London open City sources predict FTSE 100 will open down 77 points from its previous close of 5,126.
Stocks to watch
Life group Prudential moved to head off likely calls for the replacement of its senior management at its AGM today by revealing strong trading figures for April and May. Sales for the first five months of 2010 rose 27% to Ł1.37bn, with Asia and the US the main drivers. Asia sales rose by 33% to Ł579m and US sales by 41% to Ł454m. The UK was steady, up 4% to Ł322m. In April and May, sales overall rose by 28%.
The Gulf of Mexico oil spill has now cost BP $1.25bn (Ł865m) and is expected to keep rising for many months as the latest attempt to stop the leak is only capturing half the oil. The figure doesn’t cover the $360m (Ł249m) in funds for the Louisiana barrier islands construction project and the $500m (Ł346m) for a new research facility into oil disasters. BP’s lower marine riser package (LMRP) containment cap, installed on June 3, collected 10,500 barrels of oil on Saturday and 16,600 barrels from June 3-5.
Oil engineering services provider Lamprell said performance has been in line with expectations since its last statement in April. “We continue to see high levels of enquiries for our services in most sectors of our business but, most importantly, our efforts to diversify the scope of our operating markets is beginning to bear fruit, as evidenced by the contracts wins we have secured, so far, in 2010,” said the group.
In the Press
David Cameron launches a campaign on Monday to prepare Britain for an era of public sector “pain”, laying the ground for decisions that would “affect our economy, our society – indeed our whole way of life”. With just over two weeks until the Budget, Mr Cameron will promise an unprecedented level of public and business consultation before unleashing cuts that would hit “every single person in our country”. George Osborne, chancellor, will say on Tuesday that he is looking at the possible creation of a Canadian-style “star chamber” of senior ministers and officials to grill cabinet members on their proposed spending plans, the FT reports.
George Osborne, chancellor, is to press ahead with plans for a levy on UK-based banks, in spite of the G20 finance ministers at the weekend scrapping worldwide plans for a banking tax. Mr Osborne is expected to outline his thinking on a unilateral British bank tax in his Budget on June 22, undeterred by the hostile reaction to the idea from some ministers at the G20 meeting at Busan in South Korea. The prospect of a global bank levy died at 5am on Saturday when weary finance ministers agreed to drop the proposal from their final communiqué in the face of a wave of opposition, led by Canada, the FT reports.
Some of Prudential’s biggest shareholders have approached Mark Tucker about replacing Tidjane Thiam as chief executive of the embattled UK insurer, The Times has learnt. Pru investors said last night that they had sounded out the man who served as chief executive from 2005 until last September within the past two weeks about his appetite to return to the job. One Pru shareholder said: “Tucker really knows the business, particularly in Asia. He was resigned to leaving for something different. But he’ll hate what’s happening and might be prepared to come back to restore some stability,” the Times reports.
BP saw the first significant progress in its seven-week attempt to capture oil pouring from its leaking well in the Gulf of Mexico on Sunday, but was still catching only about half of the estimated flow. Tony Hayward, chief executive, said he hoped the cap lowered over the well last week would eventually catch the “vast majority” of the leaking oil. But US authorities warned that there was a “long way to go” before it reached that point, the FT reports.
Newspaper tips Supermarket chain Morrisons does not have a meaningful non-food offer. Nor does it have small convenience stores. Nor has it branched into online retailing or opened stores overseas. All of these present opportunities for new chief executive Dalton Philips – he just needs to work out where to focus his ambitions. The company is very well-regarded in the City, but until the new chief sets out his strategy – likely to be later this year – sit on the shares. Hold says the Telegraph.
Posh handbag maker Mulberry's results for the year to March 2010 will be published next week and brokers expect profits to increase by more than 40% to Ł6m this year, rising to Ł6.6m in 2011 and Ł8.7m the year after. A dividend of 2p is forecast for 2010, increasing to 2.2p next year. Mulberry shares have come a long way over the past year and now stand at 2021/2p. City analysts believe that the shares should rise to more than 250p over the next 12 months and considerably higher over the next five years. Buy says the Mail on Sunday.
Shareholders in National Grid who can afford to buy new shares in the rights issue should do so. Those who cannot and hold fewer than 500 shares should sell their entire holding says the Mail on Sunday.
US close
US stocks slumped over 300 points on renewed fears over the euro and weaker than expected jobs figures. The Dow closed down 323 points at 9,931. The S&P shed 37 at 1,064 while Nasdaq tumbled 83 at 2,219.
The jobs figures started the rout. Worries about European debt and the financial problems of Hungary added to the gloomy mood. The number of Americans on company payrolls grew by 431,000 in May, but most of the increase was down to hiring of temporary workers to carry out the US census.
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