Economics
Net borrowing in August rose to £9.1 billion, far above the expected
£6.5 billion and the worst August figure since 1993.
Andrew Sentance, of the Bank of England’s Monetary Policy Committee,
said domestic issues, rather than global economic problems, would determine
UK inflation and interest rate policy. Full implications of the credit
crunch were “far from clear”.
The IMF said the world must prepare for a protracted period of
turbulence in the financial sector that will have far-reaching consequences
for global growth.
France’s public finances are in a “critical” state and need
drastic action to reduce worrying deficits, François Fillon, Prime Minister,
said. He urged France to “change its attitude” towards state spending, two
days before his centre-right Government presents a draft budget expected to
show a deficit of €41.5 billion (£29 billion).
Banking
& finance
Fortis’s shares closed off 5 per cent at €25.30 after JPMorgan analysts
cut their target price on the Belgian bank to €30, from €38.70. JPMorgan
said that a Royal Bank of Scotland-led consortium, of which Fortis is part,
was "overpaying" for ABN Amro of the Netherlands. Fortis is set to
receive European Commission clearance to acquire assets of ABN Amro, sources
said.
Barclays Capital has launched the European Borrowing Unit, a synthetic
currency with a zero interest rate, on foreign exchange markets. The
currency is based on ten major currencies’ positions against the euro, and
is meant to shield investors from exchange risk through its low volatility.
Northern Rock has been urged by MPs to drop plans to pay £60 million to
shareholders after seeking emergency help from the Government.
Bradford & Bingley, the mortgage bank, issued a £500 million
two-year covered bond. It said the issue was part of routine financing, and
not to fill a funding gap.
Construction
& property
Llanera, the Spanish property group, which fell behind on debt payments
with local creditors, is also renegotiating a € 150 million (£104 million)
loan with Lehman. Llanera has been reported to be renegotiating €300 million
of debt.
Asif Aziz, owner of the London Trocadero, has teamed up with Accor
Hotels, to bid via his Criterion Capital for the old Metropole hotel and
adjoining 10 Whitehall Place site, being sold by the Crown Estate at £200
million-plus, with first-round bids due in today.
Erinaceous, the building management group, has breached borrowing
covenants.
Dawnay, Day Treveria, the AIM-listed German retail property group, said
it is waiting for yields in German property to widen again by about one
point, to about 6 per cent, before it makes significant acquisitions.
Meanwhile it is to seek shareholder approval to buy back up to 15 per cent
of its share capital.
Consumer
goods
PZ Cussons, the Imperial Leather soapmaker, hailed a strong performance
by its Charles Worthington brand as it said trading had been in line with
hopes.
SABMiller, the brewer, said that organic lager volumes rose 11 per cent
in the five months to the end of August, after strong growth in Africa,
Asia, Latin America and Central and Eastern Europe.
C&C Group, the embattled maker of Magners Irish cider, is launching
a low-calorie version, Magners Light, initially in supermarkets.
Engineering
Bombardier Transportation has won an order worth about €225 million
(£156 million) for 60 Bombardier Traxx locomotives plus options from Royal
Bank of Scotland’s train-leasing company, Angel Trains. The exercise of the
options is expected upon conclusion of lease contract discussions.
General Motors suffered a strike by 73,000 workers in the US, the first
walkout against the carmaker for almost a decade.
Health
Thailand may break more patents of Western drugmakers by adding copycat
versions of four cancer medicines to its generic drug programmes, an
official said, unless pharmaceutical groups cut prices.
Shire has made Sylvie Gregoire president of its Human Genetic Therapies
(HGT) business.
GlaxoSmithKline said the European Commission had approved its cervical
cancer vaccine Cervarix.
Industrials
Severstal, the Russian steelmaker and miner, said it had acquired 26.6
per cent of Celtic Resources, the London-listed miner.
Leisure
Western & Oriental, the AIM-listed travel group, has bought Villa
Select, a Mediterranean villa operator, for up to £3 million from its
founders, Roger and Pamela Ball.
Hilton Hotels Corporation, which next year opens its first hotel in
Russia, the 275-room Hilton Moscow Leningradskaya, has signed a deal with
Belgravia Asset Management to open 25 hotels in Russia and other Central and
Eastern European markets.
Britain’s hotels beat the coldest August since 1994 to raise
rooms yield by 10.7 per cent in London and 2.5 per cent in the regions,
according to PKF, the consultancy.
Jumeirah, the hotelier owned by Dubai Holding, has secured a lease to
operate a new 120-room resort at Port Soller, Mallorca.
Arsenal became Britain’s richest football club after lifting turnover
by 46 per cent to £201 million on its move to the Emirates Stadium.
Media
The Central Office of Information, the UK’s third-biggest advertising
client, has commissioned Douglas McArthur, former head of the Radio
Advertising Bureau, to review its media buying strategy.
Walt Disney’s international television arm said it is to let viewers of
Nelonen, the Finnish broadcaster, pay to see hit shows on the internet four
days after their US release. Disney-ABC International said its deal with
Nelonen, part of SanomaWSOY, marks the first time the company has introduced
multiple network series to non-US markets so soon after release.
Publishing and Broadcasting Limited and West Australian Newspapers have
agreed to sell their jointly owned Hoyts entertainment group to Pacific
Equity Partners for A$440 million (£188 million).
Sony and Bertelsmann’s BMG are set to receive European Commission
clearance for a music units merger, sources said. The Commission, which has
until October 10 to decide on a second-phase inquiry.
Natural
resources
Highland Gold reported lower first-half profits from continuing
operations after resequencing at the Mnogovershinnoe mine and cessation of
mining at its Darasun site. First-half profits from continuing operations
fell to $5.70 million (£2.8 million), from $8.39 million last year. Pre-tax
profits fell to $4.99 million, from $11.85 million.
Retailing
Alexon, the Dash and Bay Trading clothes retailer, said sales were
under pressure amid a challenging high-street trading climate. The group
reported a 2 per cent drop in interim like-for-like sales and said current
trading had worsened. Amid efforts to raise margins, half-year operating
profits rose by £2.7 million to £5.8 million.
Wal-Mart Stores has formed a partnership with the Carbon Disclosure
Project to get suppliers to manage their greenhouse gas emissions better. It
will begin with a pilot group of seven products.
Support
services
Homeserve, the household repairs and emergencies group, said it gained
“significant amounts” of work drying out homes after summer floods, but
missed out as insurers settled smaller claims in cash and householders used
local tradesmen for minor repairs.
Remploy supporters will today press Peter Hain, Work and Pensions
Secretary, to halt closure of 42 Remploy factories for the disabled. Bob
Warner, Remploy chief executive, does not believe that the Government should
reverse the closures, but he wants government work currently outsourced to
return to Remploy. Mr Hain will try to avert a union motion on Remploy at
Labour’s conference.
Technology
Google is thought to be set to trial an online virtual universe based
on its satellite imagery software, which would rival Second Life. Arizona
State University students are to test a new product “that will be publicly
launched later this year”. An announcement by the university, which has ties
with Google, said that the project was being developed by a “major internet
company”.
Dell is to sell its products through China’s biggest consumer
electronics retailer, Gome. Dell is to begin selling through 50 metropolitan
Gome stores from October and to expand its presence next year.
DoubleClick’s takeover by Google is likely to be delayed for months by
the European Commission amid debate over the broker of online advertising.
Telecoms
Opera Telecom, the phone-in service provider for ITV’s breakfast
programme GMTV, which let millions of viewers call in for competitions after
the winner had been chosen, has received a record fine from ICSTIS, the
premium phone-line regulator. ICSTIS fined the company its maximum penalty
of £250,000.
Croatia’s Government raised the stake offered for sale in T-HT,
the national telecom operator, to 32.5 per cent, from a planned 23 per cent,
because of huge demand. Of the 32.5 per cent to be listed next month, 25 per
cent is reserved for Croatian citizens. Remaining stock will go to
institutional investors.
Transport
Silverjet said its finance director, John Bavister, had resigned and
would be succeeded by Martin Lynch. Mr Lynch has held finance roles within
the XL Leisure Group and British Airways, Silverjet said.
Utilities
EDF will not be the subject of an early stake sale by France, Christine
Lagarde, Finance Minister, said. She said a sale of part of the state’s
stake in the French electricity group was not imminent. Analysts earlier
said the market expected a placement of a stake of 5 per cent from Monday.
France has 83.7 per cent of EDF. EDF’s share market value is €128.5 billion
(£89 billion).
