Lloyds, UK Treasury Talks; UK Stocks Rise

Mayank Mehta
29 Oct, 2009
New York City

Llyods Banking Group is in advanced stage of discussion with the UK Treasury that may permit the bank to raise as much as

[R]4:00PM London, 11:00 AM New York – Llyods Banking Group is in advanced stage of discussion with the UK Treasury that may permit the bank to raise as much as £23 billion and avoid additional government bailout. UK stocks rebounded at close. National Express Group and Stagecoach end merger talks.[/R]

Stocks in UK closed higher after the release of third quarter U.S. GDP data. Lloyds Banking Group is in “advanced” talks with the UK Treasury to raise as much as £23 billion in a rights offering.

In London FTSE 100 Index closed higher 31.20 or 0.6% to 5,111.62 and the pound edged higher to close at $1.647 and to €1.114.

Lloyds Banking Group is hoping that that the debt and equity offering of equal amount totaling 25 billion will allow the troubled banking group to avoid the additional government bailout. UK Treasury controls 43% stake in the group and the government support for £260 billion risky loans will cost it £15.5 billion and increase its stake to 62%.

Gainers & Losers

Arriva plc rose 2.0% to 447.10 pence after the rail and bus group said that it is working to reduce its cost ahead of potential revenue shortfall in 2011 and taking into account the lower fuel cost in 2010.

Blacks Leisure Group plc fell 6.9% to 27.00 pence after the outdoor clothing retailer said half-year revenue fell to £124.9 million from £133.0 million a year ago.

CSR plc surged 11.9% to 450.00 pence after the chips maker reported revenues at the upper end of its forecast and returned to profitability.

The Evolution Group Plc the Investment management firm increased 4.7% to 158.80 pence.

GlaxoSmithKline plc decreased 1.0% to 1,238.50 pence a day after it reported revenue increase of 15% and profit rise of 30%. The pharmaceutical company benefited from the one-time sale related to swine flu treatment.

Go-Ahead Group PLC increased 2.1% to 1,400.00 pence after the rail and bus maintained its cautious outlook for the year.

Kazakhmys PLC rose 4.7% to 1,166.00 pence after the miner said production in the first nine months of 2009 is in line with the comparable period of 2008.

National Express Group PLC plunged 10.0% to 329.50 pence after the company called of its merger talks with Stagecoach.

Prudential Public Limited Company rose 4.0% to 573.00 pence after dropping nearly 10% yesterday. The financial services company reported third quarter revenues declined 9%.

Standard Chartered PLC rose 1.0% to 1,497.00 pence ahead of earnings.

QinetiQ Group plc rose 6.8% to 152.70 pence after the defense contractor said that its chief executive Graham Love resigned effective November and will be replaced by Lo Quinn, former chief of the bank note and currency printer De La Rue.

PureCircle Limited the producer of Natural High Intensity Sweeteners rose 0.5% to 202.69 pence.

Royal Dutch Shell plc dropped 4.2% to 1,829.00 pence after it reported weaker than anticipated revenues and earnings. Earnings in the third quarter decreased on a constant currency basis to $3 billion from $10.9 billion a year ago.

RPS Group plc the environmental consultant rose 0.7% to 201.80 pence.

Scott Wilson Group plc increased 5.6% to 125.75 pence.

Standard Life plc dropped 1.2% to 216.90 pence after the life assurance group reported 13% increase in assets under management to £136.9 billion.

Yell Group plc the yellow pages directory publisher slipped 2.3% to 45.25 pence.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 79 increased, 22 declined and 1 were unchanged.

Royal Dutch Shell Plc decliners in the FTSE 100 index with a loss of 3.18% followed by losses in Royal Dutch Shell Plc of 3.17%, in BG Group Plc of 1.92%, in AstraZeneca Plc of 1.36%, in BAE Systems Plc of 0.91%.

The Royal Bank of Scotland Group Plc led gainers in the FTSE 100 index with a rise of 8.12% followed by increase in Lloyds Banking Group Plc of 7.56%, in Xstrata Plc of 6.75%, in Kazakhmys Plc of 6.02%, in Fresnillo Plc of 5.98%.