UK Home Prices Edge Up; Trade Deficit Widens

Mayank Mehta
11 Aug, 2009
New York City

UK home prices in June inched higher and number of agents reporting price decline also edged lower in July. Trade deficit widened in June as imports of goods rose at a faster pace than exports. Tata Motors arranged loans without the backing of UK government.

[R]4:00PM London, 11:00 AM New York – UK home prices in June inched higher and number of agents reporting price decline also edged lower in July. Trade deficit widened in June as imports of goods rose at a faster pace than exports. Tata Motors arranged loans without the backing of UK government.[/R]

UK stocks edged lower after trade deficit in June increased, home prices inched up and the smallest number surveyors reported a price decline.

In London FTSE 100 Index closed lost 58.96 or 1.25% to 4,664.40 and the pound closed at $1.64 and 1.16 euros.

Tata Motors Ltd is in the final stage of agreement to arrange loans of £340 million from European Investment Bank that will not require UK government guarantee. The UK unit Jaguar Land Rover had sought as much as £500 million of loans from the UK government as sales in the last one year have fallen more than expected.

UK housing reports suggested that trading conditions are at least not worsening at rapid pace as in the early part of this year. The Department of Communities and Local Government reported average home price in June increased 1.6% to £191,423.

Royal Institute of Chartered Surveyors said that number of agents reporting price decline were 8% higher compared to those reporting price increases.

UK Trade Deficit Widens

UK deficit in merchandise and services increased to £2.2 billion in June from £1.9 billion in May. The deficit in goods increased to £6.5 billion in the month from £6.2 billion in May.

The service industry surplus was unchanged at £6.5 billion in the month. Merchandise exports increased £0.3 billion and imports increased £0.5 billion.

Export and import prices declined 0.5% compared to May.

Gainers & Losers

BP Plc fell 0.02% to 514.90 pence and company also announced a joint venture to develop biodiesel from sugar.

Friends Provident plc rose 2.1% to 76.55 pence after it has signed a long-term contract for the delivery of a new corporate platform with FNZ. The new partnership will provide Friends Provident with the capability to offer an enhanced workplace platform for its customers to be delivered during 2010.

Findel plc lost 6.0% to 31.00 pence after the home shopping and education supplies businesses successfully completed placement of 404.31 million shares to raise £81 million. The offering was managed by JP Morgan Cazenove Limited.

Greggs plc added 0.2% to 412.00 pence after the bakery chain said first-half sales rose 4.4% to £312 million from £299 million a year ago. Net profit in the first-half fell 29% to £11.4 million or 11.29 pence per diluted share compared to net profit of £16.2 million or 15.81 pence per share a year ago.

Hyder Consulting PLC surged 5.8% to 180.00 pence after the Crossrail announced its intention to award the contracts for the Whitechapel Station and the Victoria Dock Portal to Hyder, the multi-national advisory and design consultancy. The London railroad operator also selected four other contractors for three tunnel and central stations projects.

InterContinental Hotels Group PLC decreased 0.7% to 752.00 pence after the hotel group said first-half sales fell 25% to $726 million from $974 million a year ago. Net loss in the first-half was $29 million or $10.0 per diluted share compared to net profit of $163.0 million or $54.9 per share a year ago.

International Power plc advanced 6.6% to 264.90 pence an independent power generation company said first-half revenues rose 72.7% to £1.09 billion from £1.1 billion a year ago. Net profit in the first-half rose £402 million or 24.6 pence per diluted share compared to net profit of £8 million or 0.4 pence per share a year ago.

Interserve Plc gained 5.1% to 238.50 pence after the building services and maintenance contractor said first-half revenues rose 4% to £951.2 million from £913.6 million a year ago. Net profit in the first-half rose 37% to £30.3 million or 23.6 pence per diluted share compared to net profit of £22.1 million or 17.4 pence per share a year ago.

Jarvis plc fell 5.3% to 13.25 pence after the company incurred a small operating loss during the first quarter which is in line with management expectations.

Latchways plc closed down 45 pence to 670.00 pence after the safety harness specialist said in its interim statement that first half business will not match results of the period a year ago on weakness in the U.S. construction market.

Melrose Resources plc surged 2.9% to 324.30 pence after the preliminary results of the gas drilling in Bulgaria based field near Galata field production platform. The company is exploring natural gas in the region.

NWF Group plc decreased 2.6% to 110.00 pence an oil, food and animal feed distributor said full-year revenues rose 5.4% to £380.6 million from £361.2 million a year ago. Net loss in the year was £2.3 million or 4.9 pence per diluted share compared to net profit of £2.5 million or 5.3 pence per share a year ago.

Provexis plc surged 13.5% to 3.01 pence after the life-science company has begun a clinical trial for its plantain medical food for Crohn’s disease patients.

Spring Group plc jumped 20.1% to 61.25 pence after the recruitment firm said it has been agreed to be acquired by Swiss staffing firm Adecco.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 23 increased, 79 declined and 0 were unchanged.

Lloyds Banking Group Plc decliners in the FTSE 100 index with a loss of 7.04% followed by losses in Aviva plc of 6.45%, in The Royal Bank of Scotland Group Plc of 6.03%, in Kazakhmys PLC of 6.01%, in Liberty International PLC of 5.98%.

International Power PLC led gainers in the FTSE 100 index with a rise of 7.61% followed by increase in Rexam PLC of 5.70%, in Reckitt Benckiser Group PLC of 1.86%, in British American Tobacco PLC of 1.08%, in National Grid PLC of 1.06%.