Economics
Eurozone output shrank in the three months to June for the first time
since the single currency was introduced in 1999. GDP fell by 0.2 per cent,
after a 0.7 per cent rise in the first quarter. Annual growth slowed from
2.1 per cent to 1.5 per cent.
Eurozone inflation remained at a record high of 4 per cent during July,
official figures showed. This was revised down slightly from an initial
estimate of 4.1 per cent.
Germany’s economy reported a 0.5 per cent fall in output between
April and June, down from a rise of 1.3 per cent in the first quarter. The
fall was less severe than the 0.8 per cent decline that economists had
expected.
French GDP France, the second-biggest economy in the eurozone, reported
a 0.3 per cent fall in GDP in the second quarter, far below economists’
forecasts for a 0.2 per cent rise. GDP rose by 0.5 per cent during the first
three months of the year.
US inflation rose by 0.8 per cent to 5.6 per cent during July, the
highest level since 1991. Core prices, which strip out volatile energy and
food costs, rose in July by 0.3 per cent from June, official figures showed.
US foreclosures The number of American households sinking into the
foreclosure process rose by 55 per cent in July with 272,000 receiving a
notice of default or its equivalent. One in every 464 US households faces
the risk of losing its home, according to RealtyTrac, the property market
research group.
Banking
& finance
Amlin, the specialist non-life insurance company, said that it had
bought a minority shareholding in TL Dallas Group, the independent UK
broker, with a view to developing its existing business relationships with
selected UK retail and wholesale brokers.
Daniel Stewart Securities, the small-cap stockbroker. said that its
full-year pre-tax loss had narrowed to £2 million, compared with a loss of
£5.4 million last time, but added that the difficult trading conditions in
the second half were likely to continue.
Vestra, the start-up accused of attempting to hijack the UK wealth
management arm of UBS, suffered a further blow after one of those leading
the move decided to stay with the Swiss bank. The about turn by David Guild,
one of UBS’s senior private bankers in the UK, comes little more than a week
after the Swiss bank won a High Court injunction barring Vestra from
approaching its staff or clients.
Merrill Lynch Andrew Cuomo, New York’s attorney-general, said that
Merrill Lynch’s offer to buy back about $10 billion of auction-rate
securities (ARS) from clients was insufficient and “not the solution we
think is necessary”.
Construction
& property
British Land is delaying starting to build the high-profile
“Cheesegrater” tower in the City in the hope of launching the skyscraper in
time for the peak of the next commercial property cycle. The UK’s
second-biggest property company expects that the building will now be
completed by 2012, a year later than originally planned, but is reluctant to
commit itself to a firm date.
Bellway, the Newcastle housebuilder, added more gloom to the housing
market as it announced that reservations had fallen by about 45 per cent for
the second half of the financial year, compared with the same period in
2007. It added that completed sales had fallen by 14.2 per cent on last year
as lenders restricted their finance to home buyers.
Goodman, the international property group, has formed a public private
partnership with the UK Atomic Energy Authority and the Science and
Technology Facilities Council that will see the Harwell Science and
Innovation Campus develop into one of the world’s principal locations for
scientific, academic and business collaboration. The partnership will run
the Oxfordshire campus in a joint venture, which should create about 5,000
jobs.
Consumer
goods
InBev, the brewing group, met expectations with flat second-quarter
earnings and, despite higher raw material costs, reiterated that it expected
a better second half. Weakness in Europe and Asia offset stronger profits
from North America and Latin America for the Stella Artois and Brahma
brewer, which is looking to complete the purchase of Anheuser-Busch for $52
billion (£27.7 billion) by the end of the year. Its volumes in the UK were
down by 4.1 per cent compared with last year but ahead of the industry,
resulting in higher market share.
Engineering
Enodis, the kitchen equipment maker, said that its overall expectations
for the current year remained unchanged. It also gave an update on the
328p-a-share offer from Manitowoc, which was approved by Enodis shareholders
on August 4.
Health
Abbott Laboratories, the US pharmaceuticals group, said that it would
help to promote Crestor, AstraZeneca’s cholesterol treatment, in the United
States, expanding a partnership between the two drug makers.
Industrials
ThyssenKrupp, the German steel group, said that it had raised its
full-year guidance for pretax profits before one-offs to above €3.2 billion
(£2.5 billion) after reporting third-quarter profits that beat market
expectations.
Leisure
TUI Travel, Europe’s biggest travel company, reported a 39 per cent
jump in third-quarter profits and dismissed suggestions of a shift to
stay-at-home holidays because of the consumer downturn and the strength of
the euro as “a myth”. The company was formed through last year’s merger of
TUI, the German parent company of Thomson Holidays, and Britain’s First
Choice.
Overseas visitors to the UK fell by 5 per cent to 8.1 million during
April to June, according to the Office for National Statistics, while the
number of visits made abroad by Britons fell by 1 per cent to 17.7 million.
Harrah’s Entertainment Apollo Management, the private equity
group, said that it had written down its investment in Harrah’s, the US
casino company, by more than 20 per cent. It had acquired the group in
January for $27.8 billion (£14.8 billion) in tandem with TPG Capital. The
announcement implies a combined writedown of $600 million.
Belgo Group Timothy Power, a former senior executive of Belgo Group, is
to stand trial on insider dealing charges over the takeover of the
restaurant chain in 1997. Mr Power denies four counts of insider trading
during the £9.8 million sale of Belgo to Lonsdale Holdings.
Media
Galleon Holdings, the AIM- listed entertainment company that is focused
on emerging markets, said that it had signed an agreement with MMTV, the
Chinese national digital TV broadcaster, to co-produce a series of Galleon’s
Play Along Gameshows. The company said that Phoenix, its Chinese operation,
would work with MMTV to produce the interactive programmes, which are
expected to launch next month.
Natural
resources
Oilexco, the Canadian exploration group, reported a second- quarter net
loss of $27.3 million (£14.5 million), compared with a net profit of $25.7
million last time, mainly because of non-cash expenses for unrealised losses
recognised on derivative contracts. It added that sales had risen to $228.5
million, from $40.7 million a year earlier.
Antrim Energy, the Canadian oil and gas exploration company, said that
it had tested the 21/28a-10z well on the Fyne Field in the UK Central North
Sea at rates of up to 4,000 barrels of oil per day and added that it was
confident about proceeding with a field development plan for the area.
Central China Goldfields, the London-listed mineral exploration group,
said that it had intersected further copper mineralisation at the Gangjiang
exploration licence area of the Nimu copper-molybdenum project.
The International Energy Agency, the intergovernmental organisation
based in Paris, said that demand for oil in the economies of the
Organisation of Economic Co-operation and Development countries was set to
average 48.6 million barrels per day this year, a decline of 1.3 per cent or
620,000 barrels from 49.2 million in 2007. This represents the largest fall
since 1983, when OECD demand fell by 684,000 barrels per day in the wake of
the Iranian revolution.
BP and its Russian co-owners in TNK-BP are set to meet next month in an
effort to resolve their feud over the group’s management and to consider a
partial flotation. News of the meeting emerged after a Moscow court banned
Bob Dudley, the joint venture’s chief executive, from working in Russia for
two years. TNK-BP is Russia’s third-biggest producer of crude oil.
Retailing
Asda and Tesco, Britain’s two biggest supermarket groups, have
announced a new round of price cuts with Asda pledging to reduce the price
of a pint of milk to 25p this weekend — the lowest since 2001 — and Tesco
vowing to reduce the cost of 18,000 products in its stores.
Wal-Mart, the US retailing group, reported better than expected
quarterly profits and raised its full-year targets as Americans tried to
make their dollars stretch farther. Profits during the three months to July
31 rose by 17 per cent to $3.45 billion (£1.8 billion).
J Sainsbury, the supermarket chain, is launching its range of TU
homewares to a further six superstores before a relaunch of its non-food
business. The 1,700- strong product range includes bed linen, towels and
cushions.
Support
services
PayPoint, the London-listed group based in Hertfordshire, which owns a
network of household bill payment and mobile top-up centres, said that its
earnings in the four months from the end of March to the end of July were in
line with market expectations, adding that its revenues for the period were
up by 11 per cent to £71 million, compared with last year. The company said
that its bill and general payments in UK were running ahead of expectations,
although there had been a delay in the introduction of bill payment services
in Romania.
Technology
Playtech, the online gaming specialist, said that it had acquired
MIXTV, a subsidiary of Win Gaming Media, for $1.75 million (£933,000). It
added that it had also signed a licence and service agreement with Win
Gaming Media, a service provider for key players in the gaming arena.
Psion, the computer group, reported slightly lower first-half pre-tax
profits, although revenues rose by about 10.3 per cent, but added that it
saw a satisfactory full-year performance — subject to global economic
conditions.
Phoenix IT Group, the technology services provider, said that it
remained confident in its growth prospects because of its strong market
position and added that its first-quarter results were in line with board
expectations.
Telecoms
Virgin Mobile USA, the US telecoms group, said that its second-quarter
profits had fallen by 50 per cent and its revenues had declined because of
slower customer growth and weaker mobile phone usage.
Vodafone, the mobile phone operator, said that its $900 million (£480
million) bid to buy a majority stake in the state-owned Ghana Telecom had
been approved by the Ghanaian Parliament, despite opposition parties
claiming that the price was too low.
Manx Telecom workers on the Isle of Man said that they would stage a
24-hour strike next week in protest at a below-inflation pay offer of 4.1
per cent.
Transport
British Airways and American Airlines have applied to regulators in the
United States and Europe for antitrust immunity that will permit them to
combine their route networks, pricing, sales, marketing and purchasing
power. Iberia, the Spanish airline, Finnair and Royal Jordanian are also
included in the submission but are secondary players in the alliance. All
five carriers are members of oneworld, the marketing group that allows
airlines to sell connecting flights offered by other members.
Utilities
RWE, the German utilities group, said that its first-half operating
profits had fallen by 8 per cent to €3.9 billion (£3.1 billion) because
trading results had declined from last time. Adjusted net profits had fallen
by 4 per cent to €2.1 billion, hit by a €634 million writedown on its
American Water unit booked in the first quarter.
