Sales warning hits Standard Life

LONDON FTSE 100 CLOSE 5,276.85 +16.54

STANDARD Life announces its trading for the last three months of 2009 next week and its shares fell yesterday after a warning of a drop in sales because of the recession.

Greig Paterson at Keefe, Bruyette & Woods trimmed his forecasts for Standard Life's sales because of "a more bearish view on the financial pain UK customers are experiencing".

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Paterson is predicting Standard Life will report a 13 per cent fall in sales to 13.66 billion for 2009, as its customers focused on paying down debt.

The market was also digesting news from Monday night that hedge fund manager AQR Capital Management has a short position – a bet that shares will fall – of 0.22 per cent in Standard Life on Monday.

Shares in Edinburgh-based Standard Life were down by more than 2 per cent at one stage, closing down 2p, or 1 per cent, at 199.5p.

Its rivals were mostly higher, with Legal & General up 1.1 per cent to 79.85p, RSA closing up 0.6p at 129p and Admiral climbing 8p to 1,135p, although Prudential dropped 3p to 601.5p.

The wider FTSE-100 index of London's top listed companies gained 16.54 points to 5,276.85 points despite trading lower for most of the day.

Its rise ended a run of four straight session falls. The index was almost 40 points lower yesterday morning after official figures showing much slower growth in the UK's economic output than economists had forecast. However, it rose later on predictions of an upwards revision in the figures.

Defensive sectors were the main driver. Pharmaceutical groups – known for steady revenues – were also boosted by strong results from Swiss group Novartis. Astrazeneca climbed 47p to 3,102p, Glaxosmithkline rose 19p to 1,262.5p and Shire closed up 19p at 1,239p.

Inter-dealer broker ICAP led the blue-chip fallers, continuing its decline on concerns over potential US reforms restricting share dealing by banks. Shares were off 14.8p to 380p, a fall of almost 4 per cent.

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Lloyds Banking Group and Royal Bank of Scotland were among the fallers – down 1.21p to 51.71p and 0.56p to 34.8p respectively.

Asia-focused Standard Chartered was yesterday's biggest gainer, up 36p at 1,481p, while Segro rose 7.1p to 323.1p and British Land climbed 9.2p to 447.5p.

Oil majors rallied after several days of falls, despite crude oil prices remaining weak.

BP closed up 3p to 602p while Royal Dutch Shell gained 11.5p to 1,734.5p.

Explorers continued to fall, though.

Tullow Oil, Britain's largest oil explorer, dropped 45p or 3.6 per cent after confirming the terms of its 835 million purchase of assets in Uganda from Heritage. Shares in FTSE-250 Heritage eased 6p to 496p.

Online betting company Partygaming closed down 5.35 per cent at 277.8p.

Shares in the Gibraltar-based group fell sharply after news that founder Anurag Dikshit had sold his entire remaining holding of 38,808,533 shares, more than 5 per cent of the company.

The sale raised concerns among traders, after the company recently confirmed that it was in talks over a possible merger, with Bwin of Austria involved in the discussions.

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On the Aim, I-Design, which provides advertising platforms for bank ATM machines, fell despite the firm predicting that media sales were expected to continue to rise in the year to 30 September, and that talks with potential new bank customers continued.

Shares in the company closed down 1.5p at 21.5p.