Date: Tuesday 01 Jun 2010
City sources predict FTSE 100 will open down 15 points from its previous close of 5,188.
Stocks to watch
Prudential’s bid for American International Group’s Asian business looks in disarray after the US insurer refused to renegotiate the $35.5bn offer down to nearer $30bn. “Following detailed discussions with AIG's management and advisers, Prudential had proposed a revision to the terms that would have reduced the value of the consideration for the acquisition of AIA by Prudential Group plc to US$30.375bn,” it said Tuesday.
Responding to speculation in the week-end press, hotels and coffee shop group Whitbread has said it has no plans to raise funds through an equity issue. The Independent newspaper had run a story on Sunday which suggested that the Premier Inn and Costa Coffee owner is planning to raise Ł100m this summer through a private placement.
Irish no-frills airline Ryanair swung strongly back into the black last year and proposed a €500m special dividend with the possibility of another €500m in the three years time. Pre-tax profits for the year to March came in at €341 against a loss of €181m. Adjusted profits rose by 204% to €319m allowing for write-downs on its stake in rival Aer Lingus. Revenues were 2% higher at €2.99bn against €2.94bn.
In the Press
More than Ł6bn was wiped from the market value of BP last night after the oil giant’s latest failure to control its oil spill in the Gulf of Mexico provoked mounting anger in the US. With markets in London closed, BP’s German-listed shares plunged almost 8% to €5.39 (Ł4.56) after the US Government warned that the leak from the blown-out Macondo well may not be stopped until a relief well can be drilled in August. The share price collapse was equivalent to a slide in BP’s UK-listed market value of Ł6.5bn, from Ł93bn on Friday to Ł86.5bn,the Times reports.
BP was given permission to drill in the Gulf of Mexico after submitting documents promising it was equipped to deal with a spill 10 times larger than the current leak. The papers will be a further embarrassment to the oil company, as it currently struggles to contain the spill spewing an estimated 19,000 barrels into the ocean daily, the Telegraph reports.
The European Central Bank sent tremors through financial markets last night when it warned that banks in the eurozone nations faced having to write off another €195bn in bad loans over the next 18 months. In what it predicted would be “a second wave” of loan losses, the ECB forecast a fresh flood of red ink for eurozone banks that already have written off €238bn (Ł200bn) since the banking crisis erupted, the Times reports.
The Bank of England is sitting on an Ł8bn net profit from its Ł200bn quantitative easing (QE) fund. A sharp increase in gilt prices over the past two weeks, as traders pull money out of European investments and into UK government debt, has swung the Bank's QE fund into profit for the first time in months. The news underlines the fact that Britain has unexpectedly established itself as a safe haven destination during the European debt crisis, the Telegraph reports.
Companies in Britain’s dominant service sector suffered disappointing sales and tumbling profits in the three months to May, heightening fears about the solidity of the recovery. Hotels, bars and restaurants suffered a sharp and unexpected drop in business between February and May as consumers reined in their spending, the CBI’s latest snapshot of the services sector will show today, the Times reports.
US close
Dow Jones closed down 122 points at 10,136. Nasdaq gave back 20 at 2,257 while the S&P 500 shed 13 at 1,089. The fall by the Dow meant the blue chip index suffered its worst May in 70 years, falling by 7.9%, and endured its worst month overall since February 2009. Nasdaq lost 8.3% in May, its worst month since November 2008, while the S&P 500 had its worst May since 1962.
City sources predict FTSE 100 will open down 15 points from its previous close of 5,188.
Stocks to watch
Prudential’s bid for American International Group’s Asian business looks in disarray after the US insurer refused to renegotiate the $35.5bn offer down to nearer $30bn. “Following detailed discussions with AIG's management and advisers, Prudential had proposed a revision to the terms that would have reduced the value of the consideration for the acquisition of AIA by Prudential Group plc to US$30.375bn,” it said Tuesday.
Responding to speculation in the week-end press, hotels and coffee shop group Whitbread has said it has no plans to raise funds through an equity issue. The Independent newspaper had run a story on Sunday which suggested that the Premier Inn and Costa Coffee owner is planning to raise Ł100m this summer through a private placement.
Irish no-frills airline Ryanair swung strongly back into the black last year and proposed a €500m special dividend with the possibility of another €500m in the three years time. Pre-tax profits for the year to March came in at €341 against a loss of €181m. Adjusted profits rose by 204% to €319m allowing for write-downs on its stake in rival Aer Lingus. Revenues were 2% higher at €2.99bn against €2.94bn.
In the Press
More than Ł6bn was wiped from the market value of BP last night after the oil giant’s latest failure to control its oil spill in the Gulf of Mexico provoked mounting anger in the US. With markets in London closed, BP’s German-listed shares plunged almost 8% to €5.39 (Ł4.56) after the US Government warned that the leak from the blown-out Macondo well may not be stopped until a relief well can be drilled in August. The share price collapse was equivalent to a slide in BP’s UK-listed market value of Ł6.5bn, from Ł93bn on Friday to Ł86.5bn,the Times reports.
BP was given permission to drill in the Gulf of Mexico after submitting documents promising it was equipped to deal with a spill 10 times larger than the current leak. The papers will be a further embarrassment to the oil company, as it currently struggles to contain the spill spewing an estimated 19,000 barrels into the ocean daily, the Telegraph reports.
The European Central Bank sent tremors through financial markets last night when it warned that banks in the eurozone nations faced having to write off another €195bn in bad loans over the next 18 months. In what it predicted would be “a second wave” of loan losses, the ECB forecast a fresh flood of red ink for eurozone banks that already have written off €238bn (Ł200bn) since the banking crisis erupted, the Times reports.
The Bank of England is sitting on an Ł8bn net profit from its Ł200bn quantitative easing (QE) fund. A sharp increase in gilt prices over the past two weeks, as traders pull money out of European investments and into UK government debt, has swung the Bank's QE fund into profit for the first time in months. The news underlines the fact that Britain has unexpectedly established itself as a safe haven destination during the European debt crisis, the Telegraph reports.
Companies in Britain’s dominant service sector suffered disappointing sales and tumbling profits in the three months to May, heightening fears about the solidity of the recovery. Hotels, bars and restaurants suffered a sharp and unexpected drop in business between February and May as consumers reined in their spending, the CBI’s latest snapshot of the services sector will show today, the Times reports.
US close
Dow Jones closed down 122 points at 10,136. Nasdaq gave back 20 at 2,257 while the S&P 500 shed 13 at 1,089. The fall by the Dow meant the blue chip index suffered its worst May in 70 years, falling by 7.9%, and endured its worst month overall since February 2009. Nasdaq lost 8.3% in May, its worst month since November 2008, while the S&P 500 had its worst May since 1962.
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