Economics
Manufacturing activity picked up last month, the CIPS/RBS purchasing
managers’ index (PMI) showed. The headline PMI measure of activity rose to
54.4 last month from 52.8 the month before, where any figure above 50
indicates rising activity. The increase reflected higher export orders and
strong output. Prices charged rose strongly.
Retail sales grew by 1.2 per cent in November compared with a year ago
on a like-for-like basis, the British Retail Consortium said. That was
stronger than the previous month, when sales were up by 1 per cent. Total
sales increased by 3.1 per cent year on year.
House prices Morgan Stanley said that UK house prices could fall by as
much as 10 per cent next year and continue to drop in 2009. In a report by
David Miles, its chief economist, it said that prices would slip by 7 per
cent in 2008.
Inflation Jean-Claude Juncker, the chairman of the eurozone finance
ministers, said that soaring inflation was becoming a risk to the bloc as
its 13 members struggle to cope with slower economic growth.
Eurozone unemployment fell in October to 7.2 per cent from September’s
7.3 per cent, Eurostat data showed. Factory activity rose in November from
October’s 26-month low, according to the final RBS/NTC eurozone purchasing
managers’ index, which rose to 52.8, compared with 51.5 the previous month.
US manufacturing remained close to stagnating last month. The Institute
for Supply Management said its manufacturing index registered 50.8 last
month, down from 50.9 in October. A reading above 50 indicates growth.
OECD The club of advanced economies said that it had started talks with
Russia, Chile, Estonia, Israel and Slovenia on membership of the group.
Banking
& finance
LMG, the business behind Nectar cards, was sold to Aeroplan, the
Canadian loyalty marketing company, for £350 million. The sale will net Sir
Keith Mills, its chairman, £160 million.
Northern Rock Virgin Group’s preferred bidder status for Northern Rock
will come under pressure today as JC Flowers begins a series of meetings
with the beleaguered bank’s board.
Consumer credit The American company that sells Goldfish credit cards
blamed the deteriorating UK consumer credit environment for a $422 million
write-off in the value of the lender. Discover Financial Services said that
the non-cash impairment charge would wipe out about a quarter of Goldfish’s
value.
Aberdeen Asset Management, the £100 billion international fund manager,
has reduced its exposure to the Chinese market, drawing explicit parallels
with the sub-prime crisis and collateralised debt obligations.
US sub-prime mortgages Henry Paulson, the US Treasury Secretary, said
that he was confident of securing an agreement with banks and regulators to
freeze interest-rate payments on high-risk “sub-prime” mortgages this week.
A deal is designed to head off the expected surge in defaults next year.
Hedge funds are on course to record their worst investment performance
since the turn of the millennium in November despite widespread predictions
that the industry is booming and heading for stellar full-year profits.
Construction
& property
Barratt Developments, the housebuilder, said that trials of
energy-saving devices at its ecovillage in Lancashire have revealed that
wind turbines fail to produce significant energy savings, but that ground
heat from bore holes and solar panels worked well, with bore holes reducing
carbon emissions by 62 per cent a year.
Dawnay, Day Sirius, the German commercial property developer that
listed on AIM in May, valued its property portfolio at €332.8 million (£236
million) at its September 30 half-year and said that market conditions
remain positive for its lettings to the small business sector
Doughty Hanson’s real estate unit has bought land in Padua, Italy, to
build a housing and shopping complex with an expected built value of €200
million.
Consumer
goods
Timestrip, the Hertfordshire-based maker of smart labels that show how
long a product has been in use, unveiled a trial run for jars of Branston
Pickle.
Engineering
Boeing The Ministry of Defence said that it had bought a sixth C17
Globemaster transport aircraft from Boeing for £130 million. The aircraft
will be used to transport heavy equipment and supplies.
Health
China is to extend a campaign to clean up its scandal-laden pharmaceuticals
industry, the State Food and Drug Administration said. The country’s State
Council launched the campaign in August with the aim of improving the safety
and supply of drugs after a series of health scares that reverberated in
China’s export markets around the world. The campaign, originally expected
to last six months, will now continue for 18 months.
Industrials
ArcelorMittal, the world’s largest steelmaker, said that Joseph Kinsch,
the chairman, would step down after the group’s annual shareholder meeting
on May 13. No information was given as to a possible successor.
Leisure
Rank Group shares jumped by more than 10 per cent after confirmation
that Genting, the Malaysian group behind Stanley Casinos, had bought a 9.38
per cent stake in the gaming group.
Clapham House the restaurant operator, gave warning that profits over
the next two years would be significantly below expectations after poor
trading from its Tootsies outlets and a decision to scale back expansion of
its Gourmet Burger Kitchen chain.
Regent Inns issued its second profit alert in seven months after
suffering a 2.8 per cent fall in like-for-like sales in November.
Cannons, the health and fitness club chain, has been sold by Royal Bank
of Scotland to Nuffield Hospitals, the healthcare group, for an estimated
£170 million.
Blackstone Group has filed to publicly list Travelport, its holiday
company, on the London Stock Exchange in an offering that could raise $2
billion (£969 million), it was reported yesterday. Travelport owns
businesses including CheapTickets.com and Orbitz.com.
Media
Emap H Bauer, the publisher of Take A Break and TV Choice, is
contemplating a late tilt at Emap’s magazine and radio divisions.
The Economist Group, publisher of the The Economist, reported a
25 per cent increase in half-year operating profit to £20.8 million, aided
by an 11 per cent increase in circulation at the flagship weekly.
Vivendi, the French media group, said that it remained committed to its
dividend policy as it held a presentation on a deal under which it will take
control of the US video games group Activision.
Natural
resources
South Africa Mines were due to fall silent at midnight last
night in a national protest against mine deaths. Almost a quarter of a million
members of the National Union of Mineworkers, the country’s biggest mining
union, will down tools in the one-day action, the first national and
industry-wide strike on safety.
Retailing
Tesco, Britain’s biggest food retailer, is expected to report an
improvement in UK like-for-like sales growth in the third quarter today
after the second quarter was affected by the miserable summer weather.
Dresdner Kleinwort is forecasting third-quarter like-for-like growth
excluding fuel of 4.4 per cent, an acceleration on the second-quarter figure
of 2.4 per cent, but weaker than the 5 per cent achieved in August.
ScS Upholstery, the sofa specialist, gave warning of “a significant
adverse impact” on sales during the first six months of its financial year.
It reported like-for-like sales down 16 per cent in just over four months,
blaming the “sub-prime debt markets and the resultant credit squeeze”. Total
sales fell 9 per cent in the first 17 weeks of its financial year.
Support
services
Capita, the outsourcing company, offset the recent loss of its London
congestion charge contract by announcing £1.9 billion of new business so far
this year. The figure compares with £1.37 billion at the same stage of last
year and includes deals with Co-operative Insurance and Prudential.
Compass Group Moody’s Investor Service upgraded its long-term debt
rating for the catering group from negative to stable after the improvement
in performance demonstrated in the company’s full-year results.
Technology
Cybercrime Staff cuts at the government agency that tackles cybercrime
will leave British businesses vulnerable to attack from criminals and
industrial espionage, experts said.
Felix Group said that its shares have been suspended from trading on
AIM, adding that Andrew Egan, chief executive, had stepped down. The maker
of multifunctional retail kiosks said that it had appointed independent
consultants to assess its operational and business prospects.
Telecoms
AT&T said that it plans to end its dwindling payphone business by
the end of 2008 as more consumers use mobile phones. Payphones in the United
States have declined across the industry from about 2.6 million phones in
1998 to an estimated one million phones today, AT&T said.
Vimpelcom, Russia’s second-largest mobile phone operator, is in talks
to acquire the fixed-line telecoms provider Golden Telecom for $4.2 billion
(£2 billion). Vimpelcom and Golden Telecom, in which Alfa, the private
equity group, and Telenor, of Norway, own large stakes, said in a joint
statement that Vimpelcom had offered cash for all the outstanding common
stock of Golden Telecom.
Motorola, the mobile handset maker, which said on Friday that Ed
Zander, its chief executive, would step down, said yesterday that Padmasree
Warrior, its chief technology officer, had also left the company
Transport
Virgin Atlantic More than 3,000 cabin crew at the airline have begun
voting on whether to strike in a dispute over pay that could cause chaos at
the UK’s airports over the holiday period. If staff vote to take industrial
action the strike could begin as early as December 27, potentially the same
day as a stoppage by workers at BAA, the airports operator.
Utilities
Berkshire Hathaway is paying $2.1 billion (£1 billion) to buy TXU junk
bonds from Goldman Sachs. Warren Buffett, its chief executive, told CNBC
that the bonds are the only junk bonds he is interested in at the moment,
adding that some recent issues give new meaning to the word “junk”.
EDF The French Government said that it had raised €37 billion (£2.6
billion) after selling 45 million shares, about 2.5 per cent, in the power
giant EDF
