Economics
Manufacturing activity The headline index in the latest CIPS/Markit
purchasing managers’ survey of manufacturing fell to a record low of 41 for
September, from 45.3 in August, on a scale where any figure under 50
indicates that the sector is shrinking. It was the biggest drop in the
17-year history of the index.
Services sector output stagnated in the three months to the end of
July, with growth falling from 0.2 per cent in the second quarter. But
output grew by 0.6 per cent in July alone, monthly official estimates
suggested.
Average pay increases accelerated to 3.8 per cent in the three months
to August, according to a survey by Incomes Data Services, the pay
consultancy. The pace of wage deals rose by 0.2 points, with most
settlements between 3 per cent and 4.3 per cent.
Business productivity, measured by output per worker, grew at an annual
rate of 0.2 per cent in the second quarter, from 0.7 per cent in the first
quarter, the worst showing since the third quarter of 1990. Manufacturing
productivity fell to 0.8 per cent, from 2.9 per cent, the biggest fall since
June 2001.
The Bank of England increased the amount of emergency funding it is
pumping into the money markets by $30 billion (£16.7 billion), bringing the
total provision of US dollar liquidity by the Bank to $70 billion.
Eurozone manufacturing activity The headline index in the that latest
purchasing managers’ survey of eurozone manufacturing fell to 45 in
September, from 47.6 in August, its fourth consecutive monthly decline and
falling at the fastest rate since December 2001.
Eurozone unemployment rose in August to a rate of 7.5 per cent, from
7.4 per cent in July.
German retail sales rose at their fastest pace in almost two years in
August, increasing by 4.6 per cent.
US manufacturing activity The headline index in the Institute of Supply
Management’s survey of manufacturing fell to 43.5 for September, from 49.9
in August. It was the lowest since October 2001 and fell at its fastest rate
since January 1984.
Banking
& finance
Numis, the investment bank, said its full-year profits would meet
forecasts, adding that its “strong” balance sheet had seen a “significant”
increase in revenues.
Internet banking fraud Banks are losing more money to online fraud,
according to Apacs, the payment industry association, Total losses were
£21.4 million from January to June, up from £7.5 million in the same period
in 2007.
Woolwich, owned by Barclays, has raised interest rates on its
buy-to-let mortgages by up to 0.5 percentage points, blaming an
“unsustainable” rise in applications from landlords seeking to remortgage in
the past three days.
AIG Maurice “Hank” Greenberg, former chief executive of AIG, has
criticised the US insurance group for not letting him bid for any businesses
that it may sell to repay a loan of $85 billion (£47 billion) from the US
Government.
Standard Life Investments, the Edinburgh fund manager, threw its weight
behind the £12 billion rescue takeover of HBOS by Lloyds TSB, signalling
that it was prepared to vote in favour of the deal in its present form.
UBS, the Swiss bank, is expected to announce further job cuts at its
extraordinary general meeting today, which has been called to vote on the
election of four new board members. UBS has cut 7,000 staff this year.
Short-selling Duncan Niederauer, chief executive of NYSE Euronext, said
he was confident that the Securities and Exchange Commission would extend
its temporary ban on the short-selling of shares in US financial companies,
which was due to expire today.
Sigma Finance, the $27 billion structured investment vehicle, has
ceased trading. It was the oldest and last surviving independent of the
complex debt funds.
Construction
& property
St Modwen Properties, the property developer, said that efforts to
preserve the value of its portfolio were being undermined by the slide in UK
property prices, warning investors to brace themselves for “disappointing”
results until the market bottomed out.
Oakdene Homes, the housebuilder, said it expected to renegotiate its
banking covenants within a fortnight, after revealing this week that it was
relying on a temporary facility.
ING UK Real Estate Income Trust, the Guernsey-registered closed-ended
investment company, said that it had sold a mixed-use property in Fulham
Road, West London, for £4.7 million to an unnamed overseas investor at a
yield of 6.7 per cent. It said the price reflected a 4.6 per cent discount
to the June 2008 valuation.
NB Real Estate, the surveying group formerly known as Nelson Bakewell,
said that empty office space in the City had soared by 46 per cent in a
year. At the same time, rents on the best City offices have fallen by 11.5
per cent from £65 per sq ft to £57.50.
Consumer
goods
Cadbury, the confectionery group, said Ken Hanna, its chief financial
officer, would step down in April to take up the non-executive chairman role
at Inchcape, the car dealership. Cadbury said it had started a search for
his successor.
Engineering
Spectris, the Surrey maker of instruments and controls, is buying LDS
Test & Measurement, its rival, from SPX for $102 million (£57.6
million). LDS, based in Hertfordshire, made underlying operating profits of
$10.1 million last year.
US carmakers reported a slump in sales during September because of the
credit crunch. General Motors saw sales of new cars drop by almost 10 per
cent and Ford suffered a 35 per cent slide in total car sales.
General Electric Warren Buffett, the billionaire investor, plans to buy
$3 billion of preferred shares in General Electric as part of a $15 billion
capital raising by America’s largest conglomerate. Mr Buffett will also
secure the shares in GE at a relatively low price as the group’s stock has
declined by 34 per cent this year.
Boeing Nasa, the US space agency, said it had awarded a two-year $650
million contract extension to Boeing to continue engineering support of the
International Space Station to September 2010.
Health
Sinclair Pharma shares rose after the skincare and oral health
specialist reported a full-year pre-tax profit of £1.9 million, from a
pre-tax loss of £4 million last time.
Eli Lilly, the American group, has emerged as the mystery “large
pharmaceutical company” that Carl Icahn, the chairman of ImClone, had said
was prepared to acquire his US biotech company for about $6.1 billion (£3.5
billion), or $70 a share.
Industrials
Paraffin cartel The European Commission has penalised nine companies
for operating an illegal “paraffin mafia” for more than 13 years. The
combined penalties of €676 million (£534 million) were imposed on the
companies for fixing prices for paraffin wax, which is used in products such
as candles, chemicals and tyres.
Leisure
Domino’s Pizza, the delivery company which operates a network of
franchised stores, reported a rise in like-for-like sales at its 449 mature
stores, up by 8.8 per cent in the 13 weeks to September 28, although this
was lower than the 14 per cent rise of a year ago.
Media
Hollywood studios have reached a more than $1 billion (£565 million)
financing deal with Digital Cinema Implementation Partners to upgrade 20,000
American and Canadian cinema screens to digital technology.
Natural
resources
Anglo American, South Africa’s largest mining company, said that it has
completed the sale of its Namakwa Sands mineral sands operation to Exxaro
Resources for 2 billion rand (£137 million).
Xstrata, the Anglo-Swiss mining giant, has cancelled its £5 billion bid
for Lonmin, its rival, because of the turmoil in the global credit markets.
The group, which made an indicative offer of £33 per share in August, said
the deal involved a refinancing of debt, which would not be in its
interests.
EMED Mining Public One of Spain’s oldest copper mines could be reopened
for business after EMED Mining Public announced plans to take full ownership
of the Rio Tinto mine in a deal worth about £50.5 million. EMED, the
AIM-listed Cyprus minerals group, has agreed to buy MRI Group’s 49 per cent
stake in the mine.
Total, the oil company, was represented at the High Court in London
facing up to £700 million in claims arising from the blast at the Buncefield
fuel storage depot in Hertfordshire in December 2005, Britain’s biggest
peacetime explosion. Total and Hertfordshire Oil Storage Limited (HOSL),
which operates the Buncefield plant, are being sued by insurance companies,
businesses and residents of Hemel Hempstead.
Retailing
Waitrose, the supermarket group, plans to take on Marks & Spencer’s
Simply Food format by opening its own convenience stores. The first of four
trial shops will open in Nottingham in December.
Miss Sixty The company behind Miss Sixty, one of the best-known UK
young fashion brands, has fallen into administration. Sixty UK said it had
appointed Vantis, the business recovery specialist, to oversee a “corporate
restructuring”.
Greenwoods, the menswear retailer, plans to open 100 more stores over
the next five years in a £25 million expansion drive after Bosideng, the
Chinese clothing group and one of the country’s largest retailers, took a 50
per cent stake in the business.
Asos, the online fashion retailer, reported a 104 per cent rise in
sales in the six months to September 30.
Hardy Amies, the Savile Row tailor and former dressmaker to the Queen,
has filed a notice of intention to appoint an administrator after failing to
secure a rescue bid. The company suspended its shares last Friday.
Harrods Mohamed Al Fayed, the owner of Harrods, is £30 million richer
after paying himself a bumper dividend. The London department store reported
an 11 per cent rise in full-year underlying earnings to £98 million, on
record sales of £688.3 million.
Support
services
Shanks, the waste management group based in Buckinghamshire, said its
first-half results had been “encouraging” and should be slightly ahead of
earlier expectations, helped by solid overall trading and the strength of
the euro.
Melorio, the construction and logistics vocational training company,
has bought HB Group, the apprenticeship training provider to the
construction sector, for £2.7 million and said it was confident that its
full-year results will be in line with expectations.
Technology
Ascribe, the healthcare IT provider, reported full-year pre-tax profits
of £3.8 million, up by 27 per cent from last year. Sales for the
Lancashire-based business were up by 14 per cent to £17.4 million thanks to
a “significant” rise in direct orders from the UK.
Autonomy, the London-listed technology group, said it has entered into
a multimillion-dollar agreement with an accounting and financial advisory
firm for the licence of its software.
Telecoms
BT Millions of homes could benefit from faster internet broadband
connection by using a device developed by BT, the telecoms group. The
I-Plate, fitted to a socket in the home, filters out the electrical
interference caused by televisions and lighting which can affect broadband
connection.
Transport
Ryanair, the budget airline, said that because of strike action at
Boeing, which has delayed the delivery of new aircraft, it has had to cancel
25 return flights to and from Birmingham and has also had to postpone the
operation of 11 new routes from Düsseldorf.
TAP, the state-run Portuguese carrier, reported a net loss of €133
million (£105.2 million) for the first eight months of the year, from a
profit last time, because of high fuel prices. Pretax earnings fell by 75
per cent to €35 million, but operating revenues rose to $1.4 billion, from
about €1.2 billion last time.
Alitalia The commissioner overseeing Alitalia’s bankruptcy said that it
had received only one offer for the airline’s entire operations by the
September 30 deadline, which was a bid from the CAI Italian investor
consortium.
Utilities
Energetix, the alternative energy company based in Manchester, said
that it has been granted a Chinese patent for its “uninterruptible power
supply” technology, valid until December 2023.
Wholesale electricity prices rose amid fears that Britain could face a
supply shortfall. The forward price of electricity for November hit £133 per
megawatt hour, up by more than £10 since Friday when the same contract was
trading at about £122.75.
