Financials Drag UK Stocks

123jump.com Staff
18 Feb, 2009
New York City

UK stocks edged lower on persistent weakness in financial stocks. The Bank of England is likely to resume printing money as it looks for ways to fund various loan commitments. Royal Bank of Scotland led decliners in the FTSE 100 index shares with a drop of 13% followed by losses in Legal & General.

[R]1:00PM New York, 6:00PM London - Bank of England to start printing money.[/R]

London stock indexes slipped as financials closed lower.

In London trading FTSE 100 index fell 0.7% or 27.3 to 4,006.83.

Of the FTSE 100 index stocks, 42 rose, and 60 declined. Liberty International led advancers in the index shares with a rise of 5.6% followed by TUI Travel increasing 5.3%.

Bank of England to Begin Printing Money

Bank of England reported in minutes released today on the meeting held on February 4 and February 5 that the monetary policy committee has agreed that Governor of the central bank Mervyn King must write to Chancellor of the Exchequer for permission to begin ""quantitative easing.""

Through the measure, government will buy up government and other securities in order to boost money supply.

Policy makers fear of deflationary pressures and the consumer price inflation is projected to fall below the 2% target.

""Therefore the Committee unanimously agreed that the Governor should write on its behalf to the Chancellor to seek authority to conduct purchases of government and other securities, financed by the creation of central bank money using the Asset Purchase Facility,"" reads part of the minutes.

U.K. Pension Regulator Urges Companies to Prioritise Individuals

TimesOnline reported today that the Pensions Regulator warned companies that they should prioritize individuals rather the dividend payouts.

The Regulator also threatened to clamp down on companies that continue to shirk their obligations. Pension schemes are being squeezed by falling stock and bond market.

According to the report, the deficit of U.K. final salary pension schemes has risen to £200 billion.

Chairman of the Regulator David Norgrove said there is no reason why a pension scheme deficit should push an otherwise viable employer into insolvency.

Gainers & Losers

Liberty International led advancers in the FTSE 100 index shares with a rise of 5.6% followed by increases in TUI Travel of 5.3%, in Admiral Group of 4.1%, in First Group of 3.9%, and Rexam Plc of 3.1%.

Royal Bank of Scotland led decliners in the FTSE 100 index shares with a drop of 12.6% followed by losses in Legal & General Group of 11.7%, in 3i Group Plc of 7.3%, in Prudential of 6.6%, and BT Group of 5.6%.

Financial stocks advanced. Barclays shed 3.4% and Standard Chartered slipped 2.8%

Earnings Review

Fidessa group Plc, a supplier of trading systems said full-year revenues increased 40% to £189.1 million from £135.03 million, a year earlier. Net profit in the full-year grew 138.4% to £27.66 million or 79.1 pence per diluted share compared to net profit of £11.6 million or 33.5 pence per share, a year earlier.

Fidessa group Plc, in the last one year traded as high as 1,040.00 pence in September 2008 and as low as 450.00 pence in November 2008. Based on the yesterday’s closing price of 692.00 pence the company has market cap of £243.37 million.

Millennium & Copthorne Hotels PLC, provides hotel rooms to guests in the Americas, Europe, Middle East, Asia and Australasia said fourth quarter revenues rose 2.1% to £190.6 million from £186.6 million, a year earlier. Net profit in the quarter plunged 92.2% to £5.6 million or 1.5 pence per diluted share compared to net profit of £72.2 million or 23.3 pence per share, a year earlier.

Millennium & Copthorne Hotels PLC, in the last one year traded as high as 447.50 pence in April 2008 and as low as 160.50 pence in November 2008. Based on the yesterday’s closing price of 210.00 pence the company has market cap of £639.28 million.

Thorntons PLC, engaged in the manufacturing, retailing and distribution of confectionery and other sweet foods said first-half revenues rose 1.3% to £128.36 million from £126.67 million, a year earlier. Net profit in the quarter plunged 74% to £2.18 million or 3.3 pence per diluted share compared to net profit of £8.3 million or 12.3 pence per share, a year earlier.

Thorntons PLC, in the last one year traded as high as 166.00 pence in March 2008 and as low as 37.00 pence in February 2008. Based on the yesterday’s closing price of 47.00 pence the company has market cap of £32.12 million.