London pre-open: Sale of Barclays stake dampens mood

2nd Jun 2009 07:41

Despite the strong showing by Wall Street overnight London is set to open lower in the wake of the decision by the International Petroleum Investment Company (IPIC) to bank profits on its Barclays stake. City sources expect the FTSE 100 will open around 16 points lower than the previous close of 4,506.Barclays said it hopes to expand its strategic and commercial relationship with the International Petroleum Investment Company (IPIC) despite IPIC’s professed intention to reduce its stake in the UK bank. ‘The decision to dispose of some of its interests in Barclays reflects the focus of IPIC's long-term investment strategy on hydrocarbon-related opportunities,’ said HE Khadem Al Qubaisi, managing director of IPIC, adding that the sale did not represent a lack of faith in Barclays, its management or current strategy.Doubled profits at B&Q helped Kingfisher's first quarter profit jump by over 40%, with the retailer also hopeful on prospects for the rest of the year. Total sales in the three months to end April rose by 9.6% to £2.64bn with like-for-like sales down by 1.7%. Sales rose by 2.4% on a constant currency basis. Profits jumped by 40% to £128m and by 38.5% excluding currency movements.Water company Pennon posted a 7% rise in underlying operating profit to £259.0m. Its final dividend has been boosted by 5.1% to 14.25p, giving a full-year dividend of 21p, up 6% on the preceding year.Gas supplier Centrica took another step in its plan to reduce its dependence on the wholesale markets by agreeing to buy a stake in a gas development block in Trinidad. ‘Gas produced from this block could help address our long-term structural hedge position by reducing our exposure to volatile wholesale gas prices, offering a potential future gas supply option for our British Gas customers in the UK and for our Direct Energy customers in North America,’ said Sam Laidlaw, chief executive of Centrica.Talvivaara Mining said it will place up to 22.2m shares to raise funds to expand and increase the capacity of its metals processing facility. The placing represents 10% of the existing share capital. The price of the shares will be agreed at the close of the book-building process.Intermediate Capital, a leading investor in and manager of buyout debt, said it was “disappointed” to post a loss for the year as net provisions surged. Pre-tax losses came in at £67m against £229.5m profit last year due to net provisions of £273m - £266m of gross provisions for portfolio companies, £36m of provisions for equity stakes in CDOs and £29m recoveries. Interest and dividend income rose to £303.7 from £236.9.