UK Shows First Signs of Economic Growth

Mayank Mehta
26 Jan, 2010
New York City

UK showed first quarterly economic expansion in the last quarter with a rise of 0.1%. The economy shrank 6% in the last six quarters. The GDP declined 4.9% in 2009. UK stocks traded volatile after the weakness in commodities prices.

[R]4:00 PM London, 11:00 AM New York – UK showed first quarterly economic expansion in the last quarter with a rise of 0.1%. The economy shrank 6% in the last six quarters. The GDP declined 4.9% in 2009. UK stocks traded volatile after the weakness in commodities prices.[/R]

The UK GDP rose 0.1% in the fourth quarter of 2009 compared to decrease of 0.2% in third quarter. This increase was due to growths in services and production by 0.1% each.

Economy shrank 4.8% in 2009.

This was the first economic expansion since first quarter of 2008. Third quarter 2009 unemployment rate increased 0.1 percentage point to 7.8% compared to last quarter.

Overall output of Index of service sector fell by 2.3% in November from a year ago. The largest contribution to the decrease was business services and finance which fell by 4.4%.

UK stocks traded volatile as commodities declined but banks edged higher. Copper closed lower and precious metals fell after China tightened regulations to issue new loans.

In London FTSE 100 Index closed higher 16.54 or 0.31% to 5,276.85 and the pound edged lower to close at $1.612 and edged lower to close at €1.147.

Intermediate Capital Group Plc increased 2.3% to 273.70 pence after it indicated higher capital gains from the sale of assets to which the company had lent in the private equity or leveraged buyout deals.

Gainers & Losers

De La Rue plc fell 2.7% to 957.00 pence after the commercial security printer and papermaker said trading in the past four months has been healthy and that it remains confident in its trading outlook for the financial year.

Intermediate Capital Group PLC rose 2.9% to 275.30 pence after the mezzanine finance provider said that recent review of the portfolio companies showed more than half performing at or above last year’s level which is broadly in line with the previous two quarters.

Island Gas Resources plc the developer of coal bed methane gained 4.1% to 87.00 pence.

JKX Oil & Gas plc decreased 3.6% to 268.00 pence after the company announces today its intention to place 14,257,270 new ordinary shares in the Company with institutional investors at a price of 265 pence per share to raise £37.8 million (approximately $61 million) before expenses.

Majestic Wine PLC closed unchanged at 228.00 pence after the wine, beers and spirits retailer announced that Simon Burke will step down from the role of Chairman following the next AGM on August 6.

Playtech Limited the online gambling software firm rose 0.9% to 514.50 pence.

Porvair plc decreased 1.6% to 59.00 pence after the filtration specialist said full-year revenues rose 0.7% to £55.2 million from £54.8 million a year ago. Net profit for the full-year fell 76% to £689,000 or 1.6 pence per diluted share compared to net profit of £2.87 million or 7.0 pence per share a year ago.

PZ Cussons plc added 3.5% to 255.70 pence after the soap manufacturer said first-half revenues rose 0.7% to £369.9 million from £367.2 million a year ago. Net profit for the first-half rose 38% to £28.8 million or 6.67 pence per diluted share compared to net profit of £20.9 million or 4.88 pence per share a year ago.

The Sage Group PLC slipped 0.4% to 236.70 pence after the business management software chief executive Paul Walker said market conditions remain challenging.

Severn Trent Plc the supply of water and the treatment and disposal of sewage rose 0.2% to 1,140.00 pence.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 56 increased, 41 declined and 5 were unchanged.

ICAP Plc decliners in the FTSE 100 index with a loss of 3.75% followed by losses in Tullow Oil Plc of 3.57%, in Fresnillo Plc of 2.31%, in Kazakhmys Plc of 2.30%, and in Lloyds Banking Group Plc of 2.29%.

Standard Chartered Plc led gainers in the FTSE 100 index with a rise of 2.49% followed by increase in Segro Plc of 2.25%, in The British Land Company Plc of 2.10%, in Invensys Plc of 2.09%, and in Imperial Tobacco Group Plc of 1.96%.