UK Mortgage Loans Rise 7%; Chemring Surges 5%

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

UK mortgage approvals increased 7% in May to 31,162 loans. Drax Group raised

[R]1:00PMNew York, 6:00PM London – UK mortgage approvals increased 7% in May to 31,162 loans. Drax Group raised £108.2 million through offering of 25.45 million shares at 425 pence each. Chemring Group increased 5% after it reported first half net income increase of 48%.[/R]

Stocks in UK trading edged lower after morning weakness. The investors are increasingly growing cautious as there are no early signs of economic recovery and stock valuation reflect strong rebound in the economy in the second half of this year.

However, the British Bankers Association noted that mortgage approvals increased 7% in May.

In London trading FTSE 100 Index fell 0.1% or 4.03 to 4,230.02.

Of the FTSE 100 index stocks 51 rose, 49 declined, and 2 were unchanged. TUI Travel Plc increased 3.9% after crude oil prices dropped on worries over the health of the global economy.

Mortgage Approvals Rise 7% in May

The British Bankers Association reported today that the number of mortgage approvals rose 7% from a month ago and 15.8% from a year earlier to 31,162 loans in May.

The average value of loans declined 13.9% to £133,600 from a year earlier.

Mortgage lending was £2.3 billion in May, the lowest since early 2001, compared with £2.5 billion in April.

The BBA reported that personal deposit inflows continue to be weak and consumer credit growth is minimal, while lending to financial companies rose marginally.

The BBA statistics director, David Dooks, said, ""Consumers'' borrowing appetite remains weak, reflecting uncertainty over household circumstances, so credit growth is negligible and spending activity on credit cards is down on this time last year. Lending to non-financial companies was little changed overall in May.""

Drax Raises £108.2 million

Drax Group said today in a statement the company raised £108.2 million by selling 25.45 million shares 425 pence each.

The money will be used to retire part of the company’s £370 million loan.

Separately, the company said it has increased sales for 2010 to lock in prices because of indications of a sharp recovery in profit margins.

Gainers & Losers

Financial stocks in global economic worries. Lloyds Banking dropped 4.2%, Standard Chartered dipped 3.4% and Royal Bank of Scotland shed 2.1%.

Anglo American dropped 2.7% to 1,652 pence after it rejected the hostile bid form Xstrata Plc and said that the merger proposal lacks ‘strategic merit.’ Xstrata closed up 0.8% to 639.90 pence.

Aggreko declined 6.2% to 492 pence after the temporary power and temperature control equipment rental agency said 2009 revenues will increase 20% and pre-tax profit will be 55% higher from a year ago and in constant currency net profit will match 2008 earnings.

Domino Printing rose 8.9% to 244.25 pence after it reported first half sales decreased 1% and net income dropped 35%.

Chemring Group increased 4.9% to 2,096 pence after it reported revenues increase of 55% and first half profit gain of 48%.

Debenhams increased 0.7% to 73.75 pence after retail investors only subscribed for 30.3% of the rights offering. The balance of the unsold stocks of 169 million shares will be now sold to institutional investors who had already subscribed to 161.6 million shares in a separate offering.

Earnings Review
Chemring Group plc, a detonation explosives detector maker for military said first-half revenues rose 55% to £233.5 million from £150.2 million a year ago. Net profit in the first-half rose 48% to £21.5 million compared to net profit of £14.5 million a year ago.
Chemring Group plc, in the last one year traded as high as 2,475.00 pence in July 2008 and as low as 1,527.00 pence in October 2008. Based on the yesterday’s closing price of 2,027.00 pence the company has market cap of £712.86 million.

Domino Printing Sciences plc, the manufacturer and seller of industrial printing equipment said first-half revenues fell 1% to £124.3 million from £125.9 million a year ago. Net profit in the first-half fell 35% to £7.2 million or 6.69 pence per diluted share compared to net profit of £11.1 million or 10.09 pence per share a year ago.

Domino Printing Sciences plc, in the last one year traded as high as 313.50 pence in September 2008 and as low as 120.75 pence in November 2008. Based on the yesterday’s closing price of 231.00 pence the company has market cap of £252.26 million.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 51 increased, 49 declined and 2 were unchanged.

Legal & General Group Plc decliners in the FTSE 100 index with a loss of 7.87% followed by losses in Lloyds Banking Group plc of 4.20%, in Standard Chartered PLC of 3.40%, in Thomas Cook Group plc of 3.38% and in Wolseley PLC of 3.18%.

TUI Travel PLC led gainers in the FTSE 100 index with a rise of 3.89% followed by increase in Antofagasta plc of 3.87%, in Eurasian Natural Resources Corporation PLC of 3.68%, in Thomson Reuters PLC of 3.62%, in British Sky Broadcasting Group plc of 3.13%.

Europe Markets Review

In London FTSE 100 Index closed lower 4.03 or 0.10% to 4,230.02, in Paris CAC 40 Index decreased 6.43 or 0.21% to close at 3,116.82 and in Frankfurt DAX index higher 13.75 or 0.29% to close at 4,707.15. In Zurich trading SMI increased 10.94 or 0.21% to close at 5,321.31.