Economics
Interest rates The Bank of England is expected to keep interest rates
on hold at 5 per cent on Thursday.
Manufacturing activity in August on the purchasing managers’ index
(PMI), due out today, is expected to fall to 44.1, from 44.3 in July. Any
figure below 50 indicates contraction. Services activity is also tipped to
slow, with Wednesday’s PMI figures expected to be 47, down from 47.4 in
July.
House prices Halifax figures, due out this week, are tipped to show
that house prices fell by 1.8 per cent during August, after a 1.7 per cent
fall in July. This would take the annual fall in the average house price in
the three months to August to about 10.7 per cent.
Eurozone manufacturing activity in the purchasing managers’ index, due
out today, is tipped to confirm a reading of 47.5 for August. Revised
figures for the services PMI, due out on Wednesday, are expected to confirm
the initial estimate of 48.2.
Eurozone producer prices are tipped to have risen by 1.3 per cent in
July in figures due out tomorrow. This will take the annual rate of increase
to 9.1 per cent, up from 8 per cent in June.
Eurozone retail sales Figures due out on Wednesday are tipped to show
that eurozone retail sales fell by 0.1 per cent in July, after a drop of 0.6
per cent in June.
Eurozone GDP figures, due out on Wednesday, are expected to confirm
that the economy shrank by 0.2 per cent in the second quarter, taking the
annual growth rate to 1.5 per cent.
German industrial production Data due out on Friday are expected to
show that German industrial production fell by 0.3 per cent in July, after a
0.2 per cent increase in June, taking the annual growth to 0.9 per cent,
down from 1.6 per cent in June.
US factory orders Figures due out on Wednesday are expected to show
that US factory orders rose by 0.5 per cent in July, after a 1.7 per cent
rise in June.
US nonfarm payrolls Figures due out on Friday are predicted to show
that US nonfarm payrolls fell by 70,000 in August, after a 51,000 drop in
July. However, the unemployment rate is tipped to remain unchanged at 5.7
per cent.
Banking
& finance
Turquoise, the rival trading platform to the London Stock Exchange,
said that it was confident of beating forecasts that it would steal a 5 per
cent market share by Christmas. Today is the start of the first full week of
operation for the venture, owned by nine investment banks. to increase the
level of risk in their share portfolios.
Construction
& property
McCarthy & Stone, the beleaguered retirement housebuilder, is
expected to seal an £800 million refinancing deal next month. In June NM
Rothschild bankers were called in to help to restructure the company’s debt
in the wake of the crisis in the housebuilding sector. (The Independent on
Sunday)
Anglian Group has been taken over by a consortium of banks after the
Norwich-based double glazing company became overwhelmed by its debts. The
syndicate has taken majority control of Anglian with a debt-for-equity
package that has reduced its debts by £90 million. (The Sunday Times)
Consumer
goods
PPR, the French luxury goods group that owns Gucci, reported first-half
operating income of €742 million (£597.5 million), up from €599 million last
time, confirmed its full-year outlook and delivered a first-half operating
profit slightly above forecasts, helped by its acquisition of Puma, the
sportswear brand.
Engineering
WS Atkins, the engineering group, will give a trading update on
Wednesday, alongside its annual meeting, with investors keen to be reassured
that demand for its services is still as upbeat as it had suggested earlier.
General Motors, the carmaker, has engaged Merrill Lynch, the investment
bank, to review the future of its Strasbourg car component plant. The
factory, which employs 1,300 people, could be put up for auction as part of
a GM plan to raise $4 billion (£2.2 billion) from disposals. (The
Sunday Times)
Health
Novartis, the Swiss pharmaceuticals company, said it would take a $235
million (£129 million) impairment charge in the next quarter after deciding
to drop its development of a new antibiotic drug.
Industrials
Evraz, the Russian steelmaker, beat expectations with an 82 per cent
rise in first-half profits to $2.04 billion (£1.1 billion), exceeding the
$1.91 billion that had been forecast by analysts, and set its sights on
full-year revenue growth of more than 80 per cent, thanks to international
acquisitions and high steel prices.
Uralkali, the London-listed Russian fertiliser producer, is expected to
announce today that its first-half net profits have more than tripled to
13.02 billion roubles (£296 million).
Leisure
JD Wetherspoon, the pub group, is likely to report a fall in pretax
profits of more than 10 per cent in Friday’s annual results after a
difficult year.
XL Leisure, the holiday company, is in urgent talks with its banks
after plans for a refinancing hit delays. The group’s lenders, Barclays and
Straumur, the Icelandic group, are understood to be considering their
options. (The Sunday Times)
Media
Vivendi, the French media conglomerate, is expected today to report a
5.1 per cent rise in second-quarter earnings to €1.4 billion (£1.13
billion), with analysts expecting a strong showing from its pay-TV and games
activities to offset weaker performances in music and telecoms.
Reed Business Information Apollo Management, the US private equity
group, has entered the bidding war for Reed Business Information, which is
being sold by Reed Elsevier, its parent group, for £1 billion. The sale
includes publications such as Variety, Farmers Weekly and New Scientist. (The
Observer)
WPP the advertising group, said that more companies were considering
joining the tax exodus from Britain and added that WPP was still reviewing
its own domicile. (The Sunday Times)
Natural
resources
Royal Dutch Shell, the Anglo-Dutch oil and gas group, faces damaging
claims over its influence on a supposedly independent environmental audit to
determine whether the $22 billlion (£12.1 billion) Sakhalin II energy scheme
off the coast of Russia, the world’s biggest oil and gas project, would
receive vital bank funding. Shell owns a 27.5 per cent stake in the Sakhalin
project, with Russia’s Gazprom holding just over 50 per cent. (The
Observer)
Urenco Bidders interested in buying the Government’s share in Urenco,
one of the world’s largest uranium enrichment companies, have contacted its
former chairman about forming a consortium to make an offer for the stake,
which could be worth up to £4 billion. (The Sunday Telegraph)
Retailing
DSG International, the owner of Currys and PC World, will give its
first trading update of the current financial year on Wednesday, when it is
unlikely to offer much comfort for investors. The group unveiled a 30 per
cent fall in profits in June after two warnings earlier in the year - and
remains “very cautious” about fragile consumer confidence.
John Lewis, the department store group, will this week open its latest
store, in Leicester, but Andy Street, managing director, said that its rapid
UK expansion was set to be curtailed by the effect of the credit crunch on
property companies. It has 11 new stores, including branches in Cardiff and
Northern Ireland, in the pipeline. (The Independent on Sunday)
Woolworths Ardeshir Naghshineh, the biggest shareholder in the high
street retailer, said that it should ignore a potential bid from Malcolm
Walker, the founder of Iceland, and focus instead on reviving its retail
chain. Mr Naghshineh - the Iranian property investor who is worth an
estimated £500 million - is said to be considering his own bid. (The
Independent on Sunday)
J Sainsbury The share-buying frenzy in J Sainsbury, which by last
Friday had seen the supermarket group close nearly 10 per cent up on the
back of bid speculation, was in all likelihood a share-ramping exercise,
according to City insiders. However, informed sources suggest that a fresh
bid by the Qatari Investment Authority is inevitable. (The Observer)
Support
services
Hays, the recruitment group, will report its full-year results tomorrow
amid hopes that its broad global spread will help to protect it from the
difficult markets in the UK. Analysts expect a 15 per cent rise in operating
profits to about £249 million, with net fee income swelling to £764 million.
Technology
Emblaze, the London-listed Israeli technology services group, reported
a narrowed first-half loss of $4.1 million (£2.25 million), adding that it
is cautiously optimistic about its prospects for the full year.
Telecoms
Oman said that it had shortlisted six bidders seeking a licence for the
Gulf country’s second fixed-line telecoms network, which would break the
monopoly of Omantel, the state-run group.
Transport
Go-Ahead, the Newcastle-based transport group, has primed investors for
a fresh set of record results on Friday after giving a bullish trading
update in June. The market is expecting full-year underlying pretax profits
of £118 million, up from £110.1 million last time.
BAA The Mubadala Development Company, the Abu Dhabi state-owned
investment group, is thought to be considering a bid for the airports run by
BAA, the Spanish-owned operator of UK airports. The Competition Commission’s
preliminary findings last month had suggested that airport sell-offs were
necessary to end BAA’s monopolies in London and Scotland. Gatwick, Stansted
and Glasgow are likely to be sold. (The Independent on Sunday)
Utilities
British Energy will not get a better offer than the £12 billion deal
from EDF, its French rival, Whitehall sources have claimed. The Government,
which has a 35.5 per cent stake in BE, wants it to accept the 765p-a-share
offer from EDF and hopes the French group would then use its nuclear
expertise to build new reactors. (The Independent on Sunday)
Share tips
The Sunday Telegraph: buy G4S (support services), Serco (support
services); hold Amec (engineering)
The Mail on Sunday :buy Shire (health), Vectura (health)
