or $1.64 billion, the Financial Times reported on Sunday.

The third-tallest building in the UK is leased to financial services provider Citigroup Inc. as its headquarters for Europe, the Middle East and Asia.

Compass Acquires India-based Catering Specialists

Compass Group Plc acquired Vipul Facility Management Private Ltd. and Ultimate Hospitality Services Private Ltd. in India. VFM located in Delhi has a national presence specializing in the provision of support services.

UHS is a strong regional player in the foodservice industry in Hyderabad specializing in the provision of food services to the Business and Industry sector.

Capita Purchases Tribal Group Divisions

Capita Group Plc entered into a conditional agreement to acquire the health and government divisions of Tribal Group Plc for a cash consideration of £15.8 million on a cash-free, debt free basis, including a deferred consideration of up to £2.5 million.

According to Capita Group, the acquisition adds key new capabilities to its health and consulting businesses.

Gainers & Losers

GKN plc gained 1.83% to 206.10 pence after the automotive and aerospace engineer reported higher profit and sales for the first quarter of 2011 despite production disruption in Japan due to the recent earthquake and tsunami.

Sales for the quarter increased 14% to £1.49 billion from £1.31 billion last year. The company''s pre-tax profit on a management basis rose 51% to £107 million from £71 million in the year-ago quarter.

Helical Bar plc fell 0.87% to 273.00 pence after the property business said it sold certain assets from its portfolio generating total proceeds of £24 million.

Lok''n Store Group Plc declined 0.38% to 105.60 pence after the provider of self storage and related services stated first-half revenue increased 4.4% to £5.42 million from £5.19 million in the same period last year.

Pre-tax profit rose 216% to £604,000 from £191,000 last year. On a per share basis, earnings were 1.53 pence, up from 0.24 pence in the prior year period.

Michael Page International Plc rose 1.26% to 523.50 pence after the recruitment consultancy reported first quarter gross profit rose 30% to £127.3 million from prior year''s £97.9 million, boosted by strong growth in all regions and business disciplines.

RWS Holdings plc surged 4.01% to 402.00 pence after the patent translation specialist estimates first-half group revenues to increase by at least 10% to £32.4 million from £29.4 million in the comparable prior-year period.