RAMSEY CROOKALL & CO
5th May 2011 Afternoon Report
The FTSE 100 is down 1%, slipping deeper into the red amid a raft of weak economic data
and a declining bank sector. The release of weaker than forecast UK PMI services data and
a slump in German industrial orders in March rattled sentiment, causing some worry about
the recovery of the euro-zone's largest economy.
The market's attention now shifts to the BOE's policy meeting at 1200, although no change
in measures are expected. Meanwhile, banks continue their downward spiral after Lloyds
Banking Group booked a net loss in 1Q.
First quarter profits fell sharply at part-nationalised lender Lloyds Banking, as the bank
took an impairment charge that was half a billion pounds larger than it was expecting,
largely to reflect declining Irish property prices. The group saw profit before tax fall to
£284m in the first quarter on a combined businesses basis from £1,104m the year before.
Underlying income fell to £5.20bn from £5.97bn a year earlier and £5.75bn in the preceding
quarter.
Medical devices firm Smith & Nephew said first quarter revenue was boosted by progress at
its US knee franchise while net profit fell. During the first quarter ended 2 April 2011
revenue rose to $1.055bn from $995m the year before. Trading profit fell to $241m from
$250m after it incurred higher administrative expenses.
Paper and packaging firm Mondi said price increases have been pushed through across all
of its major product lines, contributing to the group's best quarterly performance for
some time.
THE FTSE 100 at 12:00 Down 60 @ 5923
THE DOW JONES Closed Down 83 @ 12723
THE NASDAQ COMP Closed Down 13 @ 2828
Exchange Rates
GBP – USD 1.6502
GBP - EURO 1.1125
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