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Economics
Interest rates: The Bank of England should cut interest rates by either
a half-point or a full percentage point today, The Times Monetary Policy
Committee recommended in a split vote. Three of the nine members of the
panel said that no change should be made as interest rates were now largely
irrelevant to the economy and it was the drought of bank lending that was
the real problem.
The pound: Sterling continued recent gains ahead of the Bank’s interest
rates verdict today. The pound jumped by almost 5 cents against the dollar,
reaching $1.5161, as the US currency was undermined by bleak American
economic news. Sterling also rose against the euro, which fell back to
90.02p, while its trade-weighted index rose to 78.7, from 77.2 at Tuesday’s
close.
Eurozone producer prices: The cost of goods leaving eurozone factories
fell by a record amount in December, dropping by 1,9 per cent, to stand 3.3
per cent up on a year earlier, according to official figures.
German unemployment: The numbers out of work in Europe’s biggest
economy rose during December for the first time since February 2006,
climbing by a bigger than expected 18,000 — in seasonally adjusted terms —
to 3.181 million.
US budget deficit: Borrowing by the US Government will swell to a
record $1.186 trillion during the 2009 financial year, according to a
forecast by the independent Congressional Budget Office.
US jobs market: American private sector employers cut 693,000 jobs last
month, after reducing 476,000 posts during November, according to estimates
by ADP Employer Services, the consultancy. The figures came as some
economists had predicted that official US non-farm payrolls data, due out on
Friday, could show that up to one million jobs were lost last month.
Oil prices: The cost of crude oil tumbled, in its sharpest one-day fall
for seven years, after a government report showed that US oil reserves were
much greater than expected, suggesting that the recession is leading to a
continuing slump in demand. Benchmark US light crude fell by 12 per cent, or
$5.95 a barrel, to settle at $42.63 a barrel on the New York Mercantile
Exchange. In London, benchmark North Sea Brent settled at $45.86, down $4.67
a barrel.
Banking
& finance
Bradford & Bingley: Shareholders are pressing ahead with legal
action against the stricken bank and its directors after a commercial
barrister said they had a strong case for compensation. About 1,200
investors have so far joined forces to lodge a class action case after
paying out cash during the bank’s £400 million fundraising just before it
collapsed.
Cattles: The sub-prime and doorstep lender said it plans to cut 1,000
jobs, or 20 per cent of its workforce, and scale back lending as it deals
with a funding crisis. In a drive to save £40 million in annual costs,
Cattles said it was closing a call centre back office in Hull with the loss
of 400 jobs, while a further 600 staff would go across the rest of the
business. It also said that it would be cutting its lending by 75 per cent
on its 2008 levels.
Anglo Irish Bank: William McAteer, its finance director and chief risk
officer, has resigned, the Anglo Irish Bank said, adding that it would
reconfigure its corporate governance structure to rebuild trust in the bank.
In December the Irish Government said that it would invest €1.5 billion
(£1.35 billion) in the bank, making it the majority owner.
Barclays: Between 125 and 150 positions will go from Barclays
Commercial Bank, the division responsible for issuing loans to medium-sized
businesses. The division employs 9,250 people nationwide and the cuts will
fall both on the bank’s Canary Wharf headquarters in London and on regional
offices. The job cuts are in addition to the loss of 410 IT workers already
announced.
Guinness Peat: The investment group said that 2008 had been a very
“unsatisfactory” year because of several portfolio writedowns as a result of
the economic crisis and added that full-year profits at Coats, its main
operating unit and one of the largest suppliers of threads and zips, would
be less than expected.
Financial Services Authority: The City regulator is examining whether
to extend disclosure of short-selling to all 3,489 companies publicly traded
in the UK. Just days ago it decided to relax an outright ban on
short-selling banking stocks which had been in force since September.
Santander: The Spanish owner of Abbey and Alliance & Leicester
looks set to miss its ambitious full-year profit target of €10 billion after
suffering hits from Bernard Madoff’s $50 billion (£33 billion) investment
scandal and the collapse of Lehman Brothers, the US investment bank.
Royal Bank of Scotland: The government-controlled bank is in
discussions to sell its £2 billion stake in Bank of China, according to
reports. The 4.3 per cent stake was bought for £800 million in December
2005. RBS could expect to make a substantial profit from the sale.
Construction
& property
Kier: The London-listed construction group, based in Bedfordshire, has
been chosen by the Norfolk and Suffolk Police Authorities to build and run
six new police investigation bases across both counties for 30 years under a
£60 million contract.
Consumer
goods
Fyffes: The London-listed fruit and fresh produce group, based in
Dublin, said it expects its full-year results to be at the top end of
previous estimates, but it had been hurt by the recent gains of the dollar
against the pound. It added that it is seeking “significant increases” in
its selling prices as higher fruit and shipping costs are only partly offset
by lower fuel prices.
Engineering
Meggitt: The London-listed aerospace and defence group, based in
Hampshire, has confirmed that Engineered Fabrics Corporation, part of
Meggitt Thermal Systems, based in the United States, has been awarded a $41
million (£27 million) follow-on contract for its largest fuel tank order
from the US Air Force. The additional fuel tanks are for the KC-135 aircraft
programme.
Advanced Power Components: The London-listed electronic components
group, based in Kent, has signed an agreement with KVAR Energy Savings
Corporation, the US group, to manufacture and distribute a range of products
to improve the performance of electrical motors, leading to reduced carbon
emissions and cost savings of up to 35 per cent.
Society of Motor Manufacturers and Traders: The car industry body has
organised meetings with banks, small business support schemes and regional
development agencies in a desperate effort to try to provide the industry
with more money. Its figures also confirmed that car sales fell by 21 per
cent in December, meaning total sales in 2008 declined by 11 per cent to
2.13 million.
Health
SkyePharma: The London-listed specialist drug delivery group said that
Nitec, its Swiss partner, has received a final assessment report concluding
that its Lodotra drug is approvable for the treatment of rheumatoid
arthritis and associated conditions in 15 European countries.
Ratiopharm: Banks moved swiftly to put up for sale the operations of
Adolf Merckle, the German billionaire who committed suicide on Monday.
Ratiopharm, the German generic drugs company, will be sold as part of the
deal, followed by Phoenix Group, owner of a drugs distribution business in
Britain and the 500-store Rowlands pharmacy chain.
Industrials
ArcelorMittal: The world’s largest steelmaker said it was suspending
manufacturing at its Zenica plant in Bosnia because of the reduction in gas
supplies from Russia.
LyondellBasell: The US arm of the Dutch chemicals company, part of the
empire of Len Blavatnik, the Russian oligarch, has asked a New York court
for permission to pay foreign creditors $350 million (£229.7 million) as it
fears suppliers will cut off its access to raw materials or sue it if they
are not paid for goods they have supplied.
Leisure
FishWorks: The future of the AIM-listed restaurant operator was in
doubt after it was forced to ask for trading in its shares to be suspended
amid talks with its bankers over its strategic options.
Domino’s Pizza UK & Ireland: The pizza delivery operator
reported an 8.6 per cent jump in like-for-like sales in the fourth quarter
as consumers increasingly chose to spend their evenings at home.
Utopian Leisure Group: The privately owned bar and nightclub operator
run by Bob Senior, the former managing director of Ultimate Leisure, is in
discussions with its banks after its latest accounts show that it has
breached its covenants.
Media
Sport Media Group: The publisher of the Sunday Sport and Daily Sport
tabloid newspapers revealed that it is in urgent talks with its bank after
breaching one of the terms of its agreement. It said it was considering
“alternative financing sources and structures” with a debt for equity swap
reportedly under consideration.
Time Warner: The American cable television group, which owns the CNN
news channel and Time magazine, saw its shares sink by 7 per cent after it
warned that it will write $25 billion (£16.5 billion) off its books.
Natural
resources
Soco International: The London-listed oil and gas explorer said that it
has received preliminary approval to explore two appraisal areas in the Cuu
Long Basin offshore Vietnam. The proposals have been cleared by
PetroVietnam, the national oil company. Soco has a more than 28 per cent
interest in the 16-1 block.
Retailing
HR Owen: The upmarket car dealer has sold its Volvo dealerships, which
operate from four London sites, to a management buy-out team for £186,000.
Marks & Spencer: Sir Stuart Rose, executive chairman of the high
street retailer, pledged not to take a pay rise this year as the group
announced that a further £200 million would have to be cut from costs after
reporting that like-for-like sales had fallen by 3.4 per cent in the 13
weeks to December 27. It also confirmed that it was cutting 1,230 jobs and
closing 27 stores.
Thorntons: The high street chocolate retailer said that it had seen its
total sales decline by 2.3 per cent in the 12 weeks to December 27, to £77.6
million, pulled down by the performance of its shops. These had experienced
a 6.6 per cent drop in like-for-like sales, with total sales down by 5.4 per
cent to £51.8 million.
Blacks Leisure: The camping and surfing retailer warned that its
full-year profits would be below market expectations. In the 18 weeks to
January 3, like-for-like sales from its boardwear division, which includes
its Freespirit and O’Neill stores, fell by 19.2 per cent, lowering a 0.5 per
cent sales decline from its Millets and Blacks Outdoor stores. Overall group
sales fell by 3.9 per cent.
Greggs: The bakery chain reported a 5.3 per cent increase in
like-for-like sales over the four weeks to January 3, helped by the sale of
12 million sausage rolls and four million mince pies, as well as strong
demand for four new sandwiches priced at under £1.
Viyella: The 225-year old clothing retailer has collapsed into
administration and put about 450 jobs at risk. The chain was founded in 1784
and has more than 100 stores and concessions across the UK.
Support
Services
Carillion: The London-listed construction services group, based in
Wolverhampton, has won a highways maintenance contract in Canada, from the
Alberta Ministry of Transportation, worth £170 million. The deal is
scheduled to run from July 2009 to 2015.
Technology
Satyam: B. Ramalinga Raju, the founder and chairman of Satyam, the
Indian IT group whose name means “truth” in Sanskrit, has resigned. He said
he had wildly inflated the company’s profitability for several years,
resulting in 50.4 billion rupees (£660 million) worth of “fictitious” cash
on the company’s balance sheet at the end of September.
Intel Corp: The American group warned that its fourth-quarter revenues
would be below expectations, further reducing the estimates that it had
already cut in November. The company, which makes 80 per cent of the world's
microchips used to power computers, iPods and mobile phones, said that its
fourth-quarter sales had fallen by 23 per cent from a year ago.
Telecoms
BT: A survey released by BT Home IT Support has found that up to 190
million dormant gadgets are cluttering up the nation’s homes because more
than half of the population do not know how to use their home technology
correctly.
Chinese 3G licences: The Chinese Government has granted 3G licences to
the country’s three mobile operators — China Mobile, China Unicom and China
Telecom. The Ministry of Industry and Information Technology said they would
spend £30 billion between them building the high-speed mobile data networks.
Transport
EasyJet: The budget carrier said that its passenger numbers had risen
to 3.1 million in December, 7.3 per cent ahead of a year ago. The
Luton-based airline’s load factor — a measure of how full its plane are —
had risen to 82.3 per cent, from 78.9 per cent.
Ryanair: The low-cost carrier said it had reported Aer Lingus, the
Irish national carrier and its takeover target, to the Irish Takeover Panel,
alleging that it had made misleading statements.
Utilities
Scottish & Southern Energy: The utility has announced plans to
raise about £500 million through a placing of 40 million new shares. SSE
said the cash would help to provide funds for up to £6.7 billion in
investment opportunities over the next five years and would give it
additional means to acquire small and medium sized assets.
