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London open: Oil firms push Footsie ahead

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Date: Tuesday 06 May 2008

  • Market Movers
  • FTSE 100 6,230.60 +0.24%
  • techMARK 1,438.14 -0.25%
  • FTSE 250 10,381.60 +0.88%

LONDON (ShareCast) - London has pushed on led by Tullow Oil on a big strike in Ghana and other oil groups on the price of crude hitting $120 per barrel.

Tullow Oil's Mahogany-2 well offshore Ghana has hit a significant column of light oil. "The confirmation that Mahogany-2 is in communication with both Mahogany-1 and Hyedua-1, reinforces our interpretation that Jubilee is a major discovery and is likely to lead to a material upgrade of current resource estimates," Aidan Heavey, chief executive said.

Oil prices breaching $120 per barrel have also encouraged other oil stocks with Cairn Energy also picking up strongly, but airlines are under pressure for the same reason. British Airways and Easyjet are both suffering.

Housebuilders are under pressure. Bovis Homes says housing market conditions have deteriorated sharply in the last two months and results for the first half of 2008 will be substantially lower than previously anticipated.

The Times, meanwhile, suggests that Apollo, the American private equity group, is understood to have approached Barratt Developments to offer to buy a stake in the troubled UK housebuilder. The US firm is believed to have offered to inject between £300m and £400m into Barratt at a small premium to the current share price.

Lloyds TSB says write-downs in its Wholesale and International Banking have cost it £387m, but without that achieved revenue growth in excess of cost growth, and a double-digit percentage increase in profit before tax in the first quarter of 2008. "Our strong liquidity and funding capability have ensured that the group has continued to raise wholesale funding at market leading rates," Lloyds added.

Market research firm Taylor Nelson has rejected a rival bid from WPP of 154p in cash and 0.1214 WPP shares, worth 230p per share. Taylor, which is also in merger talks with GfK, Germany’s largest market research company, adds its board unanimously rejected the WPP proposal as not in shareholders' best interests.

Miner Xstrata said first quarter production levels increased in copper, semi-soft coking coal, platinum, ferrochrome, mined zinc and lead, but nickel production was down.

Fund manager RAB Capital has warned that on the basis of four months' trading, its current expectation is for first half earnings in 2008 to be significantly lower than those for the first half of 2007.

Fund manager Aberdeen Asset Management said half year pre-tax profit before exceptional items and amortisation of intangibles rose to £47.3m from £43.6m. Aberdeen is also acquiring Goodman Property Investors for an initial cash consideration of £89m.

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