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London afternoon: Oils drag Footsie into red

14 Apr 09

LONDON (ShareCast) - The mid-morning downward trend continued over the lunchtime session and the Footsie is now in the red, despite some chunky gains by financials.

Banks remain favoured after US bank Goldman Sachs announced better-than-expected first quarter earnings and plans to raise $5bn (£3.4bn) in a share sale to pay off US government bail-out funds.

Lloyds Banking and Barclays are amongst the better performers, while Royal Bank of Scotland is also higher as the race for its Pakistan business gathers pace with a number of local parties interested. Pakistan's biggest bank MCB confirmed its interest to acquire RBS Pakistan, while Pakistani financial services company Jahangir Siddiqui and Habib Banks are also in the running.

HSBC is another bank on the rise after it confirmed it is contemplating selling off three of its major office buildings.

Legal & General and Standard Life lead the insurers higher after recent comments from investment analysts that the sector sell-off has been overdone.

In a buoyant mining sector Vedanta leads the way after being upgraded by Barclays Capital. Elsewhere in the resource sector, however, oils are out of fashion, with BP, BG Group and Tullow the big fallers. US crude oil futures fell on Monday by over $2 after the International Energy Agency cut its forecast for global oil demand. Friday’s EIA report said global demand for oil would decrease by a further 1m barrels this year. Demand is now expected to be around 2.4m barrels a day below 2008 levels.

While the US is braced for a big week of company results, second-line stocks dominate the corporate news scene in the UK.

Soft drinks firm Britvic announced the successful refinancing of its committed bank facility, which will see its new six-bank £283m revolving multi-currency facility mature in May 2012. Prior to the commencement of this facility, effective from May 2010, Britvic will have access to increased committed bank facilities of £333m.

JKX Oil and Gas is to buy a 25% interest in the Veszto exploration licence held by Hungarian Horizon Energy. Oil and gas explorer JKX is paying for the stake by contributing its share of the drilling costs on the first well and by paying some of the previously incurred exploration costs. JKX expects the cost in the next quarter to be around $3.25m.

Russian grocery chain X5 reported a sharp rise in pro-forma earnings before interest depreciation and amortization (EBITDA) over the fourth quarter as revenues soared. EBITDA was up by 19% from the same period the previous year to $225m on sales that climbed 41% to $2.4bn.

Dart Group, the aviation and distribution firm, expects full year results to be ahead of current market expectations due to strong trading performance and the strength of the US dollar.

Support services group AssetCo said its full-year results are expected to be at the lower end of market expectations.

Oil and gas explorer and producer Leni Gas & Oil reported a slight dip in production between February and March as it underwent development programmes at its operations in Spain, Hungary and Trinidad.

Stockbroker Jarvis Securities said given the current strong trading it has decided to declare a first interim dividend for 2009 of 3p per share.

John Perriss, the independent non-executive director of The Local Radio Company has recommended shareholders reject the offer from the UKRD Group as it compares unfavourably to the rival offer from Hallwood.

Fund manager BlueBay is the best performing FTSE 250 stock after Citigroup upgraded the stock from ‘hold’ to ‘buy’.

Leisure and resort developer Minoan said contrary to press speculation, no judgement has been made by the Greek court about the development of its Cavo Sidero Project. The company said press and wire comments ‘that the Greek Conseil d'Etat has upheld the appeal against the Greek Government's approval of the Environmental Impact Assessment in respect of the project’ were pure speculation.

AIM-listed Indago Petroleum has sold off all its oil and gas assets and completed its withdrawal from Oman with the sale of some subsidiaries to RAK Petroleum. The company has now become an ‘investing company’, but the chairman played down the prospect of a return of capital to shareholders, saying the company is engaged in a number of discussions concerning ‘interesting corporate and asset transactions.’

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.


Market Data

Currency US Dollars
Price $33.75
Change Today -$0.01
52 Week High $34.26
52 Week Low $33.49
Volume 62,665
Shares Issued 271.57m
Market Cap $9,164m


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