Pru enjoys surge in US sales
London openCity sources predict FTSE 100 will open down 12 points from previous close of 5,201.
Stocks to Watch
Prudential lifted group-wide retail sales by 10% to Ł699m in the third quarter thanks largely to a surge in business in the US. Retail sales leapt 66% in the US to a record Ł249m, easily offsetting a 22% decline to Ł157m in the UK. Sales in Asia rose 4% to Ł293m.
Tobacco firm British American Tobacco said it performed well in the nine months to the end of September, although total volume growth has slowed. Revenue for the nine months grew strongly in constant currency terms, it added, driven by the continued good pricing momentum and volume growth from acquisitions.
Gas supplier Centrica has received planning permission for the construction of a wind farm project off the coast of Lincolnshire. US investment management company TCW has agreed to pay Ł84m for a 50% equity stake in Centrica’s Lynn, Inner Dowsing and Glens of Foudland wind farms, the company added.
In the Press
Lloyds, Royal Bank of Scotland and Northern Rock will be broken up and parts of their businesses sold off to create three new banks, it emerged last night. Government sources said ministers were "determined" to see more competition in the market, following the Ł1.2 trillion bailout of the sector which resulted in the loss of three independent banks and several building societies, says the Independent.
The Telegraph adds that the European Commission will today clear the way for the sale of Northern Rock by approving the nationalised lender’s plans to split into a “good bank” and a “bad bank”. Analysts reckon the government could fetch as much as Ł1.5bn.
Alistair Darling, the chancellor, will decide on Wednesday whether to sign off on the choice of senior UBS banker Robin Budenberg as the next chief executive of UK Financial Investments, the body that runs the government’s bank shareholdings, writes the FT.
Newspaper Tips
ARM Holdings cheered investors yesterday when it outstripped consensus estimates on its profits before exceptional charges at a time when the semi-conductor sector is suffering as a result of massively reduced demand for gadgets and consumer electronics. The company has also increased its margins by slimming down its operations, including the closure of a factory in Belgium. But, related charges of Ł6.5m was largely responsible for pre-tax profits tumbling from Ł15.8m to Ł7.7m. The shares have performed well, but the Telegraph’s Questor believes there could be significantly more upside potential.
With little prospect of substantial sales growth in Europe, its biggest market by far, Reckitt Benckiser has to convince that it can deliver on margins, too. The company is also promising several important launches next year, both new products and additions to existing product lines. Until there is more clarity on whether these are genuine, first-to-market innovations, hold, says the Times.
The festive season is anticipated as eagerly by Cineworld as by any four-year-old waiting for Santa. After a mediocre third quarter, which suffered from comparisons with last year’s musical smash Mamma Mia!, crowd-pleasers such as A Christmas Carol, featuring Jim Carrey as Scrooge, are expected to pack in punters again. The share price, up 45 per cent this year to 151p, or 9.8 times expected 2009 earnings, reflects much of the positive aspects of the story. A 6.3 per cent expected yield this year makes Cineworld shares worth keeping, according to the Times.
US close
US stocks put in a mixed performance after consumer confidence data concerned investors and an auction of government debt attracted more demand than expected.
US consumer confidence fell for the second month in row in October as people worried about jobs.
A $44bn sale of two year treasuries drew the strongest demand since the financial crisis began, with a bid-to-cover ratio or 3.63.
A rise in the oil price provided further impetus to oil companies. Exxon Mobil and Chevron Corp were two of the top three performers in the Dow.
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