British Air Raise

123jump.com Staff
17 Jul, 2009
New York City

British Airways after denying for months it needs additional capital raised

[R]7:00 PM London, 2:00 PM New York – British Airways after denying for months it needs additional capital raised £600 million to cover the mounting losses. Miners closed higher after the rise in copper and other base metal prices. In the third year, more shareholders voted against the controversial bonus plan at Cable & Wireless.[/R]

UK stocks edged up after commodities prices rallied on the better than expected home construction report in the U.S.

In London FTSE 100 Index closed higher 26.91 or 0.62% to 4,388.75 and the pound closed at $1.63.

Gainers & Losers

Eurasian Natural increased 5.7% to 762 pence, Xstrata Plc added 4.3% to 691.90 pence, Rio Tinto increased 3.5% to 2,154 pence and Vedanta Resources increased 4.3% to 1,502 pence. Copper futures in New York increased after new homes construction increased the most in five years.

Bunzl declined 2.5% to 525 pence after the vending machines operator was downgraded by Bank of America.

Cable & Wireless increased 2.4% to 133.40 pence after it reiterated first quarter operating earnings outlook as previously stated in May. The telecom operator is expected to earn £1,025 on the exchange rate of $1.50 to a pound. The company plans to spend £477 million in capital expenditure for the year.

The operating earnings are expected to increase 32% at its worldwide unit that includes Europe, Asia and the U.S. to £430 million. Fixed line minutes in the Caribbean unit that includes Panama, Macau and Caribbean decreased 9% in the first quarter from the previous period. And mobile revenues per customer fell 8% on higher competition.

Nearly quarter of shareholders voted down the controversial proposal for the long term bonus of top executives and Chairman Richard Lapthorne. The new proposal will give additional one year to 2011 to management to break the company in to two and reap extremely high bonuses for 60 of its most senior executives and managers.

British Airways increased after the company raised £600 million in capital to pay for losses. The air carrier raised £350 million in convertible bonds and the release of pension fund guarantees to access bank credit of £250 million.

Invensys declined 1.4% to 239.50 pence after it said that revenues increased 17% in the first quarter and were flat on fixed exchange rate and still expects the revenues to be ahead of last year.

Luminar Group surged 10% to 121.25 pence after the company said that the trading has improved since May but drink revenues are still lower for the club operator.

Electrocomponents plc, a distributor of electronic, electrical and industrial supplies said first quarter sales fell 17%. Revenues in UK fell 14%, in Asia fell by 16%, in Europe fell by 17%, in North America fell by 22%. Net debt fell around £162 million at June 30 2009 from £203 million at March 31 2009.

Electrocomponents plc, in the last one year traded as high as 182.25 pence in September 2008 and as low as 117.50 pence in February 2009. Based on the yesterday’s closing price of 139.75 pence the company has market cap of £607.33 million.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 60 increased, 37 declined and 5 were unchanged.

Lloyds Banking Group plc decliners in the FTSE 100 index with a loss of 3.50% followed by losses in Bunzl plc of 2.51%, in Rolls-Royce Group plc of 2.01%, in Intertek Group plc of 1.91%, in Fresnillo Plc of 1.57%.

Eurasian Natural Resources Corporation PLC led gainers in the FTSE 100 index with a rise of 5.76% followed by increase in Xstrata plc of 4.28%, in Vedanta Resources plc of 4.23%, in Rio Tinto plc of 3.53%, in Antofagasta plc of 3.39%.

Europe Markets Review

In London FTSE 100 Index closed higher 26.91 or 0.62% to 4,388.75, in Paris CAC 40 Index increased 18.78 or 0.59% to close at 3,218.46 and in Frankfurt DAX index higher 21.21 or 0.43% to close at 4,978.40. In Zurich trading SMI increased 55.57 or 1.00% to close at 5,594.14.