Economics
Capital gains tax The CBI reacted with fury as the realisation sank in
that hundreds of thousands of business owners would be worse off from next
April following the Pre-Budget Report. Richard Lambert, director-general of
the business group, said Alistair Darling had put the economy’s health at
risk by scrapping taper relief on capital gains tax, in a letter sent to the
Chancellor.
Public finances The Institute of Fiscal Studies said that Alistair
Darling’s forecasts for the public finances could prove too optimistic if
the turmoil in the financial markets persists, with knock-on consequences
for City activity and tax revenues. The IFS said that at the start of
Labour’s second term in 2001 the Treasury had greatly underestimated a
financial sector downturn that proved “much deeper and longer lasting” than
it had hoped. It suggested that with public finances looking vulnerable, the
Chancellor’s fiscal rules could be at risk of being breached.
Eurozone economy Jean-Claude Juncker, chairman of the Eurogroup of
finance ministers, said the euro’s record strength against other leading
currencies could weigh on eurozone economic growth next year, blaming “the
historically high foreign exchange rate of the euro in relation to other
currencies — the dollar, the yuan and the yen”.
French industrial output, excluding construction, rose unexpectedly in
August by 0.3 per cent, following a 1.7 per cent rise in July, according to
figures released by the statistics office.
World economic growth Income inequality has increased in most countries
during the past two decades as incomes have jumped amid a more recent spurt
in world growth, according to a report by the International Monetary Fund.
The comments came from the IMF’s global economic outlook.
Banking
& finance
Interbank market There were no takers at the Bank of England’s third
auction of £10 billion in the three-month interbank market. The previous
auctions, on September 26 and October 2, also of £10 billion, also received
no bids as the offer was at a penalty rate of at least 6.75 per cent.
HSBC Eric Knight, the activist investor, said that he had received more
support than expected from shareholders in his campaign for changes at HSBC,
the banking group.
Resolution, the life funds manager, has rejected a 660p per share
pre-conditional takeover bid from Pearl, its rival, and vowed to press ahead
with its controversial insurance merger with Friends Provident.
ABN Amro Rijkman Groenink, chairman of the managing board of ABN Amro,
the Dutch bank, will walk away with at least €26 million(£18 million) after
a consortium led by Royal Bank of Scotland declared victory in the world’s
largest banking takeover.
The Hedge Fund Working Group has proposed that, investors in UK-managed
hedge funds could be charged a levy to pay for a new unofficial
standard-setting body for the industry.
Northern Rock saw its shares rise as Jon Wood, the Monaco-based founder
of SRM Global Master Fund Partnership, said he had built a 4.03 per cent
interest in the mortgage lender.
Construction
& property
Spanish property market House prices in Spain are set to fall by 0.9
per cent in 2008 and by 0.4 per cent in 2009, a Reuters poll showed.
AAIM, the property investment group, looks set to acquire 37 hotels,
including 19 former Queens Moat Houses properties, in two transactions worth
a total of about £600 million.
Consumer
goods
Unilever Dutch workers at Unilever in the Netherlands, the Anglo-Dutch
consumer group, were to hold a 40-hour strike, according to Bondgenoten, the
Dutch union, which said it wanted assurances that Unilever would not impose
forced redundancies.
C&C Group, the Irish maker of Magners cider, insisted it had a
future as an independent group as it reported a 33 per cent fall in
first-half operating profits to €67.9 million (£47 million)
Scottish & Newcastle, the brewer, is to launch a pear-based variant
of its Bulmers cider to boost its share of the over-ice cider market.
UK alcohol consumption fell by 3.3 per cent to 8.9 litres per person
last year, the largest fall in 15 years, according to the British Beer and
Pub Association.
Cadbury Schweppes, the British confectionery and soft drinks group, has
formally scrapped the sale of its £6.5 billion US drinks arm and said it
would spin off the unit instead, adding that the debt market turbulence had
made it impossible to sell the unit for an acceptable price.
Engineering
Chrysler The United Auto Workers union said it had reached a tentative
agreement with Chrysler, ending a strike against the carmaker on the same
day it began. UAW president Ron Gettelfinger said the agreement would
protect wages, pensions and healthcare for UAW-represented workers.
Airbus Wizz Air, the leading budget airline in Eastern and Central
Europe, has signed a deal with Airbus, the European planemaker, to buy 50
narrow-body A320 aircraft.
Boeing admitted that its 787 Dreamliner will be delayed by a further
six months as it struggles to assemble the revolutionary new aircraft. The
787 is the largest industrial project in the world with orders worth over
$120 billion (£58.7 billion).
Fincantieri, the Italian shipbuilder, has signed a €500 million (£347
million deal with Cunard to build a 92,000-tonne passenger liner. It will be
the second-largest liner in Cunard’s history and is scheduled to come into
service in 2010.
Health
GlaxoSmithKline, the UK’s biggest drugs maker, said that it had agreed
to license the experimental cancer drug STA-4783 from Synta Pharmaceuticals,
the US biotech, in a deal that could earn Synta up to $1 billion (£491
million). The treatment is just starting global Phase III trials for
melanoma involving 600 patients.
Industrials
Akzo Nobel, the Dutch chemicals maker, which is in the process of
acquiring ICI, the UK paints maker, said that it would consider acquisitions
to expand its protective coatings business.
Leisure
Betdaq, the betting exchange, is to launch a poker room in a deal with
24hPoker, the Stockholm- listed group. The deal will also give Betdaq an
option to buy 20 per cent of its new partner’s shares.
Hotel du Vin, part of Marylebone Warwick Balfour’s boutique hotel
business, has acquired the Sussex Arts Club adjoining its Brighton hotel for
£2.2 million. After a conversion, adding 14 extra bedrooms, it will become
the chain’s first Pub du Vin.
Media
The BBC’s director-general Mark Thompson has accused Stephen
Lambert, chief creative officer of RDF, the TV production company, of
behaving “disgracefully” over the misleading editing of a trailer featuring
the Queen, which resulted in the resignation of Peter Fincham, the
controller of BBC1, last week.
Natural
resources
ExxonMobil and Shell, the oil and gas giants, have welcomed the formal
environmental clearance given by Australia which will open the way for tens
of millions of tonnes of liquefied natural gas to flow into China. The two
companies are project partners who had signed a deal in principle last month
to supply more than A$7 billion (£3 billion) worth of gas from the Gorgon
project to PetroChina.
Total, the French oil group, said that it wants to to “build up” its
partnership with Gazprom, the Russian energy giant, but refused to comment
on whether it will acquire an equity stake in the Russian group.
UK Coal, the UK’s biggest colliery, received a boost after its owner
unveiled a new five-year supply contract with E.ON, the German power
generator. UK Coal said the agreement would account for a significant
element of annual production at Daw Mill near Coventry.
Highland Gold Mining, the Russian group, said that it had successfully
won an extension to 2010 of the operating licence for its Mayskoye deposit,
which was due to expire at the end of this year.
Retailing
Carphone Warehouse, the retail group, revealed that it had added just
89,000 new broadband customers for its two services — AOL and TalkTalk — in
the second quarter, a 29 per cent drop on the previous quarter. Page 54
Jacques Vert, the fashion retailer, said that Derek Lovelock, its
non-executive chairman, is retiring from the board next month to focus on
his job as chief executive of Mosaic Fashions, the owner of Oasis and Karen
Millen. He will be replaced by Steve Bodger, a director of Alchemy Venture
Partners and Armour Group.
Tesco. the supermarket group, said that the Carbon Trust is to measure
the carbon footprint of 30 Tesco own-brand products as part of attempts to
build a national measurement standard.
J Sainsbury Justin King, the chief executive of J Sainsbury, made it
clear that he wants to stay with the supermarket chain if a bid by Delta
Two, the Qatari-backed fund, is successful, even though he is likely to
become a multimillionaire if a takeover occurs.
Support
services
Freshfields Bruckhaus Deringer Peter Bloxham, former head of
restructuring at Freshfields Bruckhaus Deringer, the City law firm, has lost
his £4.5 million age discrimination claim. Mr Bloxham had accused his former
partners of using an overhaul of its pension fund as a clandestine means of
forcing out older employees.
Experian, the credit checking group, saw its shares dive by about 7 per
cent as investors took fright at the company’s exposure to the troubled
American sub-prime mortgage market.
Technology
Net2S BT, the British telecoms group, is in talks to acquire a 68.6 per
cent stake in Net2S, the French technology company, in its latest attempt to
develop a significant presence in France.
Telecoms
Hutchison Whampoa, the Hong Kong conglomerate, said that a listed
Australian telecoms unit will sell shares worth A$330.64 million (£145.48
million) to a subsidiary of Telecom Corp of New Zealand.
Transport
BAA Union leaders representing BAA’s airport workers have told the
airports operator that they will fight plans to change the final salary
pension scheme. Last month BAA said it would close its final salary pension
scheme to new members from December this year. The £2.1 billion BAA scheme
has 20,000 members.
Aer Lingus, the Irish carrier, confirmed its plans to issue Ryanair,
the low-cost airline, with a lawsuit to force it to sell its shareholding in
the company. Ryanair owns a 29.4 per cent stake in Aer Lingus, making it the
largest shareholder after the Irish Government, but its plans for an
audacious €1 billion (£691 million) takeover have been blocked by the
European Commission.
Utilities
Electricité de France, France’s state-controlled energy producer,
and Centrica, the owner of British Gas, are believed by analysts to stand
the best chance of striking deals in the forthcoming multibillion-euro asset
sale of Gaz de France and Suez, before their €70 billion (£48.3 billion)
merger
