London open: Banks bounce back

Date: Thursday 22 Jan 2009

London’s top stocks are posting good gains in early dealings as banks bounced back from recent losses.

Royal Bank of Scotland is leading the risers, continuing its recent revival, closely followed by Lloyds Banking Group.

Centrica’s British Gas said it will cut gas prices by 10% from 19 February. Over 7.5m homes are expected to see a reduction in prices. The group said the cut, which will save customers £84 on the average annual household gas bill, is the first standard gas tariff cut by a major energy supplier since 2007.

Supermarket Wm Morrison continued to trade well through the Christmas period as it saw like-for-like sales rise 8.2% in the six weeks to 4 January. Expectations were for an 8% increase in like-for-like sales. Including fuel, lfl sales rose 6.6%, while total sales excluding fuel jumped 9.4% (7.7% including fuel).

Telecom giant BT expects to take a one-off charge of about £340m following financial and contract reviews at BT Global Services (BTGS) and warned of more to come. It said there may be further “substantial” one-off charges in the third quarter results depending on the outcome of the ongoing reviews.

The London Stock Exchange has seen a drop in cash equities trading volumes and value since the start of 2009 and said market conditions remain “very difficult and uncertain”. Revenue in the three months to 31 December rose 4% to £171m, but was down 3% at constant currency.

Enterprise Inns said in the first sixteen weeks of the financial year, overall net income per pub is down by around 8% on a like-for-like basis, in line with its expectations of a “particularly difficult” first half.

Budget airline easyJet rallied after reporting first quarter revenue growth ahead of expectations. The carrier also thinks the first half will beat previous guidance, although the outlook for the summer remains uncertain.

Home maintenance specialist Homeserve said its business continues to perform well and it expects to deliver another year of strong growth. In the UK Membership business, new policy sales have continued to perform well and the group said it remains on target to deliver at least the same level of gross new policy sales as last year.

Wealth management group St James's Place posted a 2.3% drop in 2008 sales but is confident it will outperform in 2009 despite challenging market conditions.

Property group Great Portland Estates revealed a 12.4% decline in the value of its portfolio during the third quarter and expects 2009 to be challenging.

Fund manager Aberdeen Asset Management said assets under management (AUM) were little changed by the end of the year as the effects of markets, performance and currency movements broadly matched the Group's new business flows.

Life sciences company BTG said it has made good progress during the second half of the year and trading is in line with expectations.

UK Coal said full year production and sales are expected to be flat at 7.9m tonnes, broadly in line with forecasts of around 8m tonnes. 

First quarter profitability has “significantly” exceeded expectations at qualifications and assessment firm Education Development, while like for like revenue is well up on the year before.

FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 13.90p +11.20%
Lloyds Banking Group (LLOY) 49.50p +9.76%
Xstrata (XTA) 785.50p +6.44%
Autonomy Corporation (AU.) 1,088.00p +5.32%
Eurasian Natural Resources (ENRC) 332.00p +5.23%

FTSE 100 - Fallers
BT Group (BT.A) 105.90p -13.90%
Diageo (DGE) 912.50p -1.40%
Cable & Wireless (CW.) 148.40p -0.54%
Kingfisher (KGF) 125.40p -0.16%

FTSE 250 - Risers
easyJet (EZJ) 283.00p +10.98%
Mitchells & Butlers (MAB) 176.75p +10.47%
Cattles (CTT) 20.00p +8.11%
Punch Taverns (PUB) 34.75p +7.75%
Debenhams (DEB) 31.50p +5.88%

FTSE 250 - Fallers
Fresnillo (FRES) 230.00p -5.54%
CLS Holdings (CLI) 315.00p -4.40%
Ferrexpo (FXPO) 57.00p -2.98%
Yell Group (YELL) 49.25p -2.96%
COLT Telecom Group S.A. (COLT) 73.00p -2.67%

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