Register to get unlimited Level 2

Weekly Review

Date: Friday 03 Feb 2012

The FTSE 100 closed up 168 points on the week at 5,901 points.

Equity view

Norwich-based insurance giant Aviva is to reduce its presence in eastern Europe as it continues with its strategy of focusing on markets where it has strength and scale. The company is to sell Aviva Czech Life, Aviva Hungary Life and Aviva Romania Life & Pensions to US life assurance firm MetLife.

Chip designer ARM Holdings’ strong growth in licensing revenues helped the group beat forecasts in the fourth quarter and full-year. The firm also offered a relatively positive outlook for the full year 2012.

Indian energy firm Essar Energy learnt that it must repay $1.235bn in sales tax, in addition to interest, after the firm received a demand notice from the tax authorities of the government of Gujarat following a decision by the Supreme Court of India over the repayment of deferred sales tax.

British Sky Broadcasting saw profit before tax rise to £597m in the half year to end of December versus £467m in the corresponding period of 2010, as the company managed to add a further 100,000 households to its customer base.

Mining giant Antofagasta saw full-year copper production rise 22.9% to 640,500 tonnes, compared with 521,100 tonnes in 2010 and the 620,000-640,000 tonnes guidance range.

Underlying fourth quarter earnings at Anglo-Dutch integrated oil behemoth Royal Dutch Shell came in below expectations, but there was some good news for the company's legion of shareholders as the company announced plans to nudge up the quarterly dividend.

Pharmaceuticals giant AstraZeneca has reported a strong rise in earnings in 2011 but, in an attempt to "enhance productivity" and reduce costs, the company has revealed it will by making 7,300 job cuts. To make things worse, the group said a decline in both constant currency revenues and core earnings per share (EPS) is expected in 2012.

Speculation that a merger of Swiss commodities giants Glencore and Xstrata could be on the cards has proved on the money, with Xstrata confirming that it is in talks about a merger of equals with its largest shareholder.

Economic news

Consultancy GFK’s index of consumer confidence in the UK improved during the month of January to -29 points, versus -33 in December and -29 one year ago.

The seasonally adjusted Markit/CIPS UK manufacturing sector PMI rose to a better-than-expected 52.1 in January, an eight-month high, following the previous month’s reading of 49.6. The PMI for the construction sector retreated to 51.4 points from 53.2 the month before, missing expectations.

In its latest economic forecasts, the National Institute of Economic and Social Research (NIESR) estimates that the UK economy will return to a ‘technical recession’ in the first half of the year. Nonetheless, it does foresee a recovery, should the Eurozone crisis be solved, even if unemployment is being called to remain “elevated” during the forecast period.

The Markit/CIPS PMI for the month of January has come in at 56 points, versus a reading of 54 for the month before. The consensus estimate was for a reading of 53.

International events

French President Nicolas Sarkozy has moved ahead on his promise and stated that his country will implement a 0.1% tax on financial transactions starting in August.

German industrial giant ThyssenKrupp is to merge its stainless steel business Inoxum with Finnish steel firm Outokumpu in a deal that values the new combined unit at €2.7bn.

The Eurozone unemployment rate stood at 10.4% in December, according to the latest data from Eurostat. The reading is in line with the market consensus estimate. The previous month's reading was revised higher to 10.4% from 10.3%.

The HSBC China manufacturing PMI came in at 48.8 in January, in line with preliminary estimates. However, the official PMI data also published today have come in a tad ahead of expectations, with the headline index at 50.5 (consensus: 49.6).

The Eurozone manufacturing PMI compiled by Markit Economics suggests that the area's economy may avoid a recession, the financial information agency said this morning. The Eurozone’s final manufacturing PMI set a five-month high of 48.8 in January, compared to 46.9 in the previous month.

The European Commission has blocked the proposed merger between bourse operators Deutsche Boerse and NYSE Euronext on competition grounds. “Based on its definition of the market for derivatives trading, (the commission) considers the merger to be inadmissible under competition law," according to a statement from Deutsche Boerse.

Facebook Inc. has finally filed its S-1 document to the Securities and Exchange Commission. The social networking giant intends to raise $5bn when it debuts on Wall Street later this year, which could represent the largest ever initial public offering by an internet company.

The US Employment Report for January showed that the world's largest economy created 243,000 new jobs last month, well above the 150,000 that were being expected. In December, the number of new jobs was 200,000. The unemployment rate fell to 8.3% from December's 8.5%.

« Go back to news channel

Email this article to a friend

or share it with one of these popular networks:


Top of Page