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Economics
Services sector: The CIPS/Markit purchasing managers’ survey of
services showed a headline index of 51.7 for May, from 48.7 in April, its
sixth consecutive monthly rise and taking it above the 50 mark that divides
expansion from contraction. The results were the best since April 2008.
The economy: The independent Times panel of economic experts says that
the Bank of England should pause in its aggressive campaign of action to
jump-start the economy, but warned that any recovery will be fragile.
Credit conditions: A survey from the EEF, the manufacturers’
organisation, said that 45 per cent of surveyed companies had reported a
significant or moderate rise in the cost of finance over the past two
months, up from 37 per cent in the first quarter.
Pay settlements: A study of 145 pay settlements in the three months to
April by Incomes Data Services, the pay adviser, revealed that average
settlements had fallen to 2 per cent, from 3 per cent, largely because more
workers were facing a pay freeze. A separate study of management pay deals
showed average awards of 1 per cent, down from 2.4 per cent at the start of
the year.
Take-home pay: VocaLink, the wage and salary processing group. said
that annual pay growth fell to 1.1 per cent during May, from 1.6 per cent in
April. Annual pay growth in manufacturing had fallen to 1.1 per cent, while
in services pay growth fell to 1 per cent.
Eurozone GDP: Revised data showed that eurozone GDP fell at a
year-on-year pace of 4.8 per cent in the first quarter, compared with a
first estimate of a 4.6 per cent fall. The quarterly pace of decline was
unrevised at 2.5 per cent.
Eurozone services: The latest Markit purchasing managers’ index for the
eurozone services sector showed a headline reading for May revised up to a
seven-month high of 44.8, from an initial estimate of 44.7 and compared with
43.8 in April.
Eurozone producer prices: The cost of goods leaving eurozone factories
fell by a further 1 per cent during April, after a 0.7 per cent drop in
March. It left producer prices down by 4.6 per cent from a year ago,
compared with a 2.9 per cent annual drop in March.
Latvia currency: A failed Latvian government debt sale raised fears
that the country may be forced to devalue its currency and also that
emerging nations would struggle to find buyers for sovereign debt issuances.
The failed auction, to raise 50m lats (£61 million), triggered a shares
sell-off in Nordic and Central European markets.
US manufacturing: Orders to US factories rose by 0.7 per cent during
April, marking the second increase in three months and offering further
evidence that US manufacturers may be recovering.
US budget: Ben Bernanke, Chairman of the US Federal Reserve, warned
that rising US government debt was pushing up longer-term interest rates and
said that it was time to begin work to rein in deficits.
US services: The latest survey from the Institute of Supply Management
showed that its headline index for American services rose to 44 in May, from
43.7 in April, but remained below the 50 mark that indicates expansion. New
orders for services businesses fell at a faster pace.
Australian economy: Official data showed that Australian GDP rose by
0.4 per cent in the three months to the end of March, after shrinking by 0.7
per cent in the fourth quarter. Analysts had expected a 0.2 per cent
decline.
Banking
& finance
The Bank of England: The bank transferred about £600 million of risky
property loans by mistake from Dunfermline Building Society to Nationwide,
which bought the collapsed group’s savers’ deposits. Alistair Darling is
expected to issue a parliamentary order today to correct the error made in
March by the Bank’s lawyers.
Fortis Corporate Insurance:The Dutch Government said it has agreed to
sell Fortis Corporate Insurance to Amlin, the London-listed insurance group,
for €350 million (£303 million).
HSBC: The banking group plans to close 100 high street branches of its
Beneficial Finance sub-prime division, putting 450 jobs at risk. The
remaining 25 branches will be closed to new business.
Brevan Howard Asset Management: Thirty-four members of Europe’s biggest
hedge fund manager will share a payout of £113.3 million after it more than
doubled its full-year operating profits.
Association of British Insurers: The industry body said insurers risk
being hit by a regulatory “contagion” as governments and watchdogs across
Europe threaten to apply banking crisis rules to all financial services
companies.
US securities: Eleven US banks have bought back $61 billion (£37.2
billion) worth of auction rate securities as part of a settlement reached
last year with New York Attorney General. The banks were accused of
mis-selling the securities to retail investors.
European Central Bank: Staff at the bank staged a strike over
employment benefits and a lack of bargaining power.
Barclays: The banking group has announced plans to scrap its final
salary pensions for 18,000 long-serving staff.
Construction
& property
Hammerson: The commercial property company has sold its Les Trois
Quartiers retail and office property in Paris for €210 million (£182
million) to MGPA, the private equity property investment group. Hammerson
will use the proceeds to pay off debt.
F&C Reit: The property investment company said that it has sold
seven retail and office properties around the UK for a total of more than
£12 million.
Rock Investment: The property group formed by Paul Kemsley, former
vice-chairman of Tottenham Hotspur Football Club, has gone into
administration.
Consumer
goods
Scotch Whisky: Distillers have pledged to cut their use of fossil fuels
by 80 per cent by 2050. The reduction amounts to an annual saving by 2050 of
more than 750,000 tonnes of carbon dioxide.
Dairy Farmers of Britain: The milk co-operative has gone into
receivership, putting about 2,200 UK jobs at risk. It had struggled after
losing a key contract with the Co-operative supermarket chain.
ChemNutra: The Las Vegas company and its owners have agreed to plead
guilty in connection with pet food that may have killed thousands of dogs
and cats during 2007. They were indicted in February 2008 on charges of
selling Chinese-made wheat gluten tainted with the chemical melamine to pet
food makers.
Engineering
Bombardier: The Canadian aircraft and train maker reported
first-quarter profits of $158 million (£96 million), from $229 million a
year ago. It said that general economic weakness and order cancellations in
its aerospace division had led to the decline.
Toyota: The Japanese carmaker said that it will start leasing plug-in
hybrid cars by the end of this year in the United States, Japan and Europe.
LDV: Gaz Automobile, the Russian carmaker, is set to walk away from its
investment in the Birmingham vanmaker. Nearly 850 jobs now seem certain to
be lost as Gaz prepares to withdraw its support after making losses of £2
million a month.
Health
AstraZeneca: David Brennan, chief executive of the Anglo-Swedish
pharmaceuticals company, said that he hopes to launch Onglyza, its diabetes
treatment, this year. It will be the group’s first new drug since late 2003.
He added that the company was also on track to file four new medicines for
approval which could reach the market in 2010.
Industrials
Chinese steel imports: China is investigating imports of US and Russian
steel under anti-dumping rules amid a rise in Chinese imports of the metal.
It is looking into a special type of steel used in power transformers to
determine whether US and Russian mills sold below the market value.
Leisure
Paddy Power: Sportsbet, the Australian bookmaker in which Paddy Power
has just bought a 51 per cent stake, is to acquire All Sports, a quoted
Australian rival in which it already has a 20 per cent holding. The Irish
bookmaker will contribute A$16.3 million (£8 million) of the purchase price.
Sportingbet: The internet gambling operator announced a 34 per cent
rise in its third-quarter results and promised shareholders that, in the
event of a satisfactory settlement with the US Department of Justice, it
would return cash to shareholders.
InterContinental Hotels Group: The world’s biggest hotelier has signed
a deal to develop four Holiday Inn Express properties in Brazil, which are
expected to open by the end of 2011.
Yellowstone Club: The exclusive American resort in Montana has been
sold for $115 million (£70 million) to CrossHarbor Capital Partners, the US
investment group. Last year CrossHarbor had offered $470 million for the
club.
Punch Taverns: Giles Thorley, the pub company’s chief executive, has
written to MPs after the Business and Enterprise Committee’s report on the
beer tie, arguing that an investigation would be “a waste of time and
resources”.
Media
Setanta: The sports broadcaster is withholding a £3 million payment due
to the Scottish Premier League (SPL) as investors refuse to stump up more
money. Setanta has five years to run on a £125 million contract with the SPL
but is hoping that it can reduce its payments to the football clubs to save
money.
Natural
resources
Rio Tinto: The Anglo-Australian mining group said that it will be
halving its exploration spending this year to $115 million (£70 million),
from $235 million, until conditions improve in the metals markets.
Separately, a report said that the company may cut the size of its planned
$7.2 billion issue of convertible bonds to China’s Chinalco and raise more
equity via a rights issue instead.
Lukoil: Russia’s largest privately owned oil company reported
first-quarter net profits fell by 71 per cent to $900 million, from $3.1
billion a year ago, dragged down by low oil prices.
Heritage Oil: Shares in the London-listed oil explorer surged by 10 per
cent before trading was suspended when it revealed that it was in bid talks
that could lead to a reverse takeover. Last month the group announced a
discovery in Kurdish Iraq.
Retailing
New Look: The fashion chain, based in Dorset, reported a 10 per cent
rise in full-year underlying earnings to £217.6 millionand said that
like-for-like sales in the UK and the Republic of Ireland were up by 1.4 per
cent in the year to March 28, compared with a fall of 3.4 per cent last
time.
Aquascutum: The future of the luxury goods retailer was in doubt after
it put its 343-strong workforce into consultation — the first step in the
process of making staff redundant. Last week Renown, its Japanese owner, had
parachuted a new managing director, Yukio Ueda, into the business.
Support
Services
Mears: The social housing and care group, based in Gloucester, said it
was “performing strongly” and had recently won £100 million worth of new
contracts.
Jarvis: The rail support services group, based in York, said that its
Fastline Freight subsidiary has secured an extension to its contract to haul
coal for E.ON, the German energy group. The value of this contract over the
additional period is expected to be in excess of £20 million.
Technology
Microsoft: The US software group said that it is starting a $100
million (£61 million), four-month advertising campaign for its Bing search
site in the hope that it will come to rival Google, the internet search
leader.
Telecoms
BT: The telecoms group, which is Britain’s biggest broadband provider
with 4.8 million subscribers, has launched a faster 20 megabit-per-second
service at no extra cost.
Telenor: The Norwegian telecoms operator said that it will cut 400 jobs
in Sweden because of disappointing sales.
Transport
British Airways: The carrier said that it had carried 6.5 per cent
fewer passengers in May than in the same month last year, while business
class numbers showed a decline of 17.2 per cent. Iberia, the Spanish airline
and BA’s proposed merger partner, said that it had no timeframe for
completing a deal and would concentrate on its economic difficulties
instead.
Ryanair: The budget airline said that it had carried 5.51 million
passengers during May, 9 per cent more than a year ago. Its load factor, a
measure of the number of passengers on each flight, rose to 81 per cent,
from 80 per cent.
Network Rail: The owner of Britain’s rail system, largely funded by the
Government, has seen its pension deficit nearly double after a 25 per cent
fall in the value of its assets,
Utilities
Northumbrian Water: The utility reported a 10.3 per cent decline in
full-year pre-tax profits to £152.7 million as it was squeezed by higher
energy costs and falling demand.
