UK Retail Sales Rise, BG Group Sells Comg

Arthi Gupta
29 May, 2012
New York City

The UK indexes advanced after high street sales rose in May. BG Group agreed to sell Comg

[R]4:00 PM London – The UK indexes advanced after high street sales rose in May. BG Group agreed to sell Comgás stake to Brazil-based Cosan for $1.7 billion. Wolseley slumped 3.5% after quarterly revenues fell.[/R]

The UK indexes traded higher on optimism that the Chinese government is contemplating further stimulus measures to spur economic growth.

In London, the benchmark index FTSE 100 gained 32.53 or 0.6% to 5,389.03 and the pound edged lower to $1.5666.

UK High Street Sales Rise

Retail sales volumes in the United Kingdom rose strongly in May compared to a year ago, data from a survey by the Confederation of British Industries showed today.

The CBI’s latest quarterly Distributive Trades Survey, conducted over the first two weeks of May shows that 43% of retailers reported an increase in their volume of sales compared to a year ago, and 23% said they had seen a fall. The net balance of +21% indicates a significant increase in sales compared to a year earlier.

BG Group Sells Comgás Stake

BG Group Plc, the oil and gas company signed a binding agreement to sell its entire 60.1% stake in Comgás to Brazilian energy company Cosan S.A. Indústria e Comércio for 3.4 billion reais or around $1.7 billion. The deal will reduce its BG Group debt by about $1.1 billion.

The transaction is likely to complete by the end of this year.

In addition, BG and Cosan have agreed to co-operate on evaluating and developing gas supply options in Brazil on completion of the deal.

Gainers & Losers

Pennon Group plc fell 0.3% to 726.50 pence after the water utility and waste management company reported fiscal year 2011 revenue rose 6.4% to £1,233.1 million. Operating profit for the year climbed 3% to £268.8 million.

Royal Dutch Shell plc rose 0.3% to 2,017 pence after the oil and gas explorer said it is planning to sell-off its Orion thermal oil sands project near Cold Lake, Alberta.

Wolseley Plc slumped 3.5% to 2,220 pence after the plumbing and heating products distributor reported third quarter total revenues fell 2.3% to £3.20 billion from £3.27 billion in the year-earlier period. Like-for-like sales, excluding the effect of currency exchange, acquisitions and disposals, increased 3.8% in the quarter.

WPP Plc dipped 0.3% to 792.50 pence after the advertising agency company said its wholly-owned operating network KBM Group agreed to acquire a majority stake in Predictys SAS in France.