UK Banks Rebound; Chapelthorpe Plunges

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

UK stocks rebounded after talks of economic recovery lifted trading sentiment. Banks closed higher. After the release of earnings Chapelthorpe plunged 10% and Charles Stanley dropped 5%.

[R]6:00 PM London, 1:00 PM New York – UK stocks rebounded after talks of economic recovery lifted trading sentiment. Banks closed higher. After the release of earnings Chapelthorpe plunged 10% and Charles Stanley dropped 5%.[/R]

UK Stocks edged higher after more talks of economic recovery bolstered investor confidence. The Bank of England policymaker Andre Sentance suggested that the recovery may begin as early as later this year or early 2010.

In London FTSE 100 Index closed higher 25.12 or 0.57% to 4,461.87. Resurgent commodities prices and a rise in the U.S. retail sales also lifted trading sentiment.

The eighth largest building society in UK, West Bromwich building Society has started negotiations with its subordinated debt holders to exchange the debt with a financial debt that will qualify as Tier 1 capital. The debt of £182.5 million when exchanged will strengthen the capital base of the society with 46 branches and 350,000 customers.

Gainers & Losers

Banks closed higher as investors surmised that economic recovery will lift earnings in the sector. HSBC Holdings Plc increased 2.3% to 548.25 pence, Barclays surged 5.6% to 304.50 pence and Royal Bank of Scotland added 4.8% to 39.70 pence.

Big Yellow Group plunged 7.4% to 313 pence and The Carphone Warehouse decreased 1.8% to 168 pence. Media reports suggested that David Ross, former director in both companies may have sold stocks through JP Morgan Cazenove.

Home Retail Group increased 1.9% to 271 pence after it reported in an interim trading statement same store sales at Argos declined 2.8% and at Homebase increased 3.8%.

Charles Stanley dropped 5% to 238 pence after it reported earnings declined 27.6% for the year and revenues fell 3.6%.

Chapelthorpe plunged 9.6% to 11.75 pence after it reported sales for the year ending in March declined to £86.2 million from £87.4 million and operating loss of £1.7 million compared to £0.8 million.

The weakness in the U.S. automotive and consumer sectors affected sales of polypropylene fibers which include floor coverings and automotive fabrics.

Premier Farnell increased 5.4% to 136 pence after it reported net profit declined 66%.

Earnings Review

AEA Technology plc, an energy and environment consultancy said full-year revenues grow 16% to £93.7 million from £80.9 million a year ago. Net profit in the year fell 17.6% to £7.0 million or £3.5 per diluted share compared to net profit of £8.5 million or £5.7 per share a year ago.

AEA Technology plc, in the last one year traded as high as 82.00 pence in June 2008 and as low 15.75 pence in April 2009. Based on the yesterday’s closing price of 23.00 pence the company has market cap of £52.60 million.

Charles Stanley Group plc, provides full service brokerage, financial planning and benefit consultancy said full-year revenues fell 3.6% to £101.8 million from £105.6 million a year ago. Net profit in the year fell 27.6% to £6.47 million or £14.65 per diluted share compared to net profit of £8.94 million or £20.21 per share a year ago.

Charles Stanley Group plc, in the last one year traded as high as 260.00 pence in May 2009 and as low as 152.50 pence in December 2008. Based on the yesterday’s closing price of 242.00 pence the company has market cap of £106.83 million.

Premier Farnell plc, an electronic components distributor said first quarter revenues rose 2.5% to £204.3 million from £199.3 million a year ago. Net profit in the quarter fell 66% to £6.1 million or £1.7 per diluted share compared to net profit of £17.8 million or £4.9 per share a year ago.

Premier Farnell plc, in the last one year traded as high as 207.00 pence in September 2008 and as low as 112.50 pence in March 2009. Based on the yesterday’s closing price of 137.50 pence the company has market cap of £505.89 million.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 60 increased, 38 declined and 4 were unchanged.

Carnival plc decliners in the FTSE 100 index with a loss of 2.44% followed by losses in Anglo American plc of 1.84%, in British Airways plc of 1.79%, in Kingfisher plc of 1.73% and in SABMiller plc of 1.71%.

Barclays PLC led gainers in the FTSE 100 index with a rise of 5.55% followed by increase in Invensys plc of 5.46%, in The Royal Bank of Scotland Group plc of 4.75%, in Aviva plc of 4.14%, in Antofagasta plc of 3.61%.

Europe Markets Review

In London FTSE 100 Index closed higher 25.12 or 0.57% to 4,461.87, in Paris CAC 40 Index increased 19.67 or 0.59% to close at 3,334.94 and in Frankfurt DAX index higher 56.08 or 1.11% to close at 5,107.26. In Zurich trading SMI increased 47.46 or 0.87% to close at 5,483.85.