Vodafone and Taylor Wimpey Drag UK Stocks

123jump.com Staff
27 May, 2008
New York City

U.K. loans for house purchase fell 39.4% in April. Stocks on England fell on fears of a tightening market as U.K. loans for house purchases tumbled by 39.4% in April. However, news that InBev NV is mulling a merger with SABMiller helped par losses. In London trading FTSE 100 fell 0.47% or 28.8 to 6,058.50.

[R]1:00AM New York, 5:00PM London - U.K. loans for house purchase fall 39.4% in April[/R]

Stocks on England fell on fears of a tightening market as U.K. loans for house purchases tumbled by 39.4% in April. However, news that InBev NV is mulling a merger with SABMiller helped par losses.

Marker sentiment

In London trading FTSE 100 fell 0.47% or 28.8 to 6,058.50.

Of the 102 FTSE 100 stocks 58 gained, 39 declined, and 6 were unchanged. SABMiller led advancers in the index shares with a rise of 6.94% on news that InBev NV is considering a merger with the company.

Loans for house purchase decline 39.4% in April

The British Bankers Association reported in a press release on its web site today that mortgage lending rose 13% on the year to £5.4 billion in April, while consumer credit eased from £0.6 billion in March to £0.1 billion in April.

Personal deposits and company finance advanced 6.2% and 24.9% to £5.8 billion and £22.8 billion respectively.

The report further notes that gross mortgage lending fell 6.3% to £17.8 billion.

Notably, loans that were extended for house purchase fell 39.4% from a year ago to 38,704, while approvals for re-mortgaging advanced 20.3% year-on-year to 724,722.

BBA statistics director, David Dooks, commented: “Pressures on household finances, stalling house prices and tighter lending criteria in response to lower liquidity are all constraining demand for house purchase and equity withdrawal loans, which are both well down on levels last year. In contrast, there is an active remortgaging market as people switch lenders to obtain better deals. With some £18bn of new lending and nearly 150,000 loans approved in April, it is clear that, contrary to some reports, the mainstream mortgage market has not ground to a halt.”

Overdue mortgage repayments rise

The Financial Times reported that new data from Standard & Poor show that more than a fifth of UK homebuyers who have “a chequered credit history” have fallen behind on their mortgage payments, and even those with top-quality ratings have seen a statistically significant rise in delinquencies in the first three months of this year.

According to the statistics, of all the loans to borrowers with poor or no credit history, total delinquencies – arrears of more than 30 days – made up 21.73% at the end of March.

Those who are seriously delinquent by 90 days or more, including some already in foreclosure, increased to 10.60%.

Analysts opine that more than £7 billion worth of loans are at risk of default unless lenders agree to modify the loan terms.

Gainers & Losers

SABMiller led advancers in the FTSE 100 index shares with a rise of 6.94% followed by rises in British Airways Plc of 4%, in Compass Group of 3.18%, in Tui Travel Plc of 3%, and London Stock Exchange of 2.94%.

SABMiller rose after the Financial Times reported that InBev NV is considering a merger with the company.

British Airways rose as crude oil prices fell by as much as $2.

Imperial Tobacco-NPR led decliners in the FTSE 100 index shares with a drop of 10.190% followed by losses in Imperial Tobacco of 3.01%, in Admiral Group of 2.69%, in Wood Group of 2.33%, and Royal Bank of Scotland of 2.23%.

Commodity stocks also fell on falling crude oil prices. BP plunged 2.14%, Rio Tinto tumbled 1.91%, and BHP Billiton shed 1.89%.

Company news

Vodafone Chief Executive Officer Arun Sarin to be replaced by Vittorio Colao

Vodafone Group Pl announced in a statement today that Arun Sarin will be retiring as Chief Executive at the end of the Company’s AGM on 29th July 2008 and be succeeded by Deputy Chief Executive Vittorio Colao.

Vodafone Group Plc also announced today that Non Executive Directors Michael Boskin and Jürgen Schrempp will not be seeking re-election at the AGM.

Separately the company reported that revenues in the year ended March 31st rose 14.1% year-on-year to £35.5 billion and profit jumped to a record £6.66 billion. The stock however declined 1.71%.

http://www.bba.org.uk/content/1/c6/01/37/51/stats270508.pdf
http://www.ft.com/cms/s/0/9a3c01d6-2b60-11dd-a7fc-000077b07658.html
http://www.vodafone.com/start/media_relations/news/group_press_releases/2007/vodafone_announces6.html