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Date: Monday 13 Oct 2008

  • Market Movers
  • techMARK 1,125.30 +4.01%
  • FTSE 100 4,123.77 +4.88%
  • FTSE 250 6,925.26 +2.17%

LONDON (ShareCast) - London's leading shares are still showing healthy gains, helped by indications of a near 400-point rise on the Dow Jones index when Wall Street opens. The three banks that have tapped the UK government for emergency funds are among the handful of UK blue-chips not participating in the market’s rally.

Royal Bank of Scotland (RBS) appeared to be in free-fall at one stage today, despite HM Treasury agreeing to underwrite a £15bn share issue at 65.5p and the government signing up to buy £5bn of RBS preference shares. The shares came close to hitting 50p durign the morning session but have recovered to trade around the level at which HM Treasury is underwriting the share issue.

RBS’s recovery has once again tipped mortgage lender HBOS into the unwanted position of biggest faller of the day among blue-chips. HBOS shares are sharply lower after the terms of the agreed bid from Lloyds TSB were revised.

Lloyds TSB had originally offered 0.833 of its shares for each HBOS share, but is now only prepared to offer 0.605 of its shares for each share in the Halifax-owner. The revised terms, which have been agreed to by the HBOS board, value HBOS at around 114p a share, or just over £6bn, based on current prices; when originally announced, the deal valued HBOS at more than £12bn.

Lloyds TSB originally moved higher on news of the revision of the bid terms but it has now been sucked into the red as investors get to grips with the size of the dilution existing shareholders will suffer as a result of the government’s hand-out; the British government will own around 40% of the combined Lloyds TSB/HBOS entity.

Barclays has unveiled plans to raise £6.5bn from shareholders and other investors without the need of government help, with a further £3.5bn to come from a dividend cut and other sources.

Asia-focused bank Standard Chartered climbs higher after it said it meets the capital requirements under the UK government’s banking sector scheme and will ensure it continues to do so. "As previously stated, we do not intend to raise capital under the UK's recapitalisation scheme," it added.

Despite all the attention focused on the banks it is travel company TUI Travel that tops the list of risers on speculation that German parent company TUI AG will lifts its 51% stake in the company. TUI AG said it would focus exclusively on its travel interests after selling off a stake in its shipping unit Hapag-Lloyd.

Property stocks are losing ground, with Hammerson, Land Securities, Liberty International and British Land the worst affected.

Defensive favourite British American Tobacco sees little support despite Citicorp observing that the company’s 6%+ dividend yield compares favourable with the 4.3% yield on a 10-year gilt.

Still on the subject of dividends, UBS is predicting a dividend cut at bookmaker’s William Hill as the bookie has a £1.2bn debt facility which runs out on 1 March 2009. UBS has cut its price target for William Hill to 187p from 250p.

Outsource giant Capita Group has paid £13.6m, net of cash acquired, for IP based business networking solutions firm ABS Network Solutions. “The acquisition will add valuable new expertise and capacity to Capita IT Services' existing networks business,” said the UK blue chip.

Defence and security firm QinetiQ is to acquire tender assessment and management software group Commerce Decisions for a total of £9.85m. The acquisitions of the Oxford-based company will strengthen Qinetiq’s consultancy business, QinetiQ said.

Unexpected costs related to investment in its businesses caused a fall in pre-tax profits at YouGov and prompted the pollster and market research firm to implement cost control measures.

Shares in Clinton Cards are sharply lower after the card retailer plunged into a full year loss as a result of an impairment charge of £30m related to its Birthdays business.

FTSE 100 - Risers
TUI Travel (TT.) 227.00p +18.23%
Cairn Energy (CNE) 1,717.00p +14.70%
Man Group (EMG) 328.00p +11.95%
Xstrata (XTA) 1,365.00p +11.61%
Lonmin (LMI) 1,674.00p +11.45%
Kazakhmys (KAZ) 372.50p +11.36%
ICAP (IAP) 339.00p +11.06%
Standard Chartered (STAN) 1,102.00p +10.26%
Rio Tinto (RIO) 2,663.00p +9.86%
National Grid (NG.) 607.50p +9.36%

FTSE 100 - Fallers
HBOS (HBOS) 95.10p -23.43%
Royal Bank of Scotland Group (RBS) 63.60p -11.30%
Lloyds TSB Group (LLOY) 180.20p -4.86%
Hammerson (HMSO) 771.00p -4.58%
Land Securities Group (LAND) 1,064.00p -3.54%
Liberty International (LII) 787.00p -2.24%
Drax Group (DRX) 569.50p -2.23%
British Land Co (BLND) 665.00p -1.34%
British American Tobacco (BATS) 1,451.00p +0.07%
Aviva (AV.) 414.00p +0.49%

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