London afternoon: Inmarsat bid spec a bright spot

4th May 2010 14:07

Footsie carried on falling over the lunch time session with sentiment taking a further knock from expectations of a lower start on Wall Street. BP is down heavily as the oil leak in the Gulf of Mexico shows no sign of abating. It has denied responsibility for the rig explosion that caused the problems, but expects to meet the clean-up costs that are now being estimated in the tens of billions. Other oil groups are down in sympathy. Miners BHP Billiton and Xstrata are lower too. The miners have reacted angrily to the Australian government's plans to introduce a new resource rent tax and say the levy may jeopardise future investments. Aussie PM Kevin Rudd wants to slap a 40% tax on resource projects from July 2012, which could raise about A$12bn ($11bn) in the first two years. BHP said the new tax would increase the total effective tax rate on the group's profits earned from its Australian operations from 43% to 57% from 2013.Rio Tinto, which like BHP has extensive iron ore operations in Australia's Pilbara region, is also lower.On the plus side, security group G4S moves ahead after saying it has continued in 2010 where it left off in 2009 with no material change in trading performance or market conditions. Revenues grew 4% at constant exchange rates in the first quarter from the first quarter of 2009. Using actual exchange rates sales grew 2.1%. Satellite broadcaster Inmarsat is also flying high on rumours that a bid could be on its way from Harbinger, the New York based hedge fund that has a 28% stake in the company. British Airways is brought down to earth by worries about a resurgence of the volcanic ash problems that grounded so many flights last month. Airspace over Ireland and parts of western Scotland were closed today.Emerging markets focused bank Standard Chartered said it has made a very strong start to 2010, with income and profit both higher than in the first quarter of 2009. The group said there has been an improved balance between the two sides of the business with Consumer Banking playing catch-up on the Wholesale Banking arm.British Land and private equity giant Blackstone have confirmed plans for a major revamp of Broadgate, the huge office complex in the heart of the City of London, which will see new offices built for UBS. The Swiss bank currently rents 850,000 sqft of office space in six of Broadgate's buildings for about £39m a year.FT publisher Pearson is to trouser $2bn from the sale of its 61% stake in financial data provider Interactive Data Corporation (IDC). The company has been looking to offload the stake since January of this year.Anglo-Swedish drugs giant AstraZeneca said the US Food and Drug Administration (FDA) has approved VIMOVO, the pain relief pill for arthritis sufferers.Underlying profits almost trebled at fund manager Aberdeen Asset in the first six months of the year as a recovery in equity markets and lower costs helped margins soar. Pre-tax profits to March jumped from £17.9m to £59.5m with underlying profits up from £33m to 92.6m on sales up from £192m to £295m. Funds under management jumped from £96bn to £173bn, while the group stopped the outflow of funds, pulling in £0.1bn against an outflow or £8.5bn this time last year.Recruitment company Michael Page will have to give £12m back to the taxman by the end of this month after agreeing a deal for a refund of overpaid VAT. The group will keep £38m of the £50m originally received from Her Majesty's Revenue and Customs (HMRC).Balfour Beatty has secured contracts with track Network Rail, which owns Britain's rail infrastructure, worth as much as £248m.Power station operator Rurelec slumped as the Bolivian government renationalised the country's power infrastructure. Rurelec want at least £46m in compensation. The Bolivian state power company has 120 days to say how much it will pay.Oil India Limited (OIL) and Indian Oil Corporation Limited (IOC) have ended their attempt to take over Gulfsands Petroleum.