Economics
House prices The latest survey from the Nationwide Building Society
showed that house prices fell by 1.7 per cent in September and were down by
12.4 per cent from a year earlier, the steepest annual fall since 1991.
Lending conditions Consumers and businesses face a further squeeze on
the availability of loans in the coming three months, the Bank of England’s
quarterly credit conditions survey suggested. Banking groups said they had
tightened lending standards for borrowing of all kinds and intended to curb
loan availability still more.
Interbank lending rates Interbank rates for overnight dollar borrowing
fell for the second day in a row, dropping by a full point to 2.68125 per
cent. But three-month interbank rates rose, with the rate for three-month
dollars climbing to 4.20750, its highest since January, while three-month
euro rates hit 5.31750, the highest since the single currency was created in
1999.
Eurozone interest rates The European Central Bank opted to keep
eurozone interest rates on hold at a seven-year high of 4.25 per cent for
the third month in a row. But Jean-Claude Trichet, the ECB’s President,
signalled that a future rate cut was now on the agenda.
Greece has joined the Irish Republic in guaranteeing all bank deposits,
“whatever the amount”, in a backstop worth an estimated €230 billion (£180.5
billion). Greek laws protect the first €20,000 in any bank account.
US orders New orders for goods from American factories fell by 4 per
cent in August, the sharpest contraction since October 2006.
Banking
& finance
TBO Investments The Financial Services Authority, the City regulator,
has fined TBO Investments £28,000 for failing to keep proper records. The
York-based investment company has appointed an external consultant to assess
whether it needs to pay compensation to customers who may have received
inappropriate advice.
Nationwide, Britain’s biggest building society, has raised its mortgage
rates by 0.2 percentage points on fixed-rate and tracker deals, adding £300
a year to the cost of mortgage repayments on a £150,000 loan. Abbey is also
expected to raise its rates soon.
BM Solutions, Britain’s biggest buy-to-let lender, has made a second
round of rate increases in less than a week and raised its fixed-rate and
tracker deals by 0.2 percentage points.
Aberdeen Asset Management, the fund manager, has announced a tie-up
with Mitsubishi UFJ Trust and Banking Corporation, the Japanese banking
group. Mitsubishi will promote Aberdeen products in Japan and take a 9.9 per
cent stake in Aberdeen for about 20 billion yen (£108 million).
M&G, the investment arm of Prudential, the insurance group, will
support Lloyds TSB’s £12 billion rescue takeover of HBOS. It plans to vote
in favour of the deal in respect of its Lloyds shares and HBOS shares. It
owns more than 2 per cent of each.
UBS, the Swiss bank, said that it expects to make a small profit in the
third quarter, sending its shares up by more than 10 per cent before closing
up just over 8 per cent at SwFr21.30.
Lehman Brothers Deminor, the Brussels-based investor rights group, has
begun a legal action aimed at recouping billions of losses for the creditors
of Lehman Brothers, the collapsed US bank. Deminor said Lehman vehicles had
issued an estimated $34 billion (£19.4 billion) of bonds and other
structured credit products across Europe.
Northern Rock A recent surge of deposits in Northern Rock have put the
bank close to breaking the competition rules that were imposed after its
nationalisation in February.
Construction
& property
May Gurney, the Norwich-based construction group, said it has made
“good progress” in the six months to September 30, with trading in line with
expectations and an order book standing at £1.25 billion.
Consumer
goods
Coca-Cola Hellenic, the world’s second-largest Coca-Cola bottler which
operates in 28 countries in Europe and Africa, has cut its 2008 targets for
the second time this year, blaming the economic downturn and poor weather
for lower demand for soft drinks.
Engineering
Toyota, the Japanese car maker, announced that the new Avensis car is
to be built at its Burnaston factory near Derby, safeguarding nearly 5,000
jobs at the plant. But it said that reduced working — the factory has lost a
shift because of falling demand — would continue for the foreseeable future
until demand increased. Production of the car will begin next month and it
will go on sale throughout Europe in January.
Carmakers David Smith, managing director of Land Rover and Jaguar, has
called for state aid for the industry in Britain as there has been in the
United States where the Government has pledged $25 billion (£14.2 billion)
for investment in green technology by the car industry.
General Electric Even with the backing of Warren Buffett, the
billionaire American investor, shares in General Electric, the US
conglomerate, still fell by another 10 per cent.
Health
GlaxoSmithKline, the UK’s biggest drugs maker, has agreed to settle an
American case over Paxil, its antidepressant treatment, by paying US
insurance companies $40 million (£22.7 million) to reimburse health plans
that had paid for children and adolescents to receive the drug.
Sanofi-Aventis, the French pharmaceuticals group, is planning to cut
927 jobs in France, of which 817 are in sales and the remainder among its
headquarters staff. It said the job cuts took into account new challenges
such as the rapid growth of competition from cheaper generic drugs and
pressure on drug prices.
Industrials
Hardide, the AIM-listed group based in Liverpool that makes ultra-hard
and anti-corrosive materials and coatings, said its overall full-year
trading had been in line with expectations and its outlook remained
positive.
Leisure
Marylebone Warwick Balfour Evidence that the economic downturn is
starting to take its toll on the hotel sector was provided as Marylebone
Warwick Balfour, the hotel and property investment group, reported some
softening in trading at its boutique Hotel du Vin and Malmaison chains.
Von Essen Hotels, which was believed to have been considering a bid for
the Malmaison and Hotel du Vin chains, has acquired Callow Hall, a 16-room
country house set in 44 acres in Derbyshire for a rumoured £3 million from
the Spencer family.
Powerleague Group, the five-a-side football pitch operator, said its
full-year pre-tax profits were unchanged at £5 million, as sales rose by 14
per cent to £26.3 million. It added that its sales performance had been
boosted by the addition of five Soccer Domes in February.
Marriott International, the US hotel operator, reported a 28 per cent
decline in third-quarter profits on the back of softening North American
revenues and warned investors about deteriorating conditions for 2009.
Media
WPP, the advertising company, said its £1.14 billion offer for Taylor
Nelson Sofres, the market research group, was final and will not be
increased. It said on Monday that it had received acceptances from 43 per
cent of TNS investors.
Digital radio Ofcom, the media regulator, radio groups and the
Department for Culture, Media and Sport are due to meet to discuss whether
to combine Britain’s two nationwide transmission platforms — Digital One and
Digital Two.
Natural
resources
ConocoPhillips, the third-largest US oil company, said that the
hurricanes in the Gulf of Mexico in the third quarter had hurt operations at
its refineries and curtailed its output by about 20,000 barrels of oil
equivalent per day, putting its quarterly production at slightly below the
second-quarter level.
Nighthawk Energy, the AIM-listed oil explorer, said the five vertical
wells it had drilled at Jolly Ranch, Colorado, have encountered hydrocarbons
and the project has 13 further wells permitted, which are planned to be
drilled before the end of the year.
Retailing
Lipsy The husband and wife founders of Lipsy, the young fashion brand,
are £3.5 million richer after the business was bought by Next for £17.4
million. Jeremy and Marcelle Stakol owned 25 per cent of the company.
Halfords, the car parts and bicycles retailer, gave an assurance on
profit targets and said it was coping with the tough trading climate despite
a sales slowdown in the past three months. Like-for-like sales slipped by
1.1 per cent in the 13 weeks to September 26.
Ted Baker, the fashion chain, defied the downturn in the retail sector
to report a 5 per cent rise in half-year pre-tax profits to £7.4 million.
Ray Kelvin, chief executive, said it had performed well but was
“understandably cautious” about the coming months.
MFI, the furniture retailer, is expected to appoint Kroll as
administrator to its property division on Monday. Only 92 of its 194 stores
are expected to be kept open by the management buyout team.
Marks & Spencer plans to cut its capital expenditure in half next
year and to step up cost savings to bring down food prices after suffering
its worst quarterly sales since the beginning of 2005. The high street
retailer’s store refurbishment programme will stop and its pace of
international expansion could slow as capital expenditure falls by £200
million to £700 million in the financial year.
Support
services
NWF, the Cheshire distribution company, said that it has completed the
sale of its garden centre division for £14.5 million. It had operated six
garden centres in Cheshire, Nottinghamshire, West Yorkshire and Lancashire.
Fountains, the AIM-listed environmental support services group based in
Oxfordshire, said that it has won a Streetscape works contract from North
Lanarkshire Council, expected to be worth about £1.8 million over 12 months.
Technology
Dmatek, the US electronic monitoring technologies group, has won two
law enforcement contracts in the United States. Accumulated revenues over
five years from both lease contracts are estimated at between $22 million
(£12.5 million) to $26 million.
Axon, the business software consultant based in Surrey which agreed a
£407.1 million takeover by Infosys, the Indian technology group, in August,
has switched its recommendation to a rival £441 million proposed offer from
HCL Technologies, the Indian group.
Wolfson Microelectronics, the Edinburgh-based consumer electronics
group, saw its shares fell by 25 per cent after it reported a sharp downturn in orders over the past few days. The company, which makes computer chips
for products such as Apple’s iPhone, said it had experienced a “material
reduction” in orders.
Nintendo, the Japanese group, has unveiled the DSi, a new version of
its handheld DS console, which includes a camera, internet browsing software
and a larger screen. Nintendo has a four-year campaign to convert more
adults into customers for its consoles.
Nokia, the Finnish mobile phone maker, has reached an agreement with
leading record companies to offer consumers the chance to download any song
recorded using its new Comes With Music mobile phone.
Telecoms
Skype, the online text messaging and voice service, said it was
“extremely concerned” by the monitoring of internet chat carried out by Tom
Online, its Chinese partner. It said it had only just discovered that a text
filter operated by Tom-Skype, its Chinese joint venture, had been altered.
Transport
Ryanair, the budget airline, said that it had filed a complaint with
the European Commission about the Italian investor bailout of Alitalia, the
country’s national airline. Earlier this week unions had agreed to back a
deal with CAI, the Italian consortium, which had briefly withdrawn its offer
because of labour opposition.
Utilities
National Grid, the power grid operator, said that there could be
further sharp rises in electricity prices this winter amid fears that
Britian is facing a supply squeeze. It added that the loss of some key power
stations for maintenance meant that the cushion of spare generating capacity
was tight, particularly for next month.
Ocean Power Technologies, the US renewable energy company, said it has
received a $2 million (£1.13 million) award from the US Department of Energy
for its wave power project in Oregon.
