UK Home Prices Rise; Aviva, L&G Fall

Sarla Buch
08 Jul, 2009
New York City

UK stocks closed lower after June home prices declined 0.5% after increasing 2.6% in May. A shareholder vote supported Marks & Spencer chief the company chairman. Aviva and Legal & General fell after downgrades and earnings worries.

[R]6:00 PM London, 1:00 PM New York – UK stocks closed lower after June home prices declined 0.5% after increasing 2.6% in May. A shareholder vote supported Marks & Spencer chief the company chairman.[/R]

In London FTSE 100 Index closed lower 46.77 or 1.12% to 4,140.23 and pound

The average home prices fell 0.5% in June to 157,713 according to the latest survey reported by Halifax, a unit of Llyods Banking Group. Home prices had risen 2.6% in May.

Shareholder resolution at Marks & Spencer to separate chairman and chief executive role received 37.7% votes, far less than 75% required. The resolution was submitted by the Local Authority Pension Fund Forum, an association of 49 public sector funds preferred the responsibilities to be separated.

Stuart Rose, the current chief is expected to step down by 2010 and leave his position as chairman by 2011.

Gainers & Losers

Aviva decreased 8.5% to 303 pence after Bank of American lowered its views on Legal & General. Rumors also circulated on trading desks that Aviva may lower or cut its dividend.

GSH Group plunged 33% to 105 pence

Legal & General Group decreased 8.7% to 49.8 pence after Bank of America lowered its views on the company and said that there more than one reasons for the earnings to fall.

Morse increased 24% to 24.74 pence after the company said that it has received preliminary interest to acquire the company at 25 pence a share.

Symphony Environmental Technologies increased 16% to 5.50 pence after the company in its preliminary revenue estimate suggested a rise of 59%.

Tullow Oil decreased 3% to 863.50 pence after it said that first revenues is expected to fall 23%.

Earnings Review

Alliance Pharma plc, a pharmaceutical company said first-half sales rose 33% to £13.2 million. Profit before tax for the first-half is expected to £2.7 million.

Alliance Pharma plc, in the last one year traded as high as 17.75 pence in July 2009 and as low as 2.00 pence in January 2009. Based on the yesterday’s closing price of 17.25 pence the company has market cap of £27.28 million.

Booker Group plc, a food wholesaler said total sales expected to rose 7.8% in the 12 weeks to 19 June. Non-tobacco sales rose 10.4% while tobacco sales rose 3.9%.

Booker Group plc, in the last one year traded as high as 36.75 pence in June 2009 and as low as 27.00 pence in October 2008. Based on the yesterday’s closing price of 35.00 pence the company has market cap of £521.04 million.

Emerging Metals Limited, a mining group said full-year pre-tax profit was £10.01 million compared with a loss of £1.50 million a year ago.

PureCircle Limited, a sweetener maker said full-year sales expected to rose about 85% to $62 million from $33 million a year ago. Net profit expected to rose 420% to about $11 million from last year.

Tullow Oil plc, the oil and gas exploration and production company said first-half revenues expected to be fall about 23.3% to £290 million from £378 million a year ago.

Tullow Oil plc, in the last one year traded as high as 1,049.00 pence in June 2009 and as low as 406.25 pence in November 2008. Based on the yesterday’s closing price of 851.50 pence the company has market cap of £6.93 billion.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 11 increased, 90 declined and 1 were unchanged.

Legal & General Group Plc decliners in the FTSE 100 index with a loss of 8.66% followed by losses in Aviva plc of 8.46%, in Prudential Public Limited Company of 6.33%, in The British Land Company PLC of 5.95%, in Land Securities Group plc of 5.01%.

GlaxoSmithKline plc led gainers in the FTSE 100 index with a rise of 1.54% followed by increase in Next plc of 0.86%, in Imperial Tobacco Group PLC of 0.76%, in Vodafone Group Plc of 0.66%, in BHP Billiton plc of 0.62%.

Europe Markets Review

In London FTSE 100 Index closed lower 46.77 or 1.12% to 4,140.23, in Paris CAC 40 Index decreased 38.86 or 1.27% to close at 3,009.71 and in Frankfurt DAX index lower 25.54 or 0.56% to close at 4,572.65. In Zurich trading SMI decreased 39.81 or 0.75% to close at 5,289.39.