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Economics
UK rate cuts: Charles Bean, Deputy Governor of the Bank of England,
signalled that more rate cuts were on the cards and that the Bank was
gearing up for quantitative easing to fight falling inflation. He said that
the economic downturn could be deeper than the Bank forecast last week.
European Central Bank: Jürgen Stark, a member of the ECB rate-setting
committee, indicated that future rate cuts could be limited, saying that
cutting interest rates aggressively would risk exacerbating uncertainty.
Jean-Claude Trichet, the ECB President, was quoted as saying that he did
rule out further action to support the eurozone economy.
Japan: The country’s economy plunged deeper into recession in the final
three months of last year. GDP fell by 3.3 per cent between October and
December, the biggest slump since 1974.
Russia: Industrial production shrank by 16 per cent in January compared
with the same month a year ago, the government statistics agency said.
Industrial output was down even more sharply — by 20 per cent — compared
with December, the Federal Statistics Agency said in a monthly report.
Russia’s economy is struggling with plunging commodity prices.
Banking
& finance
3i: An investment fund run by 3i, Britain’s largest quoted private
equity group, has pulled out of bidding for Gatwick Airport amid speculation
that it could not raise sufficient finance.
Lloyds Banking Group: The bank has had its Aaa credit rating downgraded
by Moody’s, the credit ratings agency, amid continued worries about
worse-than-expected losses from HBOS. Its shares closed down 8.14 per cent
at 56.4p.
Legal & General: Shares in L&G fell as much as 30 per cent at
one point, as investors and analysts predicted that Britain’s fourth-largest
insurer could be forced to top up its capital reserves by nearly £2 billion.
Although the shares recovered, they closed more than 10 per cent lower at
44.3p.
Fortis: The Belgian Government is in talks with BNP Paribas over
Fortis, Didier Reynders, the Finance Minister, said. He said that they would
hold further talks in future. Last week, Fortis shareholders voted against
state-led deals to carve up the bank, delivering a potentially fatal blow to
plans drawn up by BNP Paribas, its French peer, to buy some key Fortis
assets.
Banco Santander: The bank has sweetened a deal to compensate selected
private banking clients who lost money to Bernard Madoff, the accused
fraudster, according to the Wall Street Journal. Santander in January
offered to return some of the money lost by its clients but lawyers
representing some investors dismissed the original offer as inadequate.
Santander: The bank’s property fund cannot repay more than €2.6 billion
(£2.3 billion) to investors and is seeking government help, the CNMV, the
Spanish financial markets authority, said.
ING: The loss-making Dutch financial company has said that it will not
renew its three-year sponsorship contract with Renault Formula One after
this year. The group will reduce its spending by 40 per cent this year.
Construction
& property
Land Securities: The UK’s biggest listed property company has confirmed
it is looking at a rights issue. Land Securities looks set to follow in the
footsteps of British Land, its rival, and Hammerson, a smaller property
developer, which last week both unveiled plans for bumper rights issues.
Liberty International and Segro are also reported to be working on the final
stages of similar capital-raising schemes.
Galliford Try: The construction group has won a £103 million contract
to restore London’s St Pancras Chambers, the building which fronts St
Pancras railway station. It will create a 244-bedroom hotel, 67 apartments
and a £10 million penthouse for the Manhattan Loft Corporation.
Consumer
goods
L’Oréal: The world’s biggest beauty products group reported
full-year sales growth below its twice-revised target and steered clear of
giving guidance for 2009. It said that annual sales rose 3.1 per cent on a
like-for-like basis to €17.54 billion (£15.7 billion) in the 12 months to
December 31.
Engineering
BMW: The German car company is to lay off 850 weekend agency staff at
its Mini factory in Cowley, near Oxford, as demand for cars continues to
fall. Agency workers were given one hour’s notice. The company made the
announcements as the affected staff were finishing their shift.
Car bailout: General Motors and Chrysler are expected to tell the US
Government today that they need a bigger bailout than the $17.4 billion
(£12.1 billion) the ailing car companies were promised last December.
Umeco: The aerospace parts supplier is cutting about 30 jobs to cope
with slower growth in the coming year. It will move some sites to a four-day
week and will outsource an internal transport operation.
Health
Antisoma: The biotech company had £52.7 million cash at the end of 2008
and expects to receive at least $28 million (£19.6 million) by the end of
June from a sale of its oral fludarabine leukaemia product. Cash levels are
critical for biotech companies as many find it difficult to raise money from
investors in the credit crunch.
Ark Therapeutics: The drug company’s Cerepro brain cancer drug has been
made available to a patient outside a clinical trial for the first time.
French authorities requested that the drug be made available on a so-called
named patient basis, the company said.
Industrials
Mondi: The South African paper producer said that it would report lower
profits for 2008 than in the previous year because of the weaker economic
environment.
Leisure
Kentucky Fried Chicken: The fast food chain plans to open between 200
and 300 new restaurants, creating 9,000 jobs in the UK and Ireland in the
next three to five years. A spokesman said that the restaurants, employing
between 25 and 40 people each, would be located in both countries but there
would be emphasis on opening outlets in the North of England and in South
Wales. The £100 million to £150 million investment will include the
refurbishment of existing branches.
Media
Channel 4: Channel 4 and BBC merger talks have settled on establishing
a joint venture combining Channel 4’s digital channels and some of the BBC’s
commercial businesses, The Times has learnt. The venture would allow Channel
4 and BBC Worldwide, the commercial unit of the corporation, to retain their
independence, each owning half of the new 4 Worldwide joint venture.
Liberty Media: The media company may offer $250 million (£175 million)
in a senior secured loan as part of a transaction to rescue Sirius XM Radio
from an imminent debt deadline, according to the Financial Times. The deal
offered by Liberty would involve a debt-for-equity swap and would leave
Liberty Media with a major stake in Sirius XM.
Natural
resources
Rio Tinto: The Association of British Insurers is threatening to issue
a rare red-top investor alert over the controversial terms of a $19.5
billion (£13.69 billion) fundraising by Rio Tinto, The Times has learnt.
Sharesholders oppose the deal, which they say gives preferential treatment
to Chinalco, the Chinese state-owned metals group which already owns a 9 per
cent stake of the metals group.
BP: The oil company has been forced to broaden its search for a new
chairman after the withdrawal of Paul Skinner, its preferred candidate. The
oil group is understood to be considering a number of executives based in
the UK and Europe as candidates to replace Peter Sutherland, who is due to
retire this year.
Enegi Oil: The oil company said that the financial position at PDI
Production, its Canadian division, had been “materially adversely” affected
because of the temporary closure of a well in Newfoundland.
Dana Petroleum: The company has agreed to buy the Canada-based Bow
Valley Energy for $177 million (£124 million). Bow Valley put itself up for
sale after it had trouble refinancing its debts.
Cape: The oil and energy services group said that all talks about a
possible sale of the company had ended. Cape was confident of its prospects
as an independent business. In December, it said that it had received “very
preliminary expressions of interest” from some private equity houses.
Retailing
Principles: Debenhams and Sir Philip Green’s Arcadia emerged last night
as the favourites in the race for control of Principles, the
Icelandic-backed fashion retailer. Mosaic, the fashion group that is 49 per
cent-owned by Baugur, the Icelandic investment company, said that it had
received some approaches for Principles.
Co-operative Group: The retailer confirmed its intention to close
Somerfield’s headquarters, in a move affecting about 750 staff. The
Somerfield office in Bristol is expected to shut about 18 months after the
completion of the Co-op’s takeover, set to go through in the next month. The
Co-op hopes to be able to relocate “as many as possible” of Somerfield’s
Bristol employees to the merged head office in Manchester.
Hennes & Mauritz (H&M): The Swedish fashion retailer reported a
1 per cent year-on-year fall in January sales at established stores, a drop
that was smaller than expected. Total sales for the month were up 9 per cent
from a year ago, compared with a forecast of an 8.3 per cent rise. H&M
is the world’s third-biggest clothing retailer, after Gap and Inditex, the
owner of Zara.
Jessops: The specialist camera retailer expects to close 17 stores
across the UK by the end of this month. It has begun a “consultation” to
decide the future of the stores, which it says are no longer financially
viable. About 100 people may lose their jobs.
Support
Services
Satyam: The Indian Central Bureau of Investigation has joined the
investigation of Satyam, the outsourcing company, Prem Chand Gupta, the
Corporate Affairs Minister, said. The bureau will look into what is alleged
to be the country’s biggest corporate scandal, joining the Serious Fraud
Investigation Office and a state-level crime bureau.
TNT: The Dutch mail company unveiled a 37 per cent fall in profits
after a drop in demand for its express delivery services. Shares in Europe’s
second-largest parcel company fell 5 per cent to €13.89 (£12.45) after it
revealed that earnings before interest and tax totalled only €160 million in
the fourth quarter. It said that trading remained tough.
Technology
Fidessa: The trading software group reported a better-than-expected
rise in full-year revenue and profit and said that it expected growth in
2009, despite uncertain market conditions. Fidessa, which supplies trading
platforms to banks and financial institutions, reported a 40 per cent rise
in revenue and a 111 per cent rise in pre-tax profit for the year to the end
of December.
Samsung: A British court on Friday ordered the South Korean electronics
company to pay Dyson Technology £590,000 ($852,600) for trying to patent the
vacuum cleaner maker’s triple-cyclone technology. In a technical ruling
given at the end of January, the High Court upheld Dyson’s principal claims
that it had invented and patented the system.
Telecoms
BT: The telecoms group has defended its decision to award its
non-executives a 50 per cent pay rise despite a falling share price and two
profit warnings and at a time when the role of part-time directors is under
increasing scrutiny.
Telefonica: The telecoms company will cut mobile phone tariffs in
Spain, in a move that will help it to keep its customers in the recession
but will eat into average revenue per user, according to local reports.
Transport
Singapore Airlines: The airline plans to reduce flights and ground more
than a dozen aircraft as people travel less amid the global economic
slowdown. The carrier said that it would reduce capacity by 11 per cent
between April and March 2010 from the previous twelve months and
decommission 17 aircraft after air cargo shipments fell 20 per cent.
bmibaby: The budget airline has announced extra flights from the
Midlands and Manchester to the Mediterranean. The airline said it was adding
a total of 30 flights to its weekly summer schedule in response to customer
demand.
Utilities
Wind power: Wind farms generating enough electricity to supply three
million homes could be established off the Scottish coast after The Crown
Estate approved key preliminary bids from a clutch of power companies.
