Metals Lift UK Stocks; Heritage Oil Plunges

123jump.com Staff
10 Jun, 2009
New York City

UK stocks edged higher today tracking gains in commodities. Stocks are now following the trends in the commodities and in energy markets. UK production output declined and trade deficit increased to

[R]6:00 PM London, 1:00 PM New York – UK stocks edged higher today tracking gains in commodities. Stocks are now following the trends in the commodities and in energy markets. UK production output declined and trade deficit increased to £3 billion in April from £2.7 billion in March.[/R]

As it has been common for more than three months, what happens in London stock market is increasingly driven by what happens in world commodities markets.

The sentiment is still favorable for commodities as prices of copper, zinc and nickel advance. The hopes of stabilization in advanced economies of the world and sustained demand from China lifted prices of base metals. Stocks followed.

In London FTSE 100 Index closed higher 31.96 or 0.73% to 4,436.75 and the pound edged up .02% to $1.6362.

The Office of National Statistics reported that total production output increased 0.3% in April from March. In the three months to April, the production output decreased 3.2% from previous three months and declined 12.6% from a year ago period.

The UK deficit on trade in goods and services was £3 billion in April, compared with the deficit of £2.7 billion in March revised from the deficit of £2.5 billion.

Gainers & Losers

Commodities prices lifted mining stocks. Vedanta Resources increased 8.5% to 1,770 pence, Xstrata Plc added 7% to 771.50 pence and Antofagasta Plc jumped 4.6% to 679 pence.

Thomas Cook declined 7% to 219 pence after the tour operator’s majority stake may be seized by the bank and auctioned off.

Heritage Oil, the energy explorer in Kurdistan, plunged 10.5% to 540 pence after two reports on Bloomberg and Reuters suggested that its oil finds are illegal in Iraq. Iraq is passing revised law that will permit this exploration to be legal. The stock is expected to regain in tomorrow’s trading.

Heritage announced the merger with Genel Energy based in Kurdistan region on June 9 and after the merger the shareholders of Genel will control 50% of the company.

Charter International Plc plunged 16% to 476 pence after it reported 35% decline in sales in Europe and North America and will cut additional staff after eliminating 1,200 jobs and shut two factories and temporarily close additional two. These measures will cost company £20 million.

Earnings Review

Focus Solutions Group plc, a financial services software company said full-year revenues rose 11.6% to £9.60 million from £8.60 million a year ago. Net profit in the year fell 13% to £1.72 million or £5.26 per diluted share compared to net profit of £1.98 million or £5.99 per share a year ago.

Focus Solutions Group plc, in the last one year traded as high as 36.70 pence in January 2009 and as low as 19.25 pence in March 2009. Based on the yesterday’s closing price of 33.60 pence the company has market cap of £9.73 million.

Halfords Group Plc, a car maintenance and bicycle retailer said full-year revenues rose 1.5% to £809.5 million from £797.4 million a year ago. Net profit in the year fell 12.8% to £55.8 million or £26.6 per diluted share compared to net profit of £64 million or £29.3 per share a year ago.

Halfords Group Plc, in the last one year traded as high as 365.00 pence in June 2009 and as low as 202.00 pence in October 2008. Based on the yesterday’s closing price of 350.00 pence the company has market cap of £734.25 million.

Intercede Group plc, a security systems software developer said full-year revenues rose 103% to £5.7 million from £2.81 million a year ago. Net profit in the year was £1.75 million or £3.6 per diluted share compared to net loss of £0.1 million or £0.2 per share a year ago.

Intercede Group plc, in the last one year traded as high as 49.50 pence in June 2009 and as low as 17.00 pence in October 2008. Based on the yesterday’s closing price of 47.64 pence the company has market cap of £17.82 million.

Rensburg Sheppards plc, wealth management group said full-year revenues rose 7.5% to £87.4 million from £81.3 million a year ago. Net profit in the year rose 2.5% to £21.41 million or £48.9 per diluted share compared to net profit of £20.89 million or £47.8 per share a year ago.

Rensburg Sheppards plc, in the last one year traded as high as 580.00 pence in June 2008 and as low as 352.00 pence in March 2009. Based on the yesterday’s closing price of 485.00 pence the company has market cap of £212.83 million.

Vyke Communications plc, a voice-over-internet protocol services provider said full-year revenues rose 46.5% to £27.47 million from £18.75 million a year ago. Net loss in the year was £6.60 million or £13.2 per diluted share compared to net profit of £3.63 million or £ per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 58 increased, 42 declined and 2 were unchanged.

Thomas Cook Group PLC decliners in the FTSE 100 index with a loss of 7.1% followed by losses in Carnival PLC of 2.9%, in Cable & Wireless PLC of 2.3%, in Invensys PLC of 2.2% and in Man Group PLC of 2.2%.

Vedanta Resources PLC led gainers in the FTSE 100 index with a rise of 8.5% followed by increase in Eurasian Natural Resources Corporation PLC of 8.0%, in Xstrata plc of 6.9%, in Rio Tinto PLC of 6.6%, in Kazakhmys PLC of 6.4%.

Europe Markets Review

In London FTSE 100 Index closed higher 31.96 or 0.73% to 4,436.75, in Paris CAC 40 Index increased 18.54 or 0.56% to close at 3,315.27 and in Frankfurt DAX index higher 53.32 or 1.07 % to close at 5,051.18. In Zurich trading SMI increased 47.72 or 0.89% to close at 5,436.39.