Shares of Oil and gas firms declined after drill setback

Shares in three oil and gas firms that are active in the North Sea declined following a disappointing update on drilling in an area where they have made big finds.


Nautical Petroleum, Encore Oil and Premier Oil lost ground following the Catcher North well in the Central North Sea finding a less hopeful oil and gas bearing area than expected.


The results of the well had been eagerly projected after the success of the Catcher and Catcher East wells in the last year.
Sector watchers stated that the first Catcher find was the biggest oil discovery in the North Sea for decades when it was made in the month of June.

WOLFSON Microelectronics, the manufacturer of chips for many of the world’s must-have electronic devices, sharply narrowed its 2010 losses, indicating that the Scottish firm’s drive into the fast-growing smartphone, gaming and e-book sectors has set it firmly on the road to recovery.

The chief executive, of the Edinburgh-based company, Mike Hickey yesterday also told The Herald he was quite comfortable with expectations that Wolfson would break back into a full-year profit by the end of 2011.

The company very recently has suffered from difficult times in the electronics market and could not bag a major contract of Apple. The firm, yesterday posted pre-tax losses of $11.2 million (£6.9m) for the year upto 2, January compared with a $14.8m loss for the fifty three weeks to January 3, 2009.

Interest rates kept same despite of rising inflation

The monetary committee of the Bank of England decided to keep the interest rates at 0.5% which is a 315 year low notwithstanding the rising inflation which drew stern criticism from all quarters. The bank also decided to go on with its program of quantitative erasing, which is nothing but injecting money directly into the economy to speed up the recovery process. The current amount stands roughly at 200 billion pounds.

The decision by the Bank came even though there were great pressures that demanded the rise of the interest rates to curb the growing inflation. The bank's decision instead coincided with the mixed news from the real economy. Weaker manufacturing output was reported by the Office for National statistics for the month of December.

Disappointment regarding Rio’s proposal of buyback

The proposal made by Rio Tinto has caused dissatisfaction among the investors. It has also resulted in the decline of the shares of the miners in the stock exchanges of London and Australia. In spite of bumper profits the shares of the miners have been losing grounds. There has been a huge amount of cash which has been generated as a result of booming commodities in the markets. This allowed Rio Tinto to provide returns of about five billion US dollars to the shareholders. Rio Tinto did so by buying back the shares which were priced lower in the stock exchange of London. According to the reports of global miner there has been a rise in the net profit which has tripled in the year 2010 and has reached to 14.32 billion US dollars which is a record in itself. The net profit has increased by 194 percent in terms with the previous year.

IPOs of Russia being pulled

NORD GOLD has placed its name among the Russian firms who have scrapped plans for the London IPO i. e. Initial Public Offering. NORD GOLD is the unit of gold mining under the steel giant, Severstal. The decision of the NORD GOLD to scrap its plans for the public offering led to the dejection of the Russian issuers who were already hoping for a comeback from London. Nord gold along with its peers namely the Chelpipe and the Koks were reported to be blaming the conditions of the market. There has been a renewed interest of the country being a market that is emerging. But the cancellations made in the last minute clearly show that the investors are highly concerned about the Russian IPO (Initial public Offering). It was a few hours before the Chelpipe pulled their flotation, the chairman of Chelpipe made a statement.

European Stocks Slide; Nokia, L’Oreal Decline, Michelin Gains

Feb. 11 (Bloomberg) -- European stocks dropped, erasing their gain for the week, as Nokia Oyj slumped and Egyptian President Hosni Mubarak refused to step down immediately. U.S. index futures and Asian shares slid.

Nokia tumbled 8.2 percent after announcing that it will form a software partnership with Microsoft Corp. L’Oreal SA sank 5.2 percent after the world’s largest cosmetics maker reported profit that failed to beat analysts’ estimates. Michelin & Cie. climbed 1.3 percent as the world’s second-largest tiremaker announced that full-year profit exceeded analysts’ projections.

US, China closer to trade war

US lawmakers say they are pushing for a legislation that would punish China for allegedly manipulating its currency.

The draft bill, which is to be submitted on Thursday, is to address what the US senators describe as the unlawful practice of currency manipulation, according to the AP.

Both Republican and Democratic senators had informed US Treasury Secretary Timothy Geithner about the draft bill a month ago.

Relations between Beijing and Washington have been strained over the issues of currency and trade. 

CBI cuts down on their forecasts on growth after fall in GDP

Today, The Confederation of British Industry is reducing its forecasts for UK economic growth. They declared that the unexpected fall in gross domestic product in the fourth quarter of 2010 suggests basic economic expansion may have been weaker than previously assumed.
And it further expects that unemployment, on the International Labour Organization (ILO) measure, will rise throughout this year and go up higher than it thought previously at 2.71 million by the end of 2011. It will remain persistently high.
CBI forecasts that ILO unemployment will be at two million and six hundred and forty thousand by the fourth quarter of 2012, considerably higher than the latest available figure of two and a half million for the month of September to November period last year.

George Osborne had asked not to hike fuel tax as petrol prices increase

Yesterday, George Osborne faced growing calls to reject the planned fuel duty hike as prices hit a record high.

With petrol selling at average of 128.71p per liter and diesel 133.65p, the Chancellor stated there would possibly be announcements in next month’s Budget prior to the planned April 1 increase. A stabilizer mechanism might be included in the move to cope with oil price spikes.

During the question time of Commons, Mr Osborne stated that he fully understands the amount of pressure that motorists are facing.

But Edmund King, the AA president stated that the Chancellor needs to do more than hint at a freeze on the planned April fuel duty rise.

Insurance claims are more due to cold weather

The freezing weather in the month of December resulted in £1.4 billion of insurance claims on property and vehicles in the UK, as shown by figures. This is more than twice the sum of six hundred and fifty million pounds claimed due to the cold snap the previous year, as stated by the Association of British Insurers (ABI).

This time the snap was more severe, longer and affected more of the country.

Most of the problems were caused by burst pipes with more than one hundred thousand claims totaling to six hundred and eighty million pounds, the ABI stated.

Beazley is on the hunt for deals

The Lloyd's of London insurer, Beazley, stated yesterday that it was on the hunt for deals because bankers eye a rise in mergers and acquisitions among companies that do business at the three hundred and twenty year-old insurance market.


It came after the announcement made by another Lloyd's insurer, Chaucer on Monday that it was talking to rivals and financial bidders about a possible acquisition. One of the suitors is understood to be Terra Firma, the buyout vehicle of high-profile financier Guy Hands.


Beazley had tried and failed to buy rival firm Hardy Underwriting in the last year and its chief executive, Andrew Horton, stated that he would still be interested in buying Hardy Company if he gets the right price. But he said he expected to see further opportunities as premium levels continue to ease out making it harder for less efficient firms to make money.