London midday: Financials lead rally

4th Jun 2009 12:03

The Bank of England's interest rate decision was every bit the non-event economists had been predicting, with the key lending rate left unchanged at 0.25% while no further changes to the quantitative easing programme have been made.Equities remain slightly firmer, with financials recovering some of their recently losses, though miners are in the doldrums. Property stocks Liberty International and Hammerson figure prominently among the main gainers, as do banks Royal Bank of Scotland, Barclays and Lloyds Banking.Retailers have been hogging the limelight, with Wm. Morrison, Debenhams and WH Smith all making statements today. Wm Morrison edges higher after the supermarket made a good start to the new trading year, with sales growth well ahead of the sector norm. Like for like sales improved by 8.2%, or by 5.0% including fuel, maintaining the rate of LFL growth seen in the year to 1 February 2009. Sector peers Sainsbury and Tesco rise in sympathy with Morrison. Department store Debenhams is to raise £323m through a placing and open offer to reduce its debt burden and improve its ability to acquire retail assets that may arise if the economic downturn persists. It said its high debt levels had damaged investor sentiment towards the company, which has impacted its share price. The company had been widely expected to raise funds through a share issue, but with the price at which the shares are to be sold yet to be determined, the market has adopted a cautious stance and marked the shares lower. Newsagent WH Smith is also on the slide after said like-for-like sales in the first 13 weeks of the second half were down 4% on the same period last year, with total sales up 1%. The group said its financial position is in line with market expectations and its balance sheet remains strong as it continues to generate high levels of cash from its operations. Platinum refiner and car catalyst supplier Johnson Matthey saw profits for the year fall 5% and warned interim operating profit in the new year will be lower as the downturn in the car industry hits demand for autocatalysts. Another platinum-related stock, Lonmin, which mines for the precious metal in South Africa, said it has received approximately 96.38% take up from its rights issue to raise $457m. Elsewhere in the mning sector Vedanta, Fresnillo, Antofagasta, Anglo American and Kazakhmys are all beating a retreat.Outsource giant Capita said it is in early discussions to the partial disposal of IBS OPENSystems after the Competition Commission deemed part of the business will lessen competition. The Competition Commission confirmed the acquisition by Capita of IBS last June is expected to lessen competition in the market for revenues and benefits software systems.Healthcare support services provider Synergy Health said it is on track to fully restore margins during autumn of this year. The company saw a 1.6% decline in operating margins in the year to 29 March 2009, caused mainly by rapid escalation of energy and commodity costs together with one off start-up costs incurred on new contracts in the Decontamination Services business. Budget airline easyJet posted a 1.8% rise in passengers in May as travellers continued taking advantage of low cost fares amid difficult economic conditions.IT services business FDM Group said it is currently in discussions with its management team, which may lead to an offer at 120p per share in cash.XXI Century Investments is selling off assets as it battles to meet debt repayment schedules. The company said that if adverse market conditions continue there is a real risk that the company will not be able to meet 'certain significant debt-related commitments, unless it succeeds in restructuring such payments as they become due.'FTSE 100 - RisersLiberty International (LII) 396.50p +5.73%Royal Bank of Scotland Group (RBS) 37.40p +3.60%Barclays (BARC) 269.00p +3.56%Hammerson (HMSO) 286.75p +3.43%FTSE 100 - FallersJohnson Matthey (JMAT) 1,200.00p -4.15%Lonmin (LMI) 1,448.00p -4.11%Vedanta Resources (VED) 1,527.00p -3.48%Fresnillo (FRES) 707.00p -2.95%