Prudential shares rise after the insurer’s results
By Aude Lagorce, MarketWatch
LONDON (MarketWatch) — London stocks slipped on Wednesday as investors continued to watch the stalemate in Libya, though insurer Prudential PLC shone in the wake of results.
The FTSE 100 index (UK:UKX 5,962, -12.64, -0.21%) fell 0.2% to 5,961.67 in midday trading, paring earlier losses.
The benchmark closed virtually unchanged on Tuesday.
“With no end to the Libyan unrest in sight and violence having escalated in recent days, it is no surprise that global investors have little appetite to increase their risk exposure for the time being,” Yusuf Heusen, senior sales trader at IG Index, said in emailed comments.
Prudential PLC (UK:PRU 747.50, +33.50, +4.69%) , Britain’s largest insurer, was the biggest gainer in the benchmark, rallying 4.6%. The group’s net profit more than doubled to 1.43 billion pounds ($2.3billion) last year, helped by strong sales in Asia. Prudential also lifted its dividend by 20% to 23.85 pence a share.
The results came in ahead of expectations on both the earnings and dividends fronts. Societe Generale analysts stressed in a note to clients that the dividend increase signals “strong confidence in the future.”
Rival Standard Life PLC (UK:SL. 242.60, +2.60, +1.08%) , which reports results on Thursday, gained 1%.
In the oil sector, shares of Tullow Oil PLC (UK:TLW 1,431, -29.00, -1.99%) fell 2%. The frontier oil explorer said net profit more than doubled to £54 million in 2010, but the results were at the low end of expectations. Tullow also said it’s still awaiting approval to start a key $10 billion project in Uganda.
“The main driver of the stock in the near term will be the resolution of the dispute in Uganda,” said Jonathan Jackson, head of equities at Killik & Co, in emailed comments.
He added that Wednesday’s statement highlighted that good progress has recently been made toward gaining government approval and establishing a “strong fiscal and legal background” for the successful development of the basin.
Other oil-related stocks declined including BP PLC (UK:BP. 488.10, -5.70, -1.15%) (BP 47.63, -0.18, -0.38%) and Royal Dutch Shell PLC (UK:RDSA 2,174, -23.50, -1.07%) , both down around 1%.
Liqht sweet crude oil traded in New York stabilized above $104 a barrel Wednesday after hitting a nearly 30-month high earlier this week.
Some deal news also moved shares in London. Rolls-Royce Group PLC (UK:RR. 615.50, +15.00, +2.50%) gained 2.8% after the aerospace-engine specialist firmed up a $4.45 billion bid for Tognum AG (DE:TGM 24.79, +1.49, +6.37%) , a producer of engines and propulsion systems, via a joint venture with Germany’s Daimler AG (DE:DAI 50.18, +0.66, +1.33%) . Read more about the deal
In the financial sector, Lloyds Banking Group PLC (UK:LLOY 61.03, -0.49, -0.80%) announced a management shakeup. The head of insurance and Scotland, Archie Kane, will retire and not seek re-election as a director at the annual general meeting in May. The insurance division will be managed in two separate units in the future.
The retail bank will also be restructured and Helen Weir, group executive director for retail, has decided to leave Lloyds.
Shares of Lloyds dipped 0.7%.
Outside the top index, shares of British regional newspaper publisher Johnston Press PLC (UK:JPR 10.25, -2.00, -16.33%) sank 16%. The group said the economic outlook remains uncertain for 2011 and that it’s feeling the effect of government spending cuts on its advertising sales.
