Economics
Interest rates Minutes of the Bank of England’s Monetary Policy
Committee’s rate-setting meeting in June, due out on Wednesday, are tipped
to show that there was an 8-1 majority in favour of keeping interest rates
on hold at 5 per cent.
Inflation Official figures due out tomorrow are expected to show that
consumer price index inflation rose to 3.1 per cent in May, from 3 per cent
in April, forcing the Governor of the Bank of England to write a letter of
explanation to the Chancellor. Retail price index inflation is tipped to
remain unchanged at 4.2 per cent.
Retail sales Data due out on Thursday are forecast to show that retail
sales rose by 0.1 per cent during May, keeping the annual rate of growth at
4.2 per cent. Sales fell by 0.3 per cent in April.
German sentiment The ZEW economic expectations survey for June, to be
published tomorrow, is expected to show that the index of German
expectations has fallen to minus 44, from minus 41.4 in May.
German producer prices Figures due out on Friday are tipped to show
that German producer prices rose by 0.8 per cent in May, after a 1.1 per
cent rise in April. The annual rate of growth is forecast to have risen to
5.7 per cent, up from 5.2 per cent in April.
US producer prices are forecast to have increased by 1 per cent in May,
taking the annual rise to 6.7 per cent, when the figures are released
tomorrow. Core producer prices are expected to have risen by 0.2 per cent,
down from 0.4 per cent in April.
US housing market US housing starts are tipped to have fallen from
1,032,000 in April to 980,000 in May when the figures are published
tomorrow. Separately, the recent improvements in US housing data are not
expected to have been enough to prompt a turn-around in the NAHB housing
market index. The index, due out today, is expected to remain at 19 in June,
the same as in May.
US industrial production is expected to have rebounded slightly in May,
after falling in April. Figures, due out tomorrow, are forecast to show that
US industrial production rose by 0.1 per cent, up from a 0.7 per cent fall
in April.
The dollar Currency trading against the US dollar is primed for what
foreign exchange dealers said would be an “explosive” week, after G8 finance
ministers from the world’s wealthiest nations rallied behind calls for a
stronger greenback. Henry Paulson, the US Treasury Secretary, said after
their talks at the weekend that “a strong dollar is in our interest”.
Chinese industrial production is expected to have risen by 16 per cent
year-on-year in May when figures are published today. This is only slightly
up from the 15.7 per cent rise recorded in April.
Banking
& finance
HBOS was under pressure from shareholders to provide more details about
its exposure to struggling UK housebuilders after a company that formed one
of the bank’s investments called in restructuring experts. The call came as
HBOS prepares to write to its investors with details of its £4 billion
rights issue.
Deposit protection scheme Alister Darling is expected to use his
Mansion House speech on Wednesday to unveil a proposed new deposit
protection scheme under which savers in a failed bank are transferred to a
rival. (The Sunday Telegraph)
Friends Provident, the insurer, is expected to unveil a deal to sell
Pantheon, its network of financial advisers, to an unnamed private equity
group for about £30 million as it moves to complete the first stage of its
recovery plan.
Royal Bank of Scotland Shareholders in Royal Bank of Scotland, led by
Schroders, have called for Sir Tom McKillop, the chairman, and Sir Fred
Goodwin, the chief executive, to be dismissed after the bank announced its
£12 billion rights issue. There are rumours that Sir Philip Hampton, the
chairman of J Sainsbury, the supermarket chain, has been approached as a
possible successor to Sir Tom.
AIG The future of Martin Sullivan, chief executive of AIG, the world’s
largest insurer, was hanging in the balance as the group’s board met to
decide his fate.
Construction
& property
Gresham House Freddie Stirling, chairman of Gresham House, Britain’s
oldest investment trust company, described as “pretty disgraceful” a
resolution being put to investors at tomorrow’s annual meeting by Parkwood
Property Investments, the company’s 29.9 per cent shareholder, to oust four
directors and replace them with three from Parkwood and one of their
choosing.
McCarthy & Stone, the builder of retirement homes, has called in NM
Rothschild, the banking group, to restructure its £800 million debt as the
credit crisis wreaks havoc in the housebuilding sector. (The Independent on
Sunday)
Land Securities CGI, the German owner of the new White City shopping
centre in West London, and Canada Pension Plan are circling the one-third
stake owned by Land Securities in the Bullring, Birmingham’s biggest
shopping centre, which is up for sale for £300 million.
Consumer
goods
Norcros, the maker of Triton showers that is based in Wilmslow,
Cheshire, is expected to report a higher full-year pretax profit of £12.5
million on Thursday, reflecting the benefits of lower net finance costs.
SP, the Russian company, is to sell Stolichnaya, the Russian vodka
label, in an auction expected to value the business at more than £1.5
billion. Lehman Brothers has been appointed to handle a sale. (The Sunday
Times)
Engineering
Aker Yards, the Norwegian shipbuilding company, said it had been
awarded a deal to build two large car-passenger ferries for use in the
English Channel from P&O Ferries, worth €360 million (£28.4 million).
The vessels are scheduled for delivery in 2010 and 2011.
Health
Celsis International, the Cambridge company that provides life sciences
products and laboratory services, is expected on Wednesday to report that it
is on track to deliver a full-year performance in line with expectations.
Industrials
RPC Group, the maker of plastic packaging, is expected on Wednesday to
report full-year results in line with consensus forecasts. The company may
also give an update on its strategic review, which could lead to a sale or
reorganisation of the business.
Leisure
Whitbread, the Premier Inn and Costa coffee shop operator, is expected
to report resilient trading when it updates investors at its annual meeting
tomorrow. Analysts expect it to report like-for-like sales growth of about 6
per cent, with Premier Inn up 10 per cent, Costa up by 6 per cent and
pub-restaurants up 1 per cent.
Media
WPP, the advertising group, will continue its push into emerging
markets this week by acquiring a 30 per cent stake in Vietnam Advertising
Company, the country’s largest agency, which is based in Ho Chi Minh
City and is controlled by the communist government. (The Sunday Telegraph)
Trinity Mirror Trustees of Trinity Mirror’s pension funds have called
in advisers to test the financial strength of the company after weak trading
across the newspaper industry. (The Sunday Times)
Yell Shareholders in Yell, the owner of Yellow Pages, have called for
decisive action from the group’s management, amid concerns over its falling
share price and high levels of debt. Yell’s shares have fallen by 80 per
cent in the past year and its market capitalisation has dropped to £757
million, a fraction of its £3.8 billion debt level.
Natural
resources
Oil production Saudi Arabia has offered to increase oil production to
address global fears that prices are spiralling out of control. The world’s
biggest oil exporter is prepared to raise output by 200,000 barrels a day,
according to Ban Ki-Moon, the United Nations Secretary-General.
Rock Well Petroleum, the Canadian oil company, is planning to float on
the London Stock Exchange in a deal expected to value the company at £11
billion. (The Sunday Telegraph)
BP, the oil group, will consider buying out its disgruntled partners in
TNK-BP, its Russian joint venture, if there is a guarantee that it can sell
on the shares at the same price. (The Sunday Telegraph)
Shell and ExxonMobil, the oil companies, are close to completing a £2
billion sale of their Infineum performance fuel joint venture. The oil
groups are seeking first-round bids for the business through JPMorgan.
Infineum had turnover of about $1.5 billion (£780 million) in 2006.
Retailing
J Sainsbury, the supermarket chain, will give a trading update on
Wednesday, with analysts expecting like-for-like sales up by 3.5 per cent.
Julian Graves Baugur, the Icelandic investor, has called in advisers to
review the future of Julian Graves, its loss-making health food retailer.
Industry brokers expect it to be sold for between £20 million and £30
million. (The Sunday Telegraph)
SCS Upholstery, the furniture retailer, is expected to confirm that is
it having working capital problems. Ernst & Young was recently appointed
to restructure the troubled company.
Support
services
Securitas, the Swedish group that provides specialised guarding in 30
countries, has acquired FM Seguridad, the Chilean security services company,
for an estimated SwKr47.5 million (£4 million).
Brulines, the data management company, is expected tomorrow to report
full-year pretax sales of £4.3 million, up from the £3.1 million reported
last year and driven by new installations, system replacements and upgrades.
Four Seasons The Qatari Investment Authority is trying to find buyers
for all or part of Four Seasons, Britain’s third-biggest chain of nursing
care homes. (The Sunday Telegraph)
Technology
Filtronic, the maker of compound semiconductors based in Shipley, West
Yorkshire, said that second-half revenue and operating performance had been
“satisfactory”.
Kewill Systems, the supply chain control software company, is expected
today to report full-year pretax profits of £7 million, better than
forecast, driven by cross-selling of its products and also by recent
acquisitions.
Telecoms
Reliance Communications, the Indian telecoms group, said that Reliance
Industries had claimed first right of refusal to buy a controlling stake in
it, but added that this would not delay its tie-up talks with MTN, the South
African telecoms group.
Transport
Go-Ahead Group, the bus and train operator, is forecast to report
upbeat news about passenger numbers, fuel supplies and Aviance, its airport
ground handling business, when it gives a trading update on Thursday.
Utilities
Centrica, the owner of British Gas, could shed more light on rising
energy bills on Thursday in a trading update. The company issued a veiled
warning about rising prices last month when it pledged to take the
“necessary action” to protect margins from soaring wholesale gas costs.
British Energy could abandon its £1.1 billion auction and instead
parcel its nuclear development sites into a number of joint ventures. The
auction appears doomed after the rejection of an offer last week from EDF,
the French utility. (The Sunday Times)
Share tips
The Sunday Telegraph : buy Drax ( natural resources), Rensburg
Sheppards (banking & finance); hold Domino’s Pizza (leisure) The
Mail on Sunday : buy Aricom (natural resources)
