Miners Lead Stocks Lower; BP CFO Quits

123jump.com Staff
04 Aug, 2008
New York City

TNK-BP chief financial officer Owen quits as shareholders continue to battle for control of the company. In London trading stocks fell on weak commodities and metals prices. Crude oil fell 1% in the session and base metals prices declined. Of the 102 FTSE 100 index stocks, 49 rose, 52 declined, and 1 was unchanged. Thomson Reuters led advancers in the index shares with a rise of 4.5% and Kazakhmys led decliners with a loss of 10%.

[R]2:00PM New York, 7:00PM London - Commodities drag FTSE100 stocks lower. TNK-BP CFO James Owen quits.[/R]

London stock indexes fell after commodity stocks tumbled as metal prices, especially copper and platinum, dropped in today’s trading. Financial stocks also declined as HSBC reported interim profit fell 29% on 58% increase in asset write downs and loan loss provisions.

Market Sentiment

In London trading FTSE 100 fell 0.64% or 34.5 at 5,320.20.

Of the 102 FTSE 100 stocks 49 rose, 52 declined, and 1 was unchanged. Thomson Reuters led advancers in the index shares with a rise of 4.51% followed by Wolseley increasing 3.97%.

UK to Cushion Families From Rising Fuel Prices

The Financial Times reported on its Web site today that U.K. prime minister Gordon Brown is currently working in conjunction with energy companies to come up with measures worth ‘hundreds of millions of pounds’ to cushion families from soaring fuel bills.

TNK-BP CFO Quits

TNK-BP Chief Financial Officer James Owen tendered his resignation effective from the end of August. The troubled oil company shareholders are feuding to split oil revenue and the company is battling tax related charges with the Russian government agencies. Owen was appointed to the position in January of 2006 and departed as Russian shareholders accused the current CEO Robert Dudley of favoring BP interest and BP accused its Russian partners of trying to take over the company.

TNK-BP is a leading Russian oil company and is among the top ten privately-owned oil companies in the world in terms of crude oil production. The company was formed in 2003 as a result of the merger of BP’s Russian oil and gas assets and the oil and gas assets of Alfa, Access/Renova group (AAR). BP and AAR each own 50% of TNK-BP.

The oil company has proven oil and gas reserves 8.3 billion of barrels of equivalent oil and operates 1,600 gas stations in Russia and UK and operates refineries with iinstalled capacity of 675,000 barrels a day.

Gainers & Losers

Thomson Reuters led advancers in the FTSE 100 index shares with an increase of 4.51% followed by increases in Wolseley of 3.97%, in International Power Plc of 3.47%, in Enterprise Inns of 2.879%, and GlaxoSmithKline of 2.77%.

Other retailers also increased. Tesco edged up 1.69% and Next Plc increased 1.49%.

Kazakhmys led decliners in the FTSE 100 index shares with a fall of 9.49% followed by losses in Vedanta Resources of 8.16%, in Antofagasta of 8.04%, in Xstrata of 5.89% and Anglo America of 5.51%.

Commodity prices slumped as crude oil prices declined by 4%, while platinum plunged 5% and copper also retreated. Rio Tinto shed 4.79%, BHP Billiton tumbled 4.61% and Tullow Oil slipped 2.10%.

Financial stocks also fell as HSBC reported today that profit in the six months ended June 30 fell by 28% to $7.7 billion as the company took a $14 billion hit on exposure to US house loans.

Standard Chartered slid 4.61% and Lloyds TSB Group edged down 2.25% as a result.

HSBC Earnings Fall 29%

HSBC Holdings reported first half operating income increase of 2% to $42.9 billion and profit attributable to shareholders declined 29% to $7.72 billion from $10.89 billion a year ago. Return on shareholder’s equity dropped to 12.1% from 19.1% in the first half a year ago.

In the period, the bank increased its loan impairment charges and other credit risk provisions by 58% or $3.7 billion to $10.058 billion from or $6.3 billion a year ago.

The bank reported tier 1 capital ratio of 8.8% and total capital ratio of 11.9%.

Europe Markets Review

In London FTSE 100 Index closed lower 34.50 or 0.64% to 5,320.20, in Paris CAC 40 Index decreased 33.71 or 0.78% to close at 4,280.63 and in Frankfurt DAX index lower 46.65 or 0.73% to close at 6,349.81. In Zurich trading SMI decreased 62.99 or 0.88% to close at 7,078.22.