Economics
Consumer confidence The headline gauge of consumer confidence from GfK
NOP for the European Commission sank to minus 34 in June, down five points
since May and a near-record low. Confidence in future prospects fell below
the worst levels of the last recession, the poll found.
House prices A survey of estate agents by Hometrack, the property
website, found that house prices in England and Wales dropped by 1 per cent
in June, twice as fast as in May, to stand 2.5 per cent down since the start
of this year and 3.2 per cent down over 12 months.
Mortgage approvalsare expected to have fallen further in May, according
to Bank of England figures due out today. Net mortgage lending and consumer
credit are also expected to have retreated.
Manufacturing activity According to the latest CIPS purchasing
managers’ survey of manufacturing conditions in June, due out tomorrow, a
headline index of 49.8 is predicted, down from 50 in May. Any figure under
50 indicates contraction.
Services sector activity is also expected to have contracted in May,
for the second month in a row, according to a CIPS purchasing managers’
survey due out on Thursday. A headline reading of 49.7 is forecast.
Eurozone interest rates are expected to be raised on Thursday by a
quarter-point to 4.25 per cent, despite flagging economic activity in parts
of the 15-nation bloc.
Eurozone inflation is expected to have accelerated to an annual rate of
3.8 per cent in June, from 3.7 per cent in May, in an initial estimate due
out today.
Eurozone unemployment in June is expected to stay at 7.1 per cent in
official figures due out tomorrow. German unemployment is tipped to have
fallen again in June, by as much as 40,000, according to separate figures.
Eurozone manufacturing is tipped to have suffered a further contraction
in its activity in June, according to a purchasing managers’ survey due out
on Wednesday. A headline index of 49.1, unchanged from May, is forecast.
US employment is tipped to have suffered a further fall in June,
according to payrolls data due out on Thursday. A drop of 50,000 in the
numbers in work is predicted, after a 49,000 fall in May, although the
unemployment rate is forecast to have fallen to 5.4 per cent, from 5.5 per
cent.
US manufacturing activity The latest snapshot of US manufacturing from
the Institute of Supply Management, due out tomorrow, is forecast to show a
headline reading of 49 for June, down from 49.6 in May.
US services sector activity is expected to have eased in June,
according to an ISM survey due out on Thursday. A headline reading of 51.5
is forecast, down from 51.7 for May.
Banking
& finance
Goldman Sachs Lakshmi Mittal, chairman and chief executive of
ArcelorMittal, the steel producer, has joined the board of Goldman Sachs,
the banking group, as an independent director.
Her Majesty's Revenue & Customs is set to hand over sensitive trade
data to its American counterpart in return for access to a state-of-the-art
fraud detection system which is too expensive for the British agency to
build. (The Independent on Sunday)
Banking reformBanks will learn tomorrow whether they will be forced to
pay billions of pounds up front into a compensation scheme for the victims
of bank collapses, when Alistair Darling releases his latest consultation on
banking reform.
Construction
& property
Regis Group, the property investment company, is considering a bid for
Grainger Trust, its quoted rival, whose share price fell from 440p in
February to barely 210p last week. Although the company is a landlord rather
than a builder, it has suffered along with the rest of the housing sector. (The
Independent on Sunday)
Taylor Wimpey, the housebuilder, will report a preclose trading update
on Wednesday and could reveal details of a rumoured £400 million emergency
fund-raising to save it from collapse. The company’s management may also
detail plans of a deal with its banks to relax lending covenants on bank
debt of £1.9 billion.
Consumer
goods
Uniq, the food company, reported that one of its subsidiaries “forgot”
to cancel a standing order, costing the company £282,500. Unigate Properties
has launched a High Court legal battle to recover the money. (The Sunday
Telegraph)
Carlsberg, the Danish brewer, has sold two mineral water brands in
Denmark to Coca-Cola as part of a deal with a total sale price of $225
million (£112.9 million).
Engineering
Siemens, the German engineering conglomerate, has confirmed reports
saying that it plans to cut more than 17,000 jobs worldwide as part of a
restructuring programme. The plans were presented to the company’s board
last week. According to dpa, the German news agency, about 6,450 jobs will
be cut in Germany.
Health
Phynova, the Oxfordshire developer of prescription pharmaceuticals
derived from plants used in Chinese medicines, reported a first-half pretax
loss of £1.45 million, compared with a £1.3 million loss last time, in line
with the company’s expectations
Industrials
Plastics Capital, the plastics consolidator, is expected to report
full-year pretax profits of £2.3 million today, with investors keen to hear
about the integration of Palagan, the polyethylene film packaging company
that it bought in March.
Leisure
The Dorchester Group, a collection of five of the world’s most
luxurious hotels including the London hotel of the same name, reported
strong full-year profits. Turnover was up by 12 per cent to £231 million and
pretax profits doubled to £46 million, with its London flagship hotel
bringing in the greatest share. (The Sunday Telegraph)
Greene King, the Suffolk-based pub and brewing group, will report its
full-year results on Thursday. In February the group had said that it was
confident of meeting its full-year expectations, which analysts now see as
being flat at about £140 million.
Media
ZenithOptimedia, the media buying arm of Publicis, the French
advertising group, will announce that its advertising spend in North America
will increase by 3.5 per cent, not by 3.7 per cent as previously thought,
stripping about $400 million (£200.8 million) off its forecasts in March.
British Phonographic Industry, the record companies’ body, will release
figures today showing that record company revenues outside direct sales of
music rose by 13.8 per cent to £121.6 million in 2007, from £106.9 million
in 2006. These additional revenues account for 11.4 per cent of record
companies’ domestic income.
Natural
resources
Norilsk Nickel Fears are growing that only one independent candidate
will win a place on the board of Norilsk Nickel, as the battle for control
of the $51.7 billion (£25.9 billion) Russian mining group intensifies. (The
Independent on Sunday)
Drax, the owner of Europe’s largest coal-fired power station, will
issue a half-year trading update today. The group’s plant near Selby, North
Yorkshire, can produce about 7 per cent of the UK’s electricity needs.
Retailing
Moss Bros Shareholders in Moss Bros, the troubled menswear chain, have
called on the retailer to move to London’s junior Alternative Investment
Market in an attempt to cut costs. (The Sunday Telegraph)
Asos, the online fashion retailer, will report its full-year results
today. Analysts forecast profits of about £7 million, from £3.4 million last
time.
Carpetright, the flooring and carpet retail chain, will report its
full-year figures tomorrow. Sec-ond-half sales are expected to have dropped
by 1.8 per cent on a like-for-like basis across the UK and Ireland, with a
slump in property transactions affecting the demand for new flooring.
HMV, the music and video games retailer, will report its full-year
results tomorrow. Full-year pretax profits of about £58 million are
forecast, ahead of the £48.1 million reported last time.
ScS UpholsterySun Capital Partners, the private equity group, is
believed to be finalising a rescue bid for ScS Upholstery in a deal that is
expected to wipe out most of the value of investors’ shares in the
struggling furniture chain. (The Sunday Times)
Aldi, the German discount super-market chain, plans to spend £1.5
billion on a five-year UK expansion plan, which will increase its chain of
400 stores to a 1,500-strong empire. It is also planning to hire an extra
1,500 staff in Britain and Ireland this year alone. (The Sunday Times)
Support
services
Serco, the support services supplier, will give a trading update today.
UBS, the broker, said it expects the company to say that business has been
buoyant in the first half, with organic growth of about 10 per cent, strong
cash flow and good revenue visibility.
Four SeasonsThe consortium of banks that backed the takeover of the
Four Seasons nursing home chain by Delta Two, the Qatari investment vehicle,
is facing combined losses of up to £400 million from its exposure to the
£1.4 billion deal. (The Sunday Times)
Technology
BAA Willie Walsh, the chief executive of British Airways, has abandoned
his call for BAA’s grip on Britain’s airports to be broken, demanding
tougher regulation on the airports operator instead. BA’s lobbying had led
to the current Competition Commission inquiry. (The Independent on Sunday)
QinetiQ The Government has almost certainly decided to sell its 19 per
cent stake in QinetiQ, the defence technology group, raising more than £250
million for the Treasury. (The Sunday Telegraph)
NCC, the IT security group, is expected to report full-year pretax
profits of about £10.4 million on Thursday. Analysts are forecasting that
its trading is in line with management expectations and the integration of
Escrow Europe is proceeding according to plan.
Telecoms
Cable & Wireless is sweetening its offer for Thus by up to £27m as
the two telecoms companies work on an agreed takeover that could be
recommended to shareholders. C&W is expected to increase its cash offer
to value Thus at £329 million. (The Sunday Times)
BT, the telecoms group, has agreed with Nationwide Building Society to
manage its networked IT services in a seven-year out-sourcing deal worth
£160 million.
Virgin Mobile USA plans to acquire Helio, a joint venture between SK
Telecom, the South Korean group, and EarthLink, the US internet company, for
$39 million (£19.6 million) in equity.
Transport
EasyJet, the budget airline, is expected to urge the Government to
proceed with plans to replace its tax on passengers with a tax on aircraft
instead. The current Air Passenger Duty is charged at £10 to £20 for flights
within Europe, rising to £40-£80 for long-haul flights. (The
Sunday Telegraph)
British Airways will report its traffic figures for June on Thursday.
BA’s traffic measured in revenue passenger kilometres is forecast to have
fallen by 1.5 per cent, with aircraft loadings falling two percentage points
to 78.5 per cent.
Utilities
Utility prices Households will see their gas and electricity bills rise
by an extra 20 per cent to meet the European Union’s emission and renewable
energy goals, according to a report by Ernst & Young.
Share tips
The Mail on Sunday: buy Halma (engineering)
The Sunday Telegraph: buy Micro Focus (technology),
Porvair (engineering)
