Shares lower on AIG cash call

The FTSE 100 index fell 66.10 to 6204.70

Friday 9 May 2008

Markets ended the week on a downbeat note - financials leading the way as US insurance giant AIG confirmed it needs to raise additional capital after posting record losses. The insurer, which reported a $7.81 billion Q1 net loss, late Thursday, is asking for $12.5 billion.

BG Group gave up 47 to 1336 - the gas producer confirming in a statement that discussions regarding its £6.2 billion approach to Australian utility Origin are ongoing and that it has touched bases with senior representatives of the firm.

The statement was prompted by a request from the Australian Securities and Investments Commission and comes after BG announced on April 30th that it had approached Origen with an offer of A$14.70 (710p) per share - a 40% premium to Origin's closing price the previous day.

HSBC softened 13 to 868.50 - Morgan Stanley cutting its rating on Europe's biggest bank from 'equalweight' to 'underweight' arguing that losses at its HSBC Finance Corp unit in the US may rise to $15 billion this year before peaking in 2009.

In a note the investment bank forecast further material reserve requirements and downgrades as a consequence of the deteriorating US housing market.

British Energy fell 17.50 to 697.50 - reports suggesting France's EDF has submitted a bid for the 35% stake in the firm being offloaded by the Government. Hopes of a bidding war for the stake receded, however

HMV eased 10 to 139.25 - the bookseller to music shops operator reporting that group like-for-like sales rose by 10.1% in the 16 weeks through April 26th - 7.3% for the full year.

Meanwhile, like-for-like sales at HMV UK and Ireland grew by 13.8% - 11.4% for the year as a whole.

The company said management is confident that Group profits before tax and exceptionals will be towards the upper end of market expectations.

Expectations for the financial year ended April 26th are in the range of £46.0 million - £58.0 million.

Blinkx surged 5 to 30 - the video search engine spun out of software developer Autonomy the subject of market speculation of a 60p per share takeover - rumoured suitors including Microsoft, Google and Rupert Murdoch's News Corporation.

On Thursday Blinkx unveiled its Content Correlation Engine, an extension of its Advanced Media Platform. The CCE will allow media companies to automatically match textual and video assets on every single page of their websites, seamlessly morphing readers into viewers, in order to drive increased revenues.

Flomerics powered up 16.50 to 105.50 - the engineering designs software developer rejecting a 104p per share bid from Mentor Graphics on the basis it undervalues the company.

The firm said it intends analysing other alternatives available, including potential interest expressed by a number of other parties. However, any discussions with those parties are at a preliminary stage and there can be no certainty that an alternative offer will be forthcoming.

At 5pm sterling was down 0.0009 against the dollar at $1.9539. Against the Euro, sterling was down 0.0055 at 1.2635.

9 May 2008 © Moneyextra.com

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