UK Indexes Up 1.9%; Xstrata, Green King Gain

Mayank Mehta
01 Dec, 2009
New York City

UK stocks rebounded for the second day in a row with confidence returning and commodities prices rising. UK banks have the largest exposure in the region. Xstrata Plc agreed to sell its stake in Indophil Resources NL to China based Zijin Mining Group. Green King Plc surged 5% on earnings.

[R]4:00 PM London, 11:00 AM New York – UK stocks rebounded for the second day in a row with confidence returning and commodities prices rising. UK banks have the largest exposure in the region. Xstrata Plc agreed to sell its stake in Indophil Resources NL to China based Zijin Mining Group. Green King Plc surged 5% on earnings.[/R]

U.K. stocks rebounded for the second day in a row after investors fears of Dubai led financial contagion receded. Crude oil and gold gained more than 1.3% as investors returned to metals and commodities markets. The prospect of debt restructuring dimmed the fear of wider contagion.

Global markets rebounded after Dubai World initiated talks to restructure less than half of $59 billion of loans. Investors’ fears of wider contagion involving Russia, Ireland and Greece for now are receding.

Dubai World said that restructuring talks with lenders are “constructive” and is seeking to delay the repayment of $26 billion of loans. For now there appears to be no talks to reduce the debt burden and at least nine lenders are involved in direct talks. HSBC, Standard Chartered Plc, Royal Bank of Scotland and Barclays are among these banks.

Even though markets in Europe and Asia recovered as the prospect of wider contagion do not appear likely but the markets in Dubai and Qatar dropped.

In London FTSE 100 Index closed higher 99.87 or 1.92% to 5,290.55 and the pound edged higher to close at $1.659 and edged lower to close at €1.100.

Gainers & Losers

A.G. BARR plc added 1.1% to 878.00 pence.

Brulines Group Plc decreased 7.4% to 128.18 pence after the data management firm said first-half revenues rose 11% to £9.9 million from £8.9 million a year ago. Net profit for the first-half fell 6.7% to £1.4 million or 4.73 pence per diluted share compared to net profit of £1.5 million or 6.04 pence per share a year ago.

The Character Group plc closed unchanged at 65.00 pence after the toy maker said full-year revenues fell 16.6% to £68.6 million from £82.3 million a year ago. Net loss for the full-year was £1.6 million or 4.09 pence per diluted share compared to net profit of £5.15 million or 11.70 pence per share a year ago.

Electra Private Equity PLC increased 6.0% to 1,218.00 pence an investment trust said full-year net loss was £26.5 million or 74.87 pence per diluted share compared to net loss of £69.4 million or 191.67pence per share a year ago.

GlaxoSmithKline plc rose 1.6% to 1,277.50 pence after the drugs giant said that yesterday it completed the extension of its strategic relationship with Aspen Pharmacare Holdings Limited and a minority stake in the South African based company.

Greene King plc rose 6.1% to 426.40 pence after the pub operator and brewer said first-half revenues rose 4.3% to £464.5 million from £445.5 million a year ago. Net profit for the first-half rose 46% to £37.7 million or 18.2 pence per diluted share compared to net profit of £20.4 million or 12.3 pence per share a year ago.

Go-Ahead Group PLC advanced 0.4% to 1,220.00 pence and earlier in November the bus and train group confirmed that it completed the acquisition of Plymouth CityBus from Plymouth City Council.

Greene King plc increased 5.0% to 421.50 pence after the pub group and brewer announced an agreement to acquire seven pubs in Scotland from Mitchells & Butlers PLC for a total consideration of £12.7 million.

ITE Group plc increased 5.0% to 131.00 pence an exhibition and conference organizer said full-year revenues rose 6.3% to £116.7 million from £109.8 million a year ago. Net profit for the full-year rose 29.9% to £30.4 million or 12.7 pence per diluted share compared to net profit of £23.4 million or 9.3 pence per share a year ago.

Interserve Plc rose 2.1% to 211.60 pence and the company was awarded a £200 million facilities management contract with HSBC that begins today.

JD Sports Fashion PLC the sportswear retailer gained 3.4% to 515.00 pence.

Mitchells & Butlers plc the pub group rose 4.4% to 263.80 pence.

Rio Tinto plc rose 2.6% to 3,167.50 pence after the mining and exploration company completed the sale of Alcan Composites, part of the Alcan Engineered Products division, to Schweiter Technologies for a total consideration of $349 million.

Shaftesbury PLC climbed 7.6% to 396.70 pence after the real estate investment trust said full-year revenues rose 3.8% to £67.8 million from £65.3 million a year ago. Net loss for the full-year was £58.4 million or 31.3 pence per diluted share compared to net loss of £216.1 million or 124.6 pence per share a year ago.

Silverdell Plc rose 2.6% to 9.75 pence after the supplier of asbestos remediation consultant said full-year revenues fell 3% to £59.5 million from £61.4 million a year ago. Net loss for the full-year was £6.04 million or 7.3 pence per diluted share compared to net loss of £16.6 million or 37.2 pence per share a year ago.

TUI Travel PLC fell 1.7% to 241.70 pence an international leisure travel group said full-year revenues fell 0.5% to £13.86 billion from £13.93 billion a year ago. Net loss for the full-year was £25 million compared to net loss of £271 million a year ago.

Xstrata plc advanced 2.8% to 1,099.00 pence after the mining company has entered into an agreement with Zijin Mining Group Co Ltd in respect of the company’s 19.9% stake in Indophil Resources NL.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 97 increased, 4 declined and 1 were unchanged.

Lloyds Banking Group Plc decliners in the FTSE 100 index with a loss of 2.27% followed by losses in Tui Travel Plc of 0.73%, in Legal & General Group Plc of 0.45%, in Severn Trent Plc of 0.10%.

Fresnillo Plc led gainers in the FTSE 100 index with a rise of 6.82% followed by increase in Xstrata Plc of 5.89%, in Wolseley Plc of 5.60%, in Intertek Group Plc of 5.41%, in Home Retail Group Plc of 5.40%.