UK Indexes Fall; BAE Investigation

Mayank Mehta
01 Oct, 2009
New York City

UK stocks decreased after a manufacturing index showed a decline in activities in September. BAE Systems may be fined several million pounds on allegation of new contract bribery in EU and Africa. Dominos Pizza UK delivered better than expected earnings.

[R]4:00PM London, 11:00 AM New York – UK stocks decreased after a manufacturing index showed a decline in activities in September. BAE Systems may be fined several million pounds on allegation of new contract bribery in EU and Africa. Domino''s Pizza UK delivered better than expected earnings.[/R]

UK stocks edged lower after manufacturing index declined in September. The weakness in manufacturing in the U.S. also hovered the European market trading.

In London FTSE 100 Index closed lower 46.94 or 0.9% to 5,087.85 and the pound edged lower to close at $1.598 and edged higher at 1.097 euros.

Chartered Institute for Purchasing and Supply decreased to 49.5 in September from 49.7 in August. The decline in index surprised economists as most were looking for a mild increase. Any reading below 50 indicates a fall in activities and above 50 shows a rise.

Euro edged lower in currency trading after comments from the ECB President Trichet. The European central bankers have been talking up dollar as they coordinate a rise in the currency after G 20 meeting last week.

Gainers & Losers

3i Infrastructure plc climbed 0.5% to 101.50 pence after the closed-ended investment company said for the six months ending in September that the company is in a strong financial position with substantial cash resources.

Advfn Plc rose 2.3% to 3.48 pence after the financial information website said full-year ended June 30, 2009 revenue rose to £7.03 million from £6.93 million a year ago. Net loss was £429,000 from £1.31 million a year ago.

Aviva plc added 1.6% to 455.60 pence after the life assurance manager said that it has completed the reattribution of the inherited estate in its CGNU and CULAC with profits funds through £470 million to be paid out from shareholder funds with the vast majority of the payments tax-free. The company also sold its Australian unit to National Australia Bank for £452 million.

BAE Systems plc edged lower 5.2% to 331.80 pence after the defense contractor faces a midnight deadline set by the Serious Fraud Office to agree to a settlement or potentially be prosecuted for alleged bribery, The Guardian newspaper reported Wednesday.

The defense contractor is alleged to have bribed through intermediaries for work in South Africa, Tanzania, Romania and Czech Republic. The SFO is in discussion with the Attorney General office to decide if the company should be prosecuted or only pay a fine. The estimates of fine range between £500 million and £1 billion.

Brewin Dolphin Holdings PLC decreased 1.2% to 160.90 pence an independent private client investment manager said that “third quarter performance has been strong and results for the full year should be at the upper end of the board’s expectations. The pre-tax profit has been restated from £25.08 million to £22.02 million. Net assets have been restated from £125.2 million to £119.9 million.”

Castle Support Services plc the maintenance and repair specialist plunged 17.3% to 57.00 pence.

Domino''s Pizza UK & IRL plc added 0.2% to 292.60 pence after the pizza delivery company said that “company has seen an exceptionally strong third quarter with like-for-like sales in 501 mature stores rose 10.8% compared to an 8.8% increase in the last year. Total system sales for the 39 weeks to 27 September 2009 rose 16.2% to £294.5 million from £253.5 million a year ago.

Grainger plc increased 3.3% to 307.60 pence after the residential property group said that it has signed two new credit facilities totaling £615 million which will provide extended liquidity as the current credit facilities expire.

ICAP plc fell 1.0% to 418.20 pence an interdealer broker expects “group revenue is expected to increase around 6% in the half year September 2009 compared with the same period in the previous year. Revenues are expected to show further growth in the next six months. However, in the current environment they represent an excellent opportunity to accelerate the development of our business.

Jarvis plc the rail infrastructure contractor fell 1.3% to 18.00 pence.

Johnson Matthey Plc fell 1.2% to 1,371.00 pence after the specialty chemicals firm confirmed the purchase of the U.S. catalyst unit for up to $10 million, allowing it to increase sales of its emission control systems.

On Thursday it had bought California-based Applied Utility Systems from London-listed Catalytic Solutions for $8.5 million in cash and $1.5 million subject to contingencies.

Nighthawk Energy plc climbed 2.1% to 36.00 pence after the US-focused oil group said that the first lateral well to be drilled on its flagship Jolly Ranch project in Colorado has reached a total depth of 8,554 feet of which 2,006 feet was the horizontal leg through the Cherokee formation.

Redhall Group plc plunged 11.0% to 161.00 pence after the engineering support services group said it expected full-year profit to be marginally below market view due to a fall in volumes in the nuclear and chemical markets and reorganized its top executive team.

Renew Holdings Plc advanced 1.6% to 37.10 pence after the building contractor said it expects full-year results to be in line with market expectations and that it traded “satisfactorily” during the second half.

Robert Wiseman Dairies PLC increased 5.3% to 443.10 pence after the dairy group said that “sales volumes and turnover for the half-year ending October 3, 2009 are above our forecast and the board is confident that half-year profits are ahead of our expectations. Overall milk sales volumes are up 10% in comparison to the same period last year. We are on track for a satisfactory set of Interim Results.”

Shanks Group plc the waste management firm rose 1.9% to 101.10 pence.

VT Group plc added 0.09% to 564.50 pence after the defense and engineering company said that “the company has secured or renewed contracts worth £400 million in the first six months of its fiscal year and remains confident of performing in line with board expectations. It said a high quality order book, will be broadly in line with the £4.5 billion at the end of March 2009.

Wood Group (John) plc advanced 2.2% to 310.80 pence after the oilfield services company has acquired the energy services business of Michael Baker Corporation for $37.9 million in cash.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 15 increased, 86 declined and 1 were unchanged.

Lonmin Plc decliners in the FTSE 100 index with a loss of 8.12% followed by losses in Eurasian Natural Resources Corporation Plc of 6.10%, in Anglo American Plc of 5.75%, in Xstrata Plc of 5.69%, in Segro Plc of 5.09%.

Vedanta Resources Plc led gainers in the FTSE 100 index with a rise of 2.37% followed by increase in Home Retail Group Plc of 2.35%, in Wolseley Plc of 1.33%, in Friends Provident Plc of 1.08%, in Aviva Plc of 0.96%.