Economics
House prices staged a pre-Christmas fightback after falling for the
previous three months in a row, according to a survey from Halifax, the
nation’s biggest mortgage lender. Average house prices rose by 1.3 per cent
in December, reversing a similar slump in November and after declines of 0.7
per cent in October and 0.6 per cent in September. Halifax said that over
2007 as a whole, house prices had climbed by 5.2 per cent, with the average
cost of a home rising by £11,759 to £197,039.
Housing market A further slide in approvals of new mortgages for
homebuyers added to evidence that the property market continues to cool. The
value of new home loans agreed by lenders fell in November to its lowest for
seven months, at £12.2 billion, the Council of Mortgage Lenders said. The
number of loans agreed also dropped, by 3.1 per cent, to 80,000.
Consumer sentiment fell in December to its lowest level since February,
according to a survey by Nationwide Building Society. Its headline index of
sentiment dropped by one point to 85.
Recession An uncertain jobs market is making recession an “ever more
likely possibility”, according to a report for the Recruitment and
Employment Confederation and KPMG. Last month recruitment of permanent
employees grew at its slowest rate for more than four years.
Eurozone retail sales fell by 0.5 per cent in November, confounding
forecasts for a rise, official figures showed. It left sales growth at an
annual 1.4 per cent.
US outlook The American economy has not entered a recession but there
is a “serious risk” that it could do so, said Martin Feldstein, director of
the US National Bureau of Economic Research.
Banking
& finance
Barclays Capital, the investment banking division of Barclays, has
promoted 80 managing directors, of which just five are women. The unit
accounts for more than a third of Barclays’s profits, which last year topped
£7 billion.
Bear Stearns Alan Schwartz is expected to replace James Cayne as chief
executive of Bear Stearns, the US investment bank, after it took substantial
writedowns on investments in high-risk “sub-prime” mortgages and closed two
loss-making hedge funds.
Northern Rock AP2, one of two funds that manage pension schemes for
Swedish public sector workers and one of Northern Rock’s largest
shareholders, has backed a campaign to give investors a greater say in the
future of the stricken mortgage lender.
Countrywide Financial fell by nearly a quarter as rumours spread that
America’s largest mortgage group was poised to file for bankruptcy.
The International Accounting Standards Board is due to publish a
consultation paper on whether companies should be forced to reveal
off-balance sheet accounting practices in a “parallel” balance sheet,
according to reports.
Citigroup, the US investment bank, is planning to create a residential
mortgage business which will be overseen by Bill Beckmann, president and
chief operating officer of CitiMortgage.
Construction
& property
Savills, the estate agency and property services company, said it
expects its full-year results to be slightly ahead of expectations, after a
good performance in its consultancy, property and facilities management and
financial services helped to offset a weakening in commercial markets.
KB Home, the US housebuilder, reported a fourth-quarter net loss of
$772.7 million (£391.4 million), compared with a loss of $49.6 million last
time and said it expects 2008 to be another tough year.
Consumer
Goods
Imperial Tobacco has extended its takeover offer for Altadis, the
Spanish cigarette group, to January 18 from January 11. Imperial said in
November that Altadis had recommended its offer of ¤
Glanbia, the Irish food group, said it expects its 2007 adjusted
earnings per share to be at the upper end of market expectations, driven by
strong results from its food ingredients division.
Scottish & Newcastle‘s chief executive, John Dunsmore, has said
Carlsberg and Heineken need to offer significantly more than their current
750p bid to secure S&N. The brewing group also said it had submitted a
detailed claim to the Arbitral Tribunal in Stockholm and sees £100 million
in cost and revenue synergies arising from outright control of Baltic
Beverages Holding, its Russian joint venture.
Engineering
Renault and Peugeot said they see a positive impact on sales from the
introduction of a carbon dioxide emissions scheme. The French Government has
introduced a bonus of up to €1,000 (£747) to drivers buying cars that emit
fewer than 130 grams of carbon dioxide per km. Buyers of cars that pollute
more will pay a forefeit of up to €2,600.
Ford, the US carmaker, plans to invest $500 million (£253 million) to
double its production in India and build a low-cost car. Capacity at its
existing plant near the southern city of Madras will rise to 200,000 cars
over the next three years, creating 1,500 jobs and bringing Ford’s
investment in India to $875 million.
Health
ProStrakan, the Scottish speciality pharmaceuticals company, said it
expects its full-year revenues to increase by 18 per cent from the previous
year, with product sales up by 22 per cent.
Priory Group Philip Scott has been appointed chief executive of the
Priory Group, the mental healthcare specialist, three months after it was
announced that he was standing down as chief executive of Southern Cross
Healthcare.
Industrials
ArcelorMittal, the steel group, said it has signed a memorandum of
understanding to develop iron ore mining in Mauritania and will initially
take a 30 per cent stake in the project alongside the state-owned Société
Nationale Industrielle et Minière.
Leisure
Premium Bars & Restaurants said that it had performed well in
December, with total group sales up by 103 per cent from 2006, boosted by
recent acquisitions.
Media
Mecom, the European newspaper group founded by David Montgomery, the
former Mirror Group chief, saw its shares fall by 30 per cent despite
reporting that 2007 trading was in line with expectations. The fall came
after analysts forecast that interest costs and depreciation charges would
affect the group’s profitability.
EMI, the music group, announced the departure of of Tony Wadsworth,
chairman and chief executive of EMI Music UK & Ireland. His departure
marks the start of a shake-up at EMI after its takeover by Terra Firma, the
private equity group.
Natural
resources
Hochschild Mining, the Latin American silver and gold miner, has issued
a 2008 profit warning citing lower grade ores. The world’s fourth-biggest
primary silver producer said that higher depreciation costs, a shift to
partnered projects and lower grades at two of its mines will mean that its
attributable profits will fall short of analysts’ expectations.
Royal Dutch Shell and Total are vying to develop an Iraqi gasfield in
Anbar province, northwest of Baghdad and close to the border with Syria.
Retailing
Dunelm, the home furnishing retailer, is to create nearly 700 jobs
despite being cautious about consumer spending. It reported like-for-like
sales up by 4.9 per cent in the 26 weeks to December 30.
Marks & Spencer is to launch a new range aimed at the “foodie”
consumer, which offers a wider range of basic ingredients including herbs
and pulses. As part of the drive, the retailer will stock fewer ready meals.
Topps Tiles, the tile and wood flooring specialist, said that trading
conditions were “challenging” as it reported a 0.8 per cent increase in
like-for-like sales for the first 13 weeks of its new financial year,
compared with 5 per cent a year ago.
Zavvi A surge in demand for computer games helped Zavvi, the new owner
of Sir Richard Branson’s former Virgin Megastore chain, to overcome an 11.6
per cent slide in CD sales over Christmas and the new year. Sales of
computer games rose by nearly 63 per cent.
The Co-op said that it had generated a record £24 million on Christmas
Eve, helping to drive its like-for-like sales up by 3.3 per cent over the 13
weeks to January 5.
Jessops, the troubled photographic retailer that issued three profit
warnings last year, said that it had taken the first real step in its
recovery drive after recording a 0.3 per cent increase in like-for-like
sales over Christmas and the new year.
Support
services
Aggreko, which rents out power generators, said that it has won a
three-year contract worth $45 million (£23 million) from Uganda Electricity
Transmission to provide a further 50 megawatts of temporary power in the
country.
Michael Page International, the recruitment group, reported a 37.6 per
cent increase in fourth-quarter gross profits and said that although it is
mindful of economic uncertainty it is confident of future prospects.
Technology
NCipher, the software group, said that its full-year trading had been
in line with market expectations. It added that its NeoScale product line
acquisition was being successfully integrated.
Autonomy, the business software company, said that it has signed
licence agreements with Oracle and EMC, the technology groups.
Blinkx, the video search engine, said that it has signed a video
content deal with ITN Source to provide its viewers with direct access to
ITN’s collection of moving image libraries on the web.
Matsushita Electric Industrial, the Japanese owner of Panasonic, is
working on a deal with Google, the internet giant, to develop televisions
that will allow users to access videos directly on Google's YouTube video
website.
Telecoms
Telefónica Cesar Alierta, chairman of Telefónica, denied that the
Spanish telecoms group was considering a bid for KPN, the Dutch telecoms
giant. ”
Vodafone Arun Sarin, the head of Vodafone, the mobile phone group,
warned that the credit crunch could see mobile spending fall in Britain.
Transport
EasyJet, the budget airline, saw its shares fall by almost 14 per cent
because of doubt about its ability to hit its target of 20 per cent profits
growth this year. It reported higher passenger numbers in December but its
passenger load fell by 2.2 per cent. container shipping line which is part
of the Danish conglomerate Moller Maersk, is planning to cut up to 3,000
jobs from its 25,000 global workforce.
Ryanair, the low-cost airline, said that its proposal to set up
operations at Milan’s Malpensa airport have been rejected by SEA, the
airport operator.
Utilities
Energy markets Gordon Brown has called for a liberation of energy
markets, adding that the creation of a single market for energy was a
government priority.
