BoE Governor Sought Higher Purchase Limit

Mayank Mehta
19 Aug, 2009
New York City

UK stocks traded sideways. The Bank of England latest minutes showed that Governor King sought higher bond purchase limit which was not approved by the committee. John Menzies issued upbeat outlook for full year. Lookers Plc eliminates dividend on weak results. Rexam rights issue gets 95% bids.

[R]4:00PM London, 11:00 AM New York – UK stocks traded sideways. The Bank of England latest minutes showed that Governor King sought higher bond purchase limit which was not approved by the committee. John Menzies issued upbeat outlook for full year. Auto dealer Lookers Plc eliminates dividend on weak results. Rexam rights issue gets 95% bids.[/R]

In London FTSE 100 Index closed higher 9.40 or 0.2% to 4,695.18 and the pound closed at $1.64 and unchanged at 1.16 euros.

The pound edged lower after the Bank of England’s Monetary Policy Committee voted 6-3 to keep the bond purchase limit to £50 billion and pushing back the proposal to expand the purchase to £200 billion. Governor King and another member of the committee had sought the higher limit.

Gainers & Losers

Care UK Plc slipped 4.2% to 292.00 pence after the health and social care provider said its current trading and expectations for the remainder of the financial year remained in line with its forecasts.

Dimension Data Holdings plc fell 2.1% to 58.20 pence after the computer services group on Wednesday forecasted “higher” second-half performance after a ""solid"" third quarter.

Electronic Data Processing plc added 41.50 pence after the IT solutions firm issued cautious outlook.

Elektron PLC rose 6.6% to 8.26 pence after the components group said that the dramatic decline in the business witnessed in the last six months are stabilizing and business conditions are improving. Group sales in the six months to 31 July 2009 were approximately £14 million.

Eurasian Natural Resources Corporation PLC added 7.2% to 834.00 pence after the diversified natural resources group said first-half revenues fell 51% to $1.7 billion from $3.4 billion a year ago. Net profit for the first-half fell 58.8% to $553 million or 43 cents per diluted share compared to net profit of $1.34 billion or 104 cents per share a year ago.

Hampson Industries PLC declined 8.5% to 75.00 pence after the aerospace and engineering group announced the divestment of the non-core UK machining operations. Almost 60% of the Group’s revenue is generated from aerospace tooling sales.

Hochschild Mining plc advanced 1.3% to 269.60 pence after the silver and gold producer said first-half revenues fell 0.5% to $230.6 million from $231.8 million a year ago. Net profit for the first-half fell 24% to $24.7 million or 8 cents per diluted share compared to net profit of $32.7 million or 11 cents per share a year ago.

Jessops plc the camera retailer dropped 11% to 2 pence after it reiterated loss in the second half and estimated similar like-for-like sales declines as in the first half of 4.7%. The company also noted that it is negotiating with HSBC to restructure its high debt load that may wipe out current shareholders.

John Menzies plc surged 10.8% to 260.50 after the newspaper distribution and aviation services firm said first-half revenues fell 0.6% to £821.3 million from £826.5 million a year ago. Net profit for the first-half fell 54% to £3.9 million or 6.6 pence per diluted share compared to net profit of £8.5 million or 14.3 pence per share a year ago.

JKX Oil & Gas plc slipped 1.0% to 228.80 pence after the oil explorer announce the commencement of commercial gas production from the Hajdúnánás field in north east Hungary.

LiDCO Group Plc added 6.0% to 17.50 pence after the heart monitoring equipment supplier said that second half sales will be higher than in the first half.

Lookers plc lost 4.7% to 65.75 pence after the car dealer said first-half revenues fell 16% to £870.4 million from £1.04 billion a year ago. Net profit for the first-half fell 33% to £5.9 million or 3.25 pence per diluted share compared to net profit of £8.8 million or 4.78 pence per share a year ago.

PV Crystalox Solar PLC gained 3.1% to 85.60 pence after the silicon wafers supplier said first-half sales fell 3.7% to €121.6 million from €126.3 million a year ago. Net profit for the first-half fell 55.6% to €16.4 million or €4.0 cents per diluted share compared to net profit of €36.9 million or €9.0 cents per share a year ago.

Rexam PLC fell 1.6% to 255.00 pence after the packaging group said 95.1% rights issue taken up.

The Royal Bank of Scotland Group plc plunged 1.5% to 45.47 pence.

Sovereign Reversions plc surged 152.50 pence after the home equity release for retired persons provider places 1.8 million shares with Rckhopper Investments Limited.

Venture Production Plc slid 0.4% to 841.50 pence independent oil and gas company said first-half revenues rose 14% to £274.7 million from £240.5 million a year ago. Net profit for the first-half fell 1% to £54.1 million or 35.0 pence per diluted share compared to net profit of £54.7 million or 35.2 pence per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 50 increased, 49 declined and 3 were unchanged.

Scottish and Southern Energy Plc decliners in the FTSE 100 index with a loss of 5.11% followed by losses in Man Group Plc of 3.74%, in ICAP Plc of 2.92%, in Shire Plc of 2.51%, in The British Land Company Plc of 2.40%.

Eurasian Natural Resources Corporation Plc led gainers in the FTSE 100 index with a rise of 6.24% followed by increase in Fresnillo Plc of 5.79%, in Serco Group Plc of 2.41%, in Lloyds Banking Group Plc of 2.03%, in Admiral Group Plc of 1.98%.