UK Stocks in 3-Day Rally; Prudential Falls 8%

Mayank Mehta
02 Mar, 2010
New York City

UK stocks closed higher for the third day in a row as commodities continue to rally and sentiment in Europe improve. Greece is inching closer to finalize the terms of bailout with Germany and France and is expected to announce deeper budget cuts. Prudential Plc dropped 20% in two days.

[R]4:00 PM London, 11:00 AM New York – UK stocks closed higher for the third day in a row as commodities continue to rally and sentiment in Europe improve. Greece is inching closer to finalize the terms of bailout with Germany and France and is expected to announce deeper budget cuts. Prudential Plc dropped 20% in two days.[/R]

Prudential Plc fell 8% and declined 20% in two days after the insurer offered $35.5 billion to acquire AIA Group Ltd from American International Group Inc. Investors are hoping to buy shares in the rights offering at 40% discount from the Friday’s close price.

In London FTSE 100 Index closed higher 78.12 or 1.45% to 5,484.06 and the pound edged lower to close at $1.494 and at €1.103.

Greek government is expected to announce additional and deeper cuts to tame its estimated budget deficit from 8.7% to 6.7% in the current year.

Bowing to pressures from the European Union regulators and demands of the German and French investors, Greece is looking to increase taxes on tobacco, alcohol and general sales and cut benefits to government employees.

The additional budget cuts are scheduled to be announced as early as tomorrow ahead of the meeting between Prime Minister George Papandreou and German Chancellor Angela Markel in two days.

Gainers & Losers

Admiral Group plc declined 3.4% to 1,221.00 pence an insurance firm said fiscal 2009 revenues rose 20% to £507.5 million from £422.8 million a year ago. Net profit for the year rose 8% to £156.9 million or 59.0 pence per diluted share compared to net profit of £144.9 million or 54.9 pence per share a year ago.

Allied Irish Banks, PLC the bank said 2009 net interest income fell 16.5% to €3.23 billion from €3.87 billion a year ago. Net loss for the year was €2.4 billion or 215.2 cents per diluted share compared to net profit of €772 million or 83.3 cents per share a year ago.

Cookson Group plc fell 4.4% to 447.30 pence after the materials science company said fiscal 2009 revenues fell 11% to £1.96 billion from £2.20 billion a year ago. Net loss for the year rose was £48.5 million or 17.8 pence per diluted share compared to net profit of £46.1 million or 32.7 pence per share a year ago.

Fresnillo Plc added 1.3% to 793.50 pence after the miner said 2009 revenues rose 18% to $849.9 million from $720.5 million a year ago. Net profit for the year rose 151.6% to $322.0 million or $0.45 per diluted share compared to net profit of $128 million or $0.19 per share a year ago.

Goldenport Holdings Inc gained 5.0% to 105.00 pence after the Greek shipping company today announces the results for the year ended December 31 reporting a final dividend for 2009 of 3 pence per share and annual dividend of 3.7 pence per share or a payout of 104% of earnings before exceptional items.

Informa plc advanced 0.9% to 353.60 pence after the organizer of conferences and courses said 2009 revenues fell 4.7% to £1.22 billion from £1.28 billion a year ago. Net profit for the 2009 rose 24.4% to £105.6 million or 18.83 pence per diluted share compared to net profit of £84.9 million or 16.79 pence per share a year ago.

IP Group Plc closed unchanged at 53.00 pence an intellectual property commercialization company said 2009 revenues from services fell 21% to £1.5 million from £1.9 million a year ago. Net loss for the year was £6.1 million or 2.45 pence per diluted share compared to net loss of £40.3 million or 16.10 pence per share a year ago.

Jardine Lloyd Thompson Group plc fell 0.4% to 500.50 pence an insurance broker said 2009 net profit rose 11.5% to £70.9 million or 33.1 pence per diluted share compared to net profit of £63.6 million or 29.6 pence per share a year ago.

Keller Group plc fell 3.6% to 650.50 pence after the ground engineer specialist said fiscal 2009 revenues fell 13.3% to £1.04 billion from £1.2 billion a year ago. Net profit for the year fell 29% to £50.4 million or 77.4 pence per diluted share compared to net profit of £70.8 million or 106.7 pence per share a year ago.

Meggitt PLC dropped 2.6% to 281.60 pence an aerospace and defense company said 2009 revenues fell 1% to £1.15 billion from £1.16 billion a year ago. Net profit for the year rose 40% to £138.8 million or 20.5 pence per diluted share compared to net profit of £99.1 million or 15.0 pence per share a year ago.

Pace plc the developer of digital TV technologies said 2009 revenues rose 52% to £1.13 billion from £745.5 million a year ago. Net profit for the year rose 363% to £51.4 million or 17.2 pence per diluted share compared to net profit of £11.1 million or 3.9 pence per share a year ago.

Paddy Power plc the bookmaker said 2009 net profit fell 17.3% to €56.9 million or €1.21 per diluted share compared to net profit of €68.8 million or €1.43 per share a year ago.

Persimmon Plc gained 2.3% to 410.00 pence after the home builder said 2009 revenues fell 19% to £1.42 billion from £1.76 billion a year ago. Net profit for the year was £74.1 million or 24.5 pence per diluted share compared to net loss of £625.0 million or 208.3 pence per share a year ago.

Rotork plc the engineer fell 4.2% to 1,315.00 pence.

Vedanta Resources Plc declined 3.3% to 2,554 pence after the largest copper miner said it is preparing to raise $775 million through the sale of convertible bonds.

Vitec Group plc dropped 1.2% to 390.00 pence after the entertainment and media industries services provider said 2009 revenues fell 6.7% to £315.1 million from £337.7 million a year ago. Net profit for the year fell 84% to £3.2 million compared to net profit of £20.1 million a year ago.

Wood Group (John) plc fell 0.9% to 360.40 pence an energy services company said fiscal 2009 revenues fell 6% to $4.93 billion from $5.24 billion a year ago. Net profit for the year fell 35% to $163.2 million or 31.2 cents per diluted share compared to net profit of $251.6 million or 48.1 cents per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 87 increased, 14 declined and 1 were unchanged.

Prudential Plc decliners in the FTSE 100 index with a loss of 8.02% followed by losses in Admiral Group Plc of 3.32%, in Vedanta Resources Plc of 3.29%, in Rolls-Royce Group Plc of 1.42%, and in Associated British Foods Plc of 1.34%.

British Airways Plc led gainers in the FTSE 100 index with a rise of 6.17% followed by increase in ICAP Plc of 4.64%, in Fresnillo Plc of 4.47%, in ARM Holdings Plc of 4.26%, and in Standard Chartered Plc of 4.23%.