UK Indexes Rise and Rates on Hold, Morrison Net Rises 9%

Arthi Gupta
08 Mar, 2012
New York City

The UK indexes rose ahead of Greek debt swap deadline this evening. The Bank of England retained interest rate at record low and maintained quantitative easing program. Aviva operating profit rose in fiscal year 2011.

[R]3:15 PM London – The UK indexes rose ahead of Greek debt swap deadline this evening. The Bank of England retained interest rate at record low and maintained quantitative easing program. Aviva operating profit rose in fiscal year 2011.[/R]

The UK indexes gained on optimism ahead of the Greek debt swap deal with a deadline this evening. However, it is far from clear if Greece will be able to avoid a default.

At least 61% of private holders of Greek debt have agreed to the swap but uncertainty reigns if hedge funds will participate in the swap or challenge the offer in courts that may drag for more than a decade.

The Bank of England today decided to retain the interest rate at 0.50%.and also maintain the asset purchase program at £325 billion.

The BoE is set to publish the minutes of the meeting on March 21.

The European Central Bank left its key interest rate unchanged at a record low 1% for the third month in a row.

In London trading FTSE 100 Index gained 65.12 or 1.1% to 5,856.77 and the pound edged higher to $1.5789.

Gainers & Losers

Alkermes plc fell 2.5% to $16.86 after the integrated biotechnology company announced the pricing of an underwritten public offering of 21 million ordinary shares held by a subsidiary of Elan Corporation, plc at a price to the public of $16.50 per share.

Allied Irish Banks, plc soared 8.2% to €0.12 after the commercial bank said it would reduce its staff cost base by around €170 million in a full year that may lead to 2,500 job cuts.

Aviva Plc climbed 1.9% to 357.70 pence after the insurer reported full-year 2011 operating profit on continuing operations rose 6.4% to £2.16 billion from £2.03 billion in 2010.

Net earned premiums from continuing operations declined 6.4% to £28.09 billion from £30 billion a year ago.

The company increased its full-year dividend to 26 pence per share from 25.5 pence per share paid last year.

Balfour Beatty plc surged 5.9% to 281.20 pence after the infrastructure firm said fiscal year 2011 total group revenues rose 3% to £11.035 billion. Pre-tax profits rose 9% to £334 million.

Compass Group PLC gained 0.3% to 649.50 pence after the catering and services firm won approval for its acquisition of South African cleaning company Supercare Services.

William Morrison Supermarkets plc gained 0.3% to 649.50 pence after the food retailer reported full-year 2011 revenue rose 7% to £17.7 billion from £16.5 billion in 2010. Net profit for the period increased 9% to £690 million from £632 million the prior year.

The company hiked its total dividend for the year by 11%.