BoE Expands Bond Buys; Aviva, Unilever Up

Mayank Mehta
06 Aug, 2009
New York City

The Bank of England expanded its bond purchase program by

[R]4:00PM London, 11:00 AM New York – The Bank of England expanded its bond purchase program by £50 billion to £175 billion and left its key lending rate unchanged at 0.5%. Aviva cuts dividend by 31%. easyJet July traffic gains. Profit dives at Schroders. ITV posts loss and Unilever sales edge higher on new products and price cuts.[/R]

The Bank of England left its key lending rate unchanged at 0.5% and the ECB kept its rate at 1%. The BoE also expanded its plan to purchase bond program by £50 billion to £175 billion to provide liquidity in financial system and stem the recessionary forces.

The yield on 10-year bonds declined 11 basis points to 3.71% and the pound edged lower against dollar and euro.

In London FTSE 100 Index closed higher 25.43 or 0.55% to 4,672.56 and the pound closed at $1.68 and 1.17 euros.

Gainers & Losers

Aviva plc rose 9.1% to 388.80 pence after the insurer swung to a profit after tax for the first six months of 2009 from a loss last year and announced plans for a partial IPO of its Dutch business and cut dividend by 31%.

Bellway plc added 0.06% to 779.50 pence after the homebuilder raised £44.8 million through an accelerated bookbuild process to help fund the acquisition of more land and said it sees no further asset write downs if current market conditions continue.

Cobham plc added 4.2% to 186.00 pence after first-half revenues rose 50.6% to £952.1 million from £632.3 million a year ago. Net profit in the first-half rose 70% to £106 million or 9.25 pence per diluted share compared to net profit of £62.4 million or 5.46 pence per share a year ago.

easyJet plc gained 2.9% to 311.50 pence after the budget airline carried more passengers on its planes and lifted traffic in July.

Fresnillo Plc rose 1.7% to 643.00 pence after the world''s primary silver producer said the board has approved the pre-feasibility study for the development of the first stage of Saucito project in Mexico.

Intermediate Capital Group PLC gained 2.0% to 250.10 pence after the leading investor in and manager of buyout debt has received interest for 98% of its 7-for-2 rights issue to raise £351 million.

Inmarsat Plc rose 0.1% to 541.00 pence after first-half revenues rose 4.9% to £508.7 million from £485.0 million a year ago. Net profit in the first-half rose 25.5% to £73.9 million or 0.17 pence per diluted share compared to net profit of £58.9 million or 0.14 pence per share a year ago.

ITV plc increased 7.1% to 44.99 pence after the broadcaster posted first-half revenues fell 11.8% to £909 million from £1.03 billion a year ago. Net loss in the first-half was £70 million or 1.8 pence per diluted share compared to net loss of £1.5 billion or 39.6 pence per share a year ago.

Ladbrokes plc rose 3.8% to 173.90 pence after the materials science company said first-half revenues fell 6.6% to £565.1 million from £604.8 million a year ago. Net profit in the first-half fell 20.5% to £74.7 million or 12.4 pence per diluted share compared to net profit of £94.0 million or 15.5 pence per share a year ago.

Millennium & Copthorne Hotels PLC added 8.0% to 321.30 pence said first-half revenues fell 10.8% to £158.5 million from £177.7 million a year ago. Pre-tax profit in the first-half fell 46.4% to £19.5 million compared to net profit of £36.4 million a year ago.

National Express Group PLC added 2.1% to 374.80 pence after the takeover panel has told Stagecoach and a consortium of private equity firm CVC and the Cosmen family to decide on a bid for National Express by 11 September.

RSA Insurance Group plc sank 0.9% to 128.80 pence after the non-life insurer said it continues to deliver “robust results” in challenging conditions as it saw net written premiums rise slightly in the half year.

Schroders plc advanced 5.3% to 1,014.00 pence after first-half revenues fell 27.4% to £308.7 million from £425.1 million a year ago. Net profit in the first-half fell 80.5% to £19.5 million or 7.0 pence per diluted share compared to net profit of £100.2 million or 35.5 pence per share a year ago.

Unilever PLC jumped 6.8% to 1,650.00 pence after the food and household goods giant managed to lift sales volumes on lower prices and new products.

Victrex plc rose 1.0% to 683.50 pence after the plastics group has seen an improvement in volumes during July.