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Economics
German industry: German manufacturing orders dropped by 6.1 per cent in
October, one of their biggest monthly falls, just one month after a record
decline in September, preliminary Economy Ministry data show. Domestic
orders fell by 6.1 per cent, with foreign orders down 6.2 per cent, led by a
drop in demand from the rest of the eurozone.
UK housebuilding: The number of new homes being built fell by 14 per
cent in the three months to the end of September, figures from the Office
for National Statistics show. However, total construction activity held up
in the third quarter, aided by a 19 per cent increase in new infrastructure
over the year.
US unemployment: The US labour market deteriorated significantly in
November, with businesses cutting 533,000 jobs, official figures showed.
This is the steepest drop in non-farm payrolls since 1974, and pushes the
unemployment rate to a 15-year high of 6.7 per cent. Economists had expected
325,000 job losses in the month.
Spain’s economy: After a decade in which per capita income
doubled and household debt tripled Spain’s economy is in trouble. More than
40,000 jobs are lost each week. Unemployment is at 2.99 million, a 12-year
record of 12.8 per cent and the highest unemployment rate in the eurozone.
Turkish loan: Turkey is expected to seek an International Monetary Fund
loan agreement amounting to $25 billion (£17 billion), which may take the
form of an 18-month stand-by deal. Turkey’s growth in GDP is expected to be
flat in 2009, with inflation around 14 to 15 per cent, according to
estimates by the IMF and Turkey.
Banking
& finance
Begbies Traynor: The insolvency expert disclosed that it has not been
immune to the economic woes that have led to mounting numbers of corporate
insolvencies. The Manchester-based company said that it is pencilling in
operating losses of about £1 million in the six months to October 31, but
booming business in its insolvency and corporate recovery business helped to
offset the loss and its annual outcome remains on track.
UK banks: Lloyds TSB, Halifax and Bank of Scotland will all remain in
the high street after the planned HBOS rescue by Lloyds TSB, the buyer said.
The banking group said that Lloyds TSB and Halifax would operate alongside
each other in England and Wales, while Bank of Scotland would be the group’s
brand in Scotland. There was no update on potential branch closures or the
impact on staff of the takeover plans.
UK pensions: The Financial Services Authority said that financial
advisers must provide better advice to customers switching into personal
pensions or self-invested personal pensions, after a survey highlighted
failings. The FSA plans to write to 4,500 firms setting out the standards of
advice it expects. The move comes after an FSA survey of 500 transfers
uncovered unsuitable advice in 16 per cent of cases.
Merrill Lynch: The US bank’s shareholders voted to approve the
company’s acquisition by Bank of America, Merrill said. With the
acquisition, Bank of America would become the largest US bank by assets with
about $2.7 trillion (£1.8 trillion), surpassing JPMorgan Chase and
Citigroup.
Julius Baer: Alex Widmer, the chief executive of the Swiss private
bank, died unexpectedly yesterday. The 52-year-old, who is believed to have
taken his own life, is succeeded at the bank by his predecessor as chief
executive, Hans de Gier.
Construction
& property
Berkeley: The UK housebuilder reported a 12 per cent drop in first-half
pre-tax profits, but said that it was well positioned to cope with
“unprecedented” property market uncertainty thanks to its strong cash
position. Shares in Berkeley rose as much as 6.3 per cent yesterday as
analysts pointed to its healthy position as it grapples with a slump in
Britain’s property market.
Consumer
goods
Brown-Forman: The alcoholic drinks maker reported a bigger than
expected increase in its quarterly profit, helped by higher sales of Jack
Daniel’s Tennessee whiskey and Finlandia vodka. Net income rose to $143.2
million (£98 million), or 94 cents per share, in the fiscal second quarter,
which ended on 31 October, from $129.4 million, or 83 cents per share, a
year ago.
Gai Mattiolo: The financial police in Italy say they have arrested Gai
Mattiolo, the fashion designer, on a charge of fraudulent bankruptcy.
Stefano Catorci, a police officer, said that Mattiolo was placed under house
arrest in Rome early yesterday for allegedly taking funds from his fashion
house before declaring bankruptcy. Mr Catorci says another suspect was also
arrested on the same charges, but gave no further details.
Engineering
Car sales: Global sales by BMW and Mercedes, the world’s top premium
carmakers, plunged by a quarter in November and Honda backed out of Formula
One racing as the economic downturn took a mounting toll of the sector.
Group vehicle sales by BMW fell 25.4 per cent to 96,570 units, led by a 26.2
per cent drop for the flagship BMW brand. Unit sales by Daimler’s
Mercedes-Benz premium division dropped 25.2 per cent.
US carmakers: Bailout negotiations for America’s biggest car
manufacturers were locked in stalemate yesterday as politicians in
Washington bickered over the form that any rescue of General Motors, Ford
and Chrysler might take. The heads of the three companies appeared before
Congress for a second successive day yesterday urging the Government to
provide emergency loans of $34 billion (£23.3 billion) to prevent them from
failing.
Ford: The US carmaker has made a 5.5 per cent pay rise offer to its
British workers, despite having to cut wages by a fifth in America. It is
part of a three-year deal and has yet to be accepted by unions. It will be
back-dated to November. A spokesman for the company in Britain said that
there was no chance that the offer could be rescinded, despite the
carmaker’s global difficulties.
Health
EU pharmaceuticals: A planned reform of the EU’s pharmaceuticals sector
no longer contains a move to ban repackaging prescription drugs. So-called
parallel traders, who buy and resell prescription drugs to exploit price
differences among EU states, had faced a repackaging ban in an earlier
version of the reform. Guenter Verheugen, the EU Industry Commissioner,
faced heavy pressure from parallel traders who said such a ban would have
wiped them out.
Industrials
EU emissions: EU industrial emissions could fall by 10 per cent below
2007 levels next year, Deutsche Bank said, unnerving traders over the
possibility of another price collapse in carbon permits. The German bank cut
its previous forecasts, saying that lower productivity from companies
participating in the EU’s Emissions Trading Scheme coupled with corporate
efforts to meet EU renewable energy targets could lead to a surplus in
emissions permits over the next three years.
Leisure
Marston’s: The brewer and pub operator surprised the market by
maintaining its final dividend despite a sharp fall in profits and a
cautious assessment of future trading. It said that moves to cut capital
expenditure and to sell bottom-end pubs would allow it to meet its
refinancing obligations.
Betting: The gambling industry has expressed concern at plans by the
Prime Minister, unveiled in his “fair rules for strong communities” agenda,
to investigate “the clustering of betting shops in certain areas”.
Bookmakers feared that the move could result in the restoration of the
demand test in the awarding of new licences.
Hotels: A Morgan Stanley survey of 400 corporate travel buyers suggests
that travel demand will continue to fall in 2009, although corporate hotel
rates would hold up better than expected.
Morgans Hotels: The US-based hotel operator announced that a
recapitalisation of its London joint venture, which owns the St Martins Lane
and Sanderson hotels, would allow it to receive a $12 million (£8.2 million)
cash dividend.
Media
Bloomsbury: The UK publisher of the Harry Potter series, is to buy John
Wisden, the 144-year-old publisher of the eponymous Wisden Cricketers’
Almanack. The deal will boost the company’s efforts to expand its reference
books business, which includes Who’s Who, Schott’s Almanac and Whitaker’s
Almanack. Wisden’s price was not disclosed but was described by Bloomsbury
as “not material”.
Natural
resources
Chinese fuel prices: China unveiled a long-awaited overhaul of its
subsidised domestic fuel price regime in a move that should make petrol
cheaper in the short term and allow for more predictable profits at its
state-owned refiners. From 1 January, Beijing will let petrol and diesel
prices move more regularly in line with the global market. The National
Development and Reform Commission will price fuel at about 4 per cent above
refinery-gate prices plus transportation costs.
Retailing
Debenhams: Britain’s second- biggest department store chain is
extending its “up to 20 per cent off” pre-Christmas sale over the weekend,
adding to the frenzy of discounting in the high street.
Debenhams held its first pre-Christmas sale two weeks ago, and also
extended that by two days.
Woolworths: The collapsed UK retailer will make 450 of its staff
redundant in what is expected to be the first of many job cuts. Deloitte,
the accountants, said that it would make the redundancies at Woolworths’
offices in central London and Rochdale. The retailer said that none of the
cuts would be made at its 815 stores or from Entertainment UK, its DVD and
CD distribution business.
Technology
Facebook: The online social networking site has delayed a plan to allow
employees to sell their shares in the company because of the global economic
downturn. Mark Zuckerberg, the Facebook chief executive, had notified the
startup’s employees in an e-mail that the stock sale plan would not be
proceeding as scheduled.
Telecoms
Dalsvyaz: The Russian regional fixed-line operator said that its
third-quarter earnings fell by 51 per cent year-on-year to 441 million
roubles (£10.6 million) due to higher expenses. Sales increased 11 per cent
to 4.2 billion roubles, while expenses rose, including a 9.5 per cent
increase in wage costs to 1.2 billion roubles.
Transport
EWS: The UK rail freight company is to cut 530 jobs, the rail union
TSSA was told yesterday. TSSA said that the Doncaster-based company blamed
the cut in its workforce by a tenth on the fall in goods moving by rail.
Gerry Doherty, TSSA general secretary, and Bob Crow, RMT transport union
leader, called for talks with Geoff Hoon, the Transport Secretary, to
protect the future of rail freight.
Iberia: Tension between Iberia and British Airways, its potential
merger partner, was growing last night after it emerged that the Spanish
flag-carrier had been briefing hedge funds against BA’s prospects. One City
source said that Iberia had been “pumping the investment community full of
nonsense”.
Gatwick Airport: Initial expressions of interest in buying Gatwick
Airport have come from many quarters, ranging from Manchester airport to
Singapore’s Changi airport and Hochtief, the German construction group and
airports operator, with four potential groups of bidders forming in recent
weeks, according to reports. The deadline for indicative proposals is
January 19.
Aer Lingus: Ryanair’s renewed bid to take over the Irish airline was
rejected by unions representing workers at the part state-owned airline.
Ryanair, in its second bid in two years, is making overtures to the Irish
Government and the trade union movement, which own more than 25 per cent and
14 per cent of the carrier respectively, as it campaigns for shareholder
support for its €748 million (£646.5 million) offer. Aer Lingus has rejected
the bid, saying that it undervalues its business.
Utilities
RWE: The German utility said that it formally committed itself to the
EU Commission to sell off its German gas grid in exchange for settling an
antitrust case over its gas transmission practices. It added that the EU
Commission would conduct a market test to allow market participants to
assess the proposal. RWE in May agreed with Brussels to sell the 4,000km
pipeline network to an independent third party.
E.ON: Protesters broke into Kingsnorth coal and oil-fired power station
in Kent, which is operated by E.ON, the German power group, last week and
cut almost 2 per cent of the country's electricity supplies.
