Pound Rallies, Lloyds Banking Chairman Resigns

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

Stocks in London rallied on the back of financial stocks. Lloyds chairman resigned ahead of its annual meeting and launched

[R]6:30 PM London – Stocks in London rallied on the back of financial stocks. Lloyds chairman resigned ahead of its annual meeting and launched £4 billion rights offering. Thomas Cook surged 6% after the rival Kuoni in Switzerland is seeking to acquire companies.[/R]

Stocks in London trading closed higher on a rally in financial stock and further tightening in interbank lending rates.

The FTSE 100 Index closed higher 98.34 or 2.26% to 4,446.45.

The pound gained against the U.S. dollar, euro and Japanese yen. The pound closed at $1.53 and at 1.13 euros and at 147.05 yen.

Alliance Boots, the pharmacy and convenience store chain that was purchased by a private equity group in 2007 will trim 10% of its staff in wholesale division that employs 16,000.

The company also reported revenues in the year ending in March 2009 increased 15.5% to £20.5 billion and operating earnings increased 11.3% to £1.24 billion and net income to £13 million after paying financing charges of £1 billion. Same store sales increased 1.3%.

BAA, the British airports operator said that it will appeal the Competition Commission decision that requires to sell two airports in London, Gatwick and Stansted and either Edinburgh or Glasgow airport.

Gainers & Losers

BT Group Plc increased 2.2% or 1.90 pence to 86.90 after it reported last week to cut 15,000 staff and lower its operating costs. Today, Morgan Stanley raised its rating on the stock on the company’s plan to lower costs.

Llyods Banking Group Plc rose 9.9% to 98 pence after its chairman Victor Blank resigned. Separately, the bank also announced a plan to raise £4 billion. The rights issue will allow existing 2.8 million shareholders to subscriber 0.6213 share for each held at an offer price of 38.43 pence.

Thomas Cook plc increased 6.3% or 14 pence to 237.75 pence.

Thomson Reuters Plc gained 3.8% or 64 pence to 1,743 pence. A week ago the news and information publisher reaffirmed its 2009 earnings outlook and today Morgan Stanley lifted its rating to ‘overweight’ from ‘equal weight.’

Earnings Review

Big Yellow Group PLC, engaged in the provision of self storage and related services said full-year sales rose 3% to £58.5 million from £56.9 million a year ago. Net profit for the quarter fell 30% to £72.64 million or £62.34 per diluted share compared to net profit of £103.39 million or £89.20 per share a year ago.

Cranswick plc, a food producer said full-year sales rose 9% to £653 million from £599 million a year ago. Net profit for the quarter fell 26% to £18.99 million or £41.1 per diluted share compared to net profit of £25.61 million or £55.5 per share a year ago.

ITE Group plc, an organizer of trade exhibitions and conferences said first-half revenues rose 32.5% to £43.2 million from £32.6 million a year ago. Net profit for the quarter rose 198% to £8.08 million or £3.4 per diluted share compared to net profit of £2.71 million or £1.1 per share a year ago.

MITIE Group PLC, an outsourcing and asset management company said full-year revenues rose 8.2% to £1.52 billion from £1.41 billion a year ago. Net profit for the quarter fell 3.3% to £53.1 million or £16.5 per diluted share compared to net profit of £54.9 million or £17.0 per share a year ago.

Robert Wiseman Dairies PLC, Scottish milk supplier and distributor said full-year revenues rose 17.4% to £847.70 million from £721.98 million a year ago. Net profit for the quarter fell 66% to £6.58 million or £9.09 per diluted share compared to net profit of £19.3 million or £25.97 per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 97 increased, 5 declined and 0 were unchanged.

Fresnillo Plc decliners in the FTSE 100 index with a loss of 3.72% followed by losses in Randgold Resources Limited, of 2.07%, in Lonmin Plc, 1.96%, in International Power Plc of 1.46% and in Rio Tinto Plc of 0.49%.

Lloyds Banking Group Plc led gainers in the FTSE 100 index with a rise of 9.87% followed by increase in Standard Chartered PLC of 8.51%, in Autonomy Corporation Plc of 7.99%, in Vedanta Resources Plc of 6.76%, in Thomas Cook Group Plc of 6.26%.

Europe Markets Review

In London FTSE 100 Index closed higher 98.34 or 2.26% to 4,446.45, in Paris CAC 40 Index increased 76.34 or 2.41% to close at 3,245.39 and in Frankfurt DAX index higher 114.46 or 2.42% to close at 4,851.96. In Zurich trading SMI increased 84.45 or 1.58% to close at 5,435.12.