UK Stocks - Factors to watch on Oct 12

 

Britain's FTSE 100 index is seen opening 11-21 points, or as much as 0.4 percent higher on Monday, according to financial bookmakers tracking a pre-weekend advance on Wall Street and with commodity issues expected to be supported by rises in oil and metals prices.

The UK blue chip index ended 7.23 points higher on Friday at 5,161.87,albeit having moved in a narrow 40 point trading range. For the week, the index was up around 3.3 percent, recovering from a fairly cautious start to the month.

British Prime Minister Gordon Brown plans to detail a sale of government assets on Monday aimed at raising 3 billion pounds ($4.8 billion), a draft of a speech provided by his office showed on Sunday.

The asset sales will be carried out over the next two years, and include betting company the Tote, the cross-channel rail link between Britain and France, a portfolio of student loans and the government's stake in uranium-processing firm Urenco.

British interest rates will stay at 0.5 percent until 2011 and will not rise to 2 percent until 2014, the Centre for Economics and Business Research (CEBR)said on Monday.

The consultancy said in a report on the outlook for the UK economy that the British pound could fall to $1.40 and possibly below parity with the euro as UK rates remain low and the government raises taxes and cuts spending to reduce its budget deficit.

No domestic economic data is due for release on Monday although investors will have key UK inflation and unemployment numbers to digest over the next two sessions.

U.S. stock markets will be open today although bond markets and goverment departments are closed for the Columbus Day federal holiday and no economic data will be released.

Japanese stock markets were closed for a public holiday.

* GLOBAL MARKETS-Dollar limps up, S.Korea drags Asia shares

* Wall St extends to 5-day gain on earnings optimism

* FOREX-Dollar firm on yen after jump, rate view helps

* TREASURIES-Bonds tumble on Fed tightening fears

* Oil tops $72 on economic optimism, oil demand outlook

* PRECIOUS-Gold ticks higher near record, firm dollar weighs

* METALS-Shanghai copper edges up on demand outlook

UK stocks to watch on Monday are:

BARCLAYS

Barclays is planning to spin off a 4-billion-pound ($6.35 billion) portfolio of complex credit assets as it presses ahead with a process to clean up its balance sheet, the Financial Times said on Monday.

LLOYDS BANKING GROUP

The part-nationalised bank has lined up a syndicate of investment banks to underwrite an 11 billion pound ($17.6 billion) rights issue, the Sunday Timesreported, with UBS and Bank of America Merrill Lynch to act as lead underwriters.

ROYAL BANK OF SCOTLAND

Sources close to RBS say that the bank's advisers, Morgan Stanley and Hoare Govett, have suggested a public listing of car insurer Churchill in a move which could raise billions of pounds, The Independent on Sunday said.

Also, a group of small shareholders is planning to sue RBS claiming it misled investors in its May 2008 prospectus for a rights issue to pay for its acquisition of Dutch bank ABN AMRO

STANDARD CHARTERED

Standard Chartered has got the Indian central bank's approval to issue Indian depositary Receipts (IDRs), the Economic Times reported on Monday, without disclosing how it got the information.

BG GROUP

The British gas producer has received an unsolicited bid for most of its 1.5 billion pound ($2.4 billion) power generation business and could announce a sale shortly, the Sunday Times reported.

RIO TINTO

China has extended by a month a probe into suspected corporate espionage by employees of Rio Tinto, a defence lawyer said, a case which strained ties between Australia and its second-largest trade partner.

BRITISH AIRWAYS

Plans by the airline to form a transatlantic joint venture with American Airlines were dealt a further blow as pilots for the US carrier urged the authorities to oppose the tie-up over fears it will harm jobs, the Daily Mail said on Monday.

STANDARD LIFE

The life assurer is expected to announce within the next fortnight the results of its search for a successor to outgoing chief executive Sir Sandy Crombie, with board members Keith Skeoch and David Nish among the front runners,the Daily Telegraph said on Monday.

CADBURY

Next week's trading update from Cadbury will be critical to the confectionary company's attempts to fend off a takeover approach from rival Kraft, the Financial Times said on Monday, with the US food group expected to wait until after Cadbury's third-quarter sales update on October 21 before putting forward a formal offer.

BAE SYSTEMS

The defence firm is this week expected to reveal it has won a maintenance and support contract for its Typhoon fighter jet from the Saudi Royal Air Force,the Daily Mail said on Monday.