Economics
Western stock markets are set to rebound in the new year from a
lacklustre 2007 that saw most eke out only meagre gains, eclipsed by the
stellar performance of Chinese and other emerging market shares.
British business faces a difficult year in 2008, with the outlook
appearing uncertain following the “twin shocks” of rising commodity prices
and the credit crunch, warned Richard Lambert, the director general of the
CBI. Mr Lambert said the structure of the global economy was facing a
“bumpier ride”, with the economic balance shifting to China and India.
US housing market The pace of existing home sales in the United States
edged up in November to a 5 million-unit annual rate and the median price
fell from a year earlier, according to the National Association of Realtors.
The trade group also urged the Federal Reserve to slash interest rates by as
much as three quarters of a percentage point in January as a way of boosting
homebuyers’ confidence. Most economists expect a quarter-point cut at the
central bank’s January meeting.
Pakistani shares fell and the currency hit a six-year low as trading in
Karachi resumed after a three-day mourning period for Benazir Bhutto, the
former prime minister. The Karachi stock market fell up to 4.7 per cent, its
biggest fall in 18 months as concerns grew that instability in the region
would drive foreign funds to pull out of the country.
The Maltese lira and Cypriot pound became the latest European
currencies to disappear as the two small island members of the European
Union embraced the euro from today.
Banking
& finance
China Investment Corp has invested $20 billion (£10 billion) in China
Development Bank.
Standard Life has raised its stake in HDFC Standard Life Insurance Co,
its Indian joint venture, to 26 per cent and said it intends to launch an
IPO for the unit by the end of 2009. The bank bought a further 7.15 per cent
stake for about £25.7 million in cash from Housing Development Finance Corp,
its joint venture partner.
Taiwan Stock Exchange Corp chairman Wu Rong-I said Asia’s
seventh-biggest equities market plans to sell a stake of as much as 25 per
cent to overseas bourses. The New York Stock Exchange, Deutsche Börse, the
CME Group Inc and Nasdaq Stock Market are in “initial” talks with the Taiwan
exchange, Mr Wu said at a briefing today in Taipei.
Blue Oar, the British investment bank and stockbroker, said trading in
2007 had been broadly in line with its expectations for the year and its
financial position remained strong with significant net cash.
London Scottish Bank The British banking industry suffered a new blow
yesterday as consumer lender London Scottish Bank admitted that it needed to
raise fresh capital. It became the first London-listed bank to admit that it
had been told by the Financial Services Authority to increase its reserves
dramatically under new rules on capital that come into force today. Page 32
Nasdaq Stock Market said it has obtained clearance from the Committee
on Foreign Investment regarding Borse Dubai’s investment in Nasdaq, which
will allow Nasdaq to proceed with its plans to combine with OMX,
Stockholm-based exchange. As a result of the approval, Nasdaq said it has
formally withdrawn its standalone offer for OMX, and that it supports Borse
Dubai’s all-cash $40.97 (£20.66) per share offer for the Nordic exchange.
Construction
& property
Livermore Investments Group has signed a deal with real estate
investment company Atlas Estates’ main shareholder, Elran (DD) Real Estate,
to buy about 4.1 million Atlas shares, or 9.1 per cent of its issued share
capital, for about €19.67 million (£14.47 million). Livermore said its
holdings in Atlas will rise to about 9.58 million shares, or 21.28 per cent
of its issued share capital, following the acquisition.
Consumer
goods
Defra The Department for Environment, Food and Rural Affairs, has
launched a UK-wide consultation on regulations to enhance the protection of
Scotch Whisky. Defra is consulting on draft legislation that will deliver,
in UK law, strengthened definitions of Scotch Whisky, to help support action
against counterfeiting and passing-off, as called for by the Scotch Whisky
Association, with the aim of introducing secondary UK legislation in spring
2008.
Engineering
Orpak Systems said its unit Delpak Systems is buying a 51 per cent
stake in two software companies for up to $18.5 million (£9.33 million). The
vehicle fuel payment systems company said Delpak has agreed to pay an
initial $3.5 million, and up to an additional $15 million based on annual
profits of the acquired companies in 2007 to 2009.
Health
Acambis, the UK vaccine manufacturer, has increased the amount of
revenue it expects to record for 2007 to $9.5 million (£4.8 million), from
the previously stated $5 million to $6 million, after delivering its order
to the US Centers for Disease Control and Prevention ahead of schedule. The
company said it had delivered the entire 2.7 million doses of its ACAM2000
smallpox vaccine to the CDC on December 28, ahead of the scheduled delivery
of the first quarter 2008.
Industrials
Aluminium on the London Metal Exchange ended 2007 at $2,403 per tonne,
down 14 per cent from last year’s close. However, analysts expect the price
to rise in the new year as traders pick up the metal on the cheap.
Leisure
British consumers defied the healthy eating trend and spent about £82 a
head in fast-food restaurants in 2007, up from £77.37 the previous year,
according to figures from Horizons, the food service consultancy.
GPG (UK) Holdings has extended its offer period for Newbury Racecourse
to January 14 and added that it now holds valid acceptances for 753,037
Newbury Racecourse shares, representing a 24.74 per cent stake. GPG
Acquisition, a wholly owned subsidiary of Guinness Peat Group, had made an
£11 per share cash offer to acquire the rest of the stake in Newbury
Racecourse on November 14, which was rejected.
Media
Chime Communications’ Julian Seymour has retired from the company’s
board. Mr Seymour joined the board in 1994 at the time of the company’s
merger and listing and was the senior non-executive director and chair of
the standing committees of the board until October 1 this year.
Natural
resources
AIM Resources has withdrawn its proposed convertible debenture
fundraising on the Toronto Stock Exchange after it recently discovered
material errors in the Independent Persons Report filed with the Canadian
regulatory authorities. The company said it is investigating the errors and
conducting a detailed analysis of the Independent Persons Report’s financial
assumptions and projections, with a view to clarifying the report’s
financial integrity.
Petronas, the Malaysian state oil and gas firm, said it awarded a
production sharing contract to Royal Dutch Shell and ConocoPhillips to
explore natural gas in eastern Malaysia. Under the deal, Petronas’s
exploration arm, Petronas Carigali, will take a 40 per cent stake in the
contract to explore and produce natural gas from a cluster of offshore
fields in Sabah state. Shell Energy Asia and ConocoPhillips will each have a
30 per cent stake in the cluster of four fields.
Hardy Oil & Gas said it started drilling on its first exploration
well KGV-D3-A1 on the east coast Krishna-Godavari deep water basin in India,
and announced the successful well test on its Oza field in Nigeria. Hardy
has a 10 per cent stake in the India exploration licence, with the remaining
90 per cent held by Reliance Industries.
Copper futures at the London Metal Exchange ended 2007 with gains of 5
per cent on the year, and well above historical prices, according to
analysts. Copper, often considered a good gauge of the metals markets in
particular and real economic activity in general, closed the final trading
session of the year at $6,670 per tonne, up from $6,330 per tonne at the end
of 2006's last session.
Retailing
Game Group has emerged as the first big winner on the high street this
Christmas after stating that profits for 2007 will be nearly £8 million, or
13 per cent, higher than expected following high demand for the Nintendo Wii.
Waitrose The first Waitrose stores will open in the United Arab
Emirates this year as the supermarket chain aims to build an £800 million
international business. Spinneys, a Dubai-based operator, will open 20
stores under the Waitrose brand in the UAE by 2010. Waitrose is also eyeing
similar deals in China and India.
Asda, the supermarket chain owned by Wal-Mart, said it completed 21
million transactions in the week before Christmas, with the busiest day
being December 22. Britain’s third-biggest grocer said sales on Christmas
Eve were one third higher than the best previous Christmas Eve performance
in 2004. During the day, it reckons 67 customers a second were passing
through its checkouts across the UK.
Support
services
Billing Services Group said Norman Phipps, chief financial officer, and
Stephen Davies, non-executive director, will stand down from the board on
January 1, following the recent sale of its wireless operations and
successful re-capitalisation of its business. Mr Phipps will remain in his
role as chief financial officer. Mr Davies will leave the company.
Technology
Philips Electronics has completed the sale of 800 million shares in
Taiwan Semiconductor Manufacturing Company valued at about $1.5 billion
(£757 million). The sale of the shares, will give Philips proceeds of about
$1.4 billion, and will result in a non-taxable net gain of about $773
million in its fourth quarter results.
Alphameric said no further Turf TV contracts have been signed, while
its joint venture company, Amalgamated Racing, remains in potential
contracts talks with other major bookmakers. Turf TV is operated by
Amalgamated Racing, a joint venture between Alphameric and each of the
racecourses from which it broadcasts. Other Licensed Betting Office chains
signed up with Turf TV include the Tote, Paddy Power, Stan James and
Boylesports.
Telecoms
Poland’s telecom regulator UKE is likely to auction off frequencies
freed up by the army early next year, according to Anna Strezynska, the
agency chief. She said the resources could be auctioned off or it could
conduct a tender for an operator that would also build infrastructure.
Transport
Virgin Atlantic Sir Richard Branson has angered Virgin Atlantic staff
who are threatening to strike by telling them that they should “consider
working elsewhere”. The entrepreneur sent a letter to 4,800 cabin crew,
informing them he would not be meeting pay demands. He told staff: “For some
of you, more pay than Virgin Atlantic can afford may be critical to your
lifestyle and if that is the case you should consider working elsewhere.”
Union members have voted to stage two 48-hour strikes on January 9 and 10
and January 16 and 17.
Air France-KLM plans to place 51 per cent of Alitalia in a separate
Italian foundation or trust once it acquires the Italian airline, according
to local reports. The move is aimed at “safeguarding the Italian nationality
of the company”. A similar arrangement was made when Air France bought the
Dutch carrier KLM in 2004.
BAA The first of a series of new year strikes by workers at seven
airports, including Heathrow and Gatwick, was called off tonight following a
breakthrough in peace talks over a row about pensions. Thousands of
firefighters, security and clerical workers were due to walk out for 24
hours next Monday in the first of three stoppages in protest at a decision
by BAA to close its final salary pension scheme to new workers.
Utilities
Renewable energy grants The Department for Business, Enterprise and
Regulatory Reform said that small scale renewable energy grants worth £25
million have now been claimed from the Low Carbon Buildings Programme.
Malcolm Wicks, the Energy Minister, has called for more homes and business
to follow his lead by adopting a “go green” new year’s resolution.
