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Economics
German economy: Germany fell into recession in the third quarter as its
economy shrank by 0.5 per cent, the second consecutive quarter of falling
growth. The contraction in gross domestic product was more than twice the
0.2 per cent that economists had forecast and raised fears that the eurozone
may well tip into recession today.
US trade deficit: Official figures showed the US trade deficit narrowed
by 4.4 per cent in September to $56.5 billion (£38.2 billion) as imports
fell by 5.6 per cent to $211.9 billion, the steepest drop on record, while
exports declined by the biggest amount since September 2001, down by 6.1 per
cent to $155.4 billion.
US unemployment: Official figures showed that the number of US workers
filing new claims for unemployment benefits rose by 32,000 last week to
516,000, the highest since the weeks after the terrorist attacks on
September 11, 2001.
China’s factory output: The Chinese National Bureau of Statistics
said that the pace of growth in industrial production had slowed to 8.2 per
cent in the 12 months to October, from 11.4 per cent in September.
International Monetary Fund: Japan is preparing to offer $100 billion
of its foreign exchange reserves to bolster the International Monetary
Fund’s coffers, according to senior government sources who added that Japan
will make the proposal at today’s G20 meeting in Washington.
Oil prices: Opec, the oil producers’ cartel, said that it would hold an
emergency meeting in Cairo to discuss cutting supplies again as the price of
a barrel of US crude dropped to $54.67 — the lowest level since January
2007. London Brent crude fell by $1.12 to $51.25.
Banking
& finance
JPMorgan Chase: At least two analysts projected that JPMorgan Chase
would suffer writedowns of $1.6 billion (£1.08 billion) to $1.7 billion for
the fourth quarter and cut their profit outlook for the US investment bank.
Moneysupermarket.com: The price-comparison website said that the
banking crisis had left third-quarter revenues in its money-based division
down by 15 per cent on a year ago.
Bank of Ireland: The banking group has scrapped its dividend after its
half-year pretax profits fell by 32 per cent to €650 million (£551.8
million), from €950 million last year. It said that it had no plans to
resume paying a dividend until the current financial difficulties have
eased.
Barclays: The banking group has launched a one-year fixed-rate mortgage
deal at 3.99 per cent for borrowers with a 40 per cent deposit, or at 4.49
per cent for borrowers with a 30 per cent deposit. After a year, the deal
reverts to a lifetime tracker with a rate of 1.99 per cent above base rate.
Kohlberg Kravis Roberts: The US private equity group said that it is
“moving ahead” with its initial public offering, but declined to comment on
the timing.
London Stock Exchange: The exchange has suspended a share buyback
programme and said the markets would remain “difficult and uncertain”.
Although it reported half-year pre-tax profits up by 30 per cent to £127
million, it predicted a gloomier future.
Fortress Investment: The US hedge fund has reported a third- quarter
net loss of $57 million, sending its shares down by as much as 7.7 per cent.
Prudential: Two million with-profits investors with Prudential have
learnt that they will have their final bonuses cut by up to 10 per cent.
Construction
& property
Capital & Regional: The property fund manager, which has assets in
Britain and Germany, said that it expected to see “increased stress” among
its retail and leisure tenants as the economy contracts and added that it
had more than doubled its provisions for tenant defaults to £1.5 million.
Consumer
goods
Diageo: The drinks group has entered exclusive discussions with Vijay
Mallya, the Indian leisure entrepreneur, about a possible distribution
partnership with his United Spirits business. A deal could see Diageo take a
stake of up to 15 per cent in the Indian group.
SABMiller: The global brewer behind Grolsch and Peroni Nastro Azzurro
is to cut capital expenditure next year by about $500 million (£337.9
million) as it responds to the effect of the consumer spending downturn on
many of its biggest markets.
Glisten: The snack-food maker based in Leeds said that like-for-like
sales during the first 18 weeks of the financial year had been 5 per cent
ahead of last year at £24.3 million.
Dr Pepper Snapple: The US soft-drinks group, which was spun off from
Cadbury this year, has reported a 31 per cent drop in third-quarter profits
and said that consumer demand for its drinks has been sluggish. It also cut
its full-year forecast.
Engineering
US carmakers: Fears for the future of US carmakers grew when Chrysler
said that it could not survive without government cash and Goldman Sachs
suspended its rating on General Motors, saying that it needed $22 billion
(£14.9 billion) to survive the industry downturn.
GM Daewoo: The South Korean unit of General Motors has decided to
suspend its car production because of sluggish demand and said that it will
consider further suspensions if necessary.
JCB: The maker of diggers, excavators and tractors said that it would
have to cut an additional 398 jobs at its UK factories, just three weeks
after its last job losses were announced.
Health
Bristol-Myers Squibb: The American pharmaceuticals group said that it
is taking steps to strengthen its balance sheet to help to finance
acquisitions and partnerships that will expand its portfolio of new drugs.
Industrials
Fertiliser producers: Agropolichim and Neochim, the Bulgarian
fertiliser producers, are halting production because demand has weakened as
a result of the global financial crisis. The two companies are among the top
exporters from Bulgaria, which depends heavily on foreign cash to fund its
current account deficit.
Leisure
Ladbrokes: The bookmaker reported a 12 per cent increase in the gross
win in the four months to the end of October and said that it remained on
track to meet full-year expectations, despite a run of poor football and
horse racing results at the end of the period.
The Restaurant Group: The operator of Garfunkel’s and Frankie &
Benny’s reported a slowing of half-year like-for-like sales growth to 2.5
per cent, from 3 per cent last time, and said that it would open fewer new
restaurants over the next two years because of delays and postponements by
developers.
Hotels: Revenue per available room in London hotels is forecast to drop
by 12 per cent next year as occupancy rates slide by 23 per cent to levels
not seen since soon after the 2001 terror attacks on the US,
PricewaterhouseCoopers said.
Paddy Power: The Irish betting group said that it was on target to
achieve full-year operating profits of about €75 million (£63 million),
equating to earnings growth of 10 per cent, as growth in online gaming
softened the impact of the economic conditions and race cancellations on its
retail operations.
Whitbread: The leisure group’s Premier Inn joint venture with the
Emirates Group in the Middle East is to be extended. Having opened its first
hotel in Dubai, it is now planning three openings in Oman in 2010.
Media
Trinity Mirror: The newspaper publisher said that it had cut 28 local
newspaper titles so far this year as it grappled with a deepening
advertising slump and raised this year’s cost-cutting target by £5 million
to £25 million.
Vivendi: Europe’s largest entertainment group kept its full-year
financial goals despite the economic crisis and confirmed its policy to
raise its dividend. The owner of Universal Music, the world’s biggest record
group, reported a 4 per cent fall in its third-quarter pretax earnings to
€1.281 billion (£1.087 billion).
Natural
resources
UK Coal: Britain’s largest coalmining group, based in South Yorkshire,
has signed a deal with Peel, the property company and its biggest
shareholder, to develop wind farms on UK Coal’s land.
Gazprom: The Russian gas export monopoly said it wants to cut or delay
the growth plans of its four power generating groups. If the cuts are
approved, Mosenergo, TGK-1, OGK-2 and OGK-6 may freeze the construction of
some turbines over the next five years.
Retailing
Asda: The UK supermarket group, owned by Wal-Mart, the US retail
company, said that third-quarter sales at stores open at least a year and
excluding fuel had risen by 6.9 per cent, up from 6 per cent in the second
quarter.
Ted Baker: The fashion chain reported third-quarter sales that were
lower than expectations, causing Numis and Investec Securities to cut their
financial targets by 9 per cent.
DSG International: Shares in the owner of PC World and Currys were
rocked after Atradius, the insurance group, scaled back its cover against
the retailer being unable to pay its suppliers. News of the insurer’s move
to reduce its exposure to potential losses as part of a wider review of the
retail sector sent DSG shares falling by as much as 20 per cent.
Support
services
Post Office: The Government has awarded the Post Office a contract to
continue with the Post Office Card Account used by millions of people to
receive benefits and pensions, ending the threat of closure to thousands of
Post Office branches. The new contract will run for five years from 2010,
with the possibility of an extension.
Technology
Siemens: The German conglomerate, whose products range from turbines to
light bulbs and hearing aids, said the credit crunch had made it challenging
to achieve its 2008-09 financial goals, but added that it would retain them,
given its healthy level of new orders.
Telecoms
BT: The telecoms group looks set to increase the normal retirement age
for its staff to 65. BT, which operates one of the largest pension funds in
the private sector, with liabilities of almost £35 billion, also plans to
increase the contributions for scheme members.
Transport
SpeedFerries: The Channel ferry company has gone into administration.
It ran into difficulties last week when the Boulogne Port Authority seized
its only vessel in a dispute over unpaid taxes and fees. Talks were held,
but the group has been placed in administration at the request of its
directors.
BAA: EasyJet and Virgin Atlantic are teaming up to back a £2.5 billion
bid for Gatwick, which is owned by BAA, the airports operator. The airlines
are talking to financial backers about forming a consortium in which they
would guarantee to base a large number of aircraft at Gatwick to ensure its
future revenues.
Utilities
National Grid: The closure of factories this winter will reduce demand
for electricity, minimising the threat of disruptions to power supplies,
National Grid said. The operator of the UK’s power network published figures
indicating that normal peak UK demand for electricity this winter would be
about 500 megawatts lower than previously forecast.
