Economics
Stock market The proportion of London-listed shares owned by overseas
investors rose to 40 per cent last year, from 36 per cent at the end of
2004, official figures showed. The proportion of shares held directly by
individuals fell to only 12.8 per cent, from 14.1 per cent at the end of
2004, and a high of 54 per cent in 1963.
Charlie Bean, the Bank of England chief economist, said that central
banks should beware of pressure for them to set interest rates to lean
against excess in asset markets such as those for shares. In a speech in
London, Professor Bean argued that although the argument for factoring in
the possibility of booms and busts in asset markets when setting rates was
attractive in principle, there were “serious practical difficulties” in
implementing such a strategy.
US retail sales had their steepest drop in nearly two years last month,
falling by 0.9 per cent, compared with market forecasts for a 0.1 per cent
rise. The sharp decline was driven by a 2.9 per cent fall in car sales.
Excluding vehicles, retail sales fell by 0.4 per cent.
US consumer confidence rebounded in early July from tenmonth lows
plumbed in June, according to the Reuters/University of Michigan survey of
sentiment. Its preliminary index of confidence for this month rose to 92.4,
from a final June reading of 85.3.
The US dollar was driven down against the Japanese yen yesterday, hit
by a report that Iran had asked Japan to pay for its oil purchases in the
Japanese currency and not in dollars.
Banking
& finance
Up 0.81%
China’s banking regulator has urged banks to withdraw loans to
companies listed as very polluting or suffering from overcapacity.
Royal Bank of Scotland’s consortium bidding for ABN Amro promised
to make a revised offer as Barclays celebrated a legal victory in the race
to buy The market is booming for properties valued at £4 million and above,
with prices up 43 per cent in the 12 months to end-June, against a 1.6 per
cent rise among those below £1 million.
Construction
& property
Up 0.93%
Homes in London’s most up-market areas are soaring in value, aided by
demand from rich foreigners, figures show. Prime property price growth in
Central London was 3.1 per cent last month –– the fastest rate since the
Knight Frank estate agency began its index in 1976 –– driven by rapid growth
among the most expensive homes. The market is booming for properties valued
at £4 million and above, with prices up 43 per cent in the 12 months to
end-June, against a 1.6 per cent rise among those below £1 million.
British Land gave an upbeat outlook for 2007 as it said that the year
had begun well despite market uncertainty. The property group, now a
tax-efficient real estate investment trust, said that London was seeing
growth in the rental office sector.
Consumer
goods
Down 0.13%
Cadbury Schweppes is to be sentenced on Monday in a case concerning a
salmonella-related health scare at one of its plants in 2006, sources said.
C&C Group, the maker of Magners cider, became the latest victim of
the UK’s dismal summer weather after giving warning that wet weather and a
price war would wipe out profit growth this year. It also faces a possible
strike at its production plant in Ireland over new working practices.
Engineering
Up 0.65%
General Electric reported earnings in line with Wall Street
expectations, citing strong demand for jet engines and gas turbines, sending
its shares to a five-year high. Those businesses overshadowed weakness in
the company’s loss-making WMC Mortgage sub-prime lending unit, which is
being put on the block. GE, whose operations include the NBC media group,
said that second-quarter net income rose to $5.42 billion, from $4.95
billion a year earlier.
Health
Up 0.52%
Roche, the Swiss pharmaceutical group, signalled that it was ready to
consider increasing its £3 billion offer for the US health diagnostics
specialist Ventana Medical Systems. In a letter to Ventana, the Swiss group
said it was ready to make a hostile takeover bid if necessary.
Industrials
Up 0.66%
Dow Chemical and America’s Environmental Protection Agency have agreed
on a clean-up of three dioxin-contaminated areas near the chemical group’s
plant at Midland, Michigan, the agency said.
Leisure
Up 0.54%
Travelodge, the hotel chain, has appointed as marketing and sales
director Daniel Heale, head of media and marketing for Camelot, the National
Lottery operator.
Marylebone Warwick Balfour, the hotel and property group, confirmed
that it had begun talks for a possible sale of its Malmaison and Hotel du
Vin operating business in addition to the proposed sale of the underlying
property assets.
Media
Up 0.83%
Informa said that it had declared unconditional the 650p-a-share bid
for Datamonitor after acceptances for 76.05 per cent. The UK publishing
group and events organiser said that it had decided to waive its requirement
of acceptances of not less than 90 per cent.
Emap, the media group, said that it had bought Torcello Publishing, an
online journal provider, for £20 million as it focuses more on
business-to-business digital assets. Privately owned Torcello owns the
subscription-based online Infrastructure Journal, for the project finance
market. Torcello’s managing directors, Nickolas Imregi and Marco
Dell’Aquila, set up the London business ten years ago. This week Emap
completed the sale of Agor, its French exhibition unit.
BSkyB, the broadcaster, told regulators it is “fanciful” to suggest
that it could influence ITV’s decision-making through its 17.9 per cent
stake in the rival. BSkyB, 39.1 per cent-owned by News Corporation, parent
company of The Times, said in a submission to a Competition Commission
inquiry into its stake that the stake was merely an investment made when ITV
had been the focus of takeover interest.
Warner Music will have until Thursday to declare whether it intends to
bid for EMI, as faltering debt markets make it harder to borrow the cash
needed to pull off the £3.2 billion deal.
Natural
resources
Down 0.28%
Cunico Resources, a miner with operations in Eastern Europe and Zambia,
plans to raise between $600 million and $800 million in a London flotation
next month, an industry source said. The source said this would give the
nickel, copper and cobalt miner a market value of $2.5 billion to $3
billion.
Alcoa, the US aluminium group, is being pressed to agree a takeover
potentially worth more than £25 billion by BHP Billiton or Brazil’s CVRD.
Kenmare Resources, the Irish miner, is mired in a scandal over a “naked
director”.
Retailing
Up 0.36%
Abercrombie & Fitch, the teen clothing retailer, said it is
expanding its retail presence throughout Europe after the success of its
first flagship store in Savile Row, London. Abercrombie said that it was
securing locations in Italy, France, Germany, Spain, Denmark and Sweden. It
also plans to find other key locations in the UK.
Jacques Vert, the womenswear retailer, warned of tougher conditions in
the high street after a slowdown in sales growth. The operator of the
Windsmoor, Planet and Precis brands reported a 5 per cent rise in
like-for-like sales in its year to April 28, but said sales growth had since
eased, with like-for-like sales up by 1.2 per cent. Total sales in the year
rose 5.4 per cent to £114.9 million. Pre-tax profits grew from £2.2 million
to £3.3 million.
B&Q, the home-improvement retailer and part of Kingfisher, is suing
a Chinese firm after criticism of its dealings with suppliers in China.
Support
services
Up 0.52%
Freshfieds Bruckhaus Deringer, the law firm, neglected to check whether
changes to its pension scheme were legal, it emerged in an
age-discrimination case brought by a former employee.
Carter & Carter, the support services group, again gave warning on
profits after saying it had been unsuccessful in tenders for a government
contract and that construction trading was below expectation. The group said
adjusted pre-tax profits for its year to July 31 will be about £10.5
million, against last year’s £15.2 million.
Christie’s International, the auction house, recorded the largest
half-year sales in art market history, boosted by demand from rich fund
managers and entrepreneurs wanting modern art, it said. Christie’s, which
has 14 salesrooms worldwide, including London, New York and Hong Kong, had
global sales of £1.63 billion for the first six months of 2007, including
buyers’ premium — up 32 per cent on last year’s figure. A total of 358 works
of art sold for more than $1 million dollars, against 189 in the same period
last year.
Babcock, the defence and engineering group, said that a “hiatus” in
rail signalling contracts was restraining a better than expected performance
across the rest of the business. The group said its rail business had also
been hit by Network Rail’s decision to reduce the number of track
maintenance suppliers. However, Babcock said that full-year trading was
still in line with expectations.
Technology
Up 0.85%
Government websites are too complex and are hard to navigate, the
National Audit Office (NAO) said. Internet users complained that it was
often hard to find the information they needed among large amounts of
irrelevant policy material, the spending watchdog said. Sir John Bourn, the
NAO head, said there had been some progress since a previous review in 2002,
but there were still weaknesses, especially in provision of information
about the cost and usage of government websites.
Intel said it will support a Massachusetts Institute of Technology
researcher’s project to put computers in the hands of poor children around
the world, reversing its long-standing opposition to the proposal. The
world’s biggest chipmaker will join the board of the One Laptop Per Child
Foundation, which developed the XO laptop — a personal computer that it
plans to put into production in September at a cost of $176.
Telecoms
Up 0.06%
Tiscali said it has reached an agreement under which its Tiscali UK
Holdings will buy Pipex Communications’ broadband and voice operations for
an enterprise value of £210 million. Pipex has 650,000 voice and 570,000
broadband customers, taking Tiscali UK’s broadband users to 1.9 million.
The battle for Virgin Media intensified as Providence, the US buyout
firm, told advisers to prepare a rival bid for the £11 billion television
and broadband group, for which Carlyle has made an offer.
MTC, the Kuwaiti group, said it is weighing up several licence bids as
it reported first-half net profits of $515 million (£253 million).
Transport
Up 0.10%
EasyJet and Ryanair must apply the employment laws of France to staff
operating from the country after a court rejected an attempt by the two
budget airlines to bypass local rules.
Utilities
Up 0.51%
EU homes and businesses have continued to use more electricity
despite efforts to reduce energy consumption, an EU study says. Household
electricity use rose by 10.8 per cent between 1999 and 2004, in line with EU
economic growth, according to a report by the EU’s Joint Research Centre.
Industrial consumption rose by 9.5 per cent and service-sector electricity
use rose by 15 per cent, it said.
Renewable Power and Light’s shares lost more than half their value
because it expects to make a loss in 2007 and not the $25 million pre-tax
profit forecast by its broker. It blamed the loss of its supply of palm oil,
which it planned to use to generate electricity in power plants it is
converting to run on biodiesel. Renewable is suing its supplier, Safari
Group, in the US, for failing to deliver the palm oil at an agreed price.
Its oil palms are in Africa.
Up/Down = sector index percentage change on day
