London afternoon: RBS defies the trend

19th Apr 2010 14:37

The FTSE 100 briefly dropped below 5700 over the lunchtime session as share prices continued to drift lower. Travel stocks remain the big story as the major players start to count the cost of the disruption from the Icelandic volcano cloud. IATA, the international air transport association, has estimated that the airlines industry has lost $250m per day from the grounding of aeroplanes in Europe.Travel agent TUI, the First Choice owner, said about 100,000 of its customers due to return home yesterday were left stranded by the flight ban imposed after the eruption of the volcano in Iceland last week.TUI estimates the cumulative cost to the group, up to and including yesterday, is about £20m. Estimated daily costs thereafter will run at about £5m to £6m, it adds. The company's shares are joined in the red by those of British Airways, which has had to cancel all flights in and out of London today, and which is estimated to be losing £10m a day as a result. Travel agent and tour company Thomas Cook is also under a cloud as is no-frills airline easyJet. Taking collateral damage is eateries group The Restaurant Group, which has a number of its biggest earning restaurants located in airports. While the shares of companies that operate up in the air are buffeted, the situation is not a lot better for the shares of companies that operate underground. Kazakhmys, and Vedanta are the worst hit in the mining sector as metals prices decline.News that UK Prime Minister Gordon Brown has called on the Financial Services Authority to investigate Goldman Sachs's activities in the wake of the decision by the US Securities and Exchange Commission (SEC) to sue Goldman Sachs for fraud has encouraged some hopes that Royal Bank of Scotland (RBS) may be able to claw back some of hundreds of millions of pounds it paid Goldman Sachs in 2008 to unwind a position RBS inherited from its purchase of ABN Amro. Sage Group has confirmed that its chief executive, Paul Walker, is to stand down "in due course" after 16 years at the helm of the accountancy software company.Cairn Energy subsidiary MedOil has plugged and abandoned a well offshore Tunisia in the Louza block after finding only minor evidence of light oil.Set-top box maker Pace expects another good year with margins higher and sales growth in single mid-digits though the World Cup will bring forward some revenues into the first half. The company is sticking with its full year guidance, however, which disappointed some traders used to outperformance from the company.Construction and property consultancy firm Cyril Sweett said 2010 revenue is expected to be £67m as it cuts its cost base. "Revenue for the period is expected to be £67.0m, delivering pre-exceptional PBT of approximately £3m," the group said in a company statement. The performance of Alliance Trust last year was in the lowest quartile of its peer group after the investment trust made a slow start to 2009. Net asset value in the year to 31 January 2010 improved by 16.8% to 377.7p, while the total return advanced 22.2%.Speculation that state-owned transport group Deutsche Bahn is putting the finishing touches to an agreed bid has lifted bus and train group Arriva.