UK Consumer Confidence Strengthens; Home Prices Rise

Arthi Gupta
27 May, 2011
New York City

The UK indexes climbed after home prices rose in May and consumer confidence rose to record level in May. Irish retail sales declined in April. Vedanta proposed to raise $1.65 billion through bond offering.

[R]4:00 PM London – The UK indexes climbed after home prices rose in May and consumer confidence rose to record level in May. Irish retail sales declined in April. Vedanta proposed to raise $1.65 billion through bond offering.[/R]

German inflation slowed unexpectedly in May, according to data released from the Federal Statistics Office today. EU harmonized annual inflation slowed to 2.4% on a yearly basis in May from 2.7% in April.

In London, FTSE 100 Index gained 57.66 or 0.97% to 5,938.37 and the pound edged higher to close at $1.6424. For the week, the FTSE 100 Index fell 0.16%.

UK Home Prices Rise

The UK home prices rose 0.3% in May to £167,208, after falling 0.2% in April, data from the Nationwide Building Society showed.

On a yearly comparison, home prices declined 1.2% in May compared to a fall of 1.3% in April.

UK Consumer Confidence Improves

In the UK, consumer confidence jumped the most in 18 years in May as Britons became less pessimistic about their economic outlook, a report by GfK NOP showed.

Research firm GfK NOP said that its consumer confidence index improved by 10 points to a reading of minus 21. It was the second largest jump in confidence ever, after a 12 point jump in May 1993.

Irish Retail Sales Decline

Ireland''s retail sales volume declined a seasonally adjusted 3.9% annually in April compared to the 1.9% fall recorded in March, data from the Central Statistics Office showed on Friday. Sales declined for the third consecutive month.

Excluding sales of automobiles, retail sales dropped 5% annually in April, after declining 3.8% in March.

On a monthly basis, retail sales dropped a seasonally adjusted 0.8% in April, after recording a flat reading in March.

Vedanta Announces Bond Offering

Vedanta Resources Plc announced the pricing of its private placement of bonds to raise an aggregate principal amount of $1.65 billion. The company plans to utilize the proceeds of the offering to finance a portion of the acquisition of Cairn India.

According to the company, the bonds will be sold in two tranches. The offer consists of a $750 million aggregate principal amount of 6.75% bonds due 2016 and $900 million aggregate principal amount of 8.25% bonds due 2021.

Gainers & Losers

Bloomsbury Publishing PLC fell 1.52% to 130.00 pence after the publishing house reported revenue for the 14-month period ended 28 February 2011 was £103.4 million and pre-tax profit was £4.22 million.

Britvic Plc rose 1.31% to 431.60 pence after the soft drinks company reported first-half group revenue climbed 25.3% to £633.1 million from £505.3 million in the previous year. Profit for the period fell 33.5% to £15.8 million or 6.4 pence per share from £21.1 million or 9.5 pence per share a year ago.

Severn Trent Plc gained 1.13% to 1,519.00 pence after the water utility reported fiscal year 2011 turnover improved 0.6% to £1.71 billion from £1.7 billion in the prior fiscal. Profit for the year increased 9.4% to £272.6 million or 114.6 pence per share from £249.2 million or 105.5 pence per share in the preceding year.

Tate & Lyle Plc dipped 0.25% to 607.00 pence after the maker of ingredients and solutions for food and beverages reported fiscal year 2011 annual sales increased 7% to £2.72 billion from £2.53 billion in fiscal year 2010. Pre-tax profit for the year was £245 million compared with a pre-tax loss of £116 million last year.

Tullow Oil plc increased 2.07% to 1,332.00 pence after the oil and gas producer entered into a conditional agreement to acquire the interests of EO Group Ltd., consisting of its entire interests offshore Ghana, for $305 million in cash and shares.