British Land, Blackstone Deal; UK Stocks Weak

Mayank Mehta
18 Sep, 2009
New York City

The pound fell early 0.5% after the UK government reported record August deficit. Lloyds is looking to exit government insurance program. Ashmore increased after net annual earnings decreased 18.3%. British Land Company sold 50% stake in Broadgate office complex to Blackstone.

[R]4:00PM London, 11:00 AM New York – The pound fell early 0.5% after the UK government reported record August deficit. Lloyds is looking to exit government insurance program. Ashmore increased after net annual earnings decreased 18.3%. British Land Company sold 50% stake in Broadgate office complex to Blackstone.[/R]

UK government borrowed £16.1 billion in August to fund bank bailout and lower tax revenues. The monthly borrowing was the highest ever in August and jumped from £9.9 billion.

The UK debt liabilities have surged in the last two years as the bank bailout cost increased and government collect declining taxes from weak economy. UK debt as a percentage of GDP has surged to 57.5% in August and reached £804.8 billion.

The government receipts declined 9.2% in the month as corporate tax collection declined 49% and value added taxes receipts fell 13% but spending increased 2.9% and net social benefit spending increased 7.4%.

In London FTSE 100 Index closed higher 16.27 or 0.3% to 5,180.17 and the pound declined to $1.6277 and 1.10 euros.

The pound fell after the release of data on the worries that as the government tightens its belts the monetary policy may remain lose to accommodate the government spending.

UK Treasury forecasted deficit of £175 billion for the current fiscal year ending in March 2010 and in the first five months of the year the deficit has surged to £65.3 billion from £26.1 billion a year ago.

Gainers & Losers

Ashmore Group plc added 0.9% to 237.40 pence after the emerging market investment managers said full-year revenues fell 15% to £203.5 million from £240.0 million a year ago. Net profit for the full-year fell 18.3% to £115 million or 15.99 pence per diluted share compared to net profit of £140.8 million or 19.89 pence per share a year ago.

The British Land Company PLC rose 0.5% to 514.00 pence after the real estate investment trust said has completed the sale of half the £2.2 billon Broadgate office complex to Blackstone, the private equity group.

BlueBay Asset Management plc decreased 5.2% to 298.50 pence the fixed income investment specialist pre-tax profits and announced a share placing in which two of its directors are to sell three million of their shares.

Cassidy Brothers plc closed unchanged at 36.50 pence after the toy vacuum cleaners, cookers and other household items said that the directors of the company recommended a final dividend of £0.02 per share compared to £0.015 in 2008 payable on October 26, 2009, to shareholders on the register on October 2, 2009.

Chemring Group plc declined 2.3% to 2,407.00 pence after the weapons group said that the board is confident that the outlook for fiscal 2009 remains in line with its expectations. According to Reuters Estimate analysts are expecting the company to report revenue of £492.70 million, net profit of £71.50 million for fiscal 2009.

Domino Printing Sciences plc added 4.6% to 297.00 pence after the bar code printing group said orders in the second half had improved and it expects full-year results on cost cutting.

Imagination Technologies Group plc rose 1.8% to 182.50 pence after the chip designer said that the company is expected to meet its growth outlook helped by its active licensing pipeline and increased royalty revenue.

JKX Oil & Gas plc advanced 3.2% to 297.30 pence after the oil discoveries and mid-cap explorer said the testing of exploration well Gorbehaza-1 in the Nyirseg licence located in Hungary''s Pannonian Basin.

Kesa Electricals plc the electricals retailer fell 0.1% to 144.10 pence.

Land Securities Group plc added 0.3% to 685.50 pence has today appointed Robert Noel to the Board of Land Securities Group PLC and to the executive position of Managing Director of its London Portfolio. The appointment will take effect from 1 January 2010.

Lloyds Banking Group plc decreased 1.1% to 108.41 pence after the part-nationalized bank said that it is discussing possible changes to the terms of its participation in the government''s asset protection scheme, including possibly reducing the amount of assets covered by the scheme.

In March the bank agreed to cover £260 billion through the government insurance program and in addition Lloyds may have to sell assets to meet EU regulatory requirements.

Songbird Estates plc rose 1.5% to 33.00 pence after the property group said that its wholly owned subsidiary, Songbird Finance Limited, has entered into an agreement to purchase 54,007,620 ordinary shares in the capital of Canary Wharf from Commerzbank AG for a consideration of £112.5 million.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 41 increased, 60 declined and 1 were unchanged.

Balfour Beatty Plc decliners in the FTSE 100 index with a loss of 5.82% followed by losses in Pennon Group Plc of 5.46%, in Tullow Oil Plc of 5.30%, in Foreign & Colonial Investment Trust Plc of 3.14%, in Cairn Energy Plc of 3.12%.

Kingfisher Plc led gainers in the FTSE 100 index with a rise of 4.29% followed by increase in The British Land Company Plc of 3.33%, in Next Plc of 2.92%, in Autonomy Corporation Plc of 2.88%, in Hammerson Plc of 2.57%.