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Economics
Gilts: Banks offered to sell more than three times as many gilts as the
Bank of England offered to buy on Monday, but the cover was lower than last
week, dragging gilt futures down. The Bank bought nearly £2 billion of gilts
in its second reverse auction under the quantitative easing scheme, designed
to boost the supply of credit to the UK economy.
Shares: London’s FTSE 100 index of blue-chip shares rose 2.94 per cent
to 3,863 points, adding to last week’s 6.3 per cent gains. It is still well
below the market peak of more than 6,000 reached last summer before Britain
plunged into recession.
Eurozone inflation: A jump in food and energy costs pushed up inflation
in the eurozone last month. Consumer prices in the 16 countries using the
euro rose an expected 0.4 per cent during the month, taking the annual
inflation rate to 1.2 per cent from 1.1 per cent. Economists expect
inflation to fall again next month.
Irish recession: Ireland is set for a more severe recession than any
other European country, Brian Lenihan, the Finance Minister, said. He said
that tax increases were on the cards as the public finances deteriorate.
US recession: Ben Bernanke, the Federal Reserve Chairman, said in a
television interview that the recession would “probably” end this year if
the Government succeeded in bolstering the banking system. He said that even
if it did end this year, the unemployment rate would climb past the present
25-year high of 8.1 per cent.
US factories: Industrial production fell for the fourth consecutive
month in February. Production dropped by 1.4 per cent, a bigger decline than
economists had forecast. Industrial output, at its lowest level since April
2002 in February, was 11.2 per cent lower than a year ago. The US Empire
State manufacturing index dipped to a new record low of -38.2 in March. The
new orders index slumped to -44.8, from -30.5.
Spain: The delinquent loan rate has risen to the highest level in more
than a decade as consumers and businesses struggle to pay off debt, the Bank
of Spain said. The 3.8 per cent rate in January compares with 0.95 per cent
for the same month is 2008 and is the highest since January 1997, the
central bank said.
Banking
& finance
AIG: The insurer has refused to hand over to the New York Attorney
General the identities of workers who received $165 million (£117 million)
in bonuses, despite stinging criticism from President Barack Obama over the
payments. Seven senior executives at the London-based division responsible
for the near-collapse of the group are in line for bonuses.
Tax avoidance: Alistair Darling signalled that he was ready to crack
down on tax avoidance by Britain’s banks. The Chancellor told MPs that HM
Revenue & Customs would publish a code of practice on taxation for the
banking sector around the time of the Budget next month.
Madoff: US prosecutors signalled their intention to strip the Madoffs
of more than $100 million in assets, including a $39,000 piano and $65,000
of silverware, to repay victims of Bernard Madoff’s $65 billion scam.
Citigroup: The bank has recruited four veteran bankers to fortify its
board with steady hands after the US Treasury pressured it to increase its
number of independent directors.
Northern Rock: Ann Godbehere, the former Northern Rock finance director
whose £173,000 expenses bill sparked an outcry, is one of three new board
members nominated to join the board at UBS, the Swiss bank.
Post Bank: A coalition of trade unions, business leaders, pensioner and
pressure groups have called for a new Post Bank to be set up as part of
moves to strengthen the Royal Mail. A Post Bank would boost the post office
network, create new jobs and secure the organisation’s future, they said.
Construction
& property
Brixton: The commercial property company may ask the markets for at
least £250 million from a rights issue after it axed its final dividend and
said that there was a pressing need to secure fresh financing.
SIG: The roofing and insulation company may ask shareholders for cash
to strengthen its finances. Reports suggested the Sheffield-based company,
which reports annual results this week, could look for up to £300 million.
Sovereign Land: The property company is to raise £300 million with
Strutt & Parker Real Estate Financial Services to invest in shopping
centres. The companies, which will raise the money from financial
institutions, said that the Sovereign Land LP fund would acquire centres
valued between £50 million and £100 million.
Consumer
goods
AG Barr: The last member of a family dynasty that has ruled the Irn-Bru
maker for 134 years is to step down from the helm of the business. Robin
Barr will end his 31-year tenure as chairman in May this year and the
position will pass outside the family for the first time in the Scottish
drinks maker’s history.
Pizza: The Office of Fair Trading is investigating the purchase by Dr
Oetker of Schwan’s pizza business in December amid fears that the deal could
lead to higher prices.
Scottish & Newcastle: The UK division of Heineken, the Dutch
brewer, said that it was reducing the alcoholic strength of its White
Lightning cider brand from 7.5 per cent to 5.5 per cent from May as part of
the company’s responsible drinking drive.
SABMiller: The brewer said that claims by Sir Liam Donaldson, the chief
medical officer, that minimum pricing on alcohol would be the best way of
tackling binge drinking could not be justifed from an economic perspective.
It said that such a move would cost consumers £1.8 billion a year yet save
the NHS and the police only £200 million.
Cadbury: Matthew Shuttock, previously president of the confectioner’s
British, European and Middle Eastern business, has been appointed chief
executive of the spirit division of Fortune Brands, which produces Jim Beam
bourbon and Sauza tequila.
Engineering
LDV: The struggling vanmaker owned by Oleg Deripaska, the Russian
billionaire, is offering vans to creditors to offset its debts. The
Birmingham-based business said that it would give the vans to dealerships
and other suppliers as part-payment on the money it owes them.
Ford: The car company is to cut capacity and costs in its European
operations because of falling demand for cars, even as it plans to invest
€200 million (£184 million) in its plant in the German city of Cologne. Tom
Malcolm, a company spokesman, said that no job cuts or layoffs were planned
at present.
Chrysler: The car company’s top executive says the technology that Fiat
would contribute in its proposed tie-up with Chrysler is worth between $8
billion (£5.6 billion) and $10 billion. Bob Nardelli, the chief executive of
the company, told employees in an e-mail that the conditions for the Italian
deal were the same as those for US Government loans.
Health
Biotech: One in five of Europe’s small biotech companies risks
bankruptcy this year as the credit crunch deprives the sector of vital
funding, according to a new study. This could lead to the potential loss of
20,000 highly skilled science jobs.
Industrials
SGL Group: Susanne Klatten, Germany’s wealthiest woman, plans to take a
stake of nearly a quarter in the German graphite specialist maker, her
holding company said, sending SGL shares soaring. She also owns 12.5 per
cent of BMW.
Continental: French workers threw eggs and shoes at effigies of their
bosses at a protest in Reims against the impending closure of a tire plant.
Germany’s Continental announced plans last week to close the plant in 2010
in response to the collapse of the European car market.
Leisure
Jockey Club Racecourses: The operator of 14 racecourses, including
Cheltenham, Aintree and Epsom, has appointed Compass to handle the catering
under a contract worth a projected £500 million in revenue over a ten-year
period.
Media
Hearst: The 146-year-old Seattle Post-Intelligencer prints its last
edition this week. The Post-Intelligencer will continue to live on the
internet with a much smaller staff. Hearst, its owner, says that it has
failed to find a buyer for the newspaper, which it put up for sale in
January after nine years of financial losses. The Seattle Times is now the
only big daily in the city.
Natural
resources
Rio Tinto: Tom Albanese, the miner’s chief executive, saw his total pay
fall from £12.6 million to £2 million last year after a collapse in the
value of his share bonuses.
Royal Dutch Shell: The company is to scrap its share buyback programme
and more than double its debt this year as it struggles to maintain its
spending commitments in the face of a collapse in the price of crude,
analysts have warned.
De Beers: The world’s top producer of rough diamonds has said that
Namdeb, its Namibia joint venture, may close its mines in that country from
April 1 for three months because of weak sales.
Chevron: Militants have sabotaged an oil pipeline operated by the
company in southern Nigeria, slashing its daily production by more than
10,000 barrels. Three years of rising violence across Nigeria’s southern oil
region has led to a 25 per cent decrease in output to under two million
barrels a day.
Retailing
Debenhams: The department store group has mothballed plans for a rights
issue after its biggest shareholders failed to secure a deal with lenders to
cut the chain’s £900 million debt mountain.
Support
Services
Capita: Shares in the back office outsourcer that administers about 26
million pension and insurance policies have risen after Goldman Sachs placed
it on its “conviction buy” list.
Technology
Broadcom Corp: A federal court has dismissed the company’s complaint
against Qualcomm, its rival, the latest move in their battle over mobile
phone technology patents. Broadcom intended to refile its case within the
next two weeks.
Eidos: The games maker said that it would delay the release of the next
edition of Championship Manager until after June 30, “to ensure we deliver
the best game to our customers”. The company said that the move would have a
limited impact on its profitability for the current financial year.
Telecoms
MTN: The South African mobile phone company is expanding its phone
banking services across the continent. MTN has offered financial services by
mobile phone in South Africa since 2005 and is now working with Fundamo, the
technical specialist, to expand these services into 20 other countries over
the next year.
Transport
Gatwick: The Competition Commission has begun to vet bidders for
Gatwick to ensure that they are suitable candidates to run the UK’s
second-busiest airport.
Virgin Rail: The joint venture between Sir Richard Branson and
Stagecoach became the first large rail company to announce falling passenger
revenues as a result of the downturn. In the ten months to the beginning of
March, Virgin Rail’s like-for-like revenues fell 0.6 per cent.
Forth Ports: The group, which owns London’s Tilbury docks, is to cut
its dividend from 47.7p in 2007 to 28.6p for 2008. Its profits were up 34
per cent at £37 million, ahead of forecasts of £33 million. It said that
while there had been a drop in deep sea container volumes, traffic in basic
commodities, such as food and oil, had been robust.
Clarkson: The shipping services group said 2008 pre-tax profits were
down 29 per cent at £18.2 million because of difficult trading in some
sectors, even as revenue rose 44 per cent.
Utilities
Npower: The energy supply company reduced its electricity charges by 8
per cent, the last of the big energy companies to do so. The cut, which is
due to take effect on March 31, will mean that the average household bill
for a dual fuel npower customer will drop £35 from £1,291 to £1,256.
Areva: Nearly one third of the work involved in the construction of new
nuclear reactors in Britain will be shut off to UK companies, Areva, the
French group that is expected to build most of them admitted.
