Economics
Savings The Treasury Committee has called for all savers to be offered
the same guarantees to have their first £35,000 of savings returned within a
week regardless of whether the savings institution is based in Britain or
Europe.
US industrial output reported its biggest slide in three years.
Production fell by 1.1 per cent in August after a 0.2 per cent rise in July,
raising fears about economic growth. Analysts had forecast a fall of 0.3 per
cent.
Chinese interest rates China’s Central Bank cut its benchmark one-year
lending rate by 27 basis point to 7.2 per cent in a sign that it is becoming
concerned about the need to boost the economy. The deposit rate was kept
unchanged at 4.14 per cent.
Oil prices fell by $4 a barrel amid fears that the global economic
problems would cause energy demands to slump. US crude hit a seven-month low
of $94.13 a barrel before rebounding to $96.40. London Brent crude fell by
$5.33 to $92.25, its lowest level since February.
The Dow Jones industrial average was down 504.48 points, or 4.42 per
cent, to end unofficially at 10,917.51, its biggest one-day fall since
September 2001. The Standard & Poor’s 500 Index was down 58.74 points,
or 4.69 per cent, to finish at 1,192.96, also its biggest drop since the
terrorist attacks of September 11, 2001.
Banking
& finance
City of London Investment Group, the emerging markets asset manager,
said its funds under management rose by 24 per cent to $4.706 billion
(£2.625 billion) at May 31, from $3.793 billion a year earlier, but fell by
16 per cent from the year end to stand at $3.9 billion at August 31.
Stonebridge International, the US consultant, said that it has
appointed Charles Prince as vice-chairman. Mr Prince had been chairman and
chief executive at Citigroup, but resigned under pressure in November.
Bradford & Bingley Three-month mortgage arrears have risen slightly
at Aire Valley Finance, Bradford & Bingley’s securitisation vehicle. The
lender said that about 0.13 per cent of mortgages were behind on payments by
three months or more, compared with 0.03 per cent in June.
AIG, The US Government has asked JPMorgan Chase and Gold-man Sachs, the
Wall Street banks, to lead a $75 billion emergency funding package for AIG
to keep the US insurance group afloat. Earlier AIG had secured approval from
New York state authorities to liberate $20 billion from its own balance
sheet.
Merrill Lynch Bank of America has announced that it will buy Merrill
Lynch for $50 billion in stock. While giving a lifeline to the troubled Wall
Street group, the deal will also allegedly create the world’s largest
financial services company.
Construction
& property
Ennstone, the London-listed building supplies group, said that its
full-year results would be “substantially” below forecasts, blaming
difficult market conditions and severe weather. The company also said it was
considering asking shareholders for new funds.
Metnor, the property development company based in Newcastle upon Tyne,
reported first-half pre-tax profits up by 7.8 per cent and a 16.2 per cent
rise in revenue, but said it is adopting a cautious approach to its
development pipeline for the rest of the year.
Consumer
goods
New Britain Palm Oil, the oil palm plantation operator in Papua New
Guinea, said that it had received 92.9 per cent acceptances concerning its
offer for Ramu Agri Industries, the Papua New Guinean sugar producer and
exporter.
Engineering
GKN, the engineering group based in Worcestershire, has agreed to buy a
wing component and assembly plant at Filton, near Bristol, from Airbus, the
European planemaker, for £136 million. The Filton unit employs 1,500
workers.
VDA, the German car industry association, said new car sales in Western
Europe fell by 17 per cent to 714,700 vehicles in August. In Eastern
European countries, where demand had remained more robust, sales fell by 9
per cent to 90,800.
Ford, the US car maker, said that Transit van production at its
Southampton plant is expected to be more than halved in the next three years
with manufacturing shifting to Turkey.
Health
GlaxoSmithKline, the world’s second-largest drugs maker, said that
pazopanib, its experimental drug, appears to be effective in fighting
ovarian cancer. Given the promising results, it said it planned to push
ahead with a final-stage Phase III clinical trial.
Industrials
BASF, the German chemicals company, is to take over Ciba, the Swiss
group that makes chemical additives for the plastics, paper and coatings
industries. The cash offer of SwFr50 per share has been accepted by Ciba’s
board and values the business, including net debt, at SwFr6.1 billion (£3
billion), according to BASF.
Leisure
Tragus Group, the restaurant operator behind the Café Rouge, Bella
Italia and Strada chains, reported a 3.4 per cent rise in like-for-like
sales for its key brands in the 12 months to May 25. Acquisitions and new
openings contributed to a 67 per cent rise in turnover to £247.8 million,
while underlying earnings rose by 56 per cent to £44 million.
Kew Green Hotels, in conjunction with Close Ventures, has appointed
Christie & Co, the property agent, to sell Europe’s largest Express by
Holiday Inn — a 245-room hotel at Stansted airport — with an asking price of
at least £27.5 million.
The British Beer & Pub Association has published a report
predicting that 43,000 jobs could go in the industry over the next five
years as beer sales continue to decline and pubs close down.
Media
Trinity Mirror Richard Webb, managing director of the UK nationals
division of Trinity Mirror, has left the newspaper publisher with immediate
effect. He has been replaced by Mark Hollinshead, who will combine the role
with his duties as managing director of the Daily Record and Sunday Mail.
The World Association of Newspapers says it opposes a pending deal on
advertising between Google and Yahoo!, the US internet search engines. The
Paris-based group wants European and US regulators to block the deal on
antitrust grounds
Natural
resources
Heritage Oil, the Canadian explorer, said it has received approval from
the Government of Tanzania for four exploration licences. Heritage added
that it plans to drill its first well in Tanzania in the second half of
2009.
Cadogan Petroleum, the oil and gas explorer based in Leeds, said that a
Ukrainian regional court has postponed to September 26 a hearing to consider
the nullification of the company’s Pirkovskoe and Zagoryanska special
permits.
Atlantic Coal, the US group, said that it had raised about £2.13
million via a placing and the partial conversion of a loan from its managing
director, mainly in order to advance its Stockton anthracite mine in
Pennsylvania towards production.
Goldplat, the London-listed precious metals group, beat market
forecasts with a more than 100 per cent rise in full-year pre-tax profits to
£1.6 million and said that it was making strong progress.
Mediterranean Oil & Gas said that the Masseria De Palma 1dir
exploration well has been spudded on the Lucera gas production concession in
southern Italy. If the well proves to be successful, the testing and
completion will take another 20 days.
Retailing
Ideal Shopping Direct, the TV home shopping group, saw its shares fall
by 21 per cent after it gave warning that its full-year profits would fall
below expectations. The, group, which blamed the figures on poor sales of
homewares and fashion, also restated its results from 2006 and 2007.
Zavvi, the high street retailer formed by the management buy-out of
Virgin Megastore last year, plans to open up to ten new stores between now
and 2011. It added that like-for-like sales were up by 10.2 per cent over
the past 12 months with video games accounting for a third of all sales.
The British Retail Consortium said that strong tourist spending had
fuelled an 8.2 per cent rise in like-for-like sales in Central London during
August, compared with a 1 per cent increase across Britain as a whole.
Retailers, wholesalers and distributors have suffered a near 60 per
cent increase in fraud amid the tougher economic conditions, according to a
report by Kroll, the corporate restructuring specialist.
Best Buy, one of the largest US retailers of CDs, plans to buy Napster,
the digital music service, for $121 million (£67.5 million) to compete with
Apple’s dominant iTunes service and its iPod music players. Best Buy said it
would pay $2.65 per Napster share, nearly double the closing price on
Friday. Napster shares jumped nu 87 per cent in early trading to $2.54.
Support
services
White Young Green, the environmental consultancy, said it has won a
contract worth £1.6 million per year from Nakheel, the Dubai-based
developer, to provide control services for the Dubai Waterfront urban
development project. The company also reported a 26 per cent rise in
full-year profits to £16.8 million.
Nestor Healthcare, which provides staff for the healthcare sector, is
to sell its Carewatch unit for £37 million. The plan will be put to
shareholders in October.
Hargreaves Services, the London-listed support services group to the
energy sector, reported an 86 per cent rise in full-year pre-tax profits to
£17.9 million and added that it expects to benefit from the recent price
rises of coal and coke.
Technology
SCi Entertainment, the computer games publisher, said that investors
would see the results of a radical restructuring this year despite its
full-year losses widening to almost £100 million. The group, which will
launch the next instalment of the Lara Croft saga in November, has dismissed
a quarter of its staff and raised cash from shareholders to boost its
finances.
Hewlett-Packard, the US computer maker, and BT, the telecoms group,
said they have extended an existing agreement for more than seven years to
provide help desk services to more than 100,000 BT users in Britain. The
contract is worth $660 million (£368 million) to Hewlett-Packard over the
length of the deal.
Telecoms
Spirent Communications, the London-listed telecoms group based in West
Sussex, said that it will return up to £50 million to shareholders by way of
a tender offer. In August the company announced its first dividend payment
since 2002.
Vodafone, the British mobile phone operator, is claiming €670 million
(£530 million) in damages from Telefónica, the Spanish telecoms group, for
alleged abuse of its dominant position in Spain’s mobile telephony market.
Qatar Telecoms A consortium has won Qatar’s second fixed-line telephone
licence, ending the monopoly of Qatar Telecoms. The mobile joint venture, in
which Vodafone owns 51 per cent while the rest belongs to the Qatar
Foundation, is to sell 40 per cent of its shares to the public before the
end of the year.
Telecom Italia The Fossati family, already the second-biggest
shareholders in Telecom Italia, have increased their stake in the telecoms
group to 5.006 per cent from 4.451 per cent. The family have criticised the
strategy of Franco Bernabe, chief executive, and have suggested that it
might be better if Telefónica, the Spanish operator, took over the company.
Transport
Globaltrans Investment reported a 69 per cent increase in first-half
operating profits to $98.7 million (£55.1 million) and said it is well
positioned to enhance its leadership among Russia’s private rail freight
operators.
United Airlines, the US carrier, said that it is doubling the fee for
passengers to check in a second bag on a domestic flight from $25 to $50
one-way. United estimated that the fee would apply to only one in seven
passengers and said that the potential revenue from its merchandising
efforts, including the checked bag fees, will be $700 million in 2009.
Austrian Airlines Air France-KLM, Lufthansa, the German airline, and
Russia’s S7 have been shortlisted for buying a stake in Austrian Airlines,
the loss-making carrier, according to reports, which added that British
Airways did not make in on to the list because the business plan it filed
was incomplete.
Flyglobespan Paddy Power, the bookmaker, is quoting odds of 10-1 on
Flyglobespan, the low-cost airline, going bankrupt, behind Alitalia,
Spanair, Air Berlin and SkyEurope.
Utilities
British Energy The future of Britain’s nuclear industry could be
settled soon with the boards of British Energy and EDF, the French utility,
set to meet to consider a sweetened £12 billion-plus bid for the nuclear
group.
