UK insurance company on the hunt for acquisitions

U.K. insurer Aviva PLC expects acquisition opportunities to start arising within the next six months as it becomes simpler to value company assets. A spokesman for the company said that Aviva will be gathering cash reserves not only to protect themselves from continued financial market volatility, but also to be capable of taking advantage of acquisition opportunities till the end of the finical year.

The comments again show the optimism that is creeping back into all aspects of the UK business world, as Aviva, along with the other major British insurers continues their struggle to contend with the ongoing financial downturn. During the past 12 months Aviva has focused the on strengthening its balance sheet through trimming costs and avoiding major expenditures Soft drinks manufacturer and distributor Britvic succeeded to not only outdo market expectations with their first-half performance, but were also happy to announce that forecasts for the second half are just as fizzy. On the news, Britvic’s shares rose13.3% (35.75p to 304.5). Britvic produce the Robinson’s range of soft drink as well as being holders of Pepsi franchises both in the UK and Ireland. The company announced £20 million of pretax profits for the first half of the year, representing an annual increase of 16.3%, as well as increasing revenues by 6.3% increase to £438.2 million. All of these positives had to go somewhere, and they were represented by a dividend increase of 8%.

Commodities were on the move on the FTSE yesterday, with platinum and oil prices jumping forward,

Lonmin, the world’s third-largest platinum producer, jumped 5.6 percent (60 pence to 1,237) as prices for the metal advanced for the third consecutive day

West African gold mine owners, Randgold Resources Ltd., gained 1.7 percent (84 pence to 4,120) as gold prices also continued to rise. The rise in crude oil prices drove Shell forward. Shares in Europe’s leading oil company, climbed 1.9 percent on the day (33 pence to 1,667)

The world’s third-largest mining company, Rio Tinto had their share value rise by 1.5 percent (41 pence to 2,786) on reports that the Aluminum Corp. of China said it was “sticking” to its proposed $19.5 billion investment plan in Rio

In the air, British Airways, Europe’s third largest airline, scheduled to report earnings on May 22 saw their shares take off, jumping 4.4 percent (7 pence to 173 pence). Air France-KLM reported a smaller full-year net loss than analysts had estimated, while pledging to cut about 3,000 jobs
EasyJet Plc, the discount airline, had a good day, with their shares gaining 4.5 percent (15 pence to 317).

U.K. stocks experienced a minor hiccup with the FTSE 100 up only 7.11 points to 4,489.36, the highest since Jan. 8 4,482.45, while the FTSE 250 index continued to rise but slowly up 35.69 to close on 7,734.0.
Sterling continued its steady rise against the dollar while falling back against the Euro.

· Pound/US dollar 1.575
· Pound/Euro 1.1434
· Pound/Japanese Yen 149.0298
· Pound/Swiss Franc 1.7343

Things are looking steadily better stateside, with US financial institutions announcing that they are set to repay around £16billion of bail-out funds over the next year, according to a US Treasury Secretary Timothy Geithner. Geithner reported to the US Congress that the money will be used to further assist institutions in need of financial help.
Despite the optimism, came the news that the Federal Reserve still expects the US economy to shrink by up to 2% this year.

Share prices took a minor fall yesterday on Wall Street, with the Dow Jones index dropping 52.57 points to 8422.28 while the NASDAQ fell by 6.7 points to close on 1727.84.

General Motors’ Opel car unit remains up for grabs, with three bidders apparently in the ring. No names have been released, but known to be particularly interested are Italian carmaker Fiat and Canadian parts maker Magna as well as the US investment firm RHJ International.

The German government will be playing a major part in deciding who actually takes over the company, as the will be providing considerable financial help. However GM will have the final say on Opel, with the preferred bidder being named early next week. What may swing the bid in favour of Fiat is that their offer also includes taking over Vauxhall/

The export dependant Japanese economy reportedly shrank at its quickest pace since records began during the first three months of 2009, Figures released show that industrial output contracted by 4% during the period, or by 15.2% on an annual basis.

Oil prices are climbing, hovering around $61 a barrel. This may be temporary and no cause for panic. The price hike as prompted after two key US refineries were hit by fires and continued unrest in Nigeria, a key oil producer
US light crude increased $1.24 to $61.34 a barrel, while Brent oil climbed $1.04 to $59.96.
Figures released yesterday showed stocks of crude oil in the US have dropped by more than initially forecasted.

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Tags: Aviva PLC, Economics, Economy, Financial News, Insurance, Stock Markets