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Economics
UK manufacturing: Activity fell at its fastest pace for almost 19 years
last month as output and orders plummeted, the latest CIPS/Markit purchasing
managers’ survey of the sector showed. The CIPS headline index of
manufacturing conditions tumbled to 34.4 in November, from an October
reading of 40.7, falling to its lowest since the survey began in January
1992 on a scale where any reading under 50 indicates contraction. The
findings also showed manufacturers cutting jobs more aggressively than at
any time since 1991 despite sharp drops in their costs as inflationary
pressures fade.
Mortgages: Approvals for loans for house purchases fell by a further
1,000 in October to a record low of just 32,000, the Bank of England said.
The cash value of new loans agreed also hit a record low of £3.9 billion as
the mortgage drought worsened. Slumping house prices undermined demand for
loans.
Loans: Total lending to individuals rose by £1.3 billion in October,
down from £1.8 billion in September, cutting the annual pace of credit
growth to just 5.3 per cent, the lowest since October 1993.
Markets: Shares slumped again on both sides of the Atlantic. In London,
the FTSE 100 index closed down 222.52 points, or 5.2 per cent, at 4,065.49,
after gaining 13.4 per cent last week in its best-ever weekly performance.
In Germany, the Dax index fell by 5.9 per cent, while in France the CAC-40
was down by 5.6 per cent. On Wall Street, the Dow Jones industrial average
was down 679.95 points at 8,149.09 points.
Gilt yields: Yields on gilt-edged UK government bonds tumbled to their
lowest levels in 30 years as investors rushed for safe havens. Yields on
ten-year gilts tumbled to an intra-day low of 3.67 per cent, down ten basis
points on the day, surpassing Friday’s record low.
Pound: The pound suffered its sharpest one-day fall against the dollar
since at least September 1992, when sterling was ejected from the European
exchange-rate mechanism. The pound slumped by more than 5 cents from
Friday’s close of $1.5345 to end trading in London at $1.4839, broadly
matching its loss in the wake of Black Wednesday in 1992.
Eurozone manufacturing: The latest purchasing managers’ survey of
manufacturing across the 15-nation eurozone bloc showed the sector’s
fortunes at its lowest ebb for more than a decade. The survey’s headline
index fell to 35.6 for last month, well below an initial estimate of 36.2.
US: Manufacturing shrank last month at its fastest pace for 26 years,
according to the latest Institute of Supply Management survey. Its headline
index plunged to 36.2 for last month, from October’s reading of 38.9.
Federal Reserve: Ben Bernanke, Chairman of the Federal Reserve, paved
the way for US interest rates to be cut to an unprecedented low of under 1
per cent this month and sought to reassure markets that the Fed could deploy
other weapons, such as buying up long-term Treasury bonds, even if it is
forced to cut rates to zero.
Slowdown: Recession in the United States took hold in December last
year, according to the Business Cycle Dating Committee of the US National
Bureau of Economic Research, which, by convention, determines the dates of
American business cycles. Many economists believe the downturn will last
until the middle of 2009 and will be the most severe slump since the 1981-82
recession.
Bonds: US Treasury bond prices leapt as fears of global recession sent
investors fleeing from stock markets. The jump in benchmark ten-year
Treasury bonds pushed yields to 2.85 per cent, their lowest level in at
least 50 years.
Oil prices: The price of oil slipped by more than $5 to $49 a barrel
after Opec, the oil exporters’ cartel, opted at the weekend to wait until
later this month to cut production in defence of prices. US light crude for
delivery next month was down by $5.15 at $49.28 a barrel. The price of a
barrel of London Brent crude was $5.52 lower at $47.97.
Banking
& finance
New Star Asset Management: John Duffield, one of the City’s last
mavericks, was preparing to cede control of the New Star asset manager after
being forced into crunch talks with lenders over its £240 million of debt.
London Scottish Bank: Ernst & Young is preparing to sell off
Robinson Way, London Scottish Bank’s profitable debt-collection business,
after being appointed to run the failed sub-prime lender and savings
provider. A number of private equity and trade bidders are believed to have
expressed interest in Robinson Way.
Paul Tudor Jones: One of the world’s most successful hedge fund
managers has suspended withdrawals from his flagship fund.He is splitting
the $10 billion (£6.7 billion) Tudor BVI Global Fund in two. Investors can
get their money out from next March. The move follows requests from
investors for some $1.4 billion of their money back and shocked the
industry.
Construction
& property
Balfour Beatty: The construction company’s WorkPlace division has
acquired Colledge Trundle and Hall for £2.85 million in cash to enable it to
expand into the energy management market.
Consumer
goods
Waterford Wedgwood: The crystal and ceramics business controlled by Sir
Anthony O’Reilly and Peter Goulandris, said that it would not pay the
interest due on a bond, paving the way for a financial restructuring.
Unilever: The Anglo-Dutch consumer goods group is to combine the
research and development departments of its food, corporate and health and
personal care divisions into a single unit.
InBev: The Belgian brewer’s UK division is to phase out distribution of
its niche Peeterman Artois and Eiken Artois beers in order to focus its
resources on Stella Artois 4%, a less alcoholic version of its core Stella
Artois lager.
Zetar: The confectionery group said that it could be hit by the
collapse of Woolworths. The retailer represents about 3 per cent of its
turnover, with £970,000 outstanding when administrators were appointed to
the retailer. It said that it was unclear how much of the sum was
irrecoverable and it continued to trade as normal.
Engineering
Japan: Car sales in Japan have fallen at a pace not seen since the
early 1970s. November sales of cars, lorries and buses plunged by 27.3 per
cent from the previous year.
Spain: Car sales in Spain fell by almost 50 per cent last month. Anfac,
the trade association, said that 63,068 vehicles were sold in November, a
decrease of 49.6 per cent from the 125,206 sold in the same month last year.
Ford: The American car company is prepared to sell Volvo, one of its
most famous car marques, to convince Washington that it deserves to be
bailed out with a $25 billion (£16.8 billion) loan.
Health
Johnson & Johnson: The healthcare company is to acquire Mentor, the
breast implant maker, for $1.07 billion (£721 million). At $31 per share,
its offer is at a 92 per cent premium to Mentor’s closing price on Friday.
William Ransom & Son: The UK’s oldest independent pharmaceutical
company said that two former directors were seeking to oust the board and
have themselves reappointed. Stephen Quinn and Frederick Whitcomb, who were
directors until December 2007, have requested a general meeting to seek
reappointment.
Industrials
Victrex: The plastics group gave warning that it would miss its sales
targets for 2009 because of slowing demand as it reported a 6 per cent
increase in full-year pre-tax profit. It said that after a strong October
and early November it was unlikely that sales would grow enough to meet
targets for 2009.
Leisure
Orchid Group: Lenders to the privately owned pub and restaurant group,
which includes the Bar Room Bar and Sri Thai chains, have sent a
restructuring team from PricewaterhouseCoopers into the company, with the
management’s blessing.
Pontin’s: The privately owned holiday operator said that it was
fully booked for Christmas after generating an 11 per cent increase in
festive-season bookings. It forecasts a rise in turnover next year after a
20 per cent rise in bookings for next summer.
Gambling: Britain and Malta have teamed up in an effort to head off
moves by France to use its presidency of the European Union to forge a
bloc-wide policy for regulating the multibillion-euro gambling industry.
Capital Pub Company: The London-based company reported resilient
trading, but scrapped its interim dividend in anticipation of tough
conditions next year.
Media
Essentially Group: The sports marketing and management company said
that it expected full-year earnings to fall below expectations because some
key contracts have been delayed. The group said that market conditions had
significantlyworsened since mid-September and that its outlook for 2009 is
cautious.
Time Warner: The media company, which owns CNN and Warner Bros, is
asking its shareholders to vote for a reverse stock split, in an effort to
boost its market price and improve the shares’ liquidity, according to a
regulatory filing.
Natural
resources
TNK-BP: Tensions between the joint owners of the Anglo-Russian oil
group have heightened amid signs that the billionaires who own half of
Russia’s third-largest crude producer were increasing their grip on the
business. Reports yesterday said that TNK-BP would dismiss 390 managers and
close 200 vacancies at its Moscow headquarters.
Total: The French oil group and four other companies are facing
criminal prosecution over the Buncefield oil depot fire, Britain’s biggest
peacetime explosion. The Environment Agency and the Health and Safety
Executive have begun proceedings over the 2005 blast that injured 43 people.
Retailing
Tesco: The retailer’s customers are defecting to its rivals Asda and Wm
Morrison at record rates, The Times has learnt. Previously unpublished
“switching” data provided by TNS Worldpanel, the industry analysts, reveals
that, in the 12 weeks to November 2, some £22 million worth of spending was
switched from Tesco to Asda.
Moss Bros: The men’s fashion retailer issued a warning on its full-year
profits. It added that sales for the 44 weeks to November 29 fell 3.6 per
cent on a like-for-like basis.
Gucci: The fashion house has appointed Frederick Lukoff as the new
chief executive of Stella McCartney. Mr Lukoff, 39, was poached from Lanvin,
the French fashion house, where he was director of business development and
was credited with a rise in sales.
Land of Leather: The furniture retailer confirmed it had received
approaches that could lead to an offer for the business. Approaches are
thought to be from Hilco, the retail restructurer, and Sun Capital, which
bought ScS Upholstery this year.
Support
Services
John Laing: The public private infrastructure provider has formed a
£450 million joint venture with Croydon council to develop four sites in its
area.
Technology
Computer games: Sumner Redstone, the media magnate, has sold his
majority stake in Midway Games, the computer games company behind Mortal
Kombat. He sold the stake for just $100,000 (£67,200) to Mark Thomas, a
low-profile investor.
Anite: The technology company reported a 42 per cent rise in first-half
pre-tax profits and said that it is to return up to £20 million to its
investors after a disposal programme.
Telecoms
BT Group: The telecoms company has appointed Tony Chanmugam, the chief
financial officer of its retail division, as group finance director. Mr
Chanmugam has also worked in BT Enterprises and BT Global Solutions.
Transport
Ryanair: The budget airline has made a second takeover bid for Aer
Lingus, the low-cost carrier’s state-controlled Irish rival, hoping that
economic gloom in Europe will head off concerns about monopoly control.
Utilities
Renewable Energy Holdings: The AIM-quoted green energy group has
entered a conditional sale-and-purchase agreement with Gamar GHL to develop
a wind farm site in Kobylany, Poland.
