UK PPI Rises; RBS Plunges 12%

Mayank Mehta
07 Aug, 2009
New York City

UK producer price index in July increased 0.3% from June but declined 1.3% from a year ago. Royal Bank of Scotland said that results will not improve till 2011 and bad debt provision increased

[R]6:00PM London, 1:00 PM New York – UK producer price index in July increased 0.3% from June but declined 1.3% from a year ago. Royal Bank of Scotland said that results will not improve till 2011 and bad debt provision increased £7.5 billion. Thomson Reuters said first-half net increased 47%.[/R]

UK stocks edged lower in the early morning trading after RBS reported weak results and issued cautious outlook. The U.S. Labor Department said employers eliminated 247,000 positions in July, nearly half than in June prompting a rally in European markets.

In London FTSE 100 Index closed higher 27.59 or 0.59% to 4,718.12 and the pound closed at $1.67 and 1.17 euros.

Royal Bank of Scotland said that results may not improve substantially until 2011 and bad debts surged to £7.5 billion.

Producer prices at factory gates increased 0.3% in July from June but declined 1.3% from a year ago. Manufacturing prices increased 0.4% in the month and core producer prices, which exclude crude oil, food, alcohol and tobacco, increased 0.5%.

Gainers & Losers

African Eagle Resources plc gained 14.1% but dropped 7% to 4.88 pence after the miner’s public offering of £2.14 million was oversubscribed. The company sold 53.4 million shares at 4 pence each.

Antisoma plc declined 2.6% to 28.00 pence after the drug developer said the phase II trial of its therapy product AS1402 in breast cancer is to be discontinued.

Catlin group Limited slid 1.0% to 325.80 pence after the specialty property casualty insurer and reinsurer increased dividend 9% on record first-half net profit.

Claimar Care Group Plc rose 140.0% to 30.00 pence after AIM-listed care provider has received a cash offer from Housing 21 that valued the company at 39 pence.

Jubilee Platinum plc lost 1.8% to 36.33 after the miner has conditionally raised £13.25 million from a placing at a 19% discount to yesterday’s closing price.

Lancashire Holdings Limited fell 0.2% to 442.80 pence after the insurer said second quarter revenues rose 1.4% to $162.7 million from $160.4 million a year ago. Net income in the quarter rose 108% to $106.4 million or 57 cents per diluted share compared to net profit of $51.2 million or 27 cents per share a year ago.

The Royal Bank of Scotland Group plc decreased 12.0% to 47.02 pence said first-half net interest income fell 11% to £6.7 billion from £7.5 billion a year ago. Net loss in the first-half was £1.04 billion compared to net profit of £827 million a year ago.

Shieldtech plc rose 59.6% to 7.98 pence after the financial services group said full-year sales rose 71% to £10.3 million from £6 million a year ago. Operating profit for the year to June approximately £0.4 million against a loss of £0.8 million last year.

Sports Direct International plc lost 3.9% to 87.40 pence after the Competition Commission will investigate the recent acquisition of 31 retail stores from JJB. The OFT had asked the company to divest five stores but has not been able to do in the required time. The Commission is expected to issue its report by January 21, 2010.

The Stanley Gibbons Group Limited surged 0.8% to 131.60 pence after the stamp collector’s first half profit increased 13% in the first half to £1.43 million and net sales increase of 18% to £9.6 million and issued positive comments for the second half.

Thomson Reuters PLC slipped 2.0% to 1,952.00 pence after the provider of information for the world’s businesses and professionals said first-half revenues rose 28.8% to $6.4 billion from $4.97 billion a year ago. Net profit in the first-half rose 47% to $505 million or 60 cents per diluted share compared to net profit of $343 million or 47 cents per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 66 increased, 35 declined and 1 were unchanged.

The Royal Bank of Scotland Group Plc decliners in the FTSE 100 index with a loss of 12.09% followed by losses in ICAP Plc of 3.74%, in Eurasian Natural Resources Corporation Plc of 3.52%, in The British Land Company Plc of 3.47%, in Rio Tinto Plc of 2.95%.

Serco Group Plc led gainers in the FTSE 100 index with a rise of 3.75% followed by increase in Barclays Plc of 3.11%, in Vodafone Group Plc of 2.81%, in Experian Plc of 2.60%, in Astrazeneca Plc of 2.57%.