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Economics
House prices: Homeowners will have to wait a decade before property
prices return to 2007 levels, according to Savills. Average house prices are
tumbling at a rate of £78 a day and are set to fall in total by 16 per cent
this year and 11 per cent by the end of 2009.
First-time buyers: Savills, the estate agent, said that it did not
expect mortgage availability to improve for first-time buyers until at least
2010 — by which time, it predicts, house prices will be on their way back
up, meaning that would-be homeowners could miss out on the chance to buy
their first home at a good price.
Pay equality: Unions and women’s pressure groups stepped up demands for
compulsory pay audits after the gap between the pay of men and women widened
again.
Fiscal stimulus: Plans by Gordon Brown and Alistair Darling to jump
start the stalled economy with a “fiscal stimulus” of tax cuts and higher
public spending are given crucial support today from business leaders.
US retail sales: American retail sales fell at their fastest rate for
almost two decades last month providing new evidence that the world’s
biggest economy is weakening far faster than expected. Although Wall Street
had expected a decline in retail sales in October, the 2.8 per cent fall was
far bigger than the 2.1 per cent that economists had forecast.
Debt levels: The deteriorating economy has contributed to a sharp rise
in the number of people struggling with debt, according to official figures
released yesterday. The Ministry of Justice reported there were 13,653
bankruptcy petitions in courts in England and Wales in the third quarter of
2008, 7 per cent increase on the same time last year.
G20 summit: Global central banks are ready to take further steps to
ease market tensions and bolster faltering economic growth, top policymakers
said yesterday as world leaders gathered for talks on the economic crisis.
Speaking at a conference in Frankfurt, Ben Bernanke, the US Federal Reserve
Chairman, and Jean-Claude Trichet, the President of the European Central
Bank, said that close co-operation would continue.
Eurozone recession: The eurozone has fallen into recession for the
first time since the single currency was introduced in 1999, Eurostat, EU
statistics agency, said that third-quarter GDP across the 15-nation eurozone
shrank 0.2 per cent, following a 0.2 per cent fall in the previous quarter.
US government loans: The White House has been in talks with Congress
about to accelerate loans to carmakers under a $25 billion (£16.9 billion)
programme already appropriated for the troubled industry, Dana Perino, the
White House spokeswoman said.
Banking
& finance
Bradford & Bingley: Rod Kent, the chairman of the nationalised
bank, stood down with three other non-executive directors. Richard Pym, the
chief executive, steps up to be executive chairman, B&B said. The bank
was shorn of its 200 branches and £24 billion of deposits when it was taken
into state ownership in September.
Lehman Brothers: About 1,500 of Lehman Brothers’ creditors descended on
Indigo, the music venue at the O2, to stake their claim on the stricken
investment bank’s $288 billion carcass. Row upon row of dark suits shuffled
into the auditorium to listen to the headline act, Tony Lomas, the
administrator from PricewaterhouseCoopers.
RAB Capital: yesterday closed a dozen underperforming funds and gave
warning that the effects of investor redemptions and sliding markets would
leave it with just $2 billion of assets by the end of the year. It started
the year with $7.2 billion of funds under management, and began November
with $2.8 billion.
New Star Asset Management: The embattled fund manager renegotiated its
banking covenants yesterday in a move that added £3.5 million to its debt
bill and spurred speculation that it could be pushed into an emergency
rights issue. New Star, led by John Duffield, its colourful chairman, also
embarked on a £20 million-a-year cost-cutting programme that is likely cut
up to 60 jobs.
HBOS: The chairman of HBOS gave warning that the bank may have to be
completely nationalised if the merger with Lloyds TSB falls through. In a
letter to shareholders Lord Stevenson of Coddenham urged them to vote for
the deal. He said that HBOS will need to raise more than £12 billion of
additional capital if shareholders throw the merger out.
Freddie Mac: The mortgage giant, said that its net worth was less than
zero and asked for $13.8 billion from the US Treasury, after Fannie Mae
posted a $29 billion loss for the same period and cautioned that it might
need federal funds by the end of the year to survive.
Royal Bank of Scotland: is preparing to dismiss up to 3,000 staff
across its worldwide workforce as it braces itself against the onslaught of
the global recession. Up to 1,000 jobs are expected to be lost in the UK.
Citigroup: Citigroup is reportedly cutting at least 10,000 jobs in its
investment bank and other divisions throughout the world. Citigroup
announced in October that it had cut 11,000 jobs in the third quarter.
Fidelity Investments: The American mutual fund company, is to eliminate
1,700 jobs early next year in its second round of cuts. Boston-based
Fidelity had said last week that it would eliminate nearly 1,300 jobs this
month in the first round, with plans to make further unspecified cuts early
next year.
Construction
& property
Saint-Gobain: The European Commission imposed its highest ever cartel
penalty, fining four companies more than ¤1.3 billion for illegally working
together in Europe’s auto glass market. It fined Saint-Gobain, the French
building materials group, ¤896 million for running a cartel with Asahi
Glass, Pilkington and Soliver between 1998 and 2003.
Consumer
goods
Wine sales: Sales of wine, a supposed safe haven for investors, are
finally feeling the full effect of the credit crunch, with the biggest fall
in prices for seven years. Prices were down by 12.4 per cent in October,
according to the Liv-ex 100 Fine Wine index.
InBev: The Stella Artois brewer moved closer to completing its proposed
takeover of Anheuser-Busch, the Budweiser owner, after receiving the green
light from the US Department of Justice subject to a loosening of its
control of Labatt, its Canadian beer, in the US. It will next week draw down
a $45 billion syndicated loan and a $9.8 billion bridging loan to fund the
deal.
Engineering
GKN: The engineering group said it is cutting production at twice the
rate it announced just over two weeks ago. At the end of last month, GKN
said that a fall-off in orders from carmakers meant that its production in
the second half would be 20 per cent lower than in the first half.
Yesterday, GKN, which supplies all the top carmakers, said production would
now be 40 per cent lower.
EADS: Shares in EADS gained 4.8 per cent after the European aerospace
group’s quarterly results beat expectations and the company raised its 2008
profit forecast. EADS also announced ¤200 million of cost savings for 2011
and 2012 on top of existing restructuring plans, and boasted a strong cash
buffer against global financial turmoil.
Health
Phytopharm: Shares in Phytopharm, a developer of drugs from plant
extracts, plunged more than 43 per cent yesterday after Unilever, the
consumer goods giant, pulled the plug on its lead diet product. Phytopharm
had been conducting trials with Unilever on Hoodia, a weight-loss drug
extracted from a South African plant that had traditionally been used by
Kalahari bushmen to stave off hunger. The companies had hoped that the
extract could be used in Unilever’s Slimfast products.
Vernalis: The British biotechnology company appointed the former
management team from Acambis to its helm, and its incoming chief executive
promised significant changes. Ian Garland, who headed Acambis, the vaccine
maker, when it was sold to Sanofi-Aventis for £285 million earlier this
year, said Vernalis would grow by acquisitions under his leadership.
Industrials
Dyson Group: Shares in Dyson Group plunged 40.6 per cent after the
company, which develops high performance materials used primarily in the
automotive industry, says that it expects to miss a full-year profit target
because of falling sales volumes and could breach its banking covenants next
year if the downturn worsens.
Leisure
Macau: Macau is the latest victim of the credit crunch. The dread
sweeping through Macau and its investors is that the gambling town’s woes do
not begin and end with the financial problems of Sheldon Adelson, of Las
Vegas Sands Corporation.
MGM Mirage: The Las Vegas casino resort operator announced the
resignation of Terry Lanni as chairman and chief executive, although he
denied suggestions that his departure was related to doubts over the
validity of his MBA.
Clapham House Group: Wolvercote Investments, an investment vehicle
controlled by Lord Edward Spencer-Churchill, one of Hugh Osmond’s
lieutenants at Sun Capital Partners, has declared an 8.3 per cent stake in
Clapham House, the Gourmet Burger Kitchen operator.
Media
Press Complaints Commission: Baroness Buscombe, the head of the
Advertising Association and former Tory frontbench spokesman on media in the
House of Lords, is to chair the Press Complaints Commission. She will
succeed Sir Christopher Meyer as the head of the body that regulates the UK
press on April 1 next year.
Centaur Media: The trade magazine publisher reported a 16 per cent
plunge in group revenues for the four months to the end of October, which
also affected margins in the period. The company, which publishes titles
such as Money Marketing, said that it would keep costs under review.
Natural
resources
Norilsk Nickel: The Russian miner expects the financial crisis to
continue sapping demand for its products this year but expects that it will
not get any worse in 2009, Anton Berlin, the head of market development,
said: “First the speculative demand fell, speculators closed positions . . .
That is pushing the market down.”
Gazprom: Russia’s gas export monopoly, said that it had no intention of
buying a stake in Repsol, the Spanish oil company. Russian news agencies had
quoted Alexander Zhukov, the Deputy Prime Minister, as telling a
Russian-Spanish commission in Madrid that Gazprom was considering buying the
stake.
Retailing
Richemont: The luxury goods company behind Cartier jewellery and Mont
Blanc pens conceded yesterday that the severity of the credit crunch had
finally dawned on its customers. Richemont provided further evidence that
the consumer downturn is taking its toll of the luxury market as it said
that sales in October fell by 2 per cent once currency effects were
accounted for.
John Lewis: Sales at John Lewis, the department store chain, tumbled
last week, despite earlier signs of a modest recovery in high street trading
in the run-up to Christmas. In its weekly sales figures, John Lewis said
sales at its department stores fell 9.7 per cent to £57.78 million in the
week to November 8.
Support
services
Logica: The IT and business services company posted a better than
expected 7 per cent rise in third-quarter revenues, but said that
final-quarter growth would be less than expected, sending its shares down 7
per cent. Logica reported revenue of £845 million versus £789 million for
the same period a year ago.
Technology
Sun Microsystems: which sells server computers, has started a
restructuring that could see up to 6,000 employees lose their jobs. The US
company disclosed that it would shed 15 to 18 per cent of its work force.
The company, already dealing with cuts announced in May, expects to save up
to $800 million a year as a result, while also taking charges of up to $600
million over the next 12 months.
Telecoms
Nokia: The world’s largest mobile phone maker, yesterday issued its
second profit warning in three months, blaming a “sharp pull back” in global
consumer spending over the past few weeks. It also predicted that global
handset sales would fall in 2009 as the economic downturn worsened. If
handset sales fall next year, it will be the first drop for eight years.
Transport
EasyJet: Sir Stelios Haji-Ioannou launched an attempt to regain control
of easyJet in a fresh clash with the management of the no-frills airline
that he founded 13 years ago and whose shares have plunged. He has
threatened to oust the chairman, Sir Colin Chandler, and appoint himself to
that role if the board does not accept two new directors chosen by him. Sir
Stelios said that he had raised his direct stake to 27 per cent.
Utilities
Energy demand: Britain’s worsening slowdown is set to trigger a 7 per
cent plunge in demand for electricity next year. With hundreds of factories
expected to close in the months ahead and consumers adopting an increasingly
frugal approach towards their energy use, a study to be published by Inenco,
the energy consultancy, next week will show that within six to 12 months,
peak UK electricity demand could be 7 per cent lower than it was a year ago.
