UK Government Borrowing Rises; Croda Net Rises 26%

Arthi Gupta
21 Feb, 2012
New York City

The UK indexes dropped from the seven-month high as investors digest the details of Greek agreement with troika. The UK public sector net borrowing needs declined in January. Croda International fiscal 2011 sales rose 6.6%.

[R]3:00 PM London – The UK indexes dropped from the seven-month high as investors digest the details of Greek agreement with troika. The UK public sector net borrowing needs declined in January. Croda International fiscal 2011 sales rose 6.6%.[/R]

The UK indexes declined from the seven-month high and investors digested the details of Greek agreement.

London investors and politicians have generally taken cautious and at times skeptical view about the euro and the Greek bailout.

The historic agreement for the second bailout at least for now prevents Greece from defaulting on its loans due next month but also shows the political will and commitment in the euro zone to protect Greece and the euro, something that is not viewed favorably by the British establishment.

Though Greece is struggling with its finances and is facing serious issues in implementing reforms and increasing tax collection, but the nation is closer now than before in lowering its debt targets and stabilizing the economy.

Greece may need more aid in the years after 2014 and lenders and politicians appeared to be prepared for it. Between 2015 and 2020, Greece may need additional loan of €50 billion.

In London trading FTSE 100 Index declined 20.56 or 0.4% to 5,925 and the pound edged lower to $1.5808.

UK Public Sector Net Borrowing Rises

The UK''s public sector net borrowing excluding interventions showed a surplus of £7.75 billion in January, £2.5 billion lower net borrowing than in January 2011, the Office for National Statistics said in a report today.

The year-to-date budget deficit was £93.5 billion.

Excluding financial interventions, the public sector current budget surplus rose to £11.8 billion from £9.2 billion in January 2011.

Gainers & Losers

AMEC plc dipped 0.4% to 1,104 pence after the global consultancy, engineering and project management company said revenue increased 11% to £3,261 million.

The company further announced a £400 million share buy-back program.

ANT PLC surged 8.5% to 25.50 pence after the company which develops software for the delivery of digital TV announced a tie up with Taiwanese outfit Skyviia.

Croda International PLC soared 3.9% to 2.110 pence after the specialty chemical producer said total sales for the fiscal 2011 rose 6.6% to £1.068 billion compared to £1.002 billion in 2010. Full-year pre-tax profits grew 25.9% to £242.2 million from £192.3 million in 2010.

Rio Tinto Plc fell 0.1% to 3,703 pence but traded higher in Sydney, Australia after the Greek agreement announcement.

Xchanging PLC climbed 1.2% to 86 pence after the business process and technology services provider won a renewal of its contract with BAE Systems to provide procurement services in the UK.