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Economics
Inflation: Official figures showed that the rate of inflation fell to
1.1 per cent in September, a five-year low, from 1.6 per cent in August, on
the back of falling energy prices. Core inflation, which strips out the cost
of tobacco, alcohol, food and energy, was 1.7 per cent in September, from
1.8 per cent in August.
Sterling: The euro hit 94.1p against the pound, the highest rate since
late March. Sterling has fallen nearly 3 per cent against the euro this
month and also fell to a six-month low against a basket of leading
currencies.
Housing market: The Royal Institution of Chartered Surveyors said that
the number of surveyors and property agents saying that prices had risen in
September exceeded those reporting declines by 22 percentage points, the
highest proportion since May 2007.
House prices: Official figures showed that house prices rose by 0.5 per
cent in August, taking the annual fall down to 5.6 per cent, from 8.3 per
cent in July.
German investor confidence: The index of investor and analyst
expectations from the ZEW Centre for European Economic Research declined
unexpectedly to 56 in October, from 57.7 in September, showing the first
decline in German confidence in three months..
French inflation: Official figures showed that the French inflation
rate fell by 0.4 per cent in September, double the expected 0.2 per cent
decline and the fifth consecutive monthly drop.
Banking
&
finance
Bank of America: The lender has agreed to waive its legal rights and
hand over documents about its controversial purchase of Merrill Lynch to the
office of the New York attorney-general. The bank, which is accused of
misleading shareholders about $3.6 billion (£2.3 billion) in bonuses paid
out to Merrilll employees and about the amount of its mortgage lending
losses, said that it would make public the legal documents about its
acquisition.
National Association of Pension Funds: The lobby group for British
pension schemes managing £800 billion of assets has called on a future
government to hold a “serious debate” about the future of workplace
retirement provision. The Government has embarked on a review of generous
public sector pension schemes, which tend to be linked to an employee’s
final salary at retirement, while George Osborne, the Shadow Chancellor,
last week proposed increasing the official retirement age by a year to 66.
Royal Bank of Scotland: The lender could be made to sell more than 300
branches by the European Commission as a penalty for receiving billions of
pounds of state aid. Separately, one third of the employees working in the
Singapore office of Coutts, the lender owned by RBS, have resigned. The
departures have been prompted by the restrictions on bonuses at RBS,
according to reports.
Coutts: One third of the employees working in the Singapore office of
Coutts, the lender owned by Royal Bank of Scotland (RBS), have resigned. The
departures have been prompted by the restrictions on bonuses at RBS,
according to reports.
Spanish banks: Moody’s Investors Service, the ratings agency, said that
Spanish banks were failing to recognise the true scale of their losses amid
the deep slump in Europe’s fifth-largest economy.
Bankers’ bonuses: Eight out of ten financial services
professionals in London expect their 2009 bonuses to be at least the same or
higher than last year, according to a report by Morgan Mckinley, the
recruitment company.
American International Group: The insurance company is to sell its
Taiwan life insurance unit for $2.15 billion, marking the largest disposal
since a US government bailout saved the insurer from collapse last year. The
sale of Nan Shan Life is another step in AIG’s effort to repay US taxpayers
after the Government injected about $80 billion into the company, but the
insurer faces two more sales processes in Asia and others across the globe.
Construction
&
property
LSL Property Services: The company is in talks with Lloyds Banking
Group to buy Halifax Estate Agents in a move that will create one of the
biggest estate agency chains in the UK. LSL owns e.surv, the chartered
surveyor, and estate agency branches in the Your Move and Reeds Rains
chains. Halifax has 218 offices and 93 franchise operations.
Bellway: The housebuilder said that it had bought £120 million of land
this year, mostly in southern England, as it seeks to take advantage of
improvements in the housing market. The group has also cut back on the
incentives that it offers to first-time buyers, despite reporting an 82 per
cent fall in full-year pre-tax profits.
Rugby Estates Investment Trust: Laxey Partners, the activist investor,
has offered £24 million to take over the real estate investment trust, after
increasing its shareholding to 35.7 per cent. Rugby Estates’ portfolio was
valued at £57 million in June.
Consumer
goods
Danone: The Advertising Standards Authority is to ban an Actimel
television advertisement that claimed its yoghurt helped to protect
youngsters against common childhood illnesses.
Heineken: The Dutch brewer has announced plans to shift production of
Newcastle Brown Ale from Gateshead to the John Smith’s brewery in Tadcaster,
North Yorkshire, as part of a fresh assault on costs. The move will cost 63
jobs, with a further 100 or so posts expected to go during the next three
years at its production facilities in Manchester, Hereford and Tadcaster.
SSL International: The London-listed manufacturer of Scholl footwear
and Durex condoms said half-year underlying sales had risen by 3 per cent to
£321 million.
Engineering
BAE Systems: The defence group, which is under investigation by the
Serious Fraud Office, has won a three-year contract to service Typhoon
fighter aircraft sold by Britain to Saudi Arabia. Saudi pilots and aircraft
technicians will be trained in Britain as part of the contract.
Vauxhall: Magna International, the Canadian owner of the carmaker, said
that it had committed to the long-term future of Vauxhall’s Ellesmere Port
manufacturing plant in Cheshire and that it would try to find another
vehicle to produce at the Luton site to secure its future after 2013,
effectively securing the jobs of 5,000 British workers.
Health
GlaxoSmithKline: The London-listed pharmaceuticals group is providing
land, facilities and investment totalling nearly £11 million as part of a
joint project with the Government and the Wellcome Trust medical charity to
foster a new generation of biotech companies at its site in Hertfordshire.
Industrials
Saudi International Petrochemical: The group said that it would start
operating a new $1.8 billion (£1.1 billion) petrochemical plant in November.
Saudi Arabia is investing in chemicals and petrochemicals to become less
dependent on crude oil revenues.
Leisure
Merchant Inns: Sir John Ritblat, the veteran property magnate who
turned British Land into one of Britain’s top companies, has suffered a
setback to his pub ambitions after the appointment of administrators to his
fledgeling Merchant Inns chain.
Whitbread: The leisure group reported half-year profits that were
better than expected, helped by its Costa coffee chain, which delivered
like-for-like half-year sales growth of 2.5 per cent, and a good response to
promotions by its Premier Inn lodges.
Domino’s Pizza: The American group reported a 6.5 per cent
decline in third-quarter revenue to $302.7 million (£190.9 million), sending
its shares down by 8 per cent. Net income rose to $17.8 million, from $10.1
million a year ago.
Media
Walt Disney: The entertainment group is giving its 340 stores in the
United States and Europe a makeover and will rename them Imagination Parks.
IMG Media: The US international talent agency and production company
has decided to sell Tiger Aspect and Darlow Smithson, the independent
British television producers, either together or separately with a combined
price tag of £40 million. The sale process is being handled by Raine, the
boutique advisory group.
ITV: The commercial broadcaster has issued a convertible bond in a
planned £120 million debt issue, which was oversubscribed by “more than ten
times”, an insider said, and was scaled up to £135 million to meet demand.
ITV said that its advertising bookings were down by 3 per cent in October
and November — the best performance in over a year and a sign that growth
could return to television advertising next year.
Natural
resources
Opec: The oil producers’ cartel said that world demand for its members’
oil would be stronger than expected next year, adding to signs that an
improving global economic outlook will boost oil consumption.
Retailing
Marks & Spencer: The high street chain’s hopes of finding a
successor to Sir Stuart Rose, its executive chairman, were dealt a fresh
blow when Charles Wilson, chief executive of Booker, the wholesaler, became
the third retailer to rule himself out of the running. Mr Wilson had been
seen as a likely candidate to be appointed chief executive, allowing Sir
Stuart to become the non-executive chairman.
JJB Sports: The actions of former executives at the struggling
sportswear retailer are under investigation by the Serious Organised Crime
Agency, it has emerged. The investigation is stated in the prospectus for
JJB’s planned £100 million fundraising.
Phones4U: The mobile phone retailer said that it would start to sell
the Apple iPhone, enabling customers to buy the handset in hundreds of
stores as well as Orange, O2 and Carphone Warehouse outlets.
Support
services
Connaught: The property services group reported a 39 per cent rise in
full-year profits to £42.5 million, boosted by demand for social housing and
a rise in repair and maintenance contracts with local authorities. Social
housing revenues were up by 18 per cent to £528 million.
CareTech: The provider of social care services, based in Essex, said
that full-year trading was in line with its expectations.
Technology
Cisco: The American communications technology group has paid $2.9
billion (£1.8 billion) to acquire Starent Networks, the manufacturer of
mobile broadband equipment. Cisco is expecting mobile phone companies to be
spending more on kit to improve their networks to deal with higher
smartphone usage. It is Cisco’s second big deal of the month after it bought
Tandberg, the Norwegian video conferencing group, for $3 billion.
Intel: The US computer chip maker reported third-quarter net profits of
$1.9 billion, from $2.01 billion a year ago, beating analysts’ expectations.
Telecoms
Reliance Communications: The Indian mobile phone group has come under
scrutiny amid claims that the company had misreported its full-year revenues
by as much as 23 billion rupees (£315 million) last year, possibly to avoid
paying licence fees to the Government. Reliance has denied any wrongdoing,
suggesting that the allegations have been engineered by its business rivals.
Vodafone: The London-listed mobile phone group’s purchase of a stake in
Ghana Telecom last year has come under further scrutiny after the West
African country’s Government said that it would investigate the sale
process, which took place under a previous administration. Accusations that
Vodafone had underpaid for the asset appear wide of the mark as the British
company has already written down the value of the business on its books.
BT: The telecoms group has awarded a £1 billion contract to Carillion,
the support services group, and Telent, its joint venture partner, to
provide engineering, support and maintenance services to Openreach, BT’s
local access network business. At present the work is carried out by a
number of outsourced suppliers.
Transport
British Airways: The airline sector has reached a bottom, but the
carrier does not expect the UK market, its most important, to recover until
mid-2010. Willie Walsh, the chief executive, said that he was more cautious
than the Government, which expects the economy to recover by the end of the
year, because the airline sector usually lags behind the general economy.
Utilities
AEA Technology: The climate change and energy consultancy, based in
Oxfordshire, said that it was trading slightly ahead of management
expectations, despite the difficult market conditions and the delays in
President Obama’s stimulus money feeding through into the American market.
Novera Energy: The London- listed renewable energy group has reiterated
its rejection of what its management had described as a “cheap and
opportunistic” takeover approach from Infinis Energy, the renewable energy
company owned by Terra Firma, the private equity group.
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