London open: Early gains for Footsie
London’s blue chips have opened higher driven by resource stocks though it is banking shares that are the main focus.
Royal Bank of Scotland is close to an agreement with the government over its proposed participation in the toxic asset protection scheme (APS) and also confirmed weekend reports it will have to divest some of its businesses to meet EU rules.
The 70% state-owned bank said " It expects the agreement on the APS to reflect market improvements since February and RBS's ongoing recovery whilst giving protection against future potential stressed case losses".
Tomorrow, Lloyds will unveil its Ł25bn refinancing package and reveal how much it has cost to extract itself from the clutches of the APS.
Irish budget airline Ryanair warned that it may cancel existing orders if it does not agree a deal on new aircraft from Boeing as it reported an 80% increase in half year net profits. The figures are likely to be stark contrast to British Airways, which is expected to report a big loss on Friday.
Miners are doing well led by Randgold Resources is keen to bring the renamed Kibali mine into production as soon as possible with a definitive timeline for development to be completed by January of next year. Kazakhmys and Antofagasta are also higher.
Directories group Yell said it now plans to launch a Ł500m rights issue after it received acceptances in excess of the 95% threshold required as part of its refinancing proposals. The group said it will now approach its major shareholders and announce details of the equity raise ‘as soon as practicable’.
Support services firm Babcock has bought nuclear site management UKAEA from the United Kingdom Atomic Energy Authority. Babcock has paid Ł38m for UKAEA, a company which generated Ł32m of revenue in the year to 31 March 2009.
Power solutions provider Chloride saw pre-tax profit in the half year to 30 September tumble 41% to Ł10.4m from Ł17.6m a year earlier, on sales that edged up to Ł152.7m from Ł152.3m.
Data centre provider Telecity said revenue has been in line with management expectations in the second half of the year. All parts of the group are contributing to revenue growth, resulting in strong operating profit improvement, given that Telecity’s cost base is largely fixed.
Software and IT services business Sanderson said it expects full year results to be slightly ahead of current market expectations.
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