Banks Fall on Basel Remaks; BA Strike Invalid

Mayank Mehta
17 Dec, 2009
New York City

The UK banks declined after Basel, Switzerland based supervisory committee recommended banks to cut bonuses and dividend and improve the quality of capital on the books. UK retail sales declined 0.3% in November but gained 3.1% from a year ago. Court rules BA strike invalid.

[R]4:00 PM London, 11:00 AM New York – The UK banks declined after Basel, Switzerland based supervisory committee recommended banks to cut bonuses and dividend and improve the quality of capital on the books. UK retail sales declined 0.3% in November but gained 3.1% from a year ago. Court rules BA strike invalid.[/R]

UK and European banks were among the leading decliners after a statement from the Basel based international supervision committee and Citigroup priced its $20.5 billion offering at a discount.

In London FTSE 100 Index closed lower 93.76 or 1.7% to 5,226.50 and the pound edged higher to close at $1.637 and at €1.123.

The international banking supervisory committee with 28 member nations today said in a statement that banks should limit bonuses and dividends and improve the quality of capital on the books to absorb the future losses.

UK retail sales fell 0.3% in November after rising 0.6% in October according to the latest data released by the Office for National Statistics. Non-food sales decline of 0.9% exceeded the gains of 0.4% in food sales. Sales increased 3.1% from a year ago to the month after rising at 3.6% in October.

Gainers & Losers

Arriva plc added 0.4% to 484.50 pence after the rail and bus group said 2009 has been challenging but £30 million of lower fuel costs will contribute to the “positive medium-term outlook.”

British Airways Plc decreased 2.4% to 192.20 pence after judge Laura Cox ruled the Unite balloting for the strike invalid. The voting, the lengthy process will certainly avoid the strike by the cabin crew at the holiday period. Cox ruled the strike invalid after the voting included ballots from people who had agreed to leave the airline.

Chrysalis Group PLC closed unchanged at 101.00 pence an independent music company said full-year sales rose 16.3% to £62.9 million from £54.1 million a year ago. Net loss for the full-year was £3.9 million compared to net loss of £19.5 million a year ago.

The Clapham House Group PLC added 0.8% to 58.00 pence after the restaurant group said first-half sales rose 13% to £22.5 million from £20.0 million a year ago. Net loss for the first-half was £3.3 million or 8.8 pence per diluted share compared to net profit of £0.89 million or 2.4 pence per share a year ago.

Dechra Pharmaceuticals PLC declined 0.1% to 464.70 pence announced the appointment of Bryan Morton as a non-executive director with effect from 7 January 2010.

Inchcape plc rose 0.7% to 28.28 pence after the car dealer said the group financial performance is expected to be slightly ahead of previous expectations as a result of a strong fourth quarter, we continue to remain cautious for 2010.

JJB Sports plc dropped 5.3% to 26.50 pence after the sportswear retailer said group revenue plunged 52% for the period six months period to December 13 compared to a year ago. On a like-for-like basis for stores that are open at least for a year the total revenue fell 29%.

Same store sales declined 27% in September and October and dropped 21% in November. The company also issued cautious outlook as it struggles to replenish its inventories at a higher level. The inventories have rebounded from the low of £50 million to £81 million but are still 19% lower than a year ago.

The company is struggling with competition from high end retailer JD Sports and discounter Sports Direct and is looking to raise capital as it narrowly averted voluntary administration.

McBride plc decreased 0.5% to 209.10 pence after the supplier of private label household and personal care products expects first half revenues to be ahead of last year on better growths in France and Italy and favorable currency translation impact.

Melrose Resources plc dropped 0.4% to 292.30 pence after the oil and gas firm said the company currently forecasts an average daily production rate in 2010 of 40.0 Mboepd on a working interest basis, 4% higher than current 2009 market guidance of 38.5 Mboepd. On a net entitlement basis the 2010 production forecast will be 17.5 Mboepd (assuming a Brent oil price of $70 per barrel) comprising 20% hydrocarbon liquids and 80% gas.

Morgan Sindall plc the construction and regeneration group increased 3.3% to 620 pence.

Savills plc the estate agent increased 3.9% to 301.40 pence.

Senior plc rose 0.7% to 70.00 pence an aerospace and defense components and systems supplier reported that the adjusted profit before tax for third quarter came ahead of the board''s expectations, on a stronger performance from the Flexonics division and the ongoing benefits of cost reduction implemented a year ago.

Travis Perkins plc dropped 1.0% to 806.00 pence after the building supplies wholesaler and home improvement retailer said group turnover in the year to end November fell 8.5% compared to last year. Wholesale division total turnover for the eleven months fell 13.3% and comparable sales fell 14.3%. However, the decrease in comparable sales for the last two months has improved to 5.5%.

Wood Group (John) plc declined 3.2% to 288.90 pence after the oil and gas facilities service provider said reiterated earnings outlook for the year in-line with market expectations.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 8 increased, 93 declined and 1 were unchanged.

Lloyds Banking Group Plc decliners in the FTSE 100 index with a loss of 7.21% followed by losses in Barclays Plc of 5.72%, in Xstrata Plc of 4.78%, in Compass Group Plc of 3.96%, and in Antofagasta Plc of 3.82%.

Rentokil Initial Plc led gainers in the FTSE 100 index with a rise of 1.81% followed by increase in Invensys Plc of 0.89%, in G4S Plc of 0.74%, in Cadbury Plc of 0.44%, and in Resolution Limited of 0.30%.