London midday: Trading suspended on LSE
Banks shares are leading the market lower today as investors fret about the debt situation in Dubai.The government owned Dubai World, which has debts of $59bn, has asked creditors if it can delay debt repayments due next month until May of next year. HSBC, Royal Bank of Scotland, Barclays, Lloyds Banking and Standard Chartered all feature prominently among the biggest fallers on Footsie.
Elsewhere in the financial sector insurer Legal & General is friendless after Citigroup issued a sell note while London Stock Exchange (LSE) is still out of favour as analysts worry over how the Dubai debt situation will affect the 20.6% stake held in the company by Borse Dubai.
The latter’s reputation will not have been boosted by a technical hiccough which required the imposition of an ‘auction call period’, which essentially means all orders will be put into a queue, waiting to be executed. The exchange said the problems related to connectivity issues.
At the time of writing, the LSE is still suffering from these issues, which means prices are stuck at mid-morning levels.
Water companies are among the few bright spots among leading shares. Water regulator Ofwat said the companies will have to cut bills in real terms between 2010 and 2015, though not by as much as it previously proposed. Ofwat said average annual bills will have to fall by Ł3 to Ł340 between 2010 and 2015, but this was less than originally indicated.
Severn Trent, United Utilities, Northumbrian Water, Scottish & Southern Energy and Pennon are all well up on the news, as is Ecofin Water & Power Opportunities, the investment management firm that specialises in the utility sector.
Profits fell by nearly half at the South America-focused miner Antofagasta as tumbling metals prices hit sales. The shares trade lower, but this is not unusual in the sector today, as metal prices move lower.
Currys and PC World owner DSG International reported a drop in first half like for like sales but said it has seen improving trends in a number of its businesses, particularly in recent weeks. Like-for-like sales were down 4% in the 24 weeks ended 17 October, but were up 1% in the last 8 weeks of the half year.
Pub owner Mitchells & Butlers has made a good start to its new financial year, but worries about the strength of consumer confidence and possible tax rises after next year's General Election. Pre-tax profit fell 24% in the year ended 26 September 2009 to Ł134m on revenue up 2.6% to Ł1.96bn.
Newspaper publisher Daily Mail slumped deeper into the red last year as more write-downs knocked its figures, but underlying profits also took a tumble as its UK local papers suffered in the recession. Adjusted profits in the year to September fell by 23% to Ł201m on revenues of Ł2.1bn, down from Ł2.3bn.
Another 642 British jobs are to go at defence giant BAE Systems due to a drop in demand at its surveillance business. The company’s Integrated System Technologies unit, a maker of radar surveillance and command systems, will cut staff at eight sites.
The Department of Transport has decided not to extend the National Express East Anglia franchise beyond its normal termination date of March 2011. National Express said it had expected the decision after it handed back control over the loss-making East Coast mainline rail franchise to the government last month.
Rail maintenance group Jarvis slumped into the red at the half year point and added it will only break-even before interest this year as spending by Network Rail continues to be sluggish.
A bumper Halloween enabled cards and gifts retailer Clinton Cards to lift like for like sales for the 16 weeks to 22 November by 3.9%, an increase on the early part of the period. Halloween went “exceptionally well”, Clinton said.
FTSE 100 - Risers
Severn Trent (SVT) 1,043.00p +3.68%
United Utilities Group (UU.) 491.70p +1.57%
Scottish & Southern Energy (SSE) 1,122.00p +0.45%
Admiral Group (ADM) 1,059.00p +0.28%
FTSE 100 - Fallers
Legal & General Group (LGEN) 80.85p -4.60%
HSBC Holdings (HSBA) 709.10p -4.33%
London Stock Exchange Group (LSE) 780.00p -4.24%
Royal Bank of Scotland Group (RBS) 34.26p -4.21%
Kazakhmys (KAZ) 1,243.00p -4.09%
Antofagasta (ANTO) 899.50p -3.90%
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