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FTSE 100 weekly: Pru in the blue while Admiral founders

Published: 17:00 16 Aug 2014 AEST

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Insurers grabbed the headlines this week with Prudential getting the thumbs-up for its trading update while Admiral foundered after its interims.

The Pru (LON:PRU) posted an underlying 17% rise in first half operating profits. They grew to £1.52bn as the US and Asian businesses starred. Investors were rewarded with a 15% boost to the dividend to 11.18p a share.

“This performance underlines the value we derive from having an extensive, diversified and growing regional platform,” said chief executive Tidjane Thiam.

The group withstood the headwinds created in its home market by reforms to long-terms savings market conceived by Chancellor George Osborne.

The Pru’s UK life arm still posted a 10% rise in operating profits, although CEO Thiam admitted: "Annuities sales decreased markedly following the budget announcement."

Car insurer Admiral (LON:ADM) was the worst performing blue-chip this week. The Confused.com owner’s adjusted profit before tax edged up 2% to £184.9mln at the half-year stage, from £181.6mln a year earlier.

Investors were disappointed to hear chief executive Henry Engelhardt say: “In the UK there are some signs that premiums are no longer falling but we have yet to see firm evidence of an inflection point and a return to premium growth.”

Elsewhere in the financial sector, stockbroker Hargreaves Lansdown (LON:HL.) took a dive after UBS initiated coverage with a ‘sell’ rating.

Also lower on the week was commodity giant Glencore (LON:GLEN), after it unveiled increases in copper and coal production but less nickel and zinc in the first six months.

Security group G4S (LON:GFS) emerged part-way from the doghouse after a pleasing trading update that showed performance has been boosted by success in emerging markets.

Pre-tax profits were better than-expected 6.3% to £185mln in the six months to June, while the dividend was held at 3.2p. G4S shares rose 5.3%.

Property group Land Securities (LON:LAND) was another winner, as it sold its half-share in a number of commercial properties in Bristol for £267.8mln to AXA Real Estate.

The assets currently produce a net rental income of £17.3 million to Land Securities.

Mining giant BHP Billiton (LON:BLT) is another blue-chip in sell-off mode. It revealed plans to spin off its unwanted businesses into a separate company.

The miner said it will focus in future on iron ore, copper, coal and petroleum, where it sees scope for stronger growth in cash flow and a superior return on investment.

That leaves manganese, aluminium and nickel out in the cold, with the company making no secret recently that it wants rid.

Newspaper reports in Australia said that as well as aluminium, manganese, nickel, the new company would contain the Cannington silver mine and South African thermal coal assets in a business worth U$14 bn. Iron ore will be the core of the business in future.

The FTSE 100 advanced 122 points on the week to 6,689.

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