Economics
Crude oil rose to a record of $86 a barrel amid fear that a surge in
the price of commodities is storing up a winter squeeze on consumer wallets
and new risks of inflation for the global economy.
Alistair Darling’s shake-up of capital gains tax faces an attempt
to defeat it on the floor of the Commons.
The Nobel Prize has gone to Leonid Hurwicz, 90, and his fellow
Americans Eric Maskin and Roger Myerson for establishing mechanism design
theory, part of game theory.
The dollar sank further against sterling as the IMF’s managing director
said the US currency was still overvalued.
Banking
& finance
Resolution’s potential bidders have been given just over a week
to show their hand as Standard Life and Swiss Re put finishing touches to a
joint offer for the “zombie” funds group.
Northern Rock may soon receive a firm proposal from JC Flowers, the US
investment group, which believes it is ahead of Sir Richard Branson in the
race for the stricken mortgage bank.
HSBC’s rebel shareholders who have sought a change of strategy by
the bank will launch a more hostile critique today.
JPMorgan’s China asset management venture raised the targeted $4
billion (£1.9 billion) for its first overseas stock investment fund on the
day of its launch for sale yesterday, a company official said. The fund, the
fourth such product launched by a Chinese fund house under the country’s
Qualified Domestic Institutional Investor scheme, was three times subscribed
yesterday when it drew demand of more than 100 billion yuan (£6.5 billion),
the official said.
Wall Street banks yesterday announced plans to raise up to $80 billion
for a bailout fund to fight the US credit crunch.
Citigroup’s profits fell 57 per cent as the US mortgage crisis
hit the financial services group.
Construction
& property
Worthington Nicholls, the air- conditioning company, has taken a £6.5
million hit after a review of its accounts. The latest blow comes after an
August warning that the poor summer had hit demand for its maintenance
division and that contracts had been delayed by flooding. The group
confirmed yesterday that a further “substantial” writedown is likely after
its accounting policies review is complete.
Travis Perkins, the builder’s merchant, said that it was well placed to
weather early signs of slowing growth in its sector after “good progress” so
far this year. The company, owner of the Wickes DIY chain, said that group
turnover was up 11 per cent on last year in the nine months to September 29.
Shares in Travis Perkins have been under pressure amid fear of a slowdown in
the housing market after interest rate rises.
UK house prices rose 11.4 per cent in August compared with a year ago,
against a 12.4 per cent rise initially reported for July, the Government
said. That took the average house price to £219,528, from £218,479 in July.
The figures are based on sale completions and thus lag other surveys.
However, most house market surveys are showing signs that price growth is
starting to come off the boil.
Consumer
goods
Mattel, the toy company, reported lower quarterly profits on charges
stemming from global recalls of potentially harmful toys. Third-quarter
profits were $236.8 million (£116 million), against $239 million a year
earlier.
SABMiller’s shares fell by almost 5 per cent as the brewer
reported “moderated” growth in its fast-growing Latin American market and
higher input costs.
Coca-Cola, the soft drink maker, and illycaffe, the Italian coffee
maker, have signed a statement of understanding to form a global joint
venture to make and distribute ready-to-drink coffee drinks.
Engineering
Airbus’s A400M high-wing turboprop military aircraft is likely to
be certificated by EASA in 2009, and not 2008 as was planned, Tom Williams,
vice-president for programmes, confirmed. Delays to the commercial A380
programme, whose first aircraft was delivered to Singapore Airlines
yesterday, also had an impact, he said.
Volkswagen, the carmaking group, said global deliveries by its core
Volkswagen business rose 7.6 per cent last month to 327,000 vehicles. It
expects a sales record of more than 3.5 million Volkswagen brand vehicles
this year.
Health
GlaxoSmithKline said the US Food and Drug Administration has approved
oral Hycamtin (topotecan) capsules for treatment of relapsed small-cell lung
cancer.
Smith & Nephew, the British maker of artificial hips, is being
investigated by US regulators for possible violations of legislation
designed to prevent bribery.
Medtronic, the US medical technology group, warned doctors not to
implant its heart defibrillator wires for fear that defective ones may have
contributed to five deaths. Medtronic said it had suspended supply of its
Sprint Fidelis defibrillation leads because of a risk of lead fractures.
Industrials
Voestalpine, the Austrian steelmaker, has order books for its hybrid
bond at about three times the amount on offer of up to € 1 billion (£696
million), an official of a bank running the sale said. It is the first
corporate hybrid bond sale since the credit crisis of the summer, and books
signal strong investor appetite.
Leisure
3D Entertainment, the nightclub group that is 49 per cent owned by
Luminar, has placed 14 nightclubs, mainly Chicago Rock Café and Jumpin Jak
units, up for sale, according to M&C Report.
Japan Leisure Hotels, a new company targeting Japanese couples seeking
privacy, is to raise £100 million before an AIM listing.
Gaucho is to start an investor roadshow tomorrow and insisted that
there had been positive pre-marketing feedback for the Argentine steakhouse
group, which aims to float on the London Stock Exchange next month at a
value of about £100 million. Gaucho runs only 11 outlets, of which nine are
in London. A spokesperson said it had received a “consistently positive
response from investors”, indicating that valuations above £10 million per
restaurant, including debt, have not been an issue.
Media
UK sporting events required to be broadcast on free-to-air television
have been confirmed by the European Commission. The list for live coverage
includes: the Olympic Games, the Fifa World Cup, The Grand National, The
Derby, Wimbledon tennis, the European football championships and the Rugby
World Cup final. Under EU law, the “television without frontiers directive”
lays down framework conditions in which the public may be guaranteed free
access to broadcasts of events of major importance to society.
WPP, the marketing group, is in final talks to buy Blast Radius, a
Canadian internet agency.
AOL is cutting its global workforce by 2,000, or 20 per cent, as it
changes from internet access provider to online advertising company. The cut
comes after 5,000 jobs being shed a year ago after AOL said it would begin
giving away AOL.com e-mail accounts and other features once reserved for
paying subscribers to boost traffic to advertising-supported websites.
Virginia-based AOL, part of Time Warner, is moving its headquarters to New
York to be nearer the media advertising industry.
Natural
resources
UK Coal, Britain’s biggest coal producer, said it was committed to
improving performance at mines. UK Coal, based in Doncaster, said it had
continued to make progress in all its businesses and was confident of
successfully renegotiating coal contracts to reflect stronger prices. Less
than a week ago, UK Coal announced a new five-year supply contract with
E.ON, the power generator, which is set to account for much of production at
its Daw Mill mine near Coventry.
Platinum, the precious metal, was set, or “fixed”, at a record high of
$1,425.00 an ounce in London yesterday morning on speculative buying
attributed to supply worries.
Retailing
Hennes & Mauritz, the Swedish fashion chain, signalled an upbeat
September for clothing stores by revealing a better than expected 25 per
rise in sales in September compared with the same month last year. H&M’s
strongest growth in five years was helped by a 12 per cent lift in
underlying sales, after a 1 per cent fall in August.
Support
services
Spice said that first-half trading remains in line with its
expectations and that it is confident of further growth over the rest of its
financial year and beyond. The provider of outsourced infrastructure support
said it has won a pilot electricity contract with Npower for consultancy and
imbalance services. Spice has also received final clearance for its
acquisition of Revenue Assurance Services, it said.
Technology
Sun Microsystems staff in Linlithgow are expected to be hit after the
technology group confirmed plans to cut 1,500 jobs from its global workforce.
SAP, the German software group, has ruled out challenging Oracle’s $6.7
billion (£3.28 billion) hostile bid for BEA Systems. SAP has traditionally
focused on organic growth but made a U-turn last week by buying Business
Objects for €4.8 billion (£3.34 billion). Henning Kagermann, SAP's chief
executive, said that SAP was “categorically not excluding further big
acquisitions”, but that he was not considering a counterbid for BEA because
its operation overlaps too much with SAP’s.
Nintendo has become one of Japan’s three most valuable companies after
frenzied buying of the games console maker’s shares.
Nortel Networks, the Canadian maker of telecoms equipment, has agreed
to pay a civil penalty of $35 million (£17.1 million) to settle accounting
fraud charges brought by US securities regulators, according to court
papers. Nortel agreed the penalty without admitting or denying allegations
in a complaint filed in the US District Court in Manhattan. The US
Securities and Exchange Commission alleged that Nortel engaged in two
fraudulent accounting schemes, one involving earnings and the other revenue.
Telecoms
France Télécom has been fined by the French competition
regulator for abuse of a dominant position in ADSL in France. The fine is
part of a negotiated settlement.
Transport
Aer Lingus and its pilots have done a deal that will prevent the
airline being grounded this week in a dispute over its new Northern Ireland
hub. The pact, revealed after talks at the Irish Republic’s Labour
Commission, will permit Aer Lingus to hire and train new pilots in Northern
Ireland in time for a planned December 8 launch from Belfast International
Airport.
Crossrail, the recently agreed £16 billion cross-London scheme “does so
little for so few”, a group wanting the project extended said. Crossrail
should benefit all South East England and not only London, according to
Superlink, a group of railway managers. Superlink seeks extension as far
west as Reading, Berkshire, a link to Heathrow’s new Terminal 5, and a
branch line from Canary Wharf, London, to Cambridge via Stansted airport. It
also seeks extensions taking in Woking, Basingstoke and Guildford, and links
to Barking and Tilbury in Essex.
Utilities
E.ON, the German utility, completed the ¤utility<NO>Unified Energy
Systems. E.ON’s chief executive, Wulf Bernotat, and UES’s president, Anatoly
Chubais, signed contracts to buy the company at talks between Germany and
Russia.
