UK Stocks Rise on Home Sales and Qatar Talks

123jump.com Staff
25 Feb, 2008
New York City

U.K. prices fell for the fifth straight month as prices dropped 0.2% in January to

[R]1:00PM New York, 6:00PM London - U.K. home prices decline 0.2% in February to £174,400 in February.[/R]

U.K. stocks began the week on a high note driven by financial stocks on weekend reports Qatar Investment Authority will buy a stake in Royal Bank of Scotland. Alliance & Leicester was also mentioned as a possible takeover target by Lloyds TSB Group.

In London trading FTSE 100 gained 1.89% or 111 to 5,999.50.

Of the 102 FTSE 100 stocks 86 gained, 13 declined and 3 were unchanged. Alliance & Leicester led advancers in the FTSE 100 stocks with a rise of 8.82% on reports that the lender was a takeover target of Lloyds TSG Group.

Other financial stocks rose as well. Barclays advanced 5.62%, Royal Bank of Scotland increased 5.03% and HBOS surged 4.95%.

U.K. house prices fall 0.2% in February

Hometrack Limited said today in its report that U.K. house prices fell for the fifth straight month as the average price of a house in England and Wales fell 0.2% from January to £174,400 after declining 0.3% in January.

The property information group added that the annual rate of house price inflation declined 1.4%, the most since April 2006.

The group noted that demand for homes was improving, with the number of new buyers registering with estate agents rising 7.9% in February compared with an 11.5% drop in January.

According to the report, the greatest turnaround in demand has been in London and South East region, which registered new buyer registrations of 13% and 10% correspondingly on the latest rate cut.

QIA eyes Royal Bank of Scotland

The Sunday Telegraph reported yesterday that state-owned Qatar Investment Authority is looking at investing in the Royal Bank of Scotland.

QIA hasn’t bought any shares in the lender and has not formally engaged the bank as yet. The report notes that the investment in the bank will be relatively small.

Separately, the report said the bank is expected to write-down £3 billion in bad debts and subprime related losses.

Gainers and Losers

Alliance & Leicester led the advancers in the FSTE 100 index shares with a rise of 8.82% followed by gains in Persimmon of 6.63%, in British Airways of 6.50%, in Taylor Wimpey of 6.07%, and in Hammerson of 5.95%.

Alliance & Leicester gained on weekend reports that Lloyds TSG Group is mulling taking over the company.

Other financial stocks gained after The Sunday Telegraph reported yesterday that Qatar Investment Authority is considering investing part of its $15 billion investment capital to acquire a stake in the Royal Bank of Scotland. The Royal Bank of Scotland’s stock closed up 5.03%.

Home Retail Group advanced 4.21% and British Land Co. gained 3.43% as a result.

Lonmin Plc led the decliners in the FTSE 100 stocks with a drop of 3.09% followed by losses in Associated British Foods of 2.97%, in Antofagasta Plc of 2.44%, in Vedanta Resources of 1.50%, and in Schroders-NV of 1.08%.

Company News

Bloomberg news reported today that BAA Limited, which operates Heathrow and Gatwick airports, is seeking a £1 billion loan to refinance existing debt.

The loan will be secured by BAA''s four U.K. airports outside London including Edinburgh and Southampton, and the airport operator will announce the arrangers for the loan next month.