UK House Prices Up 0.2%, Diageo to Acquire Brazil Based Ypi

Arthi Gupta
28 May, 2012
New York City

The UK indexes closed higher tracking European markets and home prices rose in May. Diageo agreed to acquire the premium Brazilian cacha

[R]1:30 PM London – The UK indexes closed higher tracking European markets and home prices rose in May. Diageo agreed to acquire the premium Brazilian cachaça brand Ypióca for £300 million. Rolls-Royce won £100 million support contracts for UK transport and tanker fleets.[/R]

The UK indexes gained after pro austerity parties in Greece led opinion polls in Greece ahead of the June 17 national election.

The conservative New Democracy party, the party that agreed with austerity measures to win European bailout gained a slim lead over the leftist SYRIZA party.

Spain remained in focus as investor began to size up the recapitalization plans for several banks and worried that Spain may need several hundred billions of euros of bailout from international lenders and the European Central Bank.

Over the weekend, Bankia, the fourth largest Spanish bank asked for 19 billion euros of bailout from Spanish government, twice the amount earlier expected. In addition, Spanish banks faced another downgrade by a rating agency and may not be able to access capital markets as interest rate on the borrowed capital jumped to unsustainable levels.

European Union is the largest market for the UK exports.

Investors are still worried about the depth and the duration of economic recession in UK as jobless rate and the rising food and energy prices have crimped disposable spending.

In London, the benchmark index FTSE 100 gained 58.66 or 1.1% to 5,410.18 and the pound edged higher to $1.5697.

Financial markets and government offices are closed in the U.S. to observe Memorial Day.

UK House Prices Rise

The average price for a home in the United Kingdom rose 0.2% in May, following the 0.1% gain in April, property tracking Web site Hometrack said today.

The number of new buyers registering with agents plummeted to 0.4% in May from 2.1% in April.

Irish Retail Sales Fall

Ireland''s retail sales volume declined a seasonally adjusted 1.5% on a monthly basis in April, after rising 0.1% in March, revised down from 0.2%, data released by the Central Statistics Office showed.

Retail sales of food, beverages and tobacco dropped 0.7% sequentially in April.

Compared to last year, retail trade fell 2.7% in April, following the revised 0.9% drop in March.

Diageo to Acquire Ypióca

Diageo, the alcohol beverages maker agreed with Ypióca Agroindustrial Limitada to acquire the premium cachaça brand, Ypióca, and certain production assets for Brazilian Real 900 million or about £300 million in cash.

Gainers & Losers

AVEVA Group Plc soared 10.1% to 1,631 pence after the providers of engineering data and design IT system reported for the year ended March, revenue increased 13% to £195.9 million from £174.0 million the prior year. Profit before tax for the period increased 14% to £62.3 million compared to £54.7 million in 2011.

Inmarsat Plc, the maritime satellite services provider climbed 3.2% to 413.40 pence after a broker upgrade.

Prudential plc rose 0.6% to 687.50 pence and the life insurance and financial services company appointed Paul Manduca as Chairman.

Rolls-Royce Holding plc increased 1.2% to 817 pence after the provider of power systems and services secured military contract extensions worth almost £100 million to provide ongoing support for engines on the UK’s C-130 Hercules transport and VC10 tanker fleets.