Economics
House prices in England and Wales fell by a further 1 per cent last
month, according to official figures from the Land Registry, based on
completed sales of homes. The further decline in average prices cut the
annual pace of increase to a meagre 0.1 per cent.
Currency trading London extended its lead as the dominant global centre
for foreign exchange dealing in the opening months of this year, stealing a
march on New York, surveys released by the Bank of England and the New York
Federal Reserve showed. Average daily turnover in its currency markets in
April leapt by 54 per cent from levels a year earlier, to $1.82 trillion
(£912 billion). New York’s average volumes rose by only 15.7 per cent.
US budget The deficit is set to climb to a record of $490 billion next
year as the American economic outlook deteriorates, White House sources have
indicated in advance leaks of official forecasts. The new projected level of
US Government borrowing is drastically up from the $407 billion forecast by
President Bush as recently as February, although the White House is
continuing to predict a return to a $60 billion surplus by 2012.
Global financial conditions Persistent stresses in global financial
markets and still-mounting losses for banks on both sides of the Atlantic
threaten to aggravate the worldwide economic downturn, the International
Monetary Fund said.
World trade A collision between the US and two emerging market giants,
China and India, is threatening to unravel a tentative framework agreement
at the world trade talks in Geneva. A row has erupted over American
ambitions to secure more access to emerging markets for cotton and soya
beans, two important American export crops.
Spanish housing Official data showed that only 50,161 homes were sold
in May, a 34.3 per cent drop compared with the same month last year and a
10.1 per cent fall on April. The Spanish market is sensitive to rate rises
as only 10 per cent of home owners have fixed-rate mortgages.
Banking
& finance
Royal Bank of Scotland Tesco has bought out Royal Bank of Scotland’s
half-share of Tesco Personal Finance, their 11-year-old insurance-to-savings
joint venture, for £950 million.
Insider trading The Financial Services Authority is continuing its
crackdown on insider trading, instigating its third criminal prosecution
this year. It has charged Matthew Uberoi and Neel Uberoi with 17 counts of
insider dealing in an indictment filed at the City of Westminster
Magistrates’ Court.
JPMorgan Cazenove Naguib Kheraj, the former Barclays finance director,
has been named chief executive of JPMorgan Cazenove, in an attempt to
squeeze greater synergies out of the joint venture between the Wall Street
giant and the British investment bank.
Merrill Lynch plans to raise $8.5 billion (£4.26 billion) by issuing
new shares, including $3.4 billion in stock bought by Temasek Holdings. It
expects to take a further $5.7 billion pre-tax write-down in the third
quarter.
Mortgage agency Sir James Crosby, the former chairman of HBOS, is
expected to reject any suggestion that Britain set up a mortgage agency
similar to Fannie Mae and Freddie Mac, the troubled US institutions.
Kohlberg Kravis Roberts, the buyout firm, posted a $117 million
first-quarter loss, compared with a $346 million profit the year before, as
the value of its investments was dragged down by stock market woes.
Barclays is facing a €170 million (£134 million) legal action from a
bank in San Marino that claims it suffered losses on an investment in highly
geared credit securities put together by Barclays.
Construction
& property
Keller, the construction group, said that profit before tax from
continuing operations had risen by 19 per cent to £54.2 million in the six
months to June 30. It said that full-year results would be broadly in line
with 2007 as weak residential markets in Britain, the United States and
Spain were offset by growth in Australia, the Middle East and Eastern
Europe.
Consumer
goods
Reckitt Benckiser Strong sales of Airwick lavatory freshener, Nurofen
painkillers and Lysol disinfectant helped the world’s biggest manufacturer
of household cleaning products to report an 18 per cent rise in profits.
Pre-tax profits for the first half rose to £581 million, up from £494
million last year, while revenues rose to £3.07 billion.
Northern Foods, which makes sandwiches and ready meals, announced a
price rise and said that it would continue to pass on rising fuel and
commodity prices to consumers. Northern said that its total first-quarter
revenues for the 13 weeks to June 28 were 7.6 per cent up on the same period
last year, with underlying sales 3.5 per cent higher.
Unilever, the consumer goods giant, has agreed to sell its laundry
business in the US, Canada and Puerto Rico to Vestar Capital Partners, a
private equity firm, for $1.45 billion (£727 million). Included in the deal
are brands such as Surf and Sunlight, the fabric cleaning products.
Kraft Foods, the largest food producer in North America, announced
higher than expected quarterly profits as price increases offset rising
energy and commodity costs.
Mars The European Commission has approved the proposed $23 billion
(£11.5 billion) merger between the US-based confectionery company and
Wrigley. Mars will acquire a controlling equity interest of 80.7 per cent in
Wrigley.
Hornby, the airfix models and Corgi toymaker, said that there had been
higher orders between April and June despite a challenging retail
environment. The Kent-based company was experiencing “good demand” for its
products.
Cranswick, the supermarket food manufacturer, announced a 13 per cent
increase in like-for-like first quarter sales to £161 million. The
Hull-based company has increased selling prices to offset the impact of
higher costs.
Engineering
BAE Systems, Europe’s biggest defence contractor, has made a £538
million offer for Detica Group, the data security firm. BAE said that the
440p-per-share acquisition, which includes assumed net debt, will help it to
develop its security business.
Siemens A German court gave a former Siemens executive a fine of nearly
$170,000 (£85,254) and a two-year suspended prison sentence for his role in
setting up slush funds to win contracts.
Health
Novartis, the Swiss pharmaceutical giant, said that it had filed a
lawsuit in America against Teva, the Israeli generic drugmaker, over patents
for two medications to treat bone diseases.
Industrials
Severstal, Russia’s largest steelmaker, raised crude steel output by 12
per cent to 10.1 million tonnes in the first six months of 2008, helped by
US acquisitions and higher prices. The company sold hot-rolled strip and
plate at an average $760 (£380) per tonne, 28 per cent more than a year ago.
Leisure
Cains, the Liverpool brewery rescued from collapse six years ago by the
Dusanj brothers, is fighting for survival once again after a sharp drop-off
in trading. The financial crisis has been precipitated by a rise in
half-year losses from £2.7 million to £4.5 million.
Marston’s, the Midlands brewer and pub operator, reported a 0.5
per cent increase in like-for-like sales in its managed pubs in the 13 weeks
to July 26, compared with a 0.6 per cent decline in the first 43 weeks of
the year.
Sportingbet, the online gaming group, said that one of the two
employees detained by the Turkish authorities in May, related to Superbahis,
its Turkish business, had been denied bail and continued to be held in
custody.
Media
Informa, the British publishing and events group, said that trading
continued to be strong after reporting first-half pre-tax profits and
revenues slightly ahead of forecasts. The company also said that bid talks
with private equity suitors were continuing.
Pearson, the world’s largest educational publisher, has said that it is
more confident in its full-year outlook after operating profit increased by
38 per cent and sales by 14 per cent in the first half.
GfK, the market research company, said that discussions in relation to
a possible offer for Taylor Nelson Sofres are progressing “positively” but
did not provide details. It also reiterated that “no assurance can be given
that an offer will be made”.
Wilmington, the publishing and training company, said that it had
received a preliminary takeover approach. Shares in the London-based
business rose as much as 19 per cent.
Natural
resources
BP is expected to announce record quarterly profits of more than £3.5
billion today, but the announcement is likely to be overshadowed by the
battle for control of TNK-BP, the oil group’s Russian joint venture.
Cape Lambert, the iron ore company, said that shareholders had agreed
to the sale of its iron ore project in Western Australia to China
Metallurgical Corp. Shares fell because investors view a takeover by main
shareholder, Russia’s Evraz Group, as unlikely.
Soco International with its partners Petrovietnam and PTTEP Hoan-Vu
said the Ca Ngu Vang Field (CNV) in Vietnam produced the first flow of crude
oil and wet gas on July 25.
Retailing
Beds Direct, the independent bed retailer, has been bought by its
previous management after falling into administration. The new company will
be called Helibeds and will operate from 20 sites as well as the internet.
Support
services
Compass, the world’s biggest catering company, said that it had a
strong third quarter and was confident about the full year, as operating
profits were well ahead of those in the same quarter last year.
WSP Group, the design, engineering and management company, reported a
43 per cent rise in first-half pre-tax profits before special items and said
that it was confident that its performance would continue in line with
expectations.
Technology
Filtronic, the wireless communications and electronic defence equipment
company, announced a full-year pre-tax loss of £14.86 million after a profit
of £344,000 in 2006-07.
Telecoms
Mobile phones The failure of operators to explain the cost of accessing
the internet on mobile phones in simple terms has thwarted the growth of a
new market, research from the Mobile Data Association has found.
Verizon, the communications company, said that quarterly profit had
risen on strong wireless sales, which helped it to offset a fall in landline
users. Its second-quarter earnings rose from $1.68 billion (£842 million) to
$1.88 billion.
Transport
Ryanair, Europe’s biggest budget airline, reported first-quarter net
profit of ¤118 million a year earlier. The airline blamed the drop on rising
fuel prices and Michael O Leary, its chief executive, said its fuel bill had
risen by nearly 100 per cent.
Qantas has announced a new chief executive as investigations continue
into the cause of an explosion on one of its 747s. Alan Joyce, the head of
Jetstar, the airline’s budget service, will replace Geoff Dixon, who is to
step down in November.
Utilities
National Grid said that its business performance from April 1 to July
25 had been good, adding that trading was in line with expectations. The
grid operator added that its outlook for 2008-09 was also in line with
expectations and that its financial position remained strong.
