Manufacturing Output in Ireland Rises; BSkyB Slumps 6.5%

Arthi Gupta
11 Jul, 2011
New York City

The UK indexes traded lower on global economic concerns as Italy gained the focus of bond investors. Manufacturing output in Ireland increased in May and construction activity dropped in June. BSkyB slumped 6.5% after the company''s proposed acquisition by News Corporation is under scanner.

[R]3:00 PM London – The UK indexes traded lower on global economic concerns as Italy gained the focus of bond investors. Manufacturing output in Ireland increased in May and construction activity dropped in June. BSkyB slumped 6.5% after the company''s proposed acquisition by News Corporation is under scanner.[/R]

The British Chambers of Commerce’s latest Quarterly Economic Survey released today suggested that economic growth in the UK remains weak. The survey results, combining 6,600 responses from businesses across the UK estimated GDP quarterly growth in the second quarter at only 0.3%.

British Secretary of State for Culture, Olympics, Media and Sport Jeremy Hunt is asking the Office of Communications and the Office of Fair Trading to review British Sky Broadcasting''s proposed acquisition by News Corporation.

News Corp.''s competency as a ""fit and proper"" owner is also under the scanner, according to reports. There is a growing consensus among lawmakers that NewsCorp should withdraw its bid for BSkyB.

News Corp.-owned News of the World issued its final edition on Sunday after the newspaper''s alleged involvement in the phone hacking scandal. The lack of journalism standards and complete disregard to the privacy of the families of the murder victim and fallen soldier finally brought down the oldest and best selling tabloid in the UK.

In London, FTSE 100 Index declined 59.05 or 0.99% to 5,931.20 and the pound edged lower to $1.5958.

Ireland Factory Output Rises, Construction Activity Drops

Manufacturing output in Ireland increased a seasonally adjusted 0.3% from a year ago in May as against the 5.7% growth recorded in April, revised up from 4%, preliminary data released by the Central Statistics Office showed today.

On a monthly basis, factory production decreased 0.1% in May, reversing the downwardly revised 1.7% rise in April.

Ireland''s construction industry activity declined in June, according to data from a survey conducted by Market Economics and Ulster Bank released today.

The Ulster Bank purchasing managers'' index for the construction sector decreased to 40.5 in June from 41.1 in May. The rate of fall increased for the fourth straight month, and was fastest since March 2010, the agency said.

Gainers & Losers

Bank of Ireland Plc plunged 8.62% to €0.11 after the Irish lender plans to raise €1.9 billion from shareholders through a rights issue this month as part of its drive to boost capital to meet regulatory requirements.

British Sky Broadcasting Group plc slumped 6.5% to 701 pence after the satellite broadcasting company''s proposed acquisition by News Corporation is under scrutiny.

News Corp. currently owns a 39% stake in BSkyB and recently made an offer to acquire the remaining 61% shares at 700 pence per share.

GlaxoSmithKline Plc fell 0.65% to 1,366.50 pence after the healthcare company said that the FDA has approved Boostrix for use in older patients against tetanus, diphtheria and whooping cough.

HSBC Holdings plc slid 0.39% to 615.80 pence after the banking and financial services firm said HSBC Insurance Services Holdings Ltd. agreed to sell its wholly owned subsidiary HSBC Insurance (UK) Limited to Syndicate Holding Corp. for a total cash consideration of £68.5 million.

Michael Page International Plc gained 0.09% to 534 pence after the recruitment consultancy said second quarter gross profit climbed 32.4% to £147.8 million from £111.7 million in the prior year.

Northumbrian Water Group Plc soared 5.11% to 448.10 pence after the water utility said it received a non-binding takeover proposal of 465 pence per share in cash from Hong Kong-based Cheung Kong Infrastructure valuing the company at about £2.4 billion or about $3.8 billion.