Balfour Beatty Surges, TUI Travel Drops

Mayank Mehta
12 Aug, 2009
New York City

The Bank of England in its inflation report indicated that the central bank will continue to pump more liquidity into the financial system as inflation is below its target level of 2%. Jobless claims increased 24,900 in July. TUI Travel drops on pandemic flu worries and Balfour Beatty surges.

[R]4:00PM London, 11:00 AM New York – The Bank of England plans to add more liquidity to the financial system as pace of money supply growth falters and inflation is below target of 2%. The central bank estimated that pace of economic recovery to be highly uneven and uncertain and households, banks and public sector need to adjust their balance sheets.[/R]

The Bank of England in its inflation report indicated that the central bank will continue to pump more liquidity into the financial system as inflation is below its target level of 2%. The Monetary Policy Committee that household, financial sector and public sector will need a prolonged period to adjust their balance sheet and that could slow down the pace of economic recovery.

The report cited that annual money supply growth has declined from 8% over the five years to 2.5% now. Total money spending in the four quarters to first quarter of 2009 declined 4%. The declines of this level have been experienced only twice since 1990.

The statement noted the difficulties faced by banks and highlighted, “It will take time for banks to repair their balance sheets and they face considerable challenges in replacing those sources of funding that dried up in the financial crisis and the temporary support provided by the public sector.”

The households are expected to increase their savings to cushion against uncertain job market and public sector will need to adjust their finances to a more sustained level. This means that the economic recovery will be uneven and “highly uncertain.”

In London FTSE 100 Index closed higher 41.52 or 0.9% to 4, 713.85 and the pound closed at $1.64 and 1.16 euros.

Jobless claims increased 24,900 in July, less than estimated by labor economists.

Gainers & Losers

Andor Technology Plc surged 3.1% to 130.00 pence after the digital camera manufacturer says fiscal year revenue and profit exceeded market expectations.

Aquarius Platinum Limited decreased 3.9% to 257.60 pence after the platinum miner said full-year revenues fell 66% to $310.6 million from $919 million a year ago. Net loss in the full-year was $45.7 million or $13.30 per diluted share compared to net profit of $236.5 billion or $91.98 per share a year ago.

Balfour Beatty plc added 7.1% to 342.50 pence after the engineering and construction group said first-half revenues rose 18.6% to £5.1 billion from £4.3 billion a year ago. Net profit in the first-half fell 51% to £52 million or 10.9 pence per diluted share compared to net profit of £106 million or 23.9 pence per share a year ago.

BHP Billiton plc declined 0.6% to 1,518.00 pence after the mining company said full-year revenues fell 15.6% to $50.2 billion from $59.5 billion a year ago. Net profit in the full-year fell 62% to $5.9 billion or $1.05 per diluted share compared to net profit of $15.4 billion or $2.75 per share a year ago.

Emerald Energy plc rose 9.1% to 736.50 pence after the energy explorer announced an offer from Sinochem Resources UK Limited for the company.

Enfis Group plc the Swansea-based high power LED maker slumped 22.5% to 69.75 pence.

Lloyds Banking Group plc added 5.0% to 95.35 pence after the financial services group providing announced the sale of Insight Investment Management Limited and restructuring of the business.

The Medical House PLC gained 83.6% to 26.17 pence after the drug injection devices developer confirmed acquisition offers.

Micro Focus International plc sank 2.3% to 390.80 pence after the legacy software specialist said in-line first-quarter trading provides confidence for a solid first half and said it expects to generate 15% margins at its two recent acquisitions in the first year.

Norcros Plc the selling of home consumer products fell 4.8% to 7.50 pence.

The Royal Bank of Scotland Group plc increased 4.9% to 44.95 pence.

Serco Group plc advanced 0.8% to 412.90 pence after the company was awarded an order by London city.

SOCO International plc gained 1.4% to 1,341.00 pence after the energy explorer reported record first half sales of $66.6 million and after tax profit from continuing operations of $31.6 million. The Company has also made good progress in lining out production projects in Vietnam and Thailand.

Triad Group Plc was unchanged at 47.50 pence.

TUI Travel PLC lost 4.0% to 241.90 pence after the international leisure travel group said third quarter revenues fell 1% to £3.58 billion from £3.62 billion a year ago. Net profit in the quarter was £33 million compared to net loss of £216 million a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 77 increased, 25 declined and none were unchanged.

Fresnillo Plc decliners in the FTSE 100 index with a loss of 3.64% followed by losses in ICAP Plc of 3.05%, in Eurasian Natural Resources Corporation Plc of 2.93%, in TUI Travel Plc of 2.90%, in Thomas Cook Group Plc of 2.54%.

Balfour Beatty Plc led gainers in the FTSE 100 index with a rise of 8.26% followed by increase in Lloyds Banking Group Plc of 6.42%, in The Royal Bank of Scotland Group Plc of 5.42%, in BG Group Plc of 4.93%, in British Airways Plc of 4.21%.