Economics
The UK economy will be the only one of the world’s leading nations to
fall into recession this year, the Organisation for Economic Co-operation
and Development has forecast. It predicts that the UK economy will shrink by
0.3 per cent in the third quarter and by 0.4 per cent in the fourth.
Consumer confidence stayed at a record low during August, according to
Nationwide’s index of confidence, which remained at 52, although the index
for expectations in the coming months rose by two points to 56.
Eurozone producer prices rose by 1.1 per cent in July, after a 1 per
cent increase in June. This took the annual increase to 9 per cent, up from
8 per cent, official figures showed. Core producer prices, which exclude
energy and construction, rose by 0.5 per cent month-on-month and by 4.3 per
cent year-on-year.
US manufacturing activity slowed in August, according to the Institute
for Supply Management, which said that its reading for US manufacturers fell
to 49.9, from the 50 reported in July. A reading below 50 signals
contraction.
US construction spending fell by 0.6 per cent in July. Analysts had
expected a 0.3 per cent decline. However, spending for June was revised to
show an increase of 0.3 per cent, from the 0.4 per cent decline originally
reported.
Australian interest rates Australia’s central bank cut interest rates
for the first time in nearly seven years, pushing them down by 25 basis
points to 7 per cent amid signs of cooling economic growth.
Banking
& finance
HSBC, Europe’s biggest bank, has opened its second rural branch, the
Chongquing Dazu HSBC Rural Bank Company, in western China. HSBC said it
should have more than 80 branches and outlets established in mainland China
by the end of this year.
Deutsche Börse Atticus and TCI, the powerful hedge funds that
together own 19 per cent of the Frankfurt-based Deutsche Börse, have
demanded that the German exchange operator act urgently to improve
shareholder value and threatened to call for the dismissal of senior
executives. The move is reminiscent of their successful campaign in 2004 to
derail Deutsche Börse’s bid for the London Stock Exchange.
Lehman Brothers saw its shares rise after the government-backed Korea
Development Bank (KDB) admitted that it was assembling a bidding consortium
to negotiate a possible investment in the troubled Wall Street investment
bank. This could enable Lehman to be taken over by an “all-Korea” consortium
that would give managerial control to KDB.
Stamp duty Properties costing less than £175,000 will be exempt from
stamp duty for the next year in an attempt to revive the housing market. The
£600 million measure will take more buyers at the bottom end of the housing
market out of the stamp duty bracket, saving them up to £1,750.
Asian central banks embarked on a day of intervention in the foreign
exchange markets yesterday. Dealing floors in Tokyo, Hong Kong and London
said there had been noticeable intervention efforts by authorities in
Malaysia, Indonesia, the Philippines and India — selling dollars in favour
of local currencies.
Barclays, the banking group, said that it is considering selling up to
50 per cent of its insurance and pensions business in Spain and Portugal.
Marsh & McLennan, the world’s largest insurance brokerage by market
value, said it is not planning to make a counterbid for Benfield, the
UK-listed reinsurance broker. There had been speculation that Marsh might
break up an agreed bid from Aon, the risk management specialist, worth £844
million.
Construction
& property
Colonial, the Spanish property group, is moving towards agreeing a debt
restructuring with its creditors that may include a future cash injection
from shareholders and the sale of some assets, according to reports.
Consumer
goods
Dunlop Latex Foam, the maker of Dunlopillo pillows and bedding based in
North Yorkshire, has been placed in administration despite efforts by a
recently appointed management team to turn the business around.
Greene King, the Suffolk group that brews Old Speckled Hen and Abbot
Ale and has about 2,500 pubs in England and Scotland, said that its
expectations for the current financial year would probably be met, but
admitted that it was uncertain of prospects for future trading as consumers
were drinking alcohol at home rather than in the pub.
InBev, the Belgian brewer, is planning to put Oriental Brewery, its
Korean beer business, up for sale in an effort to shed a non-core asset and
raise what could be about $2 billion (£1.1 billion) for its purchase of
Anheuser-Busch, the US brewing group.
Engineering
Scott Wilson Group, the London-listed engineering consultant, said that
it continues to see strong demand across both its domestic and international
businesses along with a flow of new contracts to bolster its order book.
Tata, has formally suspended work on the Nano, the world’s cheapest
car, triggering speculation that the £1,250 vehicle could be delayed for as
much as year while a new factory site is found.
Health
GlaxoSmithKline, the UK’s biggest pharmaceuticals group, said its
experimental drug designed to fight heart disease in a new way had missed
its goal in a mid-stage clinical test, but added that the results were still
encouraging.
SkyePharma, the drug delivery company, disclosed that it would raise
£18.4 million by selling shares at the deeply discounted price of 1½p.
Additional agreements surrounding the terms of outstanding convertible bonds
will leave more than half the company owned by bondholders.
Industrials
Plantic Technologies, the Australian renewable plastics group, reported
a wider first-half net loss of A$5.6 million (£2.6 million), despite 52 per
cent higher sales volume, but said it had finished the half year with a
strong order book.
Leisure
Gamingking, the London-listed lottery and gaming group, said it is
proposing to buy Orb Holdings, the amusement machines operator, in a reverse
takeover. Gamingking has conditionally agreed to acquire Orb for the issue
of 32.95 million consideration shares, which will represent about 85 per
cent of the enlarged share capital.
Media
Essentially Group, the AIM-listed sports marketing group, said it had
bought Arundel Promotions, the cricket and football event management
businesses, for £325,000.
Project Kangaroo which promises to launch an advertiser-funded website
with access to current ITV and Channel 4 programmes, and all BBC shows a
week after original transmission, is being investigated by the Competition
Commission. Google, the internet search engine, has told the Commission that
it hopes to form commercial relationships with Kangaroo.
Informa Blackstone is understood to have teamed up with its private
equity rivals Providence Equity Partners and Carlyle to bid for Informa, the
London-listed events and exhibitions group.
Natural
resources
Lonmin, the platinum miner, said that it would be willing to open talks
with Xstrata, its rival, about a possible takeover, but only if the £5
billion offer price was raised. Xstrata had made a hostile offer for Lonmin
last month, valuing the miner at £33 a share.
Island Gas Resources, the London-listed exploration group, said it had
slipped to a first-half pre-tax loss of £61,000, compared with a pre-tax
profit of £75,000 last year, but added that it was making good progress and
was on track to achieve its goals.
Serica Energy RWE, the German utility, has signed an agreement with
Serica Energy, the AIM-listed oil and gas group, for Serica’s exploration
licence covering three blocks off the west coast of Ireland.
Opec Gloom in the commodities markets pushed the price of US light
crude oil to as low as $105.46 per barrel yesterday, a $10 fall, creating
unease within Opec. Iran, the most hawkish member of the oil producers’
cartel, called for agreement next week on a cut of 1.5 million barrels per
day in the cartel’s output. Crude oil has lost more than a quarter of its
value since the price peak in July of $147 per barrel.
Chesapeake Energy, the US natural gas producer, said it had agreed to
sell a 25 per cent interest in its Fayetteville Shale assets in Arkansas for
$1.9 billion (£1.05 billion) to BP America, a unit of BP.
Retailing
High street stores that shoppers would miss the least are revealed in a
survey by Ipsos MORI, which found that nearly 70 per cent of consumers would
not miss Mothercare or Body Shop if they went bankrupt, but more than 60 per
cent said they wanted Boots to stay and 55 per cent thought the same about
Argos.
Clothing retailers Retail executives and City analysts gave warning
that sterling’s collapse against the euro and the dollar meant that price
rises of more than 6 per cent were possible on clothing next spring when
supply contracts are renegotiated.
Support
services
Hays, the recruitment group, reported a better than expected 25 per
cent increase in full-year profits to £264.4 million, as like-for-like net
fees rose by 19 per cent to £786.8 million, driven by strong international
growth. However, it also said that the UK market would be challenging.
Eaga, the “green” support services company based in Newcastle upon
Tyne, reported full-year pre-tax profits of £28.4 million, from a loss of
£87.4 million last time, and said it was confident of substantial progress
in the year to May 2009.
Ashtead, the equipment hire company based in Aberdeen, reported 26 per
cent growth in first-quarter profits to £35.9 million, on revenue up 5 per
cent at £259.5 million. and said it expects trading to be in line with
expectations for the rest of the year, despite a weakening outlook in the
construction sector.
Technology
NETeller, the online payment company, said it had signed a contract to
provide online payment services for Cardsave, which provides financial
services to independent retailers.
Imagination Technologies, the Buckinghamshire semiconductor group, said
that it has licensed part of its graphics core family to Sigma Designs for
use in computer chips targeting multimedia consumer electronics products.
Imagination said it will receive licence fees and royalty revenues.
IQE, the Cardiff-based maker of semiconductor wafers, said that demand
for its products from mobile phone makers had remained strong as it reported
a 135 per cent rise in first-half pre-tax earnings to £3.6 million.
Nokia, the Finnish mobile phone maker, is aiming to take on the Apple
iPod with a phone that will allow its owners unlimited music downloads for a
fixed fee, and has signed a deal with Carphone Warehouse to distribute the
phone.
Google, the US online search engine, has launched its Chrome web
browser, which is designed to run on Microsoft’s Windows operating system.
Versions for other systems, including Apple’s Mac, are in the pipeline.
Telecoms
Symbian, the mobile phone operating system, reported a sharp slowdown
in second-quarter growth as the global economic slowdown hit multimedia
phone demand and few new models reached the market.
Transport
Ryanair, the budget airline, said that it was winning its battle
against ticket touts, and the European Commission said that it had ended an
inquiry into the carrier over the conflict. Last month the airline began
cancelling and reimbursing about 450 bookings a day made by online ticket
agents who were selling tickets to passengers at inflated prices.
Virgin Atlantic has held talks with financial partners about a possible
bid to buy Gatwick now that the Competition Commission has signalled its
intention to force BAA to sell up to three of its seven airports. The
airline already owns a one-seventh stake in a consortium that owns NATS, the
air traffic control system.
Utilities
Ofgem The Government was urged to “pull the plug” on Ofgem, the energy
regulator, after the GMB union criticised plans to change the pensions of
utility workers. Ofgem had proposed to remove statutory protection for
pensions brought in when utilities were privatised in the 1980s.
