UK Indexes Fall; Astra Zeneca in $1.8 Billion Deal

Arthi Gupta
22 Jun, 2011
New York City

The UK indexes slid after Greek government survived a confidence vote. The minutes showed that the Bank of England policy makers retained the interest rate and asset purchase program by a split vote. Employment intentions in the UK indicated increase in job creation in the six months.

[R]3:00 PM London – The UK indexes slid after Greek government survived a confidence vote. The minutes showed that the Bank of England policy makers retained the interest rate and asset purchase program by a split vote. Employment intentions in the UK indicated increase in job creation in the six months.[/R]

Greek Prime Minister George Papandreou survived a closely watched confidence vote in parliament yesterday with more than half the members in the 300-strong Parliament voting in his favor.

The 155-143 vote in favor of government is the first of three steps necessary to win the last tranche of European Union bailout.

In London, FTSE 100 Index gained 1.28 or 0.03% to 5,776.48 and the pound edged lower to $1.6118.

BoE Divided on Rate Decision

The Bank of England''s policy makers retained the interest rate at a record low in June, again by a split vote, the minutes of the meeting showed today.

Seven members of the Monetary Policy Committee including new policy maker Ben Broadbent voted to maintain the bank rate at 0.5% but Spencer Dale and Martin Weale sought an increase in the rate by 25 basis points to 0.75%.

In terms of the asset purchase program, eight members voted in favor of the proposition to leave the size of the scheme unchanged at £200 billion but Adam Posen called for £50 billion increase in the program.

BoE Agents’ Forecast Job Creation

Employment intentions in the UK indicated increase in job creation over the next six months, Agents'' summary of business conditions compiled by the Bank of England showed today.

Further, the report noted the growth rate of nominal spending on consumer goods and services remained sluggish. Investment intentions indicated that capital spending was likely to continue to grow at a reasonably steady and mmanufacturing output continued to expand at a steady pace.

DENTSPLY Acquires Astra Tech

DENTSPLY International Inc., a professional dental products maker signed an agreement to acquire Astra Tech, a leading provider of dental implant products, based in Mölndal, Sweden, from AstraZeneca for approximately $1.8 billion in cash.

Dentsply said the deal would create a global competitor with a number three market position.

Gainers & Losers

Cable & Wireless Worldwide Plc fell 2.15% to 50.05 pence after the telecommunications firm confirmed that its board considered and rejected the approach received for its global business division.

Imagination Technologies Group plc dropped 2.8% to 420.80 pence after the chip designer reported revenue for 12 months to April 30 rose 21.1% to £98.04 million from £80.93 million in the previous year. Profit for the year climbed 36% to £19.28 million compared to £14.21 million last year. Earnings per share were 7.4 pence, up from 5.6 pence a year ago.

Kesa Electricals Plc rose 2.24% to 136.90 pence after the electrical and electronic items retailer reported fiscal year 2011 Group revenue increased 2.2% to €5.92 billion from €5.79 billion a year ago. Full-year pre-tax profit decreased 22% to €60.7 million from €77.8 million a year ago.

Rolls-Royce Group plc dipped 4 pence to 600 pence after the global power systems and services provider reached a $100 million settlement with Australian airline Qantas over last year''s mid-air disintegration of a superjumbo A380 engine.

Royal Dutch Shell plc gained 0.39% to 2,167.00 pence after the independent oil and gas explorer agreed to acquire 254 petrol retail sites in the UK from Rontec Investments LLP for a total cash of about $400 million or £240 million.

The Weir Group PLC climbed 0.8% to 2,073.00 pence after the engineering company said it is acquiring majority stake in the South Korean valves business, formerly operated by HIM Tech Co Ltd., to strengthen its global valves business.