Economics
The Bank of England is expected to hold interest rates at 5 per cent on
Thursday.
Services sector The purchasing managers’ index for the services sector,
due out tomorrow, is tipped to show that activity fell in July to 46.7, from
47.1 in June. Any figure below 50 indicates contraction.
Industrial production figures due out tomorrow are tipped to show that
industrial production rose by 0.2 per cent in June, after a 0.8 per cent
fall in May. This will take the annual fall to 1.2 per cent, from 1.6 per
cent in May. Manufacturing production is expected to have risen by 0.1 per
cent in June, after a 0.5 per cent fall in May, reducing the annual decline
from 0.8 per cent to 0.6 per cent.
Eurozone producer prices are expected to have risen again in June. The
producer price inflation index, due out today, is tipped to show a 0.9 per
cent rise, after a 1.2 per cent increase in May. This will lift the annual
rise to 7.9 per cent, from 7.1 per cent in May.
Eurozone retail sales are tipped to have fallen in July. Data due out
tomorrow are expected to show that sales fell by 0.6 per cent, after a 1.2
per cent rise in June.
German industrial orders, in data due out on Wednesday, are tipped to
have risen 0.3 per cent in June, after falling 0.9 per cent in May.
Industrial production data, due out on Thursday, are tipped to show a rise
of 1.9 per cent in June, after a 2.4 per cent fall in May, keeping the
annual rate of growth at 0.8 per cent.
Eurozone interest rates The European Central Bank is forecast to keep
interest rates on hold at 4.25 per cent on Thursday.
The US Federal Reserve is expected to hold US interest rates at 2 per
cent tomorrow.
US house sales Figures due out on Thursday are tipped to show that US
pending home sales fell by 1 per cent in June, after a 4.7 per cent decline
in May.
US consumer spending is tipped to have risen in June when data are
released today. Personal spending is expected to have risen by 0.5 per cent,
after a 0.8 per cent increase in May, while personal income is tipped to
have fallen by 0.2 per cent, after a 1.9 per cent increase in May.
US non-farm productivity is expected to have risen during the second
quarter. Data due out on Friday are tipped to show that productivity rose by
2.6 per cent, the same as in the first quarter.
Banking
& finance
Korea Exchange Bank HSBC, the banking group, said it stood firm on a
deal to buy a 51 per cent stake in Korea Exchange Bank, after a deadline for
approval from Korea’s Financial Services Commission passed last week. HSBC
agreed to buy the stake, valued at $6.3 billion (£3.2 billion), from Lone
Star, the US private equity group, last September.
Standard & Poor’s, the ratings agency, said that defaults on
US corporate junk bonds could quadruple in the next year as a decline in the
economy hits companies’ ability to repay debts.
Northern Rock will reportedly reveal this week that about a fifth of
its mortgage customers will face negative equity next year as it unveils a
substantial loss for the six months to June. Further falls in house prices
are expected in the months ahead.
HBOS, Britain’s biggest home lender, said that it was selling a £400
million portfolio of investments in British private companies. It has asked
UBS, the bank, to raise a fund from private investors to acquire parts of
HBOS’s stakes in companies such as Keepmoat, the housing renovator.
Carbon tax Gordon Brown has intervened in the controversy over soaring
fuel costs by proposing a £500 million carbon tax on energy companies to
help families with gas and electricity bills.
Construction
& property
Hammerson, the European property group, will report its half-year
results on Thursday amid a difficult backdrop for the commercial property
sector. Prices have been on the slide this year as the credit crunch hits
the market.
Helical Bar, the quoted commercial property company, is in exploratory
talks with the Norwegian sovereign wealth fund that could lead to a takeover
of the company. The Norwegians have a war chest worth more than £200 billion
thanks to the country’s oil and gas industry. (The Observer)
Metrovacesa Goldman Sachs is understood to have been told to sell a
stake in the HSBC tower, the landmark skyscraper at Canary Wharf in London’s
Docklands, to help to pay off an £810 million loan on the building.
Metrovacesa, the Spanish property giant, racked up the debt when it took
over the building for £1.09 billion last year, believed to be the highest
price paid for a property in the UK.
Consumer
goods
Carlsberg, the Danish brewer, is expected to report tomorrow a 34 per
cent rise in first-half operating profits, boosted by its sales in Eastern
Europe.
United Biscuits, Britain’s biggest biscuit maker, slumped to a £24
million loss last year after rising commodity costs and expenses linked to
the company’s £1.6 billion private equity buyout hit the business. However,
revenues rose by 5.1 per cent to £1.1 billion thanks to strong growth in
some of its brands, such as Hula Hoops. (The Sunday Telegraph)
Engineering
Schneider Electric, the French engineering group, has raised its 2008
forecast and said that the group was continuing to shift its production base
to emerging countries where there was strong growth. The company’s shares
fell because of its cautious outlook for the sector.
Health
Elan The Irish pharmaceuticals company shares fell by half their value
while Biogen Idec, its partner, fell by a quarter as renewed safety concerns
called into question the future of Tysabri, their multiple sclerosis
treatment.
Industrials
ThyssenKrupp, the German steelmaker, has denied speculation that it is
interested in acquiring AK Steel Holding, its American peer, and said that
no talks were being held between the two companies.
Crown Paints Senior management of Crown Paints is close to completing a
buyout of the company for about £70 million. The deal is being led by Howard
Luft, the managing director, and backed by Endless Investments, the private
equity group that is thought to be taking a majority stake in the company.
(The Sunday Times)
Leisure
Ladbrokes, Britain’s biggest bookmaker, will report its interim figures
on Thursday after what is likely to have been a mixed half.
Media
ITV, the commercial broadcaster, has begun to consult staff over fresh
job losses as it prepares to outline deeper cost savings alongside lower
half-year profits on Wednesday. The move is after a review by the Boston
Consulting Group, drafted in to assess efficiency at its content and
commercial divisions. (The Sunday Times)
News International said that The Sun, Britain’s bestselling tabloid
newspaper, will cut its cover price today to 30p from 35p. News
International is the UK subsidiary of News Corporation, which is parent
company of The Times.
Time Warner has reportedly completed internal work needed to separate
its AOL unit’s dial-up- access business from its advertising and content
business. It is expected to announce developments this week.
Illegal downloads More people downloaded Radiohead’s In Rainbows album
from illegal websites than from the band’s site, where the customer decided
the price. A study by the MCPS-PRS Alliance, which represents music rights
holders, and Big Champagne, a media measurement company, found 2.3 million
people downloaded the album from illegal sites in the 25 days after its
release rather than from Inrainbows.com.
Natural
resources
Royal Dutch Shell is thought to have approached Origin Energy about
acquiring its coal-seam gas assets in a move that could scupper BG Group’s
A$13.8 billion (£6.5 billion) hostile bid for the Australian Energy company.
Shell yesterday refused to comment.
Imperial Energy Sinopec, the Chinese state-owned oil company, is
understood to have approached Imperial Energy about making a bid that could
trump an existing £1.3 billion offer for the London-listed energy group.
Royal Dutch Shell, the Anglo-Dutch oil group, has had initial talks
with Sibir Energy, a Russian-focused oil company, about a £1 billion asset
swap under which it could acquire a stake in its smaller rival. (The Sunday
Times)
Retailing
Peacocks, the discount clothing retailer, is in talks with banks over
refinancing its debt. The company, which put off an £800 million refinancing
deal at the end of last year because of the turmoil in the debt markets, is
looking again at a restructuring. (The Independent on Sunday)
Ikea, the Swedish furniture retailer, will launch a pre-paid mobile
phone service on Friday that it claims will be the cheapest in Britain at 9p
a minute for calls and 6p for text messages. It will use the T-Mobile
network.
Support
services
Securitas, the Swedish security group, will report its second-quarter
results on Thursday, with analysts expecting pre-tax profits to rise by 70
per cent.
Brakes Brothers, the UK’s biggest food distributor, has reportedly put
a 98p fuel levy on every delivery it makes as it grapples with rising costs.
Brakes was bought by Bain Capital, the US private equity group, for about
£658.5 million shortly before the credit crunch began.
Moneysupermarket.com, the price-comparison website, is cutting nearly
10 per cent of its workforce in the face of worsening market conditions. The
cuts are principally from its Mortgage 2000 subsidiary, which offers support
services to the home loans market. (The Independent on Sunday)
Technology
Fidessa, the London-listed financial technology group, will report its
interim results today after a strong first-quarter update. Analysts are
forecasting revenues of £82 million, aided by its acquisition of LatentZero
last year.
Yahoo! Jerry Yang, chief executive of Yahoo!, the US internet search
engine, and his board of directors may have been re-elected by shareholders
at Friday’s annual meeting, but they disappointed Wall Street by offering
few new ideas that could help to return the share price to above $33 — the
price offered by Microsoft, the software giant, only three months ago.
Telecoms
Nortel Networks, the American telecoms group, said that its quarterly
loss had tripled because of restructuring charges and currency exchange
losses, and its shares fell as it said that a tough American market was
choking wireless spending by carriers.
Transport
Lufthansa, the German airline, said that it expected to cancel about
130 flights today and will not resume its full flight schedule for two weeks
because of a strike held last week. Lufthansa usually runs about 2,000
flights per day.
Qantas Airways Australian civil aviation officials have announced an
unprecedented special review of Qantas Airways after three mid-air dramas in
the space of two weeks threatened to tarnish its safety record.
British Airways Willie Walsh, the chief executive of British Airways,
said there was no guarantee that flights that will be scrapped this winter
to reduce the airline’s fuel bill would restart next year. BA, which
announced on Friday that its first-quarter profits had plummeted by almost
90 per cent, said that it was reducing capacity by about 3 per cent during
the winter. (The Observer)
BAA, the airports operator, is facing a crunch week for its £7.1
billion refinancing. Bondholders in the group will vote tomorrow about
whether to accept a plan to shift their loans into a new credit structure.
(The Sunday Times)
Utilities
Enel, the Italian power company, reported a 66 per cent rise in
first-half core profits, above analysts’ forecasts, and raised its guidance
for 2008 and 2009.
British Energy The Government is expected to put pressure on EDF, the
French energy group, to table an improved offer to buy British Energy after
its £12 billion bid for the nuclear power group was snubbed by shareholders.
The Government has a 36 per cent stake in British Energy.
Share tips
The Sunday Telegraph: buy Reckitt Benckiser (consumer goods),
Shaftesbury (construction & property); hold Compass (support services)
The Mail on Sunday: hold Rexam (industrials)
