London open: Footsie strong despite Pru cash call looming

1st Mar 2010 08:46

Leading shares have started the week on a firm footing with miners strong, but the prospect of the Prudential shortly unveiling the largest rights issue ever seen in the UK has unsettled other life groups.Prudential is currently suspended while the details are sorted out. The group has confirmed weekend press reports that it is in talks with AIG about acquiring the troubled US insurer's Asian business for around $35bn. A rights issue could raise £15bn according to weekend reports.There had been speculation that the Pru would seek to offload its UK life assurance operations to acquisitive insurance group Resolution to raise money for the Asian acquisition and while this may yet happen Resolution has responded to the speculation by saying that it is not in discussions with Prudential.HSBC meanwhile has just released worse than expected profits of $7.1bn. Underlying profits were $13.3bn but loan impairments rose again. Traders marked the shares lower in early dealings.Miners are a strong spot, accounting for all of the early risers and led by Kazakhmys, Fresnillo and Xstrata. Educational and financial information publisher Pearson bumped up sales and profits in 2009 helped by favourable exchange rate movements. Sales in 2009 at £5,624m were 17% higher than 2008's £4,811m but were up just 4% at constant exchange rates. Adjusted pre-tax profit also rose 13%, to £761m from £674m. Market expectations were for a pre-tax profit of around £725.68m.Engineer Tomkins moved modestly back into profit last year, but cautioned that conditions remain challenging and any sustained recovery will be towards the latter half of the year. The group posted a pre-tax profit of $38.4m in 2009 against a loss of $8.1m the previous year, but remained in deficit after tax with a net loss of $15.6m against $64.6m. Sales tumbled from $5.52bn to $41.28bn.Underwriter Amlin enjoyed a bumper 2009 with profits rising by more than 300% as low claims combined with a record performance from its investment arm.