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Economics
The Bank of Japan: Japan’s central bank has cut interest for the first
time in seven years. It cut its key rate of lending by 20 basis points to
0.3 per cent. Three members of its rate-setting board voted for a
quarter-point cut.
Japanese inflation: Inflation in Japan has slowed. Core consumer prices
in Japan rose 2.3 per cent in September, against 2.4 per cent in August.
Core prices rose 0.2 per cent in September, from August.
Eurozone inflation: Inflation in the eurozone fell as expected in
October. It eased to 3.2 per cent, from 3.6 per cent in September and 4 per
cent in August.
Eurozone unemployment: Unemployment in the eurozone remained at 7.5 per
cent, the EU’s Eurostat data agency said. In the 27-nation EU as a whole,
unemployment edged up in September to 7 per cent, from 6.9 per cent in
August.
US business confidence: The Institute for Supply Management’s Chicago
business barometer fell to 37.8 for October, from 56.7 in September, the
steepest monthly fall on record for business confidence. Economists had
forecast a reading at 48.0. A reading below 50 indicates contraction.
American consumers: US residents cut spending by 0.3 per cent in
September. A Commerce Department report said the drop in spending, which
accounts for two thirds of US economic activity, came even as incomes rose
0.2 per cent. The decline in spending was the steepest since June 2004,
according to officials, and sharper than the average 0.2 per cent decline
expected by economists.
Germany: German shoppers remained wary in September, official data
showed, as a sombre economic outlook smothered a boost from lower energy
prices. Retail sales fell 2.3 per cent from August, seasonally adjusted
figures showed.
Spain: The Spanish economy contracted 0.2 per cent in the third
quarter, from the previous three months, suffering its first quarterly
decline since 1993 as the global financial crisis pushed Spain towards
recession. The estimate from the Bank of Spain showed that gross domestic
product grew in annual terms in the third quarter, up 0.9 per cent
year-on-year.
Banking
& finance
Illegal trading: Hedge funds rely too heavily on open-plan offices to
overhear and prevent illegal trading, Britain’s financial regulator said.
After visits to assess UK-based hedge funds’ controls for preventing market
abuse, the Financial Services Authority said there is “scope for
improvement”.
TCI: The Children’s Investment Master Fund (TCI), run by Chris Hohn,
sold its 9.9 per cent stake in J-Power, the Japanese utility, at an
estimated loss of 12.5 billion yen (£80 million). The abrupt exit saw
J-Power buy the shares for Y3,830 each, a premium over their Thursday close,
but vastly below the price that TCI paid for them.
F&C Asset Management: The sale by the insurer Friends Provident of
its 52 per cent stake in F&C Asset Management will “significantly
broaden shareholder base and provide greater liquidity”, F&C said.
Its chief executive, Alain Grisay, said the fund manager would continue to
explore all opportunities for its future, including a management buyout.
Friends confirmed plans to distribute its stake to its shareholders. It
decided to divest its stake in F&C in January, but uncertain market
conditions have hindered a sale.
GMAC: Bonds in GMAC, the ailing car finance and mortgage provider, fell
as much as 6 points yesterday after it said it would offer to exchange much
of its debt, a deal that would leave bondholders with an investment loss.
GMAC’s 7.75 per cent notes due in 2010 fell to 75 cents on the dollar, from
81c on Thursday, according to MarketAxess. Its 8 per cent 2031 bond fell to
46c on the dollar, from Thursday’s 49.5c.
Frankfurt stock exchange: Deutsche Börse has revised rules on its main
indices after distortions from volatility in Volkswagen shares. Big swings
occurred in the Dax this week because of a huge short squeeze in VW shares
that sent the stock up from €210 to €1,000 over two trading sessions before
it halved during a third. Deutsche Börse said a share can be removed from
Dax, MDax or SDax outside adjustment dates, if its weighting on a trading
day is above 10 per cent at the close because of its free-float market
capitalisation and if there is annualised volatility over the preceding 30
days of more than 250 per cent.
French banking: The European Commission approved a French plan to
guarantee interbank borrowing. It said that France’s plan was an efficient
way to restore confidence in the market. The French Government agreed an
overall €360 billion (£283 billion) rescue package to financial
institutions. Some of the funds will go towards recapitalising banks. The
bulk will underpin interbank lending.
Mitsubishi: Japan’s top trading house, Mitsubishi Corp, booked a record
quarterly profit, but cut its full-year outlook by 10 per cent on falling
metal prices and a firmer yen, sending its shares down 11 per cent. Tumbling
copper and aluminium prices and depreciation of the Australian dollar are
hitting its metal business’s profit, while the global economic slowdown is
denting car demand.
Construction
& property
Empty houses: A quarter of a million UK homes are sitting empty as
thousands of home-owners are being repossessed, according to figures from
Halifax, the lender. A survey by it found that vacant private homes account
for 3 per cent of all homes. The North West has the highest number of empty
homes, accounting for almost a quarter of the 279,281 across the UK. Ten per
cent of empty properties are in London. The Empty Homes Agency said the
total of empty properties, including social housing, is much higher, at
about one million.
Consumer
goods
Burger King: the fast-food group reported a lower than expected profit,
after pressure from high commodity costs. It said net income was $50 million
(£31 million) in its first quarter to September 30, against $49 million a
year earlier. Burger King, which has 11,500 restaurants worldwide, has been
adding value menu items to catch up with rivals such as McDonald’s.
Fetzer Vineyards: The wine-maker is switching to a lighter-weight glass
to cut shipping costs. The new bottles are on average 14 per cent lighter.
With 23 million bottles a year shipped, that adds up to 2,200 tonnes of
glass saved.
Engineering
Thales: Europe’s largest defence electronics supplier, said it would
miss its 2008 profitability goal after a €60 million (£48 million) charge on
delays to a big defence project, the Airbus A400M military transport plane.
It is the first measurable sign of industry damage since Airbus’s parent,
EADS, postponed the A400M’s first flight last month, and may raise pressure
on EADS to update its own damage estimate with results on November 14. EADS
a year ago took provisions of €1.4 billion on delays on the €20 billion
A400M project, now at least a year late.
Tata Motors: India’s top vehicle maker is to rethink its planned overseas
fundraising because of bad market conditions, it said.
Health
Southern Cross: Shares in the care-home chain rose 48 per cent after it
said that it had secured a £70 million debt refinancing package. It is
understood that the company will pay interest of Libor plus 3 per cent, or
about 9 per cent, up from 7 per cent before refinancing.
Ranbaxy Laboratories: India’s top drug maker by sales, reported a
standalone net loss of 3.53 billion rupees (£44 million) for the September
quarter, on foreign exchange losses. Ranbaxy, in which Japan’s Daiichi
Sankyo has taken a controlling stake, had net profits of 1.68 billion rupees
in the year-ago quarter.
Industrials
Hyundai Steel: The South Korean steelmaker is to cut prices for the
first time in nearly three years, signalling that a long boom in the steel
sector may be over as global credit woes threaten economic growth.
Leisure
Wagamama: the noodle bar chain, is to open its third American outlet in
Boston in February. The group, which already has two units in the area, is
due to open its first eaterie in Washington DC in May. It believes there is
scope for opening more than 500 outlets in America over the coming years.
Admiral Taverns: the privately owned tenanted pub company, has put
about 100 pubs up for sale for prices between £50,000 and £525,000 for
freeholds, according to the Morning Advertiser.
Arora International: the privately owned hotel group, has appointed two
nonexecutive directors to its holding company’s board, Bob Cotton, chief
executive of the British Hospitality Association, and Steve Pateman,
managing director of commercial banking at Abbey, part of Santander.
Media
Independent News & Media: The newspaper group said it was looking
to sell its 39.1 per cent stake in the Australasian press and radio group
APN News & Media to cut debt by about €800 million (£634 million). The
Dublin-based group said it believed that proceeds from selling its APN stake
would enhance its balance sheet and be earnings neutral for 2009. It said it
expects revenue in 2009 to be a little lower than in 2008 on a constant
currency basis.
BSkyB: the satellite broadcaster said its customer numbers topped nine
million after it bucked “challenging” trading conditions. The company added
87,000 customers in the three months to September 30, taking its total to
9.07 million - its best first-quarter performance for five years.
Natural
resources
Vale: The world’s largest iron ore miner, which is based in Brazil, said it
would cut iron ore output by 30 million tonnes a year from November to
adjust to what it sees as a new economic outlook in the credit crisis. Vale
said a 20 per cent drop in world steel output was having a direct impact on
demand for iron ore. The company said there was not sufficient space to
simply store the mined ore.
Retailing
Blacks Leisure: The outdoor clothing retailer, reported a 55 per cent
rise in losses in its first half as poor performance from its surfing stores
continued to weigh on it. Sales fell by 9.4 per cent to £133 million, and
the company had a pretax loss of £6.7 million for the six months to August
31. Like-for-like sales fell 7.7 per cent, against a 3 per cent rise in
2007.
Ghost: The fashion label Ghost has been saved from collapse. It has
been bought by the owner of the shirtmaker Hawes & Curtis. Ghost -
founded in 1984 by the designer Tanya Sarne -said it had been forced into
administration after the fund KCAJ “refused to invest further” after the
collapse of Iceland’s banking market. The UK label’s purchase by Touker
Suleyman, the fashion executive, safeguards 142 jobs. He plans a relaunch,
with new designs, in March 2009. Ghost has 33 outlets and several
concessions
Technology
Intel: The semiconductor maker said the credit crisis may hit demand
for its chips, and lead to the insolvency of key suppliers, causing product
delays.
Tokyo Electron: The world’s No 2 supplier of equipment used to make
semiconductors, reported a 72 per cent fall in first-half operating profit
after customers’ credit lines dried up. Tokyo Electron, which trails
America’s Applied Materials, made operating profits of 26.28 billion yen
(£165 million), down from Y95.01 billion a year earlier, amid a global slump
in the chip sector. The supplier to South Korea’s Samsung Electronics and
other chip makers cut its earnings forecast by Y39 billion to an operating
profit of Y12 billion for the full year to next March 31.
Computer recall: Computer makers are recalling 100,000 lap-top
batteries made by Sony after 40 incidents of overheating, the Japanese
electronics giant said yesterday. Some users reported smoke.
Hewlett-Packard, Toshiba, Dell, Acer and Lenovo are involved in the global
recall.
Telecoms
BT Group: The telecoms group yesterday suffered one of its darkest days
as its shares hit a record low after a profit warning.
Transport
Alitalia: CAI, an Italian investor group, pressed ahead with a rescue
bid for Alitalia shortly before a deadline yesterday, as Italy’s Government
urged the airline’s unions to accept the deal. CAI said it had decided to
bid without the unions’ support and made a binding offer to buy Alitalia’s
best assets, which it plans to merge with those of the rival Air One.
Finnair: The Finnish airline blamed costly fuel and lower fares for a
€17.3 million (£13.6 million) third-quarter loss, after net profits of €39.6
million a year earlier.
Cathay Pacific: The airline plans to “dispose of” or sell five Boeing
777-200s and expects slowing bookings in the rest of 2008. In a report
obtained by Reuters, Asia’s fifth-largest airline said capacity lost would
be replaced eventually.
Utilities
Centrica: The British Gas owner plans to tap shareholders for £2.2
billion to fund acquisition of a stake in British Energy.
