UK Inflation on the Rise; Glencore, Xstrata Deal

123jump.com Staff
05 Mar, 2010
New York City

UK producer prices increased 4.1% in February from a year ago, eleventh monthly increase in a row. Swiss based Glencore international exercised its option to buy back Colombia based coal unit from Xstrata Plc for at least $2.2 billion. United Business Media surged 7%.

[R]4:00 PM London, 11:00 AM New York – UK producer prices increased 4.1% in February from a year ago, eleventh monthly increase in a row. Swiss based Glencore international exercised its option to buy back Colombia based coal unit from Xstrata Plc for at least $2.2 billion. United Business Media surged 7% on after it reported higher operating profit.[/R]

UK producer prices index or wholesale annual inflation for all manufactured products rose 4.1% in February from a year ago. Prices increased 0.3% in the month from January.

Input price annual inflation rose by 6.9% according to the latest statistics from the Office for National Statistics. This mainly reflects price increase in chemicals, and other imported materials equipment.

Core wholesale prices excluding food and energy increased 2.9% from a year ago and gained 0.3% from January.

In London FTSE 100 Index closed higher 72.60 or 1.31% to 5,599.76 and the pound edged lower to close at $1.503 and edged lower to close at €1.106.

Greece completed its offering of 5 billion euros drawing interests from Germany, UK and Asia.

In a statement released by HSBC Plc, one of the bond underwriting managers said Greece based investors took 23% of the offering, followed by German and UK investors bought collectively 34% and Asian investors purchased 8% of the offering.

The underwriting team increased the fees to 0.2% of the offering compared to 0.15% of size in January bond offering.

Glencore International AG is looking to raise $1 billion through asset sale to the purchase of coal mining unit Prodeco based in Colombia from Xstrata Plc.

The Swiss based commodities trading company said today it exercised to buyback Prodeco for $2.25 billion plus adjustments for profits and investments from Xstrata.

Glencore said to investors in a statement reviewed by 123jump.com said that the company has line up $1 billion of bridge loans.

The Caribbean coast facility has 250 million tons of coals reserves and also 40% stake in the railways that connect to the port.

Gainers & Losers

BAE Systems plc rose 0.2% to 386.30 pence after the defense company and Investor AB the holding company reached an agreement with the company to acquire 11,166,173 of class B shares in Saab AB or 10.2% of the capital, at a price of SEK 95.50 a share or SEK 1,066 million in total.

Costain Group PLC rose 1.0% to 23.50 pence after the company in joint venture with Skanska, announces that it has been awarded a £15 million contract by Crossrail to construct the Royal Oak Portal, the first tunnel-related construction project.

Filtrona plc rose 1.2% to 207.60 pence after the cigarette filter paper and plastics group announced the acquisition of the entire issued share capital of BP Secure Solutions Limited and Summercombe 110 Limited.

Hardy Oil and Gas plc dropped 4.0% to 225.00 pence and the explorer said fiscal 2009 revenues fell 55.5% to $7.7 million from $17.3 million a year ago. Net loss for the year was $6.52 million or $0.10 per diluted share compared to net profit of $7.5 million or $0.11 per share a year ago.

Hochschild Mining plc rose 0.7% to 292.40 pence and the copany sold its 36.9% holding in Zincore Metals Inc for a total of C$10.3 million.

Marshalls plc fell 0.8% to 84.25 pence after the specialist landscape products group said fiscal 2009 revenues fell 17.6% to £311.7 million from £378.1 million a year ago. Net loss for the year was £0.75 million or 0.42 pence per diluted share compared to net loss of £6.2 million or 3.98 pence per share a year ago.

Michael Page International plc fell 1.8% to 387.90 pence after the specialist recruitment consultancy said fiscal 2009 revenues fell 26% to £716.7 million from £972.8 million a year ago. Net profit for the year fell 87% to £12.4 million or 3.8 pence per diluted share compared to net profit of £97.3 million or 29.9 pence per share a year ago.

Premier Oil Plc slipped 1.9% to 1,109.00 pence after the Lundin Petroleum AB has completed the drilling of exploration well 16/4-5 on the Greater Luno Area Extension prospect located in the Norwegian North Sea.

United Business Media Limited surged 10.4% to 512.00 pence after the global business media company said fiscal 2009 revenues fell 4.4% to £847.6 million from £887.0 million a year ago. Net profit for the year fell 1.6% to £75.2 million or 30.5 pence per diluted share compared to net profit of £76.4 million or 30.8 pence per share a year ago.

WPP Plc decreased 0.7% to 619.50 pence an advertising company said fiscal 2009 revenues rose 16% to £8.7 billion from £7.5 billion a year ago. Net profit for the year fell 0.3% to £437.7 million or 35.3 pence per diluted share compared to net profit of £439.1 million or 37.6 pence per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 86 increased, 16 declined and none were unchanged.

Resolution Limited decliners in the FTSE 100 index with a loss of 1.86% followed by losses in United Utilities Group Plc of 1.61%, in Petrofac Limited of 1.29%, in Centrica Plc of 0.56%, and in GlaxoSmithKline Plc of 0.52%.

Schroders Plc led gainers in the FTSE 100 index with a rise of 6.56% followed by increase in Schroders Plc of 6.10%, in Xstrata Plc of 5.56%, in Fresnillo Plc of 4.18%, and in BHP Billiton Plc of 3.79%.