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Economics
UK companies: Investment in business is falling at a faster rate than
previously assumed, according to the Office for National Statistics.
Investment in the July-to- September quarter was down by 1.3 per cent from
the previous quarter. The figure, which totalled £35.58 billion, was
originally put at only 0.2 per cent lower than in the April-June quarter,
and later 0.5 per cent, but was revised down for the second time yesterday.
House prices: Two of the UK’s leading mortgage lenders have decided not
to publish house price forecasts for 2009 because of market volatility.
Halifax and Nationwide release house price indices each month and forecast
prices for the coming year as well. Nationwide said that market conditions
were so unstable that any forecasts would have to be revised frequently.
Oil: Prices tumbled below $34 a barrel amid continuing fears about
global demand. These fears obscured a record production cut by the world’s
leading oil producers. New York light sweet crude fell as low as $33.44 in
midday trading but closed at $46.
US Treasury: Henry Paulson, the Treasury Secretary, has given warning
that the financial system remains unstable and indicated that the world's
largest economy would not return to growth until well into the next
administration. Addressing questions about interest rate cuts, Mr Paulson
said: “The biggest mistake we can make is to not intervene enough.”
US job losses: The number of layoff announcements involving at least 50
workers rose by 188 in November from the previous month, official data
showed, as the deepening recession forced employers to cut jobs. The Labour
Department said there were 2,328 mass layoff actions involving 224,079
workers in November, with the manufacturing sector recording its fourth
successive monthly increase in redundancies. That took the total number of
mass layoff announcements since the start of the recession to 20,712.
Japan: The central bank has returned interest rates to nearly zero and
unveiled measures to fix its broken credit markets. Additional measures are
likely to include the purchase of as much as 20 trillion yen (£145 billion)
of shares from the bloated portfolios of the banking sector.
French fund: Gilles Michel, the managing director of Citroën, will head
a strategic investment fund designed to support small businesses and managed
by CDC, the French state-owned bank, Christine Lagarde, the Finance
Minister, said. The fund has an initial budget of €20 billion (£18.6
billion).
Latvia aid: International lenders, including the International Monetary
Fund (IMF), say that a few details need to be finalised before they can
announce an emergency aid program for Latvia. “We are very close,” Christoph
Rosenberg, the IMF’s regional chief in Poland and the Baltic states, said.
Banking
& finance
Anglo Irish Bank: David Drumm, the bank’s chief executive, resigned
just hours after Seán FitzPatrick, the lender’s chairman, stepped down,
after revelations that he attempted to hide €87 million (£82 million) in
loans from investors by transferring them temporarily to another bank.
Blue Oar: The takeover battle for the stockbroker has taken another
turn as WH Ireland, its rival, has emerged as a potential white knight. WH
Ireland said that it was considering an offer but noted that it was
conditional on a recommendation from Blue Oar’s board. The move comes eight
months after Blue Oar made an approach to WH Ireland.
GLG: The hedge fund manager has snapped up the UK asset management
division of Société Générale, the French bank, for less than $150 million
(£101 million). The deal gives GLG, which has been battling for months to
stop investors redeeming funds, an additional $8.2 billion of retail and
institutional assets.
Watchdog row: An independent panel set up by the Financial Services
Authority (FSA) has rounded on the chief City regulator, accusing it of
launching an “assault” on consumer rights. The Financial Services Consumer
Panel, set up ten years ago to police the FSA’s activities, said that it
opposed a discussion paper that appeared to put more onus on consumers to
safeguard their interests.
Construction
& property
New Scotland Yard: The Metropolitan Police Authority has bought its
Central London headquarters from Land Securities for about £120 million
after 41 years of renting.
DTZ Holdings: The consultant unveiled pre-tax losses of £9 million in
the six months to October 31. It plans to raise up to £55 million to help it
to trade through a period of “prolonged market weakness”. The group said
that it could fall into administration if shareholders rejected the
fundraising.
Keller Group: The foundations group said that it continued to see
strong trading and that it was confident that it would report another
excellent set of results for 2008.
Consumer
goods
Polaroid: The company that created the instant camera after the Second
World War has filed for bankruptcy protection for the second time in less
than a decade. Polaroid, which now makes digital cameras and printers, said
that it had filed for Chapter 11 bankruptcy protection after admitting that
a fraud investigation into its parent had damaged its own credibility.
Rolex: Bruno Meier will be its fourth chief executive since 1905 after
the surprise departure of its chief executive. Rolex denied this week that
it had lost money in the alleged Madoff fraud.
Engineering
Car industry: America’s struggling carmakers have been granted a
reprieve after President Bush pledged to provide the industry with a $17.4
billion (£11.6 billion) bailout. Mr Bush gave warning that the collapse of
the country’s car industry could send the economy into a deeper and longer
recession.
Wagon: Nearly 300 jobs have been lost at the failed car parts group
after administrators began winding down its Walsall manufacturing base. The
Brownhills site makes panels and door parts for Honda, Ford, General Motors,
Land Rover and Nissan.
Russian cars: Russia has pledged to prop up its crumbling car industry
with Vladimir Putin, the Prime Minister, promising more than $5 billion
(£3.4 billion) to support the industry.
Barnes Group: The aerospace and industrial components maker said that
it was exiting certain non-core operations and would take related charges in
the fourth quarter. It has sold the UK Motalink van business as well as the
systems business and catalogue division.
Health
AstraZeneca: The Anglo- Swedish drugmaker is to develop and
commercialise US-based MAP Pharmaceuticals’ paediatric asthma drug. MAP
Pharma is developing unit dose budesonide as a potential treatment for
asthma in children aged between one and eight years. AstraZeneca will make
an initial cash payment of $40 million (£27 million).
SkyePharma: Talks about the US commercialisation of Certihaler, its
asthma treatment, have ended after advisers to the Food and Drug
Administration questioned the benefits of the drug.
Industrials
ThyssenKrupp: Germany’s biggest steelmaker may cut crude steel output
from February if demand remains weak, it said. Its rivals are also scaling
back production. Next month ThyssenKrupp will make a decision on whether to
cut production from its average of between 30,000 and 40,000 tonnes a day.
Leisure
Deals: The second half of next year will generate a surge in mergers
and acquisitions involving distressed leisure companies, as cash concerns
force owners to consider cut-price deals, according to KPMG.
Ladbrokes: The bookmaker announced that Chris Palmer would succeed Alan
Ross as corporate development director in February. At present he runs the
Hesketh family interests, including Towcester racecourse.
Media
Radio: FM radio should be switched off by 2017, forcing listeners to
buy digital sets, a Government-backed body of industry experts is expected
to conclude. The Digital Radio Working Group, chaired by Barry Cox, said
that stations could be forced on to digital only when certain conditions
were met. No switchover should take place until 50 per cent of radio
listening is through DAB digital sets.
Electronic Arts: The computer games maker said it would cut a tenth of
its workforce as it contends with weaker than expected sales.
Natural
resources
Alrosa: The Russian state diamond miner has secured a 44.2 billion
rouble (£1 billion) loan from VTB, the state-controlled bank. The loan will
allow it to redeem its short-term debt this year. The financing has been
provided for 600 days, VTB said in a statement.
Retailing
Monsoon Accessorize: The fashion chain’s founder has told suppliers
they need to offer “assistance and contributions” to ensure its stability.
John Lewis: Sales at the department store failed to improve last week,
falling by 6 per cent. The decline in trade follows a drop of 6.6 per cent
in the first week of December. It is also 4.9 per cent lower than the same
week last year.
Max Spielmann: About 545 jobs have been saved with the sale of 187 Max
Spielmann and Klick photo-processing shops to Timpson, the family-owned shoe
repair and keycutting chain. It bought the stores from KPMG, the joint
administrator to Bowie Castlebank Group.
Baugur: The heads of the Icelandic investment group, which owns large
chunks of the UK high street, were charged with tax evasion amounting to
$2.4 million (£1.6 million) in Reykjavik. Jon Asgeir Johannesson, the
chairman, Kristin Johannesdottir, his sister, and Tryggvi Jonsson, a former
co-worker, as well as Baugur itself and Gaumur, another of Mr
Johanennesson’s investment companies, have been charged with five counts of
tax evasion, which allegedly took place between 1998 and 2003.
Laura Ashley: UK like-for-like sales were down almost 10 per cent in
the tough trading climate. The group, which has 231 stores in the UK, said
that, in spite of the “extremely challenging” outlook, it was on track for a
performance in line with expectations.
Support
Services
Hunting: The oil services company said that its 2008 results should
meet analyst forecasts but the outlook for next year was uncertain as many
customers have yet to announce capital expenditure plans. “Current trading
is good with an order book for some operations extending into the first half
of next year,” it said.
Bateman Litwin: The Dutch oil and biofuel refinery support services
group said that its profits for the year to June 30, 2009, would be
significantly lower than previously indicated. It will be hit by a delay in
the award of contracts worth about $110 million (£74 million).
Communisis: The print and marketing communications group said that it
continued to trade in line with expectations for 2008 and that it had
replaced some of its outstanding lending agreements with a new £20 million
three-year committed loan facility.
Technology
Software Radio Technology: The electronic hardware and software
engineering company expects full-year revenue to be significantly below
market expectations because of a lack of orders in its professional mobile
radio (PMR) business. It said that it was considering options regarding this
division, including talks with potential investors, as the business has a
shortfall in funding because of payment delays.
Telecoms
BT: Thousands of workers at the telecoms company have backed changes to
their pensions. The Communication Workers Union (CWU) and Connect said that
their members had voted by large majorities to accept the proposals.
Ofcom: The communications regulator has published new guidance for
telecoms and pay-TV companies to help to protect consumers from unfair
charges that it claims are “often hidden” in the small print. Companies have
until the beginning of April to make changes to their terms and conditions.
KPN: The Dutch telecoms operator has had its fibre-to-the-home joint
venture with Reggefiber, which specialises in constructing and operating
fibre access networks, approved by the Dutch Competition Authority. KPN has
a 41 per cent stake in Reggefiber.
Transport
Aer Lingus: The Irish carrier has opened a new base at Gatwick as it
seeks to shrug off a hostile takeover bid from Ryanair and build its own
low-cost business. It will operate short-haul services to Irish and
continental destinations from Gatwick.
Scandinavian Airlines (SAS): The troubled airline has signed a deal to
sell a controlling stake to a group of Spanish investors for an undisclosed
sum. The Consorci de Turisme de Barcelona and Catalana d’Iniciatives will
take a 20 per cent stake in loss-making SAS, which will rise to 80 per cent
later.
Utilities
RWE: The German utility plans to build its first offshore wind farm, a
€2.8 billion (£2.6 billion) project, which will add it to the ranks of
would-be operators in the North Sea. RWE Innogy, its renewable energy arm,
said that it had acquired Enova Energieanlagen, the project company, with a
view to installing about 1,000 mega-watts of wind power generation capacity
near the island of Juist.
