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Economics
Services sector: The pace of contraction in the services sector,
accounting for about two thirds of the economy, slowed a fraction in
December, according to better than expected figures from the latest
CIPS/Markit purchasing managers’ survey. Its headline index of services
activity rose to 40.2, from a November reading of 40.1, on a scale where any
reading under 50 indicates contraction.
House prices: The average value of a home in the UK fell by a further
2.5 per cent in December to stand 15.9 per cent down on a year earlier,
according to the latest figures from the Nationwide Building Society. Its
findings chimed with a recent report from the Halifax, the nation’s biggest
mortgage lender.
Jobs market: The number of new placements of permanent staff by
recruitment agencies fell in December at the fastest pace for more than 11
years, while numbers of vacancies also tumbled and numbers of candidates
seeking posts leapt, according to the latest Report on Jobs from KPMG and
the Recruitment and Employment Confederation.
Pay growth: The average level of wage deals for the three months to the
end of November remained steady at 3.5 per cent, according to Incomes Data
Services, the pay consultancy. IDS said there were tentative early signs
that the outlook for pay is weakening in the face of falling inflation.
Eurozone inflation: The headline pace of increase in consumer prices in
the eurozone dropped abruptly in December, falling to an annual rate of 1.6
per cent, from 2.1 per cent in November, official figures showed.
Eurozone services: Activity in the eurozone services sector fell at a
faster pace in December, according to a purchasing managers’ survey of its
conditions. Its headline index dropped to 42.1, from 42.5 for November.
US services: The pace of contraction in the US services sector eased a
little in December, according to a better than expected survey from the
Institute of Supply Management. Its headline index of services conditions
rose to 40.6, from a reading of 37.3 in November.
Banking
& finance
Deutsche Bank: The Chinese securities joint venture of the German bank
has won regulatory approval from Beijing to gain accress to China’s
restrictive domestic capital markets with a proposed joint venture with
Shanxi Securities, to be called Zhong De Securities.
Kaupthing: Lawyers for Kaupthing, formerly Iceland’s largest bank, are
preparing to file a lawsuit at the High Court in London attacking the way in
which Britain forced Kaupthing Singer & Friedlander into administration
in October. The lawsuit has the “full support” of the Icelandic authorities.
Bank of America: Kenneth Lewis, chief executive of Bank of America, has
told the bank’s board that he and other senior executives should not receive
bonuses for 2008, after the bank performed below expectations. The board has
not yet decided whether to act on Mr Lewis’s advice, reports said.
GMAC: Ezra Merkin, whose hedge funds lost billions of dollars on
investments with Bernard Madoff, may be forced to give up his position as
chairman of GMAC. The car loan arm of General Motors, which was bailed out
by the US Government last month, must form a new board led by an independent
chairman, according to a regulatory filing.
Construction
& property
Galliford Try: The construction group said that it has won three
contracts with Yorkshire Water worth a total of £29 million. The deals
involve the refurbishment of East and West Hull pumping stations, flood
remediation works in Hull and water treatment works in Sheffield and
Rotherham.
Hirco: HSBC has been drawn into a deepening row at Hirco Developments
after the bank was accused of taking an excessive fee for advising the
AIM-listed property investment vehicle on its controversial restructuring
plan. Laxey Partners, the activist investor that is leading a shareholder
revolt at Hirco, has made an official complaint to the AIM regulation team
at the London Stock Exchange.
Consumer
goods
Carr’s Milling Industries: The agriculture, food and engineering
group said its profit in the first quarter of the current financial year
ending August 29 had been ahead of budget and it remained on target for the
full year, despite difficult trading conditions.
Anheuser-Busch InBev: The Stag Brewery at Mortlake, located on the
Thames by the finishing line of the Oxford and Cambridge Boat Race, is to
close next year with the loss of up to 182 jobs as a result of InBev’s
recent takeover of Anheuser-Busch.
Engineering
Toyota: The Japanese car group has been forced into suspending
production at a number of factories because of the economic climate, the
strong yen and rapidly collapsing car markets. The group said that all 12 of
its Japanese manufacturing facilities will be closed for a total of 11 days
between February and March.
Gravatom: Onet, the French company, has acquired Gravatom, the British
nuclear engineering group with manufacturing sites in Hampshire and West
Cumbria, for an undisclosed sum. Gravatom will become part of Onet
Technologies, the specialist nuclear and engineering division, a leader in
France in the decommissioning market. It has a turnover of €167 million
(£152 million) and employs 2,000 staff across Europe.
Wrayram Engineers: The Hereford-based supplier of hydraulic cylinders
has gone into administration with the loss of the “majority” of its 50
staff, according to PricewaterhouseCoopers, its administrator. PwC said the
company had suffered a sudden drop in sales in the last six months of 2008
as the economic climate affected clients in sectors such as construction.
The car industry: Carmakers are expected to reveal that sales in
December fell by an estimated 20 per cent. Worries are also increasing about
the future of components makers, which are thought to have been hit badly by
lack of bank lending.
Health
Ark Therapeutics: The London-listed specialist healthcare group said
that European officials have agreed to accept Cerepro, its brain cancer
drug, for approval. It is one of the first gene-based drugs to be cleared
for approval worldwide. Ark first applied for approval in 2005 after
mid-stage trial results, but was asked by regulators to perform a larger
trial.
AstraZeneca: The Anglo-Swedish drugs maker said that it hopes to sell a
nasal spray flu vaccine in Europe; the product is already available in the
United States. The vaccine was approved for use in 2003 in the United
States, where it is sold as Flumist.
Industrials
Posco: The South Korean steelmaker said that it might cut steel
production further in the current quarter to cope with slumping demand from
carmakers and home appliance companies. Last month the group announced the
first output cut in its history, reflecting the impact of the global
recession on steel-consuming industries.
Dow Chemical: The US group said that it would pursue legal and other
options to fulfil its rights under its agreement with Petrochemical
Industries of Kuwait. Last month Kuwait decided to scrap a deal to form a
$17.4 billion (£11.8 billion) petrochemical joint venture with Dow,
potentially upsetting Dow’s plans to buy Rohm & Haas, its rival.
Lyondell Chemical: The affiliate of LyondellBasell Industries, the US
chemicals producer, has filed for bankruptcy protection in New York.
Lyondell Chemical has assets of $27.1 billion.
Leisure
Barracuda Group: The privately owned operator of 225 pubs and bars
suffered a decline in like-for-like sales of 4.5 per cent in the five weeks
to January 3, although the fall narrowed to 3.5 per cent over the key
Christmas and new year trading period.
Ladbrokes: The gambling group’s advertising campaign for its online
casino business has been banned by the Advertising Standards Authority for
linking gambling to “excessive risk-taking and reckless behaviour”.
InterContinental Hotels Group: The world’s biggest hotel company by
number of rooms, with brands including Holiday Inn, Crowne Plaza and Indigo,
is believed to be cutting several hundred jobs worldwide, including up to
200 in Britain, as it responds to a decline in trading in many of its main
markets.
Media
ITV: The commercial broadcaster has bought a 25 per cent stake in
Carbon Media, the documentary maker, through its ITV Studios production
business. Under the terms of the deal, ITV Studios will invest £1.1 million
in the company and provide a £150,000 development fund for five years.
Bloomsbury: The Publishing group has bought Arden Shakespeare, the
academically respected series of the playwright’s works that was launched in
1899. Arden Shakespeare will retain its internationally recognised name and
will become part of Bloomsbury’s Methuen Drama imprint.
Natural
resources
Leed Petroleum: The London-listed oil and gas exploration company
operating in the Gulf of Mexico is deferring its 2009 capital expenditure
programme until the cost of drilling better reflects the tumbling price of
oil. The company also said that it had started commercial production at
three Eugene Island wells in the Gulf of Mexico.
Western Canadian Coal: The coalmining group said that it would cut
production at two mines in British Columbia because of rising inventory
levels as customers delayed shipments and the uncertainty of the coal
markets beyond April. It has notified employees at the Wolverine mine, which
produces primarily hard-coking coal, that it might curtail operations on May
18 to cut costs.
Alcoa: The American aluminium producer will cut 15,200 jobs because of
falling prices and said that it will let 14.5 per cent of its workers go by
the end of the year.
Retailing
The Co-operative Group: Britain’s fifth-biggest food retailer, which
expects to complete its £1.57 billion purchase of Somerfield, its rival, in
the first quarter, reported a 6 per cent rise in underlying sales during the
three weeks to January 3. It also said that like-for-like sales excluding
fuel were up by 5.2 per cent in the 13 weeks to January 3, the last quarter
of its financial year.
New Look: The cut-price fashion chain said it had enjoyed a successful
Christmas after sales rose by 2.8 per cent on a comparable basis with a year
earlier. It also reported improved margins in the 14 weeks to January 3.
Dunelm: The out-of-town homewares chain said it was in “robust” shape
to ride out the retail storm as it reported a 5.6 per cent fall in
like-for-like sales in the six months to December 29 but added that it had
held its margins by avoiding unplanned promotions.
Ocado: The online grocery retailer reported a 97 per cent jump in sales
for the Christmas week as sales topped £2 million for the first time for the
Sunday, Monday and Tuesday before Christmas. Over the four weeks to January
3, Ocado’s sales rose by 25 per cent, compared with the year before, making
it the best Christmas period in the group’s eight years of operation.
Support
Services
Clifford Chance: The UK's biggest law firm has hired William
Blumenthal, the former senior lawyer at the US Federal Trade Commission, to
head its American antitrust practice. Mr Blumenthal will also work in
Clifford Chance’s mergers and acquisitions practice.
Law firms: A landmark ruling by the Employment Appeal Tribunal means
that law firms will now be able to enforce a mandatory retirement age for
partners. The ruling has clarified how age discrimination laws apply to
partnerships.
Technology
Semiconductor Manufacturing International: China’s leading maker of
computer chips is discussing the possibility of selling a strategic stake in
itself to Intel, the US semiconductor group, according to local reports.
Logitech International: The Swiss computer mouse maker said it plans to
cut 15 per cent of its non-manufacturing jobs and is withdrawing its 2009
financial forecasts amid a slowdown in sales of computer goods.
Telecoms equipment sector: Fitch, the ratings agency, has given a
negative outlook for the global telecoms equipment sector in 2009, based on
expectations of declining markets in both handsets and infrastructure.
Apple: The US computer group is offering millions of songs free of copy
protection on its iTunes digital music store, allowing the music to be
played on any device.
Telecoms
Telefónica: The Spanish telecoms group has won a five-year
contract worth about €350 million (£319 million) to provide all mobile,
fixed voice and data services to Deutsche Post World Net’s 125,000 staff.
Telefónica claims that the deal will help Deutsche Post, which owns the DHL
delivery brand, to save more than €150 million in costs.
Transport
Ryanair: The budget airline said that it has extended its offer period
to Aer Lingus shareholders after getting almost no response to its €750
million (£683.4 million) takeover bid for the Irish carrier. Separately,
Ryanair said it had carried 4.37 million passengers in December, 11 per cent
ahead of last time. Its load factor - a measure of how full its planes were
- was unchanged at 79 per cent.
British Airways: The number of passengers flying business and first
class with the airline fell by 12.1 per cent in December . Overall traffic,
measured by the number of passengers and how far they travelled, fell by 3.4
per cent in December compared with last time, helped by travel over the
Christmas period.
EasyJet: The low-cost airline said that it was opening 14 new routes
across Europe this summer, with nine flying from regional airports such as
Newcastle and Bristol. The destinations will include Corfu, Naples, Athens
and Bordeaux.
Utilities
Scottish and Southern Energy: The utility said that it is now able to
operate its 2,000-megawatt Fiddler’s Ferry power station in Cheshire full
time after commissioning flue gas desulphurisation equipment at the station
in December. The number of hours that the coal-fired power plant could
generate electricity had been limited last year by European environmental
regulations.
Enron: Jeffrey Skilling, former chief executive of Enron, the collapsed
US utility, could have his 24-year sentence for fraud and insider trading
reduced after a federal appeals court ruled that while his trial had been
fair, the judge had not applied proper sentencing guidelines.
