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Economics
Credit strains: The Bank of England said it would cut the number of its
weekly corporate bond purchases to three, from four, as of Monday and would
hold three reverse auctions per week starting under its “quantitative
easing” (QE) strategy to pump newly printed money into the economy. The
corporate bond purchases form a small part of the QE plan, with the Bank
having bought £435 million, compared with gilt purchases totalling more than
£28 billion.
High street: The British Retail Consortium’s latest snapshot of high
street conditions shows that the total value of retail sales rose by 0.6 per
cent in March, compared with a year ago, after a rise of 0.1 per cent in
February. Like-for-like sales fell by 1.2 per cent in March from a year
earlier, after a 1.8 per cent year-on-year drop in February.
House prices: The price of an average British home fell by 12.3 per
cent year-on-year in February, the Department of Communities and Local
Government, reported. Prices dropped by 2.7 per cent between January and
February, marking the sixteenth consecutive monthly fall.
Eurozone stimulus: The European Central Bank will produce alternative
monetary policy measures next month to boost the eurozone economy, Axel
Weber, president of the German Bundesbank, said. Jean-Claude Juncker,
chairman of the “Eurogroup” of eurozone finance ministers, said measures
taken to fight the economic crisis may need a rethink if they fail to bring
results by 2010.
US deflation: Official figures showed that US consumer prices fell by
0.1 per cent in March, leaving the headline annual US inflation rate at
minus 0.4 per cent, in negative territory for the first time since August
1955.
US industrial production: The US Federal Reserve said output from
American factories, mines and utilities had dropped by 1.5 per cent in March
in the fifth consecutive monthly decline.
US bank lending: The US Treasury Department said that lending to
consumers and businesses during February had fallen, despite the billions of
dollars in government support for banks.
US housing market: The National Association of Home Builders/Wells
Fargo housing market index of sentiment rose to 14 in April from 9 in March,
emerging from single digits for the first time in six months. It was the
largest one-month gain since May 2003.
US prospects: The US economy continued to weaken in March and early
April but there were some signs that the recession may be nearing an end,
the Federal Reserve said. It found that five of its 12 districts noted a
moderation in the pace of the economy’s decline and several saw signs of
activity “stabilising at a low level”, according to its Beige Book summary.
Oil demand: Opec, the oil cartel. forecast that global oil demand would
drop by 1.37 million barrels per day (bpd) in 2009 to average 84.2 million
bpd. Its previous forecast had been for consumption to fall by 1.01 million
bpd.
Banking
& finance
UBS: The Swiss bank plans to cut a further 8,700 jobs, equivialent to
11 per cent of its global workforce, after it said it would record a
first-quarter loss of nearly SwFr2 billion (£1.2 billion).
US banks: The Obama Administration is drawing up plans to disclose the
conditions of the 19 biggest American banks as it tries to restore
confidence in the financial system without unnerving investors.
The Children’s Investment Fund: John Ho, head of the hedge fund’s
operations in Asia, is poised to resign over changes in the way the £6.5
billion fund is run. It invests on behalf of a charitable foundation run by
the wife of Chris Hohn, the founder.
Barclays: The banking group is set to increase the cost of fixed-rate
mortgages. Woolwich, the mortgage arm of Barclays, blamed the decision on a
rise in the cost of longer-term wholesale borrowing, which banks use to fund
new mortgage lending.
Panmure Gordon: One of the City’s oldest stockbrokers has secured its
future with a £17.3 million cash injection from BlueGem Capital Partners,
the private equity group, which will take a 40.3 per cent stake in Panmure.
Construction
& property
Jones Lang LaSalle: The property agency said direct investment in
European commercial real estate went down by 30 per cent to €12 billion
(£10.5 billion) in the first quarter. This was 30 per cent down on volumes
in the previous quarter and 70 per cent lower than the same time last year.
Gulf Finance House: The Islamic investment bank plans to launch a £50
million UK commercial property fund, according to Alan Durrant, head of
asset management at the Bahrain bank.
Consumer
goods
Pernod Ricard: The French drinks group said that its €1 billion (£879
million) rights issue would be at a 36 per cent discount to the prevailing
share price and reiterated its profits growth downgrade after a 4 per cent
decline in volumes in the first nine months.
Beer duty: The British Beer & Pub Association said a poll suggests
that 59 per cent of all MPs, and 41 per cent of Labour backbenchers, are
opposed to plans to raise beer tax in next week’s Budget.
SSL International: The maker of Scholl sandals and Durex condoms said
that demand for its key brands had helped it to report full-year profits
growth of more than 30 per cent.
Engineering
WS Atkins: The London-listed engineering and construction group, based
in Surrey, said that it had seen “no signs of a recovery” in the UK building
market and added that its full-year results will be in line with market
hopes.
Fiat: The Italian carmaker is threatening to abandon plans for a joint
venture with Chrysler, the US motor group, unless unions agree to cut labour
costs.
Health
Abbott Laboratories: The US pharmaceuticals group reported lower than
expected quarterly sales, hurt by generic competition for its Depakote
seizure drug.
Industrials
Hyundai Heavy Industries: The South Korean group, which is also the
world’s largest shipbuilder, is to pay $6.5 million (£4.3 million) for a
67.6 per cent stake in Khorol Zerno, which operates a 10,000- hectare farm
growing maize and soya beans near Vladivostok.
ArcelorMittal: The world’s biggest steel group, based in Luxembourg,
said that it may delay its planned $20 billion to $25 billion investment in
India by at least two years. It had said that it would build two steel
plants in the eastern Indian states of Orissa and Jharkhand to produce about
25 million tonnes of steel in total.
Lucite International: Fears are growing in Tokyo that the £1 billion
takeover of the leading British textiles company by Mitsubishi Rayon, the
Japanese chemicals group, may be delayed indefinitely by the Chinese
competition regulator. Although neither Lucite nor Mitsubishi Rayon is based
in China, both have substantial operations in the country making acrylic
resins used in the production of electronics and cars.
Leisure
TUI Travel: The tour operator has signed a definitive joint venture
agreement with S-Group Capital Management to develop its presence in Russia
and the Commonwealth of Independent States. The new venture will invest $40
million (£26.7 million) this year to acquire 75 per cent stakes in three
companies: VKO Group, a Russian travel group; Voyage Kiev, a Ukrainian tour
operator; and Mostravel, a Moscow group that sells holidays to Turkey and
Egypt.
Marston’s: The pub operator and brewer said that it had seen a
“modest improvement” in trading in the past eight weeks, with like-for-like
sales in its managed pubs up by 3.1 per cent and beer volumes in its
tenanted pubs seeing a “better underlying trend”.
Spirit Group: The managed pub arm of Punch Taverns is planning to
reposition up to 200 of its 800 pubs in an attempt to address the business’s
underperformance by comparison with its peers, according to M&C Report.
Fairmont Raffles Hotels International: Raffles Hotel, home to the
Singapore Sling cocktail, has been put up for sale for up to $450 million
(£300 million) as Prince Alwaleed of Saudi Arabia, its controlling
shareholder, seeks to plug the holes left by some of his other investments.
Media
Pearson: The publishing group, which also owns the Financial Times, has
bought Wall Street English, one of China’s English language training
providers, for $145 million (£96.7 million). The business teaches about
35,000 students in China.
Adventis: The marketing services, media buyer and advertising agency
reported lower full-year pre-tax profits of £1.8 million, from £2.6 million
last time.
Natural
resources
BG Group: The London-listed oil and gas company, based in Berkshire,
announced that it had made an oil discovery in Brazil. The group said that
it has found light oil at a concession in the offshore well, Iguacu, in
which it has a 30 per cent stake.
Amec: The oil services group has won a contract from BP in the United
Arab Emirates for two years, with a one-year extension option, to handle
work on its onshore gas facilities.
Regal Petroleum: The AIM-listed oil and gas group, which has assets in
Ukraine and Romania, said that its talks with Macquarie, the Australian
bank, about a $100 million (£66.7 million) loan had ended. The group added
that its primary objective was to strengthen its financial position and
negotiations were continuing with other potential lenders and joint venture
partners.
Afren: The London-listed oil and gas group said that it had raised
£84.8 million from a share placing with investors to help to pay for the
development of its Ebok field in Nigeria.
Rio Tinto: The Anglo-Australian mining group has come under fire from
small shareholders over its plans to raise $19.5 billion in China via
Chinalco, the state-owned metals group. There has also been concern that Rio
is selling stakes in its most valuable mines at the bottom of the cycle.
Retailing
Carrefour: The world’s second-largest retailing group said that it
plans to open its first cash and carry outlet in India late this year or
early in 2010.
Support
Services
Lok’n Store Group: The London-listed self-storage business has
revealed that it has received a takeover approach from a third party. It
added that the talks were still at an early stage and there could be no
certainty of an offer being made.
Technology
Intel: The American maker of computer chips claimed that the downturn
in the personal computer sector had bottomed out, even as its shares slid by
nearly 6 per cent after economic uncertainty prevented it from offering
financial forecasts for the rest of 2009.
Yahoo!: The US internet search engine is planning to cut several
hundred jobs in what would be its third round of dismissals in little more
than a year. The job losses could be announced next Tuesday when it reports
its first-quarter results.
Sarantel: The AIM-listed maker of antennas for mobile and wireless
devices, based in Northamptonshire, said that its first-half revenues are
expected to be about £1.6 million, an increase of 60 per cent on last time.
Telecoms
Tiscali: The crisis at the Italian broadband and communications
operator deepened when Ernst & Young, its auditor, refused to sign-off
its accounts. Ernst & Young cited “the fundamental uncertainties on
business continuity” that were making it impossible to sign off the year-end
2008 figures for the company, which has 1.8 million UK customers.
Transport
Ryanair: The budget airline said that it expected to save about €500
million (£440 million) in the 2009-10 fiscal year because of lower fuel
costs. Michael Crawley, the group’s deputy chief executive, said that most
of the savings would be reinvested in promoting lower fares.
Air France: The carrier said that it will reduce its workforce by 2,500
staff over the next two years and aimed to eliminate the jobs through
natural turnover rather than redundancies.
BAA: The aiports operator said the number of passengers flying out of
Gatwick and other UK airports had fallen by 11.3 per cent during March.
Gatwick was the worst hit, with passenger numbers falling by 17.7 per cent,
compared with March last year.
Long-haul passengers: Thousands of long-haul passengers, who were
affected by the price-fixing organised by British Airways and Virgin
Atlantic, are finally set for a refund after three passengers dropped their
legal challenge to a £73.5 million deal that had been agreed with the
airlines by American lawyers.
Network Rail: The owner and operator of Britain’s rail infrastructure
has mounted a campaign to defend its controversial bonus scheme, under which
the directors are due to collect more than £1 million funded largely by the
taxpayer.
Utilities
Airtricity: The renewable energy operation of Scottish and Southern
Energy has formed a consortium with the UK arm of Fluor, the US company, to
bid for the exclusive rights to develop offshore wind farms from the Crown
Estate. They have jointly developed the 500MW Greater Gabbard wind farm off
the Suffolk coast — the world’s largest offshore wind farm under
construction.
Nuclear power stations: The Government has named the 11 likely sites of
new nuclear power stations. Nine of the locations have previously been home
to nuclear reactors, while the remaining two are close to the former
Sellafield reactor site in Cumbria.
