FTSE 100	4234.27, -106.44	Dow	8280.74, -223.32
FTSE 250	7374.01, -132.70	Nasdaq	1796.52, -49.20
FTSE All Share	2164.23, -51.55	S&P 500	896.42, -26.91
Nikkei	9876.15, -63.78	Hang Seng	18094.66, -83.39
Oil (Crude)	$66.94	Gold	$930.70
Base Rate	0.5%	10 Yr Gilt	3.765%
£/$	1.636	£/€	1.168
1 month LIBOR	0.655	3 month LIBOR	1.2

 

Markets

London - The FTSE 100 is currently 11.88 points higher at 4,246.15. Reed Elsevier tops the risers board, up 1.53%, with Wolseley following with a gain of 1.4%. Friends Provident drops 7.6% after handing its stake of F&C Asset Management to shareholders as a result of a demerger. Balfour Beatty slips 1.2% after its half yearly update. Royal Dutch Shell causes the biggest drag on the blue chip index after crude prices dropped overnight.

New York - US stocks slumped yesterday following a disappointing jobs report. The Labour Department said employers cut 467,000 jobs from their payrolls in June, following a 322,000 cut in May. Analysts had a predicted a figure of 365,000, leading to stocks being pummelled across the board. Furthermore, the NYSE extended trading by 15 minutes to 4:15pm after connectivity glitches affected orders originating from the trading floor. This enabled traders to execute customer orders affected by system irregularities.

The Dow Jones tumbled 223.32 points to close at 8,280.74 while the S&P 500 dropped 26.91 points to end at 896.42. The Nasdaq slumped 49.20 points to finish at 1,796.52.

All 30 stocks on the Dow were lower, headed up by IBM, which lost 3% and knocked 23.5 points off the blue chip index. Energy companies Exxon Mobil and Chevron Corp followed as the price of crude sank 3.7%. Chevron lost 3.2% while Exxon fell 2.9%.

Deal news did little to lift stocks. Reports that Exelon has improved its offer for rival power generator NRG Energy to $8 billion in stock from $7 billion still left both stocks in negative territory. Exelon slid 4.25% while NRG dropped 4.8%. Elsewhere, Johnson & Johnson said it will buy an 18% equity stake in biotech Elan, for $1 billion. Johnson & Johnson slipped 1.9% as a result.

US light crude oil for August delivery plunged $2.37 to $66.94 a barrel. COMEX gold for August delivery fell $10.60 to $930.70 an ounce. Treasury prices went higher, lowering the yield on the 10 year note to 3.5% from 3.53%.

Tokyo - The Nikkei fell 60.08 points to close at 9,816.07 this morning. Seven & I Holdings led retailers lower after posting a record quarterly decline in profit. Mitsui OSK Lines dropped 3% after commodity cargo fees fell to the lowest level in three weeks.

Hong Kong - The Hang Seng is currently 83.39 points lower at 18,094.66. Cnooc falls 1.2% after crude prices tumbled in the US. Aluminium Corp of China, the country’s largest producer of the material, loses 1.5% after metal prices retreated. 
  
Economics

UK PMI services (Jun) 09:30 BST

The service sector PMI is the most reliable indicator of UK GDP. In May this rose above the crucial 50 level indicating that service sector output is again expanding. Analysts expect a further improvement this month to 52.5.

Corporate

Friends Provident PLC finally unloaded its majority stake in F&C Asset Management PLC Friday, cutting it free of losses at the troubled asset management firm and letting it focus on reviving its core businesses. The insurer handed over the bulk of the 52% holding - worth about GBP170 million based on F&C’s closing share price Thursday - to its own shareholders after a fruitless attempt to sell it to a rival asset manager. Shareholders with at least 2,500 Friends Provident shares were offered one F&C share for every 10 Friends Provident shares they owned, while smaller shareholders were given the option to instead receive cash for their entitlement. The plan had first been announced in October and was approved by shareholders last month. It became effective Friday after a court sanction Thursday. For Friends Provident, the demerger puts a line under an acquisition that analysts say was beset with challenges from the start. The company paid GBP383 million in a 2004 transaction to merge F&C, then owned by Dutch insurance company Eureko BV, with its own ISIS Asset Management arm. Integrating the two investment firms - which by the end of 2005 managed GBP125 billion - proved time-consuming and costly, while shifts in the ways institutions and pension funds allocate their investment money resulted in a steady drain of assets out of the combined company. By January 2008, Friends decided the business "no longer fit" with a new strategy to focus on its U.K. protection and group pensions products. Those markets have recently been shrinking, though, as a weakened economy means fewer new workers joining pension schemes and a reduction in purchases of home insurance and other personal protection. In April, Friends Provident reported a 40% drop in first-quarter new business sales. As Friends Provident sought a buyer for the F&C stake, the asset manager’s share price plummeted 70% amid the global credit crisis, cutting the value of the holding to GBP149 million at Dec. 31, from GBP499 million at the start of 2008. In October, the insurer abandoned the proposed sale and said it would instead pursue a demerger. Jason Hollands, a spokesman for F&C, said the demerger would give it more flexibility to manage its capital base and to pursue potential acquisitions. Resolving the uncertainty about its ownership means investment consultants who recommend asset management firms and funds to clients are putting F&C back on their lists, Hollands added. At March 31, F&C’s funds under management were GBP92.7 billion; including GBP22.2 billion it will continue to manage for Friends Provident until at least 2014. F&C reported a GBP50.5 million net loss in 2008, as investors pulled money out of declining stock and bond markets. Friends Provident held back about 5% of the F&C shares to sell and cover costs related to the demerger. Its shares closed flat Thursday at 68 pence, giving it a market value of about GBP1.6 billion.

Engineering and construction group Balfour Beatty PLC said Friday that trading at the half-year continues to be in line with internal expectations and it anticipates making progress in 2009. The company said trading was boosted by customer infrastructure expenditure, acquisitions and tight cost control. Its order book is in line with the GBP12.8 billion target set at the start of the year, and it has generated net cash of GBP200 million in the first half. Balfour’s building sector performed stronger than last year with particular strength in the U.S. driven by new contracts in North Carolina, Texas and California. Following a sector-wide trend, rail volume has been weak in the U.K., although the company recently secured GBP210 million worth of contracts extensions for London Underground and Network Rail. The U.K. engineering sector continues to be driven by government projects including construction on major road links. In the investment sector, Balfour has reached financial close for three of the company’s four Public Private Partnership projects. The group also reached financial close for the GBP6.2 billion design, build, finance and operate contract to provide additional capacity and to maintain the M25 London circular road.

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Posted: July 3rd, 2009 under Asset Management.
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