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Date: Tuesday 07 Oct 2008

  • Market Movers
  • techMARK 1,225.76 -0.56%
  • FTSE 100 4,623.19 +0.74%
  • FTSE 250 7,384.92 -1.20%

LONDON (ShareCast) - Rumours that some of Britain’s banks are seeking capital injections from the government sent banking shares into a tail-spin today.

The chief executive officers of Royal Bank of Scotland, Lloyds TSB and Barclays have reportedly been in discussions with Chancellor of the Exchequer, Alistair Darling, and Bank of England governor, Mervyn King, to discuss the proposals for the British government to, effectively, part nationalise sections of the UK banking industry. Rumours indicate the government is considering investing £45bn to £50bn in UK banks in return for equity stakes.

Royal Bank of Scotland has lost around one quarter of its value but having plunged to 90p at one stage its share price is, at least, back into treble figures, though this is scant compensation for shareholders who bought a year ago at 469p. Credit rating agency Standard & Poors has added to the misery by cutting its long and short term credit ratings on RBS to “+/A-1”from “A-/A-1+”.

According to the BBC, RBS has confirmed that a meeting with Darling did take place, but the bank blamed today’s share price fall on two very large trades in the company’s shares taking place today.

Barclays has categorically denied that it has requested any capital from the UK government, the BBC reports. Its shares are down but nowhere near as severely as the shares of Lloyds TSB and its intended merger partner HBOS

British Airways is sharply lower after it said its merger with Spanish airline Iberia will be delayed by the continued economic slowdown in Britain and the USA.

Investors looking for somewhere safe to invest have turned to drink, with Guinness and spirits group Diageo going well and brewer SABMiller also on the up. Their enthusiasm does not extend so far as highly-geared pub groups, however, as Mitchells & Butlers and Enterprise Inns both plummet, but other pub groups such as JD Wetherspoon and Marston’s improve.

Miners are also wanted following the cut in interest rates announced by the Australian government last night. Rio Tinto, which has significant interests in Australia, leads the sector higher.

Kazakhmys has signed a memorandum of understanding with Samruk-Energy that will see the pair consider a strategic partnership and joint ownership of the Kazakhmys Power division.

Michael Page saw third quarter profit rise 14.6% to £141.4m, but the recruitment firm warned it will axe more staff during the final quarter of the year if market conditions continue to deteriorate.

Ready meals group Northern Foods said although profits are weighted more towards the second half, at the half way stage, it remains on schedule to deliver pre-tax profits in line with expectations.

Yellow Pages publisher Yell has agreed an amendment to its bank covenants with major banks that gives it more flexibility in tough conditions.

Terrestrial TV network ITV has plunged after Swiss bank UBS reiterated its sell rating and cut its 12-month price target to 25p from 28p. UBS said that after stripping out the content business, the shares are trading on “56 times 2009 earnings, more than pricing in an uncertain recovery and regulatory benefits.”

Although UBS acknowledges the possibility of a bid it does not think any offer will emerge until “the share price catches up with the economic reality.”

Sausage maker Cranswick's like-for-like sales rose by 10% in the half year to September with higher selling prices offsetting raw material increases.

Weak trading in the US and Asia mean that Kewill’s pre-tax profits in the second half will be lower than those of the first six months of the year, the logistics software company warned.

Road and infrastructure support group Mouchel has reported a 20% hike in profit before tax and one-off items and full year underlying revenue growth at the top end of its 10-15% target.

Shares in Oxford Biomedica surged ahead after positive talks with the US Food and Drug Administration (FDA) on further trials for its renal cancer drug TroVax.

Mobile phone software specialist Psion said it will make a full provision in its 2008 accounts for claims made against it from trading partners of its Japanese arm Psion Teklogix KK (Psion Japan).

UK catering equipment maker Enodis is firmer after its takeover by The Manitowoc Company obtained US antitrust clearance.

FTSE 100 - Risers
Diageo (DGE) 904.00p +8.00%
SABMiller (SAB) 983.00p +5.25%
Admiral Group (ADM) 938.50p +4.92%
Marks & Spencer Group (MKS) 238.25p +4.50%
Man Group (EMG) 297.50p +3.93%
Standard Life (SL.) 241.00p +3.88%
BG Group (BG.) 858.00p +3.75%
Kingfisher (KGF) 137.70p +3.69%
Reckitt Benckiser Group (RB.) 2,663.00p +3.62%
Associated British Foods (ABF) 700.50p +3.47%

FTSE 100 - Fallers
Royal Bank of Scotland Group (RBS) 112.80p -23.84%
HBOS (HBOS) 138.00p -14.18%
Lloyds TSB Group (LLOY) 234.75p -9.36%
British Airways (BAY) 132.80p -8.41%
Sage Group (SGE) 175.80p -6.49%
Autonomy Corporation (AU.) 782.50p -6.06%
Invensys (ISYS) 173.70p -5.96%
Kazakhmys (KAZ) 394.00p -5.69%
John Wood Group (WG.) 278.25p -4.30%
Friends Provident (FP.) 72.10p -3.87%

FTSE 250 - Risers
BH Global Ltd USD (BHGU) 8.8 +8.64%
Enodis (ENO) 322.00p +8.42%
Game Group (GMG) 160.25p +6.83%
Carillion (CLLN) 266.75p +6.49%
Mouchel Group (MCHL) 306.75p +6.14%
Tullett Prebon (TLPR) 260.75p +6.00%
Marston's (MARS) 122.00p +5.40%
JD Wetherspoon (JDW) 237.00p +4.98%
Daily Mail and General Trust (DMGT) 319.75p +3.98%
St James's Place (STJ) 217.25p +3.58%

FTSE 250 - Fallers
Barratt Developments (BDEV) 88.00p -13.73%
Mitchells & Butlers (MAB) 164.25p -12.17%
Johnston Press (JPR) 43.25p -11.73%
Aveva Group (AVV) 965.50p -10.44%
Enterprise Inns (ETI) 134.50p -9.88%
Wellstream Holdings (WSM) 745.00p -9.70%
Micro Focus International Plc (MCRO) 258.75p -9.21%
Heritage Oil (HOIL) 140.25p -9.08%
Moneysupermarket.com (MONY) 54.25p -8.82%
Telecity Group (TCY) 178.25p -8.59%

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