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Economics
Housing market: The worst of the slump in house prices may have passed
as expectations of future conditions in the market among buyers and sellers
improve, David Miles, the newest external member of the Bank of England
Monetary Policy Committee, told MPs. He said that there were signs that the
worst of the recession was over but warned over anaemic UK growth ahead.
Credit conditions: The Bank of England’s latest survey of lending
conditions facing consumers and businesses suggested that banks will
continue to increase the availability of credit for mortgage borrowers and
businesses in the coming quarter, but at a pace little faster than in the
past three months. Banks also expected to continue to tighten unsecured
lending conditions, in the latest sign that credit markets remain badly
constricted.
European Central Bank: The ECB held interest rates in the eurozone at 1
per cent and reinforced expectations that official borrowing costs would
remain at this level into next year. The central bank also confirmed that it
would begin its unconventional programme to buy up mortgage and public
sector-backed covered bonds in an effort to breathe life into the eurozone
economy.
Latvia: The European Commission says Latvia should be given until 2012
to bring its budget deficit in line with EU rules. Joaquin Almunia, the EU
Economic and Monetary Affairs Commissioner, announced that the EU is
releasing the next €1.2 billion (£1 billion) rescue loan payment, now that
Latvia has approved budget cuts worth $1 billion.
Eurozone unemployment: The jobless rate in the 16-nation eurozone rose
to 9.5 per cent in May, from 9.3 per cent in April, reaching its highest
since 1999, official data indicated.
US employment: The number of jobs cut by American employers last month
was larger than expected by Wall Street at 467,000, according to figures
that ended a four-month run of decline in the number of posts lost. The
disappointing data pushed the US unemployment rate up to a 26-year high of
9.5 per cent.
Banking &
finance
PVM Oil Futures: The London-based oil broker, has lost almost $10
million after falling foul of an alleged rogue trader. The individual is
understood to have been suspended while the unauthorised trades are
investigated.
Business finance: The European Commission said that it would create a
€100 million (£83 million) microfinance facility to provide credit to small
businesses and encourage people who have lost jobs to start such
enterprises. The initial budget of the loan facility could leverage more
than €500 million in joint ventures with other financial institutions.
FDIC: The Federal Deposit Insurance Corporation’s board outlined for
the first time terms under which private equity firms would be permitted to
buy struggling US banks. As well as the three-year minimum ownership rule,
buyers must meet stringent capital requirements and will not be permitted to
make a purchase through an offshore vehicle.
Tax evasion: Luxembourg said that it had signed a double taxation and
tax evasion pact with Britain following international pressure to stamp out
tax fraud. Under fierce international pressure, Luxembourg recently promised
to co-operate with foreign tax authorities in tax fraud cases.
Intermediate Capital: The private equity lender, has raised £351
million in a rights issue to take advantage of investment opportunities. The
group said that the fundraising would allow it to participate in the
refinancing of existing buyout transactions and that it had extended £395
million of debt to 2013.
TCI: Profits at The Children’s Investment fund rose 73 per cent but the
hedge fund said that this year would be tougher. It reported profits of
£555.9 million for the year to 31 August 2008, against £321 million a year
before. It paid £484 million to its charity, The Children’s Investment Fund
Foundation, up from £271 million.
Construction
&
property
Max Property: Nick Leslau’s AIM-listed investment fund is poised to buy
the Industrious portfolio that went into receivership last year. The
entrepreneur set up Max to take advantage of distressed property and raised
£220 million from investors when it floated in May.
Valad Property: The Australia-listed property fund manager said that it
has restructured its European properties business, through the creation of a
joint venture with creditor Bank of Scotland. Valad said that it contributed
£230 million in UK and European property assets to the venture.
Laing O’Rourke: The construction group has appointed Douglas
Oakervee, the former Crossrail chairman, to its senior team. Mr Oakervee,
who starts in September, will lead the company’s business development in
Hong Kong and surrounding regions.
ROK: The building group, has asked its creditors for more time to make
payments. The company wants to change the terms of new contracts to include
a 60-day deadline for payments, double the current maximum.
Consumer
goods
Tandem Group: A small shareholder in the distributor of Ben Sayers golf
equipment and Falcon Cycles has started a shareholder activism group in
order to press the company to return value to shareholders in the form of
dividend payments or share buybacks.
Game Group: Europe’s biggest computer games retailer has been one of
the UK’s more resilient high street performers but its sales have started to
fall as consumers tighten their belts. The retailer said that like-for-like
sales were down by 15.4 per cent in the 21 weeks to June 27, compared with a
6.3 per cent fall for the 11 weeks to April 18.
Philip Morris: The tobacco company said that it has agreed to buy
Swedish Match’s South African operations for 1.75 billion rand (£136
million). Swedish Match reported sales of 687 million rand last year and its
products represent about 31 per cent of tobacco consumption in the region.
Engineering
Airbus A400M: France voiced confidence just days ahead of a
Franco-British summit that Britain would not drop out of the seven-nation
consortium behind the new Airbus A400M military transport plane. President
Sarkozy is to discuss the future of the €20 billion (£17 billion) project
with Gordon Brown during their summit on Monday.
VDA: The German carmakers’ association was upbeat on prospects for the
domestic market in 2009, raising its forecast for new vehicle sales thanks
to a government “cash for clunkers” scheme. The VDA said that thanks to the
scheme, 26 per cent more cars were sold in the first half of 2009 compared
to a year earlier.
Health
Johnson & Johnson: The healthcare company will take an 18.4 per
cent stake in Elan, the drug developer based in Ireland, with a $1 billion
(£609 million) investment. It is also buying Elan’s stake in the Alzheimer’s
disease treatment partnership with Wyeth and rolling it into a new company
to be 49.9 per cent owned by Elan.
Industrials
Siemens: The German industrial group will pay $100 million (£61
million) over 15 years into a fund to fight corruption after investigations
revealed fraud at its subsidiaries, the World Bank said. Siemens has also
agreed not to bid for business from the Washington-based bank for two years
as part of its punishment.
Steel: European demand for steel, after shrinking by a third this year,
should rise about 14 per cent in 2010 as an inventory draw-down by steel
users comes to an end, the European Confederation of Iron and Steel
Industries said.
Leisure
Domino’s Pizza UK & Ireland: The pizza delivery operator is
paying up to £15 million over seven years to acquire a finance leasing
business from Dresdner Kleinwort that will give it £29 million of tax
benefits.
Ladbrokes: The bookmaker is to cut 42 of its 500 UK call centre staff
in Aintree and Harrow due to competition from offshore internet and
telephone operators that enjoy significant tax advantages.
Gordon Ramsay Holdings: The embattled restaurant company reported an 87
per cent slump in 2008 pre-tax profits to £383,000, but said that current
trading remained robust. It said that it also secured an extension to its
loans from Royal Bank of Scotland until May 2011.
Travelodge: The budget hotel operator announced a €61 million (£52
million) expansion of its Spanish business with plans for three new hotels,
in Barcelona, Valencia and Seville. The group, which already has two hotels
in Madrid and one in Barcelona, plans to have 100 hotels in Spain by 2020.
Pubs: The Business and Enterprise Committee, which asked the Government
to refer the tied pub business model to the Competition Commission by the
middle of this month, has now requested that a response be delayed until
after the summer pending a number of industry initiatives.
Greene King:The brewer and pub operator reported a 15 per cent fall in
full-year profits to £118.5 million but said the recent warm weather had
produced a discernible upturn in trading. In the eight weeks to June 28, its
managed pub division reported a 5.2 per cent increase in like-for-like
sales.
Media
Eros International: With a slate of highly anticipated Bollywood films
ready to release, the Indian movie distributor expects to boost its overall
revenue by 20 per cent for the current financial year. The AIM-listed
company plans to expand its music label by acquiring three or four companies
over the next two to three months.
Natural
resources
Chinalco: The Chinese state-controlled aluminium company said that it
took up its full entitlement in Rio Tinto’s $15.2 billion (£9.3 billion)
share issue to maintain a 9.3 per cent stake in the Anglo-Australian miner.
Retailing
Woolworths.co.uk: One million shoppers logged on to the new site in its
first week of trading, the company said. The brand made its online comeback
seven days ago and consumers have ordered more than a tonne of its
pick-and-mix sweets over the internet. Clothing from the Ladybird brand has
also done well.
Photo-Me International: The photo booth company reported a loss of more
than £17.7 million and warned of a potential sales hit from the launch of
biometric passports in some countries. The group said that losses were
slightly better than the previous year’s £19.8 million.
Home Retail Group: More than a third of investors in the owner of Argos
have voted against a controversial short-term bonus scheme that could reward
its executives with up to 150 per cent of their salary in cash.
Support
services
Petrofac: The oil and gas services company said that it had won a
contract worth more than $350 million (£299 million) for the Kauther gas
compression project in Oman. Petrofac will undertake the engineering,
procurement and construction of the gas compression system.
Hydrogen Group: The specialist professional recruitment business said
that trading in the first half had continued to be challenging and that it
believes the outcome of the period will be similar to that of the second
half of 2008, with trading broadly at breakeven.
Technology
Green Dam: Several PC makers are including internet-filtering software
with computers shipped in China despite a government decision to postpone
its plan to make this mandatory. Beijing’s decision to delay the requirement
that the software — known as Green Dam — be supplied with all PCs sold in
China averted a possible trade clash with the US and Europe.
Telecoms
Vodafone: The mobile phone group buried the hatchet with Carphone
Warehouse after agreeing to sell its contract mobiles across the chain’s
outlets. Vodafone dumped Carphone as a supplier of contract mobiles in
favour of an exclusive deal with Phones4U in October 2006, but has returned
to the chain in an increasingly competitive UK market.
Transport
Virgin Atlantic: The UK airline, which has warned that it could cut up
to 1,200 jobs because of the recession, awarded its senior managers a 40 per
cent pay increase last year. Furious staff have accused Steve Ridgway, the
chief executive, of a lack of moral leadership after his salary rose from
£500,000 to £700,000.
Austrian Airlines: The ailing carrier, due to be taken over by
Germany’s Lufthansa, said that it would cut about 1,000 jobs by mid-2010 in
an effort to boost its competitiveness. The airline said that the cuts would
happen in stages and include layoffs.
Utilities
EDF: France is being forced to import electricity from Britain to cope
with a heatwave that has helped to put a third of its nuclear power stations
offline. With temperatures across much of France surging above 30 degrees
this week, EDF’s reactors are generating the lowest level of electricity in
six years, High temperatures lead to reactors overheating.
Exelon: The US power group sweetened its hostile takeover bid for NRG
by 12 per cent to $8 billion (£4.8 billion) in stock, citing newly
identified cost savings along with NRG’s recent deal for Reliant Energy’s
Texas retail business. The former offer has a current value of about $7
billion.
