UK Banks Drop; Prudential Plunges 10%

Mayank Mehta
28 Oct, 2009
New York City

UK banks declined after the government advances the plan to separate bad loans at three largest troubled banks that are operating under its supervision. Prudential Plc dropped 10% after it reported weak results. GlaxoSmithKline quarterly sales rise on weak pound and one-time sale of H1N1 treatment.

[R]4:00PM London, 11:00 AM New York – UK banks declined after the government advances the plan to separate bad loans at three largest troubled banks that are operating under its supervision. Prudential Plc dropped 10% after it reported weak results. GlaxoSmithKline quarterly sales surged on weak pound and one-time sale of H1N1 treatment drugs.[/R]

European Union approved the UK plan to create a “bad bank” to separate risky assets of Northern Rock. The move will help the mortgage lender to expand its business and also tap capital markets.

UK is considering breaking the recently nationalized banks Royal Bank of Scotland Group and Lloyds Banking Group Plc to split as well according to a report published by Independent.

In London FTSE 100 Index closed lower 99.07 or 1.9% to 5,100.87 and the pound edged lower to close at $1.632 and at 1.104 euros. Banks led the decliners.

Gainers & Losers

AstraZeneca PLC fell 1.2% to 2,795.00 pence after the drugs giant announced today that it has withdrawn the regulatory submissions for the use of ZACTIMA 100 mg in combination with chemotherapy in patients with advanced non-small cell lung cancer from the US FDA and the European Medicines agency.

Avocet Mining plc rose 2.9% to 79.25 after the gold mining company with assets in South East Asia and West Africa said quarter ended September 2009 gold sales rose 7% to $27.9 million.

BAA plc the airport operator said nine months revenues rose 7.6% to £1.85 billion from £1.72 billion a year ago. Pretax loss for the nine months was £784.7 million compared to pre-tax loss of £519.5 million a year ago.

BG Group plc decreased 2.3% to 1,105.50 pence after the natural gas producer said third quarter revenues fell 33.3% to £2.2 billion from £3.3 billion a year ago. Net profit for the quarter fell 44% to £484 million or 14.3 pence per diluted share compared to net profit of £857 million or 25.3 pence per share a year ago.

British American Tobacco plc declined 1.3% to 1,964.50 after the tobacco firm said nine-month underlying sales declined 3% but said price rises led to """"strong revenue growth"""".

BP plc dropped 1.6% to 584.90 pence after the oil company said third quarter revenues fell 35.2% to $67.9 billion from $104.8 billion a year ago. Net income in the quarter fell 34% to $5.34 billion or $28.18 per diluted share compared to net income of $8.05 billion or $42.56 per share a year ago.

Carpetright plc rose 0.2% to 902.00 pence after the floor coverings retailer said 12 weeks to October 24, 2009 group sales rose 10.3%.

Centrica plc rose 0.5% to 245.50 pence after the gas supplier today announced that its 270 megawatt (MW) Lincs offshore wind project has received final investment approval, and that construction is expected to begin in 2010.

Dana Petroleum plc fell 2.3% to 1,339.00 pence said that it has discovered oil at the Jetta prospect offshore Norway, close to the Jotun producing oil field in which the company is a partner.

Debenhams plc the department store fell 2.0% to 82.65 pence.

GlaxoSmithKline decreased 0.2% to 1,254.50 pence after it reported third quarter earnings of £1.34 billion compared to £1.03 billion a year ago quarter. Sales increased 15% to £6.76 billion. The earnings reported its first quarterly sales increase in three years on the one-time sales related to H1N1 virus.

Laird PLC decreased 5.2% to 188.80 pence after the electronic components maker confirmed that the company is considering an equity issue however no final decision has been made by the company at this time.

Medusa Mining Limited slipped 5.0% to 187.10 pence after the gold producer said quarterly gold production increased to 18,054 ounces compared to 16,009 ounces a year ago.

Prudential Plc dropped 9.8% to 550.50 pence after it reported nine months revenues declined 9%. Weak asset management fees hurt the business.

Rio Tinto plc fell 4.9% to 2,729.00 pence after the mining and exploration company confirmed today it has completed the second tranche of its private placement investment in Ivanhoe Mines Ltd, increasing its ownership by 9.8% to 19.7% of Ivanhoe''s common shares.

Royal Bank of Scotland dropped 3% to 39.60 pence and Lloyds Banking Group fell 4.6% to 80 pence. Barclays dropped 6.1% to 319 pence.

Rugby Estates plc dropped 0.4% to 245.00 pence after the property and asset management group said first-half revenues rose 17.9% to £4.6 million from £3.9 million a year ago. Net loss for the first-half was £374,000 or 2.8 pence per diluted share compared to net loss of £4.05 million or 30.0 per share a year ago.

Tesco PLC the global retailer rose 0.2% to 396.00 pence.

TUI Travel PLC declined 3.1% to 234.00 pence.

Wolfson Microelectronics plc fell 0.6% to 119.25 pence after the semiconductor company said third quarter revenues fell 41.5% to $35.4 million from $60.5 million a year ago. Net loss for the quarter was $1.5 million or 1.29 cents per diluted share compared to net profit of $3.9 million or 3.33 cents per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 12 increased, 89 declined and 1 were unchanged.

Man Group Plc decliners in the FTSE 100 index with a loss of 8.42% followed by losses in Xstrata Plc of 7.76%, in Prudential Public Limited Company of 7.26%, in Lonmin Plc of 7.15%, in Kazakhmys Plc of 7.03%.

Friends Provident Plc led gainers in the FTSE 100 index with a rise of 3.29% followed by increase in Tesco Plc of 1.78%, in Wm Morrison Supermarkets Plc of 1.24%, in Diageo Plc of 1.20%, in Inmarsat Plc of 0.97%.