Economics
House prices in England and Wales rose by 0.4 per cent on the month in
September and by 8.7 per cent on the year, the Land Registry said. That took
the average house price to £183,896. Last month, the Land Registry said
house prices rose by 0.2 per cent on the month in August and by 9.4 per cent
on the year.
Japan’s deflation Headline consumer prices in Japan remained
mired in negative territory in September, confirming that the country
remains in the grip of deflation. The overall, national inflation data
showed that consumer prices in September were down 0.2 per cent from a year
earlier, while “core” prices, excluding fresh food, were down 0.1 per cent.
The more timely data for Tokyo alone showed that the core inflation rate
edged up to zero last month, from minus 0.1 per cent in September.
Japanese industrial production fell by 1.4 per cent in September in a
decline that was widely expected after August saw a 3.5 per cent surge
driven by recovery from disruption caused by typhoons and an earthquake.
US consumer sentiment fell more sharply than expected at the end of
last month as the latest news from the housing market dealt new blows to
confidence, the University of Michigan survey showed. Its headline
confidence index fell to 80.9, a 17-month low that was down from a
preliminary October reading of 82 and a final figure for September of 83.2.
US credit crisis Plans by three leading US investment banks to set up a
so-called Super Fund to prevent a fire sale of shaky asset-backed securities
held through American banks’ off-balance sheet vehicles came under fire from
John Snow, the former US Treasury Secretary. Mr Snow added his voice to
warnings by other leading figures, including Alan Greenspan, the former US
Federal Reserve Chairman, that the scheme — backed by the US Treasury —
could make the shake-out in credit markets more protracted.
The dollar tumbled to new record lows against the euro and on its
trade-weighted index as it was hit by fears over the US economic outlook, a
further expected cut in US interest rates next week and the latest jump in
oil prices to a record. The euro was driven to a peak of $1.4393, while the
pound closed in London above $2.05.
Oil prices climbed to record highs above $92 a barrel, before sinking
back in New York trading. The cost of benchmark US light crude rose as high
as $92.22 a barrel, but then retreated sharply to $90.20 by early afternoon
in New York. In London, benchmark Brent crude was 80 cents higher at $88.28
a barrel on the ICE futures exchange.
Banking
& finance
Merrill Lynch Wall Street was braced last night for its first chief
executive casualty of the summer’s credit turmoil after it emerged that Stan
O’Neal of Merrill Lynch faces the axe this weekend.
Legal & General Tim Breedon, the chief executive of Legal &
General, insisted that the insurer was in “good shape”, despite reporting a
9 per cent slide in British business because of a housing slowdown.
Resolution Clive Cowdery’s closed life fund consolidator Resolution is
this weekend considering whether to back a 720p a share all-cash takeover
offer from Pearl Assurance, Hugh Osmond’s rival “zombie” fund.
Countrywide Financial, America’s largest mortgage lender, lost $1.2
billion in the third quarter, but its shares soared after the company said
it expects to be profitable this quarter and next year. It was Countrywide’s
first quarterly loss in 25 years.
Northern Rock Paul Myners has stepped down as a director of the Bank of
England while he works with JC Flowers on the private equity firm’s takeover
bid for Northern Rock.
Credit fraud The number of people lying on application forms in an
attempt to secure credit illegally has risen by nearly a quarter since last
year. Banks and building societies reported 57,321 cases of “application
fraud” between January and September this year, up 23 per cent on last year.
Elephant Loans The credit crunch struck yet again when Elephant Loans,
the specialist sub-prime loans broker, gave warning that full-year profits
would take a hit.
Construction
& property
Erinaceous Fursa Alternative Strategies, a New York-based hedge fund,
has called for the heads of the two founders of Erinaceous, Neil Bellis and
Lucy Cummings.
aAIM Robert Whitton, one of the founders of the aAIM property fund, has
teamed up with property developer Daren Burney to launch a £400 million fund
backed by Bank of Scotland to buy UK commercial property.
Consumer
goods
Kraft Foods, the global food products maker, said it was increasing the
prices of its roast and ground Maxwell House and Yuban coffees, citing
higher green-coffee prices.
Engineering
Volkswagen posted a 47.4 per cent rise in operating profit, excluding
one-offs in the first nine months in Europe. The company said profits were
¤2.90 billion last time, as sales grew 5.1 per cent on the back of
continuing positive demand from China, South America and Europe.
Health
GlaxoSmithKline and Sanofi-Pasteur MSD, the Sanofi-Aventis unit, are
likely to go head to head to meet demand for the vaccination to prevent
cervical cancer. The Department of Health recommended that all British
schoolgirls between the ages of 12 and 13 receive vaccinations for the human
papillomavirus.
Industrials
Chapelthorpe, the industrial products maker, said shareholder Peter
Gyllenhammar increased his stake to 13.2 per cent through his wholly owned
companies Forvaltnings AB Bronsstadet and Union Discount Company.
Leisure
EasyHotel, Sir Stelios Haji-Ioannou’s budget hotel franchise, is to
open four hotels in Portugal over the next three years under a deal with the
Portuguese group Best Ecran.
Bingo The Chancellor, Alistair Darling, visited his local bingo club,
the Mecca at Edinburgh’s Fountain Park, to listen to the views of his
constituents who are concerned that the Government is killing the game with
a penal tax regime.
Wendy’s International, the world’s third-largest fast-food chain,
said that, while quarterly net income fell 57 per cent, to $29.9 million
(£14.2 million) from $69.2 million, continuing operating profits rose 55 per
cent on higher prices and cost cuts.
Tim Hortons, the Canadian coffee chain, reported a 30 per cent jump in
third-quarter profits. The company took net profits of C$67.4 million (£34.1
million), compared with C$51.8 million last time.
Media
Time Warner Richard Parsons, the chairman and chief executive of Time
Warner, is set to announce that he will hand over the chief executive role
at the group to Jeff Bewkes, his longtime No 2.
Shaw Communications, Canada’s number two cable and satellite television
company, reported a 66 per cent boost in adjusted fourth-quarter profit. The
Calgary-based company also said earnings excluding non-operating items rose
to C$100 million (£50.6 million), compared with C$60 million last time.
Natural
resources
Max Petroleum, the oil and gas exploration and development company
focused on Kazakhstan, reported a pre-tax loss of $24.8 million (£12.1
million) for the year to March 31, and said its shares are expected to
resume trading on October 29. The company, whose shares have been suspended
pending the publication of its annual report, had posted a pre-tax loss of
$23.7 million in the period from April 8 2005 to the end of March 2006.
Celtic Resources, the gold mining company, said it had received a new
270p-a-share offer from the Russian industrial company OAO SeverStal,
valuing the company at £161 million. Celtic had twice refused OAO
SeverStal’s offers, and said this latest offer was “woefully inadequate” and
“severely undervalues” the company.
Retailing
J Sainsbury Delta Two, the Qatari-backed investment fund stalking J
Sainsbury, must bid for the supermarket group by November 8 or walk away,
the Takeover Panel ruled, as new concerns arose over funding for the £10.6
billion bid. Page 61
Kingfisher, the home improvement retailer, saw its shares jump as much
as 7 per cent, to 12.2p, during trading amid market talk of a possible
takeover bid. The company declined to comment.
Support
services
MobilityOne, the holding company, said its Malaysia unit has signed
agreements with Bank Kerjasama Rakyat Malaysia Berhad and KeyElite to sell
its products and services through their distribution channels. The company
said the deal allows MobilityOne Malaysia to sell electronic-based products
and services to the bank’s customers through its payment channels such as
internet banking.
Technology
Microsoft, the software giant, said its fiscal first-quarter profits
soared 23 per cent, mostly on strong sales of its Halo 3 video game and
Windows and Office software. The company reported profits of $4.29 billion
(£2.1 billion), compared with $3.48 billion last time.
Oracle, the world’s third-largest software maker, said its $17 a share
offer to BEA systems stood, and that BEA’s asking price of $21 a share was
“impossibly high”. Oracle, with a market share of $100 billion,
has until Sunday afternoon California time to finalise a deal, when its
offer expires.
Nintendo, the Japanese gaming company, announced plans to launch its
Wii gaming console in China and South Korea next year. The company, which
has taken a commanding lead over Sony in the console industry mostly because
of lower hardware prices, said it is looking to cement its lead.
Telecoms
Mobile Streams, the mobile media specialist, said it had teamed up with
Vodafone to create an exclusive games channel for the Vodafone Live! portal
in Australia. The company said the partnership would strengthen its focus
and commitment to the Australian and New Zealand markets.
Transport
Aer Lingus, the Irish airline, said it would raise its long-haul fuel
surcharge from November 1 because of the rising price of oil.
British Airways, the carrier, said it concluded a long-term debt
facility for $1.7 billion (£829 million), which will be used to finance
aircraft deliveries over the next five years.
Utilities
British Energy, the power utility, said its Hinkley Point nuclear power
station was running safely and to plan, despite market talk of a fault that
has sent the group’s shares sliding.
ConocoPhillips said its president of exploration and production for the
Americas, Randy Limbacher, is leaving the company to pursue other
opportunities and will not be replaced. The company said John Lowe,
executive vice-president for exploration and production, will take on the
responsibilities that Limbacher had managed. It said Limbacher will leave
ConocoPhillips on October 31.
