Markets: The week that was (23-27/11/09)

London's leading index endured a rollercoaster ride, with miners leading it higher before things came crashing down in the wake of concerns over mounting debts in Dubai. The Footsie ended the week just six points down at 5245, despite the rocky road to the end of the week.

As expected, Lloyds' shareholders voted in favour of the bank's record £13.5 billion cash call, but chairman Win Bischoff did not escape a rocky ride at its AGM on Thursday. You can read the inside story from the meeting in Birmingham in: Bischoff battles Lloyds shareholders at AGM.

Across the globe, markets were a sea of red for the week, with the Nikkei suffering its fifth successive weekly fall, as the continuing strength of the yen against the dollar - with the latter slumped to a 14-year low against its Japanese counterpart.

Japan's benchmark index tumbled to 9081 for the week, while the Hang Seng closed Friday at 21134 - a five-day loss of almost 1000 points.

In the US, downwardly revised GDP figures weighed on Wall Street on Tuesday, with the Thanksgiving holiday on Thursday providing only brief respite. This was because US markets missed out on the initial slumps brought on by repayment issues with multi-million pound debts at Dubai World - the Emirate nation's largest state-owned firm. The Dow Jones was on course to end the week marginally down.

The action from Monday

** Lloyds Banking Group (LLOY) is due to reveal the terms of its record £13.5 billion rights issue after the bond exchange part of its fundraising plans met with strong demand from corporate investors.

The final pricing of the world's largest ever cash call will depend on the movements of Lloyds' share price although is likely to come in around 33p.

The bank has said cash call will be priced at the higher of either 15p or a 38-42% discount to the theoretical ex-rights price - which the market is expecting to drop to around 55p following dilution from the issuance of new shares.

** Oil explorer Gulf Keystone Petroleum (GKP) set investors' tongues wagging after announcing it had struck more black gold in its outperforming Iraqi operations.

The AIM-listed group has made further Triassic discoveries at its Shaikan-1 well which are flowing at 10,000 barrels of oil a day equivalent (boe).

This gives the Triassic section alone potential aggregate rates of about 24,000 boe per day, the group said.

** Oil exploration group Heritage Oil (HOIL) confirmed a special dividend for investors after selling off its Ugandan interests in a $1.5 billion deal with Italy's Eni.

The FTSE 250 group will pay between 75p and 100p a share following the deal which saw it offload if half-share of Block 1 and Block 3A, which cover the northern and southern end of Lake Albert, in Uganda.

These represent reserves of around 300 million barrels of oil.

The action from Tuesday

** Royal Bank of Scotland (RBS) and HBOS received secret emergency funding of almost £62 billion at the height of the financial crisis last year, the Bank of England governor revealed today.

Mervyn King told the Treasury Select Committee that the two banks were given the cash injections in October and November 2008 to "prevent a loss of confidence spreading through the financial system as a whole".

He said the Bank acted as a "lender of last resort."

In return, the two banks put up collateral including residential mortgages, personal and commercial loans worth more than £100 billion in return for the loans and were charged a fee of 1.7 percentage points over the usual lending rate.

** The US economy grew by a much lower rate than previously forecast in the third quarter, revised figures have shown.

The GDP of the world's largest economy grew by 2.8% between July and September, down from the 3.5% previously given by the Department of Commerce.

** Oil prices were on a slippery slope as investors grew jittery over the pace of global demand.

A much slower-than-anticipated economic recovery in the US, coupled with fears that Chinese banks will be forced to curb their lending, caused tension in the market.

Crude oil slipped to $76.21 a barrel, while London Brent was trading down at $76.54 a barrel.

The action from Wednesday

** It was the UK economy in focus on Wednesday, with revised figures showing that GDP shrank by a slightly smaller amount that previously thought in the third quarter of the year.

The 0.3% contraction is a slight improvement on the 0.4% previously estimated, reflecting a small upward revision to services output.

Economists said the breakdown of the figures showed only limited signs of the hoped-for rebalancing away from consumption and towards exports.

The downward change came from a higher level of imports, which exert a negative effect, and lower than expected construction of non-residential buildings.

** Millions of current account holders were today left reeling by the Supreme Court's shock decision to rule in favour of the banks over unauthorised overdraft charges.

Following an epic 850-day legal battle, the Court overturned two earlier rulings which gave the green light to the Office of Fair Trading to investigate the fairness of the fees levied on people who accidentally stray into the red on their overdraft.

An estimated 12 million people have been hit with fees of up to £39 each time their accounts veered into unauthorised territory. Critics claimed the actual cost of the administration is £4 - and the rest is pure profit.

** Angel Mining (ANGM) swung back into profit in the six months to the end of August amid a pick-up in market conditions and some unexpected currency gains.

This boosted its half-yearly pre-tax profits to £528,958 - in stark contrast to a loss of £2.33 million suffered during the same period of 2008.

In his first set of interim results since being appointed chairman in August, Frank Chapman said rebounding market conditions during the March-August period also helped the mining company along considerably.

The action from Thursday

** Lloyds Banking Group's (LLOY) 2.8 million private shareholders have, as expected, given their support to the bank's record cash call.

Hundreds of investors made their way to the bank's AGM in Birmingham, grilling the bank's bosses over their actions during the financial crisis and, ultimately, backing its fundraising plans.

It has asked investors to back a £13.5 billion rights issue, with shares priced at 37p each - towards the higher end of expectations - with investors being offered 1.34 shares for every existing share held.

** Banks should disclose the number of employees earning seven figures salaries and strengthen the role of non-executive directors on banking boards, the Walker Review has concluded.

The government sponsored report on the corporate governance of UK banks is tightening the screws on the risky activities of the financial sector which almost brought about its collapse earlier this year.

The changes are being called the toughest set of rules on pay in the world although these are not technically caps.

** Oil exploration and production company Heritage Oil (HOIL) has embarked on a year-long drilling programme on the Miran West-2 appraisal well in the Kurdistan region of Iraq.

This targets the three principal Cretaceous reservoir formations encountered in the Miran West-1 well where the FTSE 250 group found a 700 metre oil column.

Miran West-2 is the first well in a planned multi-well drilling programme on the Miran Block and will take around four months to drill.

The action from Friday

** Petra Diamonds (PDL) was on gleaming form on Friday, after fetching over $6 million for its 168 carat white Cullinan diamond.

An undisclosed buyer beat off "high interest" to purchase the special white diamond, which was recently recovered at the Cullinan mine in South Africa, for a healthy sum of $6.28 million.

The AIM-listed company described the stone of "exceptional colour and quality".

It was recovered in the same production series as three other special diamonds; the 507.55 carat white diamond which has not yet been sold and two diamonds of 58.50 and 53.30 carats which were sold earlier this month for a total of $2.8 million.

** Gold shied away from its record high as fears over Dubai's health sent shockwaves through the financial markets.

Gold prices slipped almost 5% to $,1158 an ounce, down from yesterday's $1,189 an ounce, after real estate investor Dubai World asked creditors to delay repayment of $3.5 billion due next month.

There is concern that investors within and into the region may sell off some gold holdings to stimulate the global economy.

** Desire Petroleum's (DES) Ocean Guardian drilling rig has begun its treacherous journey from Scotland to the Falkland Island waters.

The AIM-listed oil and gas exploration company said its rig departed from the Cromarty Firth in Scotland on Thursday and is expected to take two months to arrive at its destination.

Desire will begin drilling around early February 2010.