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Economics
Currency markets: The dollar rose yesterday and was heading for its
first yearly gain against the euro since 2005 as the worst financial crisis
in 80 years led investors to take refuge in the greenback. During morning
trading in New York, the euro was on track to reporting a 4.3 per cent fall
against the dollar this year, its first annual drop since 2005, standing at
$1.3956. The dollar was also set to gain about 5 per cent over the year on
its trade-weighted index against a basket of currencies.
US unemployment: The number of American workers filing new claims for
jobless benefits slumped unexpectedly by 94,000 last week, official figures
showed. Economists said that seasonal factors were probably behind this
surprisingly large decline, with US unemployment still expected to undergo
further steep increases as America’s economic downturn deepens. Initial
claims for state unemployment insurance benefits fell to a seasonally
adjusted 492,000 in the week ending December 27, from an unrevised 586,000
in the previous week. The figure for last week was the lowest since the
start of November and marked the steepest decline from week to week since
1992.
Banking
& finance
Aberdeen Asset Management: The fund manager is expected to announce
that it will buy the UK asset management division of Credit Suisse for
between £200 million and £250 million in an all-share deal. This will make
the Swiss bank the largest shareholder in Aberdeen and will turn the
Scottish group into Britain’s largest independent fund manager. At present
Aberdeen runs a business with about £110 billion of assets under management
and will acquire an additional £40 billion worth.
UBS: The Swiss bank said that it had sold its stake in Bank of China at
a profit of about $350 million (£244 million) as it set about repairing the
ravages to its balance sheet caused by $49 billion of investment losses.
Blue Oar: Management at Blue Oar, the City stockbroker, have conceded
defeat in the battle for control of the company, triggering the resignation
of Gavin Casey, its chairman. The £15.4 million hostile takeover bid had
been led by Edward Vandyk, Blue Oar’s disgruntled former chief executive.
FTSE 100: An end-of-year mini-rally on the final half-day of trading
for 2008 managed to lift the FTSE 100 by 41.49 points to 4,434.17, but it
ended the year down by 31 per cent, losing a total of £484 billion in value
— its worst 12-month period since the index was created in 1984. It was a
stark contrast to the final day of 2007, when a 20-point fall on the day
took the FTSE to 6,456.90, a 3.8 per cent rise on the year before.
Numis Corporation: The independent City broker said that Bill Trent had
resigned as chief financial officer and group company secretary. Simon
Denyer has been appointed as company secretary with immediate effect.
GLG Partners: The hedge fund has suspended its dividend payments and
has given no date for when it might resume them. GLG shares have fallen by
84 per cent in the past year.
Berkshire Hathaway: Shares in the investment vehicle of Warren Buffett,
the legendary US investor, fell by 32 per cent in 2008, its worst
performance in more than 30 years. Most of the fall occurred in the last
three months of the year, after poor results from its insurance business.
GMAC: The car finance unit of General Motors, which has been thrown a
$6 billion lifeline by the US Government, failed to reach the $38 billion
capital boost sought from a debt-for-equity swap.
Citigroup: Vikram Pandit, chief executive of Citigroup, and Win
Bischoff, the bank’s chairman, will forgo their bonuses for 2008. The bank
accessed $45 billion in US Government aid late last year.
Construction
& property
Property Recycling: The London-listed company, based in Norfolk, which
acquires and prepares brownfield sites for development, has bought a
16-hectare site at Welford, Northamptonshire, for £500,000. Paul Rackham,
the company’s chairman, said that he had first become aware of the site in
January 2003.
Morgan Stanley Real Estate: Garth Peterson, the Shanghai-based managing
director of Morgan Stanley Real Estate, who headed its China operations and
was regarded as its leading property dealmaker, is reported to have
resigned. His departure has been announced internally to the group’s
property investment staff in Asia.
Consumer
goods
Farm production: Peter Kendall, president of the National Farmers’
Union, warned that red tape, bad weather and the “ruthless methods” of
retailers could contribute to plummeting farm production in Britain during
2009. In a new year message, Mr Kendall said that farming was in a stronger
position than most industries in Britain to cope with the looming recession.
But the credit crunch is making it hard for farmers to finance the growing
of crops and the rearing of livestock in the face of increases in costs such
as animal feed and fertiliser and the investment needed to meet an
increasing number of new regulations.
Engineering
Cosco: The Chinese shipbuilder has issued a profit warning, saying that
its 2008 financial results will be lower than than last year, hit by a
severe downturn in the shipping industry and the macroeconomic conditions.
Cosco said in a statement that its units had received requests for payment
delays from several shipowners and it had incurred higher operational costs
from a rise in steel prices and higher outsourcing, as well as increased
subcontracting costs.
Pininfarina: The Italian family has agreed to sell its stake in the
Pininfarina company, the designer of Ferrari sports cars. After months of
wrangling, a banking syndicate led by Intesa Sanpaolo and UniCredit have
agreed to reschedule debts of almost €600 million (£580 million) but the
family must sell its 50.6 per cent stake in the company. Health
Bayer Healthcare: The unit of Bayer , the German pharmaceuticals and
chemicals group, has filed a patent-infringement lawsuit in a US court
against Abbott Laboratories relating to Humira, Abbot’s top-selling drug.
Humira is used to treat certain patients with arthritis, psoriasis, Crohn's
Disease and a form of arthritis called ankylosing spondylitis. Abbott
forecast Humira sales of more than $4.4 billion (£3.06 billion) for 2008 and
expects the drug’s annual sales could top $10 billion in coming years.
William Ransom: The London-listed natural healthcare products group,
based in Hertfordshire, rounded off a turbulent year by beating a deadline
to publish its half-year results. It said that it was now confident that a
six-month suspension of its shares would be lifted by January 9 after it met
a December 31 requirement to report the figures, which revealed a £500,000
interim loss. The group is also facing another battle after two former
directors called on shareholders to pass resolutions to remove the board.
Industrials
FuturaGene: The AIM-listed agriculture biotechnology group said that it
had settled litigation with eight of its founders and all the parties had
terminated the lawsuits against each other. The company did not disclose
specific terms of the settlement but said it would not issue any additional
shares to the founders involved in the litigation. It also added that it had
reached an out-of-court settlement with Bruno Ruggiero, a founder and former
chief executive, about a wrongful dismissal case filed in 2006, without any
admission of wrongdoing.
Leisure
Folio Hotels: Administrators to the privately owned hotel operator have
estimated the group’s total liabilities to creditors to be about £11.5 million.
The group’s 36 hotels are expected to be carved up between the management
and Bespoke Hotels, the operator of Home House, the London club.
Media
Viacom: The US entertainment group said that it would remove its cable
television networks, including Nickelodeon, Comedy Central and MTV, from
Time Warner Cable if the companies failed to reach a deal on carriage fees.
Viacom added that it was seeking a fee increase of less than 25 cents per
month per subscriber from the second-largest American cable TV operator.
Natural
resources
ONGC: The Indian oil company said that it would proceed with its £1.3
billion takeover of Imperial Energy, the London-listed oil and gas explorer
that is based in Leeds. Investors in Imperial had feared that ONGC would
back out of the high-priced deal. ONGC Videsh, the state-controlled
company’s overseas unit, said that shareholders representing 97 per cent of
Imperial Energy had accepted its offer, which was now unconditional. ONGC
Videsh added that it intended to use Imperial Energy as a platform around
which to build a wider business in Western Siberia.
Rio Tinto: The Anglo-Australian mining group has agreed to sell its
half in a Chinese aluminium smelting joint venture to Qingtongxia Aluminium,
its partner. Rio, which is trying to sell up to $30 billion (£20.8 billion)
in assets to pay off debt, had acquired the stake in the joint venture when
it bought Alcan, the Canada-based aluminium group, last year.
Retailing
Tesco: The price of petrol continued to fall after Tesco, the
supermarket group, cut 3p a litre from unleaded and diesel at its 430 petrol
filling stations. The reduction, which represents the latest shot in a
supermarket price war, comes a day after the AA motoring organisation
revealed that the price of petrol had hit a three-year low. The AA said the
average cost of petrol at the beginning of this week was 87.79p a litre,
compared with 88.27p at the end of December 2005. Diesel is now averaging
99.72p a litre – the lowest price since November 2007.
Adams: A further 3,200 retail jobs were put at risk after Adams, the
children’s fashion chain, called in the administrators.
PricewaterhouseCoopers, which had been put on standby before Christmas, said
that store closures across Adams’s 271 outlets were likely. An announcement
is expected next week. Unlike other retailers that have recently called in
the administrators, Adams has not agreed a prepack deal that would have
delivered an instant buyer and saved some parts of the business.
Support
Services
Cashbox: The London-listed independent installer and operator of ATM
machines reported a narrower full-year pretax loss of £3 million, compared
with a loss of £6.7 million last year, as it increased the number of its
sites, and added that it was confident about the new year.
Technology
BlueStar SecuTech: The AIM-listed provider of video network
surveillance services, which operates primarily in China, said that it
expected much lower fiscal-year results than it had previously anticipated,
as its Chinese banking clients were more cautious about placing orders amid
the global financial crisis. The group added that it expected revenues to be
in the range of £7 million, or about 32 per cent, lower than the figures it
had previously forecast for the financial year that will end on March 31,
2009.
Dell: The American computer group said that Mike Cannon, its president
of global operations, would retire at the end of January and will be
succeeded by Jeff Clarke. Mark Jarvis, the chief marketing officer of the
group, will also step down. The departures are part of a reorganisation at
the maker of personal computers, which is facing weak demand during the
economic downturn.
Telecoms
Vodacom: The South African mobile phone operator in which Vodafone, the
UK telecoms group, has a 50 per cent stake, said that it had completed the
purchase of Gateway, the African network and satellite services group, for
$700 million (£480 million). Vodafone is finalising the purchase of a
further 15 per cent stake in Voda-com from Telkom, the South African fixed
line operator, for 22.5 billion rand (£1.64 billion).
Chinese mobile phone networks: China’s state council, or cabinet, has
approved the issuance of long-awaited licences for next generation (3G)
mobile networks, opening the door to $41 billion in spending for equipment.
The council did not say when the licences would be issued by the Ministry of
Industry and Information Technology, but the industry minister has said that
it would happen by early 2009.
Transport
Passenger Focus: The rail customers’ watchdog has warned that rail
passengers will be shocked at the new fare rises. Regulated fares, which
include annual season tickets, will be going up by an average of 6 per cent
– well above the level of inflation. Unregulated fares, which include
off-peak tickets, will be rising even more – by an average of 7 per cent.
Easyjet: Dawn Airey is to stand down as nonexecutive director at
easyJet, the busdget airline, to focus on her role as chief executive and
chairman at Five, the TV channel.
Utilities
Spanish utilities: The Spanish Government has agreed to let power
companies raise electricity tariffs by more than 20 per cent over the next
three years, according to local reports. The agreement is part of the
Government’s plan to eliminate the gap between what utilities charge clients
for electricity and the cost of generating it, which is known as the tariff
deficit.
