UK Retail Sales Rebound; Vodafone Won Tax Ruling in India

Arthi Gupta
20 Jan, 2012
New York City

The UK indexes fluctuated after retail sales volume rebounded in December. Irish economy is estimate to weaken this year. Vodafone won its tax case against Indian government for the purchase of a stake in the local telecom carrier.

[R]2:50 PM London – The UK indexes fluctuated after retail sales volume rebounded in December. Irish economy is estimate to weaken this year. Vodafone won its tax case against Indian government for the purchase of a stake in the local telecom carrier.[/R]

The UK indexes fluctuated after retail sales rose and for the week the benchmark index is set to gain 1.9% in the week.

Investors focused on the outcome of stalled talks between Greece and its international lenders that may affect the holdings of several UK based banks.

Greece is looking to cut its debt load by €100 billion and Greek government is offering new securities to bond holders that pay less than 4% but private lenders, mostly hedge funds, are demanding higher interest rates and lower cut in the principal payment.

Greece is looking to cut its interest payment by €4 billion a year and cut its debt to GDP ratio to 120% from the current 140%.

Greece needs to wrap up its discussion by next week to avail the next tranche of its €130 billion bailout from European institutional lenders.

In London, FTSE 100 Index gained 0.46 or 0.01% to 5,741.20 and the pound edged higher to $1.5473.

For the week, the FTSE 100 Index advanced 1.9%.

UK Retail Sales Rebound

UK retail sales volume, including auto fuel, climbed 0.6% on a monthly basis in December, following a revised 0.5% drop in November, data from the Office for National Statistics showed today.

On a yearly basis, sales edged higher 2.6% in December.

Food stores sales increased 1.2% from a year ago and non-food store sales climbed 1.1% in December.

Excluding auto fuel, retail sales volume advanced 0.6% in December, reversing the 0.8% drop in November.

Irish Economy to Weaken

Ireland''s economic growth is likely to weaken this year, according to a report released by the international lenders or troika.

The troika comprising the European Commission, the International Monetary Fund and the European Central Bank said that the gross domestic product will expand 0.5% in 2012, weaker than the 1% projected earlier in October.

Ireland is aiming to lower its budget deficit to 8.6% of GDP for 2012, and to reach the 3% of GDP deficit target by 2015.

Gainers & Losers

Close Brothers Group Plc rose 1.1% to 666 pence after the specialist financial services company said in the five-month period ended December 31, 2011, the Banking division''s loan book increased to £3.8 billion from £3.4 billion as at July 31, 2011, reflecting ongoing good demand across the portfolio.

Assets under Management, as at December 31, 2011 were £8.4 billion, lower than £9.6 billion as at July 31, 2011.

Kentz Corp. Ltd. fell 3.2% to 445.10 pence after the engineering solutions business said it appointed Christian Brown as chief executive, effective February 1, 2012.

RM Plc gained 1.1% to 66 pence after the company engaged in education solutions decided to dispose of the access control and cashless catering systems part of the AMI business known as Easytrace.

Vodafone Group Plc advanced 1.5% to 177.20 pence after the telecommunications carrier received a favorable judgment from the Indian Supreme Court in a tax case related to the acquisition of interests in mobile operator Hutchison Essar Limited.

The highest court denied the government’s request to tax the company for capital gains and said even if the taxes were to be collected it should have been paid by the Cayman unit of the Hong Kong based Hutchison, the seller and not the buyer of the stake in India’s mobile carrier.