London afternoon: Stocks still softer

10th Aug 2009 15:01

The Footsie continues to trade lower, but in a narrow range as weaker banks and miners easily offset gains among the insurers.Lloyds Banking is apparently mulling a £15bn fundraising to keep down the cost of insuring toxic debt with the Government. Reports in the weekend press suggest the Treasury is backing the plans. Royal Bank of Scotland is down in sympathy. Miners are still struggling, with Rio Tinto among the worst performers after China accused it of conducting a six-year spying campaign. Life insurer Friends Provident is top the risers though after saying it is now is close to agreeing a takeover by Resolution as terms of the original offer were improved. In a statement, Friends Provident confirmed it had received a new offer of 0.9 Resolution shares for each Friends Provident share, worth about £1.85bn. The offer also includes a partial cash alternative up to £500m. Rio Tinto is also under pressure as the row with China over the detention of four of its employees and iron ore pricing is escalating rapidly. China has now accused Rio of spying on its steel industry for six years, costing the country Rmb700bn ($102bn) in excessive charges for iron ore. Construction and regeneration group Morgan Sindall said first half results were in line with expectations despite posting a 28% slide in profits due to the challenging conditions in the period. Profit before tax fell to £20.5m from £28.6m on revenue that slipped 8% to £1.14bn. Troubled Irish airline Aer Lingus carried 8.2% more passengers in July than last year as the number making short-haul journeys increased, though long-haul passenger numbers fell sharply and the load factor fell. Occupancy fell again at care home operator Southern Cross over the last three months with the average occupancy of the mature portfolio 87.5% (2008: 89.8%). Revenues in the 14 weeks to 5 July were £254.8m (2008: £245.6m) and operating profits £22.2m (2008: £24.4m). Operating margins were 31.8%, 0.2% lower than during the same period in the prior year. Recruitment firm Harvey Nash said trading in the six months to June has remained broadly in line with expectations underpinned by its broad portfolio of services. Revenue for the period is in line with the previous year while gross profit for the same period has recorded only a modest decline of 5%. Just Retirement has extended the timeframe within which Avalon would need to submit a firm offer proposal for the specialist life assurance group. Avalon, which made an approach for Just Retirement in June, now has until 25 September 2009 to make a bid.