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Economics
Economic stimulus: The Bank of England announced that it will pump £125
billion of newly created money into the economy by purchasing government and
corporate debt, up from its initial plan for £75 billion of purchases.
Interest rates: The Bank’s Monetary Policy Committee held official
interest rates for the second month in a row at their 315-year low of 0.5
per cent. The Bank said that it saw some “promising signs” that the economy
is recuperating but warned that risks remain.
Eurozone interest rates: The European Central Bank (ECB) cut interest
rates in the single currency area by a further quarter-point to 1 per cent,
as had been expected.
Eurozone stimulus: The ECB’s Governing Council also approved a form of
quantitative easing in the eurozone, saying that it would pump extra cash
and credit into the eurozone economy through purchases of corporate debt in
the form of covered bonds. It also said that it would extend the duration of
its unlimited loans to eurozone banks from six to 12 months.
Eastern Europe: The European Bank for Reconstruction and Development
(EBRD) cut its 2009 forecasts for emerging market nations in Europe to
predict a drop of 5.2 per cent in GDP, compared with the 0.1 per cent growth
it had predicted. Cutting its forecasts for the second time in six months,
it predicted that the Russian economy would shrink by 7.5 per cent this
year.
US productivity: Output per worker, the key gauge of productivity, grew
at a 0.8 per cent annual rate in the first quarter, after a drop of 0.6 per
cent in the previous three months. Productivity was boosted as workers’
hours registered the sharpest drop since 1975, falling by 9 per cent.
Oil prices: Crude oil rose above $57 a barrel as US economic
improvement boosted expectations of increases in demand for oil products. US
light crude rose by 88 cents to $57.22 a barrel in afternoon trade, having
earlier climbed to a high of $58.57, not seen since November. London Brent
crude rose by 84 cents to $56.99.
Banking
& finance
Northern Rock: The scope of the legal inquiry into government plans for
the nationalised bank was widened when the European Commission demanded more
information about the splitting of the lender into “good” and “bad” banks.
Société Générale: The French bank reported a
first-quarter net loss of €278 million (£248 million), down from profits of
€1.1 billion a year ago, after it took nearly €2 billion in new writedowns
and provisions.
Swiss Reinsurance: The company reported a 76 per cent drop in
first-quarter net profits to SwFr150 million (£88 million), from SwFr624
million a year ago.
Nasdaq: The US exchange operator said that its first-quarter profits
had fallen by 22 per cent to $94 million (£63 million), compared with $121
million a year ago, when it had booked hefty gains on foreign currency
contracts.
London Stock Exchange: The operator said that it has sold a fifth of
EDX London, its equities derivatives market, to TMX, its new Canadian
partner in the business, for £4.35 million. It also announced that the daily
value of equities traded during April had increased by about 16 per cent on
the average for the first quarter, although this was down by 34 per cent on
April last year.
Barclays: First-quarter profits at Barclays Capital, its investment
banking unit, rose almost fourfold to £907 million, helping to offset a more
than doubling of bad debts in the wider bank to £2.31 billion.
AIG: The insurer, which has been bailed out by the US Government,
reported a first-quarter loss of $4.35 billion, from a $7.81 billion loss
last time. It was AIG’S sixth consecutive quarterly loss.
US bank stress tests: Morgan Stanley and Wells Fargo have announced
multibillion-dollar capital raisings in response to government stress tests
that uncovered a $74.6 billion shortfall in the reserves of some of
America’s biggest banks.
Construction
& property
Bovis Homes: The London-listed housebuilder reported that reservations
for its houses in the 17 weeks to May 1 were up by 71 per cent on the same
time last year. But it added that sales for 2009 so far are down by 25 per
cent from the same time in 2007.
Rok: The property maintenance group said first-quarter trading was in
line with its expectations.
Barratt: The London-listed housebuilder, based in Newcastle, announced
that its new finance director to succeed Mark Pain will be David Thomas,
finance director and deputy chief executive of Game Group. He will join the
company in August.
Commercial property values: The latest CB Richard Ellis Monthly Index
reveals that the slide in commercial property values had slowed in April to
minus 2.1 per cent, from minus 2.7 per cent in March. Rental values showed a
1.3 per cent decline in April, compared with 1.6 per cent in March.
Hypo Real Estate Holding: The German Government announced that it holds
more than 47 per cent of Hypo Real Estate Holding, paving the way for a full
takeover and nationalisation of the troubled lender. after the Government
bid to buy up shareholders’ stock.
Consumer
goods
Anheuser-Busch InBev: The Budweiser and Stella Artois brewer announced
the sale of Oriental Brewery, its South Korean beer unit, to Kohlberg Kravis
Roberts, the US private equity group, for $1.8 billion (£1.2 billion) to
help to pay down the debt it took on to buy Anheuser-Busch.
Diageo: The drinks group reported a 7 per cent fall in first-quarter
net sales because of planned stock reductions in America, but reiterated its
guidance for full-year organic operating growth of between 4 per cent and 6
per cent.
Unilever: The Anglo-Dutch maker of consumer products such as Dove soaps
and Ben & Jerry’s ice-cream reported a 45 per cent fall in first-quarter
net profits to €731 million (£652 million), from €1.34 billion a year ago,
when earnings were increased by the sale of its Boursin cheese operations.
PepsiAmericas: The US bottling group has rejected PepsiCo’s takeover
bid, agreeing with Pepsi Bottling Group, its larger rival, that Pepsi’s
offer for the two groups was unacceptable and not in the best interests of
shareholders.
Engineering
Airbus: The European aircraft maker did better than Boeing, its US
rival, in terms of orders despite cancellations in the first third of 2009.
Between January 1 and April 30, Airbus took 30 new orders and received 19
cancellations, expanding its sales by 11 aircraft; Boeing had announced 40
new orders and 33 cancellations between January 1 and April 28.
General Motors: The US carmaker, which is attempting to stave off
bankruptcy, reported a first-quarter loss of $6 billion (£4 billion) amid
the continuing slump in global car markets.
Health
Bayer: The National Institute of Health and Clinical Excellence,
Britain’s healthcare cost-effectiveness watchdog, said it had recommended
that Nexavar, Bayer’s new drug, should not be given on the National Health
Service to patients with liver cancer.
Industrials
DuPont: The US chemicals group will cut 2,000 jobs because of falling
sales and said it would take a second-quarter charge of between $340 million
(£226 million) and $390 million.
Lanxess: The German chemicals company reported a first quarter net loss
of €14 million (£12.5 million), compared with a net profit of €104 million a
year ago. Sales fell by 31 per cent to just over €1 billion, from €1.5
billion last time.
Leisure
CryptoLogic: The internet gaming software group, based in Dublin,
reported a near-halving of first-quarter revenues but insisted that it was
on track to meet its target of returning to full-year profitability as its
games are brought on stream by licensees including PartyGaming and Gala
Coral.
Betfair: The betting exchange operator said that it had launched legal
action against the Dutch Government over its attempt to stop banks
processing betting payments involving Dutch citizens. It said that the suit
could result in a multimillion-euro claim for damages.
Media
The Wall Street Journal: SBI, the Japanese financial services group,
said that it will set up a joint venture with Dow Jones, publisher of the US
financial daily, to launch a Japanese edition of the newspaper’s website,
its second non-English site in Asia. Dow Jones is a division of News
Corporation, parent company of The Times.
Thomson Reuters: The financial information provider reined in costs to
make first-quarter profits of $228 million (£152 million), despite the
difficulties of the banks that are its biggest customers.
EMI: The group’s recorded music division generated full-year profits of
£58 million, even though revenues fell by 10 per cent in a year when it cut
2,000 jobs.
Natural
resources
Rio Tinto: Shareholders renewed their pressure on the Anglo-Australian
miner to rethink its $19.5 billion (£13 billion) capital-raising with
Chinalco, China’s state-owned metals group.
Vedanta: The FTSE 100-listed mining group, based in India, said that
its full-year profits had fallen by 75 per cent to $219.4 million, from $879
million last time, and added that it will cut capital expenditure by $5.3
billion after a collapse in commodity prices.
Retailing
Wal-Mart Stores: The US retail group said that Easter merchandise and
higher customer traffic had helped its same-store sales to rise by 5 per
cent in April. Analysts had expected a 2.9 per cent rise. Total sales for
the four weeks ending May 1 rose by 2 per cent to $29.85 billion (£19.84
billion).
Support
Services
Securitas: The Swedish security group reported a 3 per cent rise in its
first-quarter net profits to SKr510.2 million (£43.4 million), from SKr493.3
million a year ago. as the weakening of the Swedish currency boosted the
value of sales. Securitas gets the majority of its revenues in dollars and
euros.
Technology
Hitachi: The Japanese electronics group said that it expected a
full-year net loss of 788 billion yen (£5.3 billion), after a Y58.1 billion
shortfall in the previous year, more than had been forecast. It added that
it was cutting up to 7,000 jobs to cope with the downturn.
Nintendo: The Japanese games hardware company will face calls to
disclose its plans for a next generation of the Wii after it admitted that
sales of its console may have peaked.
Telecoms
Mobile phone calls: The European Commission wants telecoms operators to
charge each other less for connecting mobile phone calls between different
networks within the European Union, setting a recommended price target for
wholesale tariffs by 2012.
Transport
Coventry airport: The West Midlands airport has been put up for sale
after it lost Thomsonfly, its only passenger airline, last year. It has also
had a planning application for a new terminal turned down. KPMG has been
appointed as adviser on the sale.
Korean Air Lines: The carrier reported a first-quarter loss of 526.3
billion won (£274.5 million), from a net loss of 325.5 billion won a year
ago as weakness in the South Korean currency drove up costs denominated in
dollars. It was the sixth quarterly loss for South Korea’s largest airline.
Utilities
Severn tidal power: The short-list of renewable energy schemes for the
Severn estuary, using tidal power, must be reconsidered, green groups urged,
after a study highlighted “serious flaws” in the way the list had been drawn
up.
British Gas: The utility, owned by Centrica, cut the price of its
electricity tariffs by 10 per cent, benefiting 4.5 million customers.
