UK Lending Stalls; National Express Soars 9%

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

UK stocks closed higher in weak trading. Gross mortgages issued in May matched the lows last seen in 2000 at

[R]6:00 PM London, 1:00 PM New York – UK stocks closed higher in weak trading. Gross mortgages issued in May matched the lows last seen in 2000 at £10.6 billion as lenders issued 43,191 loans. On earnings, the online retailer declined 5% and Airsprung Furniture surged 90%. Rolls Royce acquired 33% of Norway based Odim.[/R]

UK stocks edged higher after ratings revision on several companies, merger news and optimism related to housing market.

National Express confirmed that it received merger interest from First Group. The company rejected the takeover offer.

The Bank of England in its monthly estimate suggested that banks issued 43,414 mortgage loans in May compared to 43,191 in the month a year ago. Gross mortgage lending was at £10.6 billion in May stalling at levels last seen in 2000.

Separately, Hometrack Ltd. said that home prices held up for the second month in a row in June

In London FTSE 100 Index closed higher 53.02 or 1.25% to 4,294.03.

Gainers & Losers

National Express Group increased 9.8% to 302.75 pence after it confirmed a takeover offer from First Group. First Group declined 1.3% to 366 pence.

Admiral Group, the auto insurance company increased 3.2% to 883 pence after it was upgraded by Credit Suisse Group.

The market optimism lifted financials in the UK and across Europe. Tullett Prebon Group surged 8.6% to 293 pence, Old Mutual increased 3.5% to 80.7 pence and Legal & General Group increased 2% to 57.15 pence.

Hargreaves Lansdown increased 4.5% to 210 pence after it estimated full year results higher than market expectations.

Informa Plc soared 9% to 231 pence after it estimated semi annual revenues in the Events and Training group to be substantially lower than a year ago but its impact on adjusted earnings will be limited.

Serco Group increased 2.5% to 423 pence after it reiterated that the company is on track to deliver on its earnings guidance for the current fiscal year.

Rolls Royce Group increased 3.6% to 365.75 pence after it acquired 33% of ODIM from Aker Solutions ASA at Nok 45 a share or Nok 700 million or £66 million.

Airsprung Furniture Group Inc surged 90% to 19 pence after it reported annual revenue for the year ended in March 2009 decreased 14% to 42.8 million and net loss of £417,000. The company earned in the second half £304,000 surprising the market.

The online retailer Asos declined 5% to 360 pence after full year earnings jumped 93% to £7.3 million and revenues surged 104% to £165.4 million. The company is the second most visited web site in the UK for apparel and accessories. The company estimated first quarter sales of 52%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 80 increased, 22 declined and None were unchanged.

3i Group plc decliners in the FTSE 100 index with a loss of 2.06% followed by losses in Xstrata plc of 2.03%, in Thomas Cook Group plc of 1.89%, in British Airways Plc of 1.39% and in GlaxoSmithKline plc of 1.07%.

Lloyds Banking Group plc led gainers in the FTSE 100 index with a rise of 6.12% followed by increase in Prudential Public Limited Company of 5.89%, in Rio Tinto plc of 4.51%, in Barclays PLC of 4.31%, in BG Group plc of 4.12%.

Europe Markets Review

In London FTSE 100 Index closed higher 53.02 or 1.25% to 4,294.03, in Paris CAC 40 Index increased 63.95 or 2.04% to close at 3,193.68 and in Frankfurt DAX index higher 108.62 or 2.27% to close at 4,885.09. In Zurich trading SMI increased 67.46 or 1.25% to close at 5,443.45.