Economics
Interest rates The Bank of England kept interest rates on hold at 5 per
cent, as expected.
House prices in June, measured by the average price over the three
latest months compared with the same period a year earlier, were 6.1 per
cent lower, figures from Halifax showed. The average house price is now
£180,344, nearly 10 per cent lower than when house prices peaked in August
last year.
French industrial output plunged in May. Production fell by 2.6 per
cent with declines in all sectors. The automobile industry was particularly
badly affected, with output falling by 8 per cent.
US unemployment The number of people filing new claims for unemployment
in the United States fell by 58,000 to 346,000 last week, the largest fall
in three years. But it was said that the surprise figures were largely
because of seasonal adjustments.
Japanese wholesale prices The annualised Japanese wholesale price index
hit 5.6 per cent in June, its highest level for 27 years, according to the
Bank of Japan. The figure for May was 4.8 per cent.
Banking
& finance
Fortis Jean-Paul Votron is expected to resign as chief executive of
Fortis, after the Belgian-Dutch financial group infuriated investors by
raising €8.3 billion (£6.6 billion) to prop up a balance sheet stretched by
last year’s acquisition of ABN Amro, the Dutch bank.
Man Group, the listed hedge fund manager, said demand for its
investment products had held up well despite the industry suffering a dismal
start to the year. Investors poured $5 billion (£2.53 billion) into its
funds in the first quarter as total funds under management rose from $74.6
billion to $79.6 billion.
Royal Bank of Scotland suffered a setback to its plans to beef up its
balance sheet after Zurich Financial pulled out of the auction for its
insurance arm. RBS had hoped to raise as much as £7 billion from the sale.
Zurich, the Swiss insurer with large UK operations, said it had decided to
withdraw from further negotiations after a “detailed review”.
F&C Asset Management Dawnay, Day, the London investment group,
began selling its stake in F&C Asset Management, sending shares in the
fund manager plummeting and raising question marks about a sale of the
business.
Plus Market, the exchange that used to trade as Ofex, has signed a
heads of agreement with the Munich stock exchange and its Bayerische Börse
operator to develop a small and mid-cap market across Europe.
Construction
& property
Barratt Developments, the housebuilder, has ruled out any immediate
need for a rights issue after agreeing a deal to extend its lending
facilities. Its shares rose by 25 per cent in early trading on news that it
had pushed back the repayments of a £400 million facility into 2011 and that
its lenders had relaxed their covenants.
Wienerberger, the world’s biggest brick maker, which is based in
Vienna, said that its first-half underlying earnings would be 10 per cent
lower than last year because of the global economic downturn. It takes about
7 per cent of its sales from Britain.
Consumer
goods
Associated British Foods The cost of sugar is set to rise after
Associated British Foods announced that it was under pressure to pass on the
higher cost of oil and natural gas. It said that while the price of
commodities such as wheat had begun to level off, its oil and gas bill had
doubled in the past year.
Photo-Me International, the photo-booth group, has set out a recovery
plan after “deeply unsatisfactory” results saw it plunge £21.6 million into
the red.
Carr’s Milling Industries, the agriculture, food and engineering
group, said that it has continued to enjoy strong trading, particularly in
agriculture, and expects its full-year pre-tax profits to be more than £9.2
million, against the £5.5 million reported last time.
Bacardi, the drinks group based in Bermuda, reignited speculation that
it could pursue an initial public offering by strengthening its board with
the addition of two directors — Melanie Healey, a senior executive at
Procter & Gamble, and Roman Martinez, a former managing director at
Lehman Brothers.
Engineering
General Electric, the US conglomerate, announced plans to spin off its
entire consumer and industrial group as it accelerates its drive to boost
profits by offloading less profitable units.
Solar Integrated Technologies, the US group, said it has won orders
worth more than $8 million (£4 million) for its new metal roofing product,
including a $2.4 million order from Fiorini Impianti, the Italian
electricity company.
Health
Renovo Group, the scar tissue specialist that is based in Manchester,
said it had received positive feedback from the European medicines regulator
on its Phase III plans for Juvista, its leading product, and said that it
plans to start the first trial soon.
Industrials
ArcelorMittal, the steel group, has agreed to withdraw ($1.74 billion
(£660 million) claims against the Czech State in return for a stake in
ArcelorMittal’s Czech unit. Separately, Coal of Africa, a reported takeover
target for ArcelorMittal, said that it was not aware of any bid.
Dow Chemical, the US chemicals maker, is buying Rohm and Hass, the
paint ingredient and chemicals group, in a deal worth $18.8 billion (£9.5
billion), with the backing of Berkshire Hathaway, the investment vehicle run
by Warren Buffett, and the Kuwait Investment Authority. Dow is reducing its
exposure to soaring commodity prices and moving towards more profitable
products such as paints, coatings and electronic materials.
Leisure
Northern Racing, the racecourse operator controlled by the Reuben
brothers and chaired by Michael Howard, the former Conservative Party
leader, has been appointed to run Ffos Las racecourse in Carmarthenshire
when it becomes Britain’s 61st racecourse next year.
Britain’s restaurants sector will start feeling the squeeze more
acutely unless it responds to the huge increase in competition from pubs and
invests in marketing and innovation, according to Horizons, the food service
consultancy.
Marriott International, the US hotel operator, reported strong
international growth in the second quarter but reduced its full-year revenue
per available room forecast on the back of a weak economic outlook in the
United States.
Media
Bertelsmann The European Court of Justice (ECJ) has rejected a lower
court’s refusal to clear the merger of the recorded music units of
Bertelsmann and Sony. The ECJ made its ruling after the lower court refused
to back the European Commission’s decision to approve the deal.
Wilmington Group, the information and training company, expects its
trading performance for the year to June 30 to be in line with the board’s
hopes and, reinforced by acquisitions, “significantly ahead” of the previous
year.
Yell, the publisher of Yellow Pages, has faced an investor revolt and
calls for its chief executive and chief operating officer to step down.
Senior executives have received bonuses worth 110 per cent of their
salaries, despite an 87 per cent plunge in its share price in the past year.
ITV, the commercial broadcaster, was bracing itself for a severe
decline in its autumn advertising revenues. Its advance deadline for
September advertising bookings passed yesterday and agencies said they
expected that ITV1 would face a 13 per cent drop. September acts as an early
barometer for how willing advertisers are to spend on promotion in the run
up to Christmas.
Natural
resources
Opec The oil and gas export revenue of Opec members rose by 12 per cent
to a record $730 billion (£369 billion) in 2007, according to its annual
statistical bulletin. Saudi Arabia, the world’s biggest oil exporter, earned
$206 billion last year from petroleum exports, a rise of 9.6 per cent on
2006.
The International Energy Agency said that high prices for diesel fuel
will continue during the summer and may begin to ease only next year. It
also gave warning of continuing tightness in the world’s refining markets.
Rio Tinto, the Anglo-Australian mining group, has agreed to sell the
Kintyre uranium project in Western Australia to a joint venture consortium
comprising subsidiaries of Cameco and Mitsubishi for $495 million (£250
million).
International Ferro Metals, the London-listed ferrochrome producer,
said that for the three months to June 30 its ferrochrome production rose by
16 per cent to 60,698 tonnes, against the March quarter, boosted by
recovering chrome from the slag stockpile, and added that ferrochrome sales
jumped by 57 per cent to 89,091 tonnes, from 56,905 tonnes in the previous
quarter.
Salamander Energy, the London-listed oil and gas explorer that is
focused on South-East Asia, has agreed to acquire interests in certain
Indonesian assets from Serica Energy for $52.75 million.
Soco International, the London-listed oil and gas explorer, said that a
drill test on Te Giac Den discovery well on Prospect “E” in Vietnam has
recovered black oil, condensate and gas, with qualities similar to that of
the Ca Nu Vang Field, which will begin production later this month.
Retailing
Primark, the budget fashion chain, reported third-quarter sales up 14
per cent, despite weak trading in April. But the company, owned by
Associated British Foods, said that like-for-like sales were only “broadly
flat” in the 16 weeks to June 21, compared with year-on-year growth of 4 per
cent in March.
Sports Direct, the sportswear chain, said full-year underlying pre-tax
profits fell 51.1 per cent to £85 million, in its first full year on the
stock market, as it cut margins to boost sales. It added that it had
suffered from poor weather and the England football team’s failure to
qualify for Euro 2008.
Support
services
Experian, the credit check provider, told investors not to expect a
fast recovery in the financial services sectors in Britain and America, but
said that business in emerging markets had increased its turnover in the
first quarter.
SIG, the supplier of insulation and specialist construction products in
Europe, said half-year trading has been solid, adding that it expects
underlying profits before tax to be not less than £68 million, an increase
of £6 million from last time.
EcoSecurities Group, the carbon credits group based in Dublin, said
that it may report a shortfall in its full-year profits because of the slow
registration of new projects that will create carbon emissions reductions.
Hays, the recruitment group, said that the number of permanent job
placements in the City had fallen by 20 per cent in the past three months
and that for the first time in five years temporary appointments across the
UK were outstripping permanent posts.
Technology
NCipher, the encryption software company, confirmed that it is in late
stage discussions with a third party which may lead to an offer being made
for the company.
Craneware, the revenue management software maker, said it is confident
that its full-year results will be in line with expectations.
Computacenter, the computer services group based in Cambridge, said
first-half pre-tax profits are expected to be lower than in the previous
year but, thanks to share buybacks and an improved tax position, earnings
per share will show an improvement.
Xerox Chuck Prince, former chairman and chief executive of Citigroup,
the US investment bank, has joined the board of Xerox, the digital printing
group. Mr Prince resigned from Citigroup in November 2007 after large losses
on sub-prime mortgage investments.
Telecoms
Nokia said that nine more leading technology groups have given their
backing to the Symbian Foundation, the mobile phone software alliance,
dealing a blow to competing handset software providers such as Microsoft,
Google and Apple. The not-for- profit organisation has been set up by Nokia
and others in a bid to create an open-source platform with industry-wide
appeal.
Transport
FirstGroup, the London-listed bus and train operator based in Aberdeen,
said it has made a good start to the year and trading was in line with its
expectations. It added that it is 100 per cent hedged for its UK fuel
requirement at $76 per barrel and for North America at $84 per barrel for
2008-09.
Utilities
National Grid, the gas and electricity utility, said that the
Government will not meet its renewable energy generation targets without
widespread regulatory planning reforms.
