UK Public Sector Borrowing Drops; Whitbread, Misys Surge

Arthi Gupta
21 Jun, 2011
New York City

The UK indexes climbed as concerns eased about a Greek debt default. The UK public sector borrowing declined in May and manufacturing demand remained strong in June. Irish trade surplus narrowed in April.

[R]3:00 PM London – The UK indexes climbed as concerns eased about a Greek debt default. The UK public sector borrowing declined in May and manufacturing demand remained strong in June. Irish trade surplus narrowed in April.[/R]

UK investors looked beyond Greek confidence vote and stocks rallied in anticipation of speedy resolution of the ongoing Greek crisis.

Greek Prime Minister George Papandreou is seeking a crucial vote of confidence this evening in the Parliament that will be a deciding factor for the second tranche of bailout by the European Union and the International Monetary Fund.

The confidence vote is the first of three conditions laid by the euro-zone finance ministers and the IMF to disburse last tranche of the first bailout.

In London, FTSE 100 Index gained 43.47 or 0.8% to 5,736.71 and the pound edged higher to $1.6208.

UK Public Sector Borrowing Drops

The UK public sector borrowing declined in May as receipts from sales tax surged from last year, official data showed today.

Public Sector Net Borrowing, excluding financial interventions, was £17.4 billion in May compared with £18.5 billion in May 2010, the Office for National Statistics said.

The year-to-date borrowing of the government rose to £27.4 billion versus £25.9 billion logged for the same period of 2010/11. The PSNB for the full year 2010-11 was upwardly revised to £143.2 billion from £139.4 billion.

UK Manufacturers Report Solid Demand

UK manufacturers expect solid growth in output in the coming quarter after logging healthy order book balance in June, the Confederation of British Industry said on Tuesday.

Manufacturing demand remained strong in June. Of the 457 manufacturers responding to the CBI’s latest monthly Industrial Trends Survey, 27% of manufacturers describe total orders as above normal, while 26% said they were below normal. The resulting balance of +1% is well above the long-term average of -18%.

Irish Trade Surplus Narrows

Ireland''s trade surplus narrowed to a seasonally adjusted €2.62 billion in April from €4 billion in March, data released by the Central Statistics Office showed on Tuesday.

Export of goods fell a seasonally adjusted 2% to €7.53 billion in April from €7.72 billion in March. Imports surged 32% to €4.91 billion in April from €3.72 billion in March.

Foster''s Group Rejects SABMiller Offer

Foster''s Group Ltd., the Australian beer maker rejected an unsolicited and conditional offer from the UK listed brewer SABMiller plc to acquire it for A$4.90 per share in cash or $9.98 billion.

The company rejected the offer and said it “undervalues” the company.

Weatherford Settles Claims with BP

Weatherford International Ltd., an equipment and service provider to oil and natural gas producing companies, said its U.S. subsidiary reached an agreement with BP plc for settlement of any claims between the companies related to the Deepwater Horizon oil spill. Weatherford provided products and services to BP for the Macondo oil well.

Under the settlement, BP will indemnify Weatherford for current and future compensatory claims resulting from the incident and the impacts from that event.

Gainers & Losers

Creston Plc fell 1.8% to 111.00 pence after the communications firm stated fiscal year 2011 revenues climbed 10.6% to £67.77 million from £61.26 million in the prior year. Profit for the year declined 54.2% to £2.35 million or 3.89 pence per share versus £5.13 million or 8.74 pence per share last year.

Jupiter Fund Management plc plunged 4% to 245 pence after the investment management firm estimated first-half EBITDA growth of 17% and revenue growth of 15%.

Misys Plc surged 8.7% to 417.90 pence after the financial services software provider received a preliminary approach that may or may not lead to a takeover offer.

The Capital Pub Company Plc gained 3.69% to 198.05 pence after London''s largest free house operator reported fiscal year 2011 revenues rose 24% to £27.2 million from £22.01 million reported in the previous year. Profit before tax for the year was £3.46 million compared to a pre-tax loss of £1.51 million a year ago.

Whitbread Plc soared 6.4% to 1,580 pence after the hotel and restaurant group reported sales grew 9.2% from last year, helped by a 22.5% growth at Costa, and an 8.1% rise at Premier Inn''s for the 13 weeks ended June 2.

Total like-for-like sales rose 1.7% following a 3% growth at Premier Inn and a 4% rise in Costa.