UK Shares Stay Mostly Unchanged Despite Utility Companies Improve Performance

On the first 2 days of this week, UK stocks saw the biggest growth since August. However, on Wednesday, those changed only a little. Euro-area ministers are yet to come up with a good debt package for Greece and this overpowered that fact that utility companies have improved their performances.

The FTSE 100 Index of United Kingdom gained 0.1% and therefore finished at 5752.03. The FTSE All-Share Index and The ISEQ Index of Ireland changed little. According to the Market Analyst of IG, Chris Beauchamp, the ground of UK shares was strong yesterday because of the approval of the $31 billion takeover of Xstrata Plc. given by the shareholders and also because of the hope that Euro zone finance ministers will finally be able to come up with a solution to the Greece debt problem. However, on Wednesday, the situation is a bit different as the debt deal could not still be finalized. Beauchamp added that as the next attempt to come up with a possible deal to help Greece starts in six days, investors are being patient and watching over the progressions of next few days.

Incidentally, the discussion on Greece debt deal took place in Brussels and was attended by 17 Finance Ministers of Euro zone countries (All of these countries use Euro as their primary currency). Germany basically refused to pay any additional money or provide any sort of debt relief to Greece. Hence, the Finance Ministers were not able to source sufficient money to alleviate the debt burden of Greece. The debt is expected to hit 190% of gross domestic product within the next 2 years. On 26th November, the ministerial meeting will take place again. Incidentally, the aid payment for Greece is being delayed since last June.

United Utilities Group Plc. share prices increased by 1.9% after it was announced by JPMorgan Chase & Co. that Ofwat has decided to clarify the proposed changes to United Utilities Group Plc.’s licenses. Severn Trent Plc. also saw increase in share prices by 1.4% and is at 1569 pence currently. According to renowned analyst Edmund Reid, as Ofwat has decided to clarify the license modification proposal, the investors are reassured now that the water regulation of United Kingdom is proportionate and sensible. This softened stance of Ofwat on a Competition Commission referral eliminates the near-term risk of a possible negative news flow.

British Land Co. share prices saw an increase of 1.8% and it is at 524 pence now. British Land Co., incidentally is the 2nd largest real estate investment trust of United Kingdom and Morgan Stanley recently raised its recommendation for its investment trust to overweight. Incidentally, the company has gained 11% in 2012. Among others, Land Securities Group Plc. also surged by 22% this year on a whole.

The third biggest auto catalyst producer in the world, Johnson Matthey Plc. share prices plummeted by 5.8%. The reported net income of the company missed the initial estimates made by analysts’ and hence the investors were not in favor of Johnson Matthey Plc. BG Group Plc., advanced by 2.8% as well to 1060 pence and marked the biggest advance of the FTSE 100 for the day. It is speculated that the company may become target of a possible takeover and yet then, it was shown excellent growth today. According to insider reports, the BG Group Plc., a big oil and gas producer in United Kingdom has already hired Goldman Sachs Group Inc. and Rothschild to avoid any hostile takeover attempt.

As the first half profit of Johnson Matthey got down to 145.7 million pounds, its share prices plummeted by 5.8%. The initial estimates were of a profit worth 149 million pounds. Neil Carson, the Chief Executive Officer of the company clarified that the visibility of the company has weakened over the past few weeks. However, he expressed hope that the company will show improvement in the next half of the year.

The biggest catering company worldwide, Compass Group Plc. slipped by 1.3% as well. The company missed its estimated 17 billion pounds profit for the full year therefore attributing to the drop.