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Economics
Global trade: The volume of world trade will fall by 9 per cent this
year, in its sharpest contraction since the Second World War, as demand for
imports and exports of goods collapses in the face of the global economic
slump, the World Trade Organisation warned.
Bank clean-up plea: The world is in a “dire” economic crisis that will
push millions into poverty and unemployment, Dominique Strauss-Kahn,
managing director of the International Monetary Fund (IMF), said. He said
that no recovery would be possible until the financial sectors of big
Western economies were cleaned up.
Global currency move: China threw down a challenge to America’s 50-year
dominance of the global economy as it proposed replacing the dollar as the
world’s main reserve currency with a new global system under the control of
the IMF, based on its so-called Special Drawing Right, a quasi currency.
UK recovery fear: David Blanchflower, the most doveish member of the
Bank of England’s Monetary Policy Committee, who steps down at the end of
May, challenged its view that the UK economy will revive by the end of the
year. Professor Blanchflower said: “There are plausible arguments to say
this will not happen.” He added that he expected sharp rises in unemployment
and called for action to bolster the jobs market.
Germany: The German economy could shrink by as much as 6 to 7 per cent
this year, Commerzbank said in a grim forecast.
Eurozone trade: The 16-nation eurozone registered a sharper than
expected trade gap of €10.5 billion (£9.8 billion) in January as its exports
fell by more than 10 per cent, setting the bloc on course for a steep
contraction in GDP in the first quarter, official figures indicated.
Banking
& finance
US banks: President Obama unveiled a plan to purge banks of up to $1
trillion (£686 billion) of toxic assets and justified it on the ground that
it would eventually help to save taxpayers’ money. The scheme is the
Administration’s latest effort to unclog credit markets and stabilise
America’s financial institutions.
Signet: The fund manager emerged as a potential victim of the collapse
of Weavering Capital, the hedge fund manager. Weavering Capital was placed
into voluntary administration after its flagship fund Weavering Macro Fixed
Income Fund, registered in the Cayman Islands and valued at $506 million,
was put into liquidation.
JPMorgan Chase: The US bank said that it would not buy any new
corporate jets until it had paid off its $25 billion government loan. The
bank said that it may then buy new jets to replace existing ones but would
not increase the size of its fleet.
Bernard Madoff: The trustee liquidating Bernard Madoff’s fund
management business has found a further $75 million in assets held by Mr
Madoff in Gibraltar. The discovery takes above $1 billion the amount that
Irving Picard, the trustee, has uncovered. The funds will eventually be used
to compensate the victims of Mr Madoff's $65 billion Ponzi fraud.
Société Générale: A law to curtail executive pay is
being drawn up by the French Government amid indignation over the award of
discounted stock options to four directors of Société Générale. The move
comes after the French bank bowed to pressure and said that the directors
had renounced the options.
Construction
& property
Hammerson: The property group said that it had enjoyed overwhelming
support for its recent £584 million rights issue. The company, whose
property assets include Birmingham’s Bullring shopping centre, said that
investors owning 98.6 per cent of its existing shares had agreed to take up
their rights.
Correction: Contrary to our report “Morgan regains control of Redrow in
swift coup” (March 21), executive directors Robert Peto and Killian
O’Higgins have not left real estate company DTZ but merely stepped down from
the board in January. We are happy to set the record straight.
Consumer
goods
Alcohol: Ireland’s drinks industry recorded its worst performance for a
quarter of a century last year as the volume of alcohol consumption fell by
5.9 per cent, according to the Drinks Industry Group of Ireland. It said
that flagging sales could mean up to 9,000 more job losses across the sector
in 2009.
Wii: Nintendo’s game platform sold nearly three million units in the UK
last year, attracting fans from outside the industry’s traditional following
of teenage boys. The games sector contrasted with slowing video sales and a
contracting music market.
Glisten: The maker of Fruitus biscuits said that profit before tax for
the six months to December 31 was £2 million, against £3.3 million in 2007.
Glisten has introduced a cheaper range to appeal to increasingly
price-conscious consumers.
Waterford Crystal: The world-renowned brand could continue to be made
in the Irish city under plans to establish a new manufacturing plant in the
area, despite the collapse of Waterford Wedgwood, its parent company, and
its sale to KPS Capital Partners, a private equity group.
Engineering
General Electric: The conglomerate lost its AAA rating from Moody’s
after losing its top rating from Standard & Poor’s this month. Moody’s
cut to Aa2 was one-notch deeper than S&P’s downgrade.
TEG Group: The composting technology provider reported a narrower
pre-tax loss for 2008, helped by improved trading across its operations, and
said that it was confident about the future with a strong outlook for
trading in 2009.
Health
NeutraHealth: The maker of own-label vitamin and supplement products
revealed a 35 per cent increase in revenue for the year as consumers
traded-down from branded pills. Profit before tax was £1.8 million, 3.7 per
cent below 2007, on a turnover of £28.9 million.
SkyePharma: The drug delivery company has submitted Flutiform, its
asthma drug, for approval with the US Food and Drug Administration, bringing
the medicine’s commercialisation a step nearer.
Industrials
Nippon Steel: The world’s second-biggest steelmaker has sealed a
year-on-year discount of about 57 per cent on coking coal contracts with BHP
Billiton Mitsubishi Alliance for 2009-10. The deal, the first between the
Australian miner and Nippon, will set a benchmark for other companies’
contract negotiations for the year starting on April 1.
Leisure
Wellington Pub Company: The £184 million of debt held by the tenanted
pub company controlled by the Reuben brothers and managed by Criterion Asset
Management has been put on notice of a possible downgrade by Fitch, the debt
rating agency, after a 4.6 per cent fall in underlying earnings in 2008 and
a sharp rise in bad debts.
Dubai World: The developer helping to build the $8.6 billion (£5.9
billion) CityCenter complex on the Las Vegas Strip said that it was suing
MGM Mirage amid concerns about the project’s viability. Dubai World said
that its Infinity World subsidiary contended that statements by MGM Mirage
about its ailing financial state constituted a breach of its joint-venture
deal and have put the project at risk.
Media
DMGT: Daily Mail and General Trust said that its recession-hit local
newspapers were showing signs of recovery, even as it announced that it
would shed another 500 staff from its regional titles. The publisher is
closing printworks and shutting a handful of titles.
Future: The publisher said that it expected to report a first-half
operating loss for its US business, which was hit by a dispute among
wholesalers and distributors in the North American magazine market and
weakness in print advertising. It said that its results for the year ending
September 30 would be in line with expectations.
Natural
resources
Petro-Canada: The former state-owned enterprise has agreed to merge
with Suncor Energy, its Canadian rival, in a transaction that values it at
more than £10 billion. The merged oil group, which will adopt the Suncor
name, will have the biggest position in Canadian oil sands.
Sem Logistics: Britain’s largest oil storage facility has been put up
for sale after its troubled American owner filed for bankruptcy protection
from creditors. The sale of the operator of more than 50 huge tanks at
Milford Haven in South Wales is being handled by Blackstone Group, the
American private equity company.
Retailing
Marks & Spencer: Britain’s largest pension funds have added to the
pressure to curb the power of Sir Stuart Rose, Marks & Spencer’s
executive chairman. The National Association of Pension Funds has joined the
Local Authority Pension Fund Forum, Pirc, the consultant to investors, and
the Association of British Insurers in expressing concern about Sir Stuart’s
role.
Ideal Shopping Direct: Shares in the shopping channel group plunged
almost 30 per cent as it warned of a worse than expected £9.2 million hit
after reviewing its balance sheet. Ideal said that it still expected to make
an underlying trading loss for the year to December 28 of £4 million.
Support
Services
Enterprise: The infrastructure maintenance group shrugged off gloomy
economic conditions as it boasted a £10 billion bid pipeline and a 37 per
cent rise in annual profits. The company’s client base of local councils and
utilities has remained largely recession-proof so far, helping revenues to
reach a record £1.09 billion in 2008.
Technology
Intel: The bellwether of the technology industry announced an overhaul
of its employee compensation plan, including a freeze on top salaries and an
exchange of “underwater” stock options.
BT: The broadband supplier will make superfast delivery available to
500,000 homes and businesses in 29 locations in Britain by early next year,
using internet connections capable of running at up to 60 megabits per
second, nearly eight times faster than ADSL on copper telephone lines.
Correction: Contrary to our report (March 20) Premier Farnell, the
electronics components distributor, is not planning to close sites in the
UK. We apologise for the error.
Telecoms
Vodafone and O2: The UK’s two biggest mobile phone operators promised
savings worth hundreds of millions of pounds under a network pooling deal.
The formerly fierce rivals, who together service 549 million customers
across the globe, are to merge existing networks and build new phone sites
together. The two companies will now compete on the various services they
offer.
Transport
Czech Airlines: Air France-KLM, Aeroflot and two other companies have
expressed non-binding interest in buying the state-owned Czech Airlines,
which the Government in Prague has put up for sale. Besides Air France-KLM,
Europe’s largest airline, and the Russian carrier, applications were also
filed by the Unimex-Travel Service consortium and the Odien group, the
Finance Ministry said.
Ryanair: A Swedish court has ruled that the Irish low-cost airline has
to compensate a couple for expenses related to a cancelled flight, the
Swedish Consumer Agency (KO) said. Ryanair offered the couple a new flight
two days later and reimbursed them the SKr322 (£27) they had paid. KO did
not say how much the airline had been ordered to pay.
Bristow Helictopters: The helicopter company which serves the offshore
industry warned that it was to shed jobs after a decline in demand for its
services. The company has launched a consultation into proposed job cuts at
its bases in Aberdeen and at Redhill in Surrey.
Wincanton: The logistics group has won two contracts for warehousing
and transport services set to generate £100 million in revenues. The company
has extended its current deal with HJ Heinz, the food group.
Utilities
Ofgem: The energy regulator unveiled a package of proposals to ensure
that power suppliers do not discriminate against certain customers by
offering them bad deals with “unjustified price differences”. An earlier
investigation had found “flaws” in the retail market that meant some
consumers were given bad deals.
Ceres Power: The AIM-listed alternative energy company said that it was
on track to complete all the Alpha milestones under the British Gas combined
heat and power programme, which should see it get a payment of £2 million.
