UK Home Price Rise Lift Builders; Wolseley Up

Mayank Mehta
28 Sep, 2009
New York City

UK stocks closed higher after home prices increased in September and rental contracts advanced in the three months. Home builders gained. Wolseley surged after the retailer guided positive earnings outlook. The online casino 888 Holdings signs joint venture with a South Africa based casino.

[R]4:00PM London, 11:00 AM New York – UK stocks closed higher after home prices increased in Sept and rental contracts advanced in the three months to the month. Home builders led the gainers. Wolseley surged after the retailer guided earnings at the top end of its estimate. The online casino operator 888 Holdings has signed joint venture with South Africa based casino.[/R]

UK stocks closed higher after a deal between Abbott and Solvay SA and between Xerox and Affiliated Compuer Services lifted stocks in the U.S. Stocks in UK and also responded positively to the latest data on home prices.

Hometrack Ltd, the property research company said that home prices in UK and Wales increased 0.2% to 156,000, the sharpest increase since June 2007. Home prices according to the research company are now only 5.6% lower than a year ago from 6.7% deficit in August.

The rental agents also reported a rise in activities. Association of Residential Letting Agents said that 83% members were successful in signing 10 or more contracts in the three months to Sept compared to 79% in the previous quarter.

In London FTSE 100 Index closed higher 82.16 or 1.6% to 5,162.13 and the pound edged lower to $1.584 and at 1.081 euros.

Gainers & Losers

888 Holdings PLC rose 0.4% to 93.75 pence after the business to business arm of online gaming group said the signing of an exclusive agreement with Tsogo Sun Gaming Group to provide total gaming services for the land-based TSG''s first move into online gaming.

AMZ Holdings PLC lost 66.8% to 45.90 pence after the Taiwanese property company said that the local referendum on 26 September 2009 which sought to establish Penghu, Taiwan as the approved location for gaming resorts was unsuccessful.

The company now anticipates that the capital raising required for its redemption obligations in respect of its 2011 loan stock of £1.6 million due on 24 October 2009 and secure its working capital requirements beyond December 2009 will be significantly more difficult.

AstraZeneca PLC added 2.6% to 2,825.00 pence after the pharmaceutical company and UCB Group entered into a partnership to register and commercialize UCB''s PEGylated anti TNF alpha drug Cimzia in Brazil. The deal between Solvay SA and Abbott for $4.2 billion also lifted stocks in the sector.

Albemarle & Bond Holdings Plc added 1.2% to 235.00 pence after the pawnbroker said full-year revenues rose 18% to £55.5 million from £46.9 million a year ago. Net profit for the full-year rose 48.6% to £10.7 million or 19.39 pence per diluted share compared to net profit of £7.2 million or 13.24 pence per share a year ago.

Autonomy Corporation plc fell 1.4% to 1,564.00 pence after the provider of infrastructure software for large companies said that it has entered into a multi-million dollar license agreement with Pfizer Inc.

Balfour Beatty plc fell 0.6% to 323.80 pence after the engineering and construction contractor said today it was selected as the preferred bidder for the £120 million West Sussex National Academics Framework for West Sussex County Council.

Churchill Mining Plc surged 11.4% to 94.75 pence after the Indonesian-focused coal miner said it had received three separate approaches and denied press speculation linking the company to BHP Billiton pushing the shares up as much as 17%.

Euromoney Institutional Investor PLC decreased 0.2% to 347.10 pence. The company on Friday reiterated its positive business outlook and expects strong cash flow that will help to reduce debt to £170 million.

Freshwater UK Plc dropped 4.5% to 37.00 pence after the marketing services firm said it expected to generate positive earnings and cash flow.

Home Retail Group Plc declined 3.2% to 276.90 pence after Credit Suisse lowered its outlook on the company.

Kesa Electricals plc fell 0.07% to 144.60 pence after the owner of the Comet consumer electronics and white goods store said the appointment of Dominic Platt as Finance Director who will join as an Executive Director of the Board in early January 2010.

Luminar Group Holdings plc advanced 2.5% to 89.00 pence after the nightclub company said that “trade worsened in September with weekend admissions, in particular, below expectations. Overall sales in the continuing business fell by 5.9% in the 26 weeks to 27 August 2009 compared to the same period last year.”

Phoenix IT Group plc fell 0.1% to 225.00 pence after the IT services firm said that the business is in-line with management expectations. Analysts were expecting the company to report revenue of £248.80 million net profit of £20.80 million for fiscal 2010.

Scottish and Southern Energy plc advanced 0.2% to 1,157.00 pence after the electricity generator said that adjusted profit before tax for the six months ended September 30 will be significantly higher than the same period a year earlier despite a lengthy shutdown at its Glendoe hydroelectric plant and a construction delay at the Greater Gabbard offshore wind farm.

Sunkar Resources Plc decreased 7.3% to 31.50 pence after the fertilizer plant operator said in an update on its pilot plant tests for the production of phosphoric acid from its Chilisai phosphate rock facility in Northwest Kazakhstan. Two independent tests concluded that the rocks at the location are amenable to commercial conversion into phosphoric acid.

Vyke Communications plc plunged 39.4% to 13.18 pence after the telecoms and internet services provider said that for fiscal 2009 it expects results to be below the guidance the company gave to the market on March 19 and the board expects the company will be declare loss for full year.

Wolseley PLC surged 10.0% to 1,434.00 pence after the builders’ supplies specialist said a lower sales decline in the second half of the year as final results showed sharp declines but at the top of forecast ranges.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 94 increased, 8 declined and none were unchanged.

Home Retail Group plc decliners in the FTSE 100 index with a loss of 3.18% followed by losses in Tullow Oil plc of 1.53%, in BT Group Plc of 1.02%, in The Royal Bank of Scotland Group plc of 0.77%, in London Stock Exchange Group Plc of 0.42%.

Wolsele Plc led gainers in the FTSE 100 index with a rise of 11.15% followed by increase in Legal & General Group Plc of 5.26%, in SEGRO Plc of 4.27%, in 3i Group Plc of 4.18%, in Hammerson Plc of 3.93%.