Economics
Repossessions of homes by lenders leapt to 18,900 in the first half of
the year, up 48 per cent on 2007’s first half, the Council of Mortgage
Lenders reported. Its data also showed a rise of a fifth in mortgage
borrowers in arrears for more than three months.
Eurozone banks and financial institutions further tightened lending
conditions for businesses and households in the 15-nation bloc during the
second quarter, while demand for loans declined, according to a European
Central Bank study that heightened anxiety over the economic outlook in the
single currency area.
Italy’s economy shrank in the second quarter by 0.3 per cent,
according to official figures that stoked expectations that Italy has slid
into the grip of recession.
US businesses boosted their productivity in the second quarter by
cutting jobs to cope with rising costs. Productivity gauged by output per
employee rose at a 2.2 per cent annual rate in the second quarter, down only
a little from the 2.6 per cent rate in the previous three months.
The dollar leapt, extending its biggest 24-hour rally against the euro
since 1999, as markets rethought competing US and eurozone economic
prospects. The euro slid 1.8 per cent to five-month lows just above $1.50,
to be almost ten cents below its record high of $1.6028, set less than a
month ago. It lost nearly five cents in 24 hours. The pound also tumbled,
down by 2.8 cents to 17-month lows below $1.92, to close in London at
$1.9159.
Oil prices sank further from last year’s record highs above $147 a
barrel. Benchmark US light crude fell by $2.11 to $117.91 while benchmark
North Sea Brent crude fell $1.84 to $116.02.
Banking
& finance
Royal Bank of Scotland has reported a pre-tax loss of almost £700
million for the first half, after writing down £5.9 billion on investments
hit by the credit crunch.
Schroders, the asset manager, reported a fall of 26 per cent in pre-tax
profits for the six months to June 30, after writing down seed capital and
fixed-income investments.
Catlin, the insurer, said that its first-half profit fell by 21 per
cent to $150 million (£78 million) after investment returns weakened.
Warren Buffett’s Berkshire Hathaway said second-quarter profits fell 8
per cent, hurt by losses tied to derivatives contracts and reflecting lower
insurance premiums.
UBS is spending $22 billion buying back bonds it sold to clients such
as the state of New York and which investors have been unable to sell amid
the credit crisis.
Construction
& property
Equest Balkan Properties said that it secured a €15 million (£11.7
million) corporate debt facility on July 16, which has now been fully drawn
down. The property investment company said that the financing with
Raiffeisen Zentral-bank Österreich has a seven-month term and has been
agreed at normal market rates. It will be used for general financing and to
fund some of the company’s late-stage developments.
Consumer
goods
British American Tobacco’s shares fell by as much as 5 per cent after
the company said that it was seeking a secondary listing on the South
African stock exchange. BAT fell 49p to £18.27 before recovering after
Richemont, the luxury goods company, and Remgro, the investment group, which
are controlled by South Africa’s Rupert family, said they would spin off a
total 27 per cent of BAT to shareholders. The shake-up is driven by tax law
changes in Luxembourg. Traders felt that it cut the likelihood of a
takeover.
Carr’s Milling Industries said that it had raised its forecast
for the year to August, with pre-tax profits expected to exceed £9.2
million, up from £5.5 million a year earlier. In a statement, the
agriculture, food and engineering group said that it expected revenues of at
least £330 million, against £253 million last year.
Engineering
General Motors and Deloitte, the accounting firm, have agreed to pay a
combined $303 million (£157 million) to Deka, a German investment fund, to
settle a class-action lawsuit. General Motors will pay $277 million and
Deloitte $26 million to settle a lawsuit that accused the carmaker of
misstating its financial results.
Boeing and Airbus are facing a slowdown on their assembly lines for
older aircraft models because of a shortage of basic components such as
seats, lavatories and galleys, according to press reports.
Health
Galapagos, the Belgian biotechnology company, reported a rise of 30 per
cent in first-half sales and stuck to its full-year targets. The company,
which specialises in treatments for bone and joint diseases, said that
revenue had totalled €33.6 million (£26.3 million).
Industrials
Avon Rubber said that delays in the award of a multiyear government
contract to its US-based engineered fabrications business would reduce
revenues this financial year. However, the company said that it remains
confident that this contract will be in place for 2009. Higher levels of
inquiries and orders experienced by Avon-ISI towards the end of the first
half have not been maintained amid aggressive pricing by competitors.
Leisure
Bookmakers, including William Hill and Ladbrokes, lost their case
against Turf TV, the televised racing supplier, when a High Court judge
ruled that its shareholders — Alphameric and 31 racecourses — had not
contravened competition law in setting up the service.
InterContinental Hotels Group announced that Stevan Porter, 53,
president of its Americas region, has died after a short illness.
Starbucks, the American coffee shop giant, surprised the market by
announcing the resignation of Phil Broad, its managing director for the UK
and the Irish Republic. He has been replaced by Darcy Willson-Rymer,
previously vice-president of Starbucks Europe, Middle East and Africa.
Media
Reed Elsevier is due to close the first round of bidding for its £1
billion-plus Reed Business Information unit on Monday. Offers for the trade
magazine division, whose titles include New Scientist and Variety, are
expected from a consortium led by Cinven, the private equity group. A
consortium led by Apollo and Bain Capital is also thought to be interested.
The broadcasters ITV, Channel 4 and the BBC’s commercial arm may have
to wait until next year to find out whether their Kangaroo internet
television joint venture is allowed to go ahead.
Global Radio will be allowed to own five radio stations in London after
an Office of Fair Trading ruling that will allow one company to control half
the capital’s radio advertising market.
Dori Media Group, the production company, said that it had signed an
extension agreement with the Israeli cable platform HOT to continue to carry
its Telenovela television channels VIVA and VIVA Platina. The current
agreements for both channels will be extended for three years, with effect
from January 1, 2009.
Natural
resources
TNK-BP’s chief executive, Robert Dudley, avoided a possible three-year
ban from doing his job when a Moscow court said that the head of BP’s
troubled Russian 50-50 joint venture had broken Russia’s labour code. Mr
Dudley is managing TNK-BP from abroad after leaving Russia amid a dispute
between BP and four Russian billionaires, who own the other half of Russia’s
third-largest oil producer. Mr Dudley was fined 500 roubles (£10.80), a
court official said.
BG Group has made a new oil discovery in the pre-salt Santos Basin, off
Brazil, the third from the BM-S-11 concession area. The discovery at the
Iara well comes after finds at the Tupi well and the Tupi Sul well, both in
BM-S-11, since October 2006. BG said that this latest well was still being
drilled to evaluate deeper targets.
Berkeley Resources announced an initial inferred resource estimate of
9.23 million pounds of uranium oxide (U308), for the Gambuta uranium deposit
in Spain’s Ceres province. The gold and uranium mining exploration company
said that drilling had stopped during the fire season. The group expects
drilling to resume in early October.
Global Energy Development said that the test result for the Tilodiran 3
well within the Colombian Rio Verde contract was successful. The Latin
America- focused petroleum exploration company said that the successful test
result came after recent successful testing of the Ubaque formation within
the well, which tested at a stabilised natural flow rate of 322 barrels of
oil per day with a trace of water, reflecting the Ubaque formation being
found structurally higher at this location.
Retailing
MFI’s chief executive, Guy Favell, has broken cover and insisted that
the struggling furniture retailer was not at risk of collapsing into
administration. The comments come a month after The Times revealed that
Kroll, the corporate restructuring specialist, had been appointed by the
group.
John Lewis delivered a rare piece of good news for the high street by
revealing a “very welcome” sales revival. The department store chain said
that sales rose by 3.7 per cent last week after an 18 per cent jump on
Saturday, August 2.
Debenhams has pledged to give £100 to every couple affected by the
collapse of Wrapit, the online wedding gift service, if they agreed to spend
£500 or more on completing their lists in one of the group’s stores. Up to
3,000 couples were hit when Wrapit went into administration on Monday.
Vente-privee.com, one of Europe’s biggest retail websites, is coming to
the UK. The French-owned business sells more than 500 designer brands,
ranging from cars to wine, and is expected to generate almost £400 million
of turnover this year.
Gap, the American clothing group, suffered an 11 per cent fall in
like-for-like sales for the four weeks to August 2 as it cleared stocks
ahead of autumn. International sales, including the UK, were down by 9 per
cent.
Stanley Gibbons, the stamps and memorabilia dealer, said that it
believed that the “all-consuming passion” of collectors would continue to
insulate it from the economic slump and attract investors from other falling
classes of assets.
Support
services
Payzone confirmed speculation by saying that it had received a number
of approaches for its Spanish, Italian and French businesses, and that it
was evaluating prospects for shareholders. The Irish electronic payments
company said that a further announcement would be made when appropriate.
Technology
CryptoLogic, the online gambling software company, has signed a deal to
license its casino games to BSkyB for the SkyVegas.com site. The company
also announced a separate deal with The Poker Channel. However, it reported
a second-quarter loss because of higher expenses.
Blinkx, the video search engine provider, said that it planned to buy
Miva, the US-based digital media company.
Telecoms
Tiscali, putting it in danger of being overtaken by BSkyB as the
fourth- largest provider in the UK. The group now has 1,838,000 customers.
By comparison BSkyB added 200,000 customers, giving it a total of 1,628,000.
Tiscali cut sales and profit forecasts for the year.
Transport
Network Rail faces fresh strike action. About 12,000 rail maintenance
workers are to start a four-day strike next week in a long dispute over pay
and conditions, the RMT union said yesterday. The Network Rail workers, who
have already held strikes at weekends, now plan to stop work next Friday
until the following Tuesday. Bob Crow, the general secretary of the RMT,
said: “RMT members have shown the company how they feel by delivering two
weekends of rock-solid strike action.”
Utilities
Two wind farms with capacity to power more than 200,000 homes have been
approved by the Government, although the approvals are subject to developers
making sure that the projects do not interfere with defence radar in their
areas. The 315 megawatt (MW) Sheringham Shoal offshore wind farm in Norfolk
and RWE’s 75 MW onshore wind farm in Northumberland were both given the
conditional approval.
