Economics
Non-domiciled foreigners from South Asia living in Britain are looking
to leave because of plans to levy a £30,000 annual tax on “non-doms”,
according to a study by Grant Thornton, the financial adviser.
Bankruptcy is losing its stigma as consumers struggle with mounting
debts, new figures indicate.
The eurozone swung into a trade deficit in December as the euro stayed
strong, the European Union’s statistics office said yesterday. The trade
deficit of the then 13-country zone came to €4.2 billion, compared with a
surplus of €2.4 billion in December 2006 and a revised €3 billion surplus in
November 2007.
US consumer sentiment in February fell to the lowest level since 1992.
The Reuters/University of Michigan Surveys of Consumers index of consumer
sentiment fell to 69.6, below analysts’ median forecast of a preliminary
reading of 76.3, and down from 78.4 at the end of January.
New York State’s manufacturing growth fell for a fourth consecutive
month in February to its weakest level since April 2003, the New York
Federal Reserve said. The “Empire State” general business conditions index
fell to -11.72 in February, from 9.03 in January.
Banking
& finance
Bradford & Bingley has had its long-term issuer default credit
rating reaffirmed at ‘A’ by Fitch days after the bank revealed larger than
expected writedowns on investments in US mortgages.
Northern Rock management bidding for the troubled bank would inject at
least £700 million in new capital into the company, up from a minimum of
£500 million promised in its previous offer.
FGIC, the world’s third-largest bond insurer, unveiled a survival plan
that will split the business in two. Like rivals such as MBIA and MBAC, the
bond insurer faces a jump in claims relating to the sub-prime home-loan
securities it underwrites as a result of the US mortgage meltdown.
The world’s banks “remain at risk”' of up to $203 billion in
further provisions for losses, largely because the bond insurance crisis may
worsen, UBS’s London-based analyst Philip Finch said in a note to investors.
Countrywide, America’s biggest mortgage lender, said delinquent loans
rose to their highest level in at least six years during January, adding to
evidence that the US housing slump is worsening. Unpaid principal on loans
more than two months in arrears rose to 7.47 per cent last month, from 7.2
per cent in December.
Citigroup, the Wall Street investment bank, has been forced to bail out
one of its best-known hedge funds with a capital injection of $100 million
(£50 million) in the latest setback for the world’s biggest financial
services operator.
Bank of Ireland has said that the continuing volatility in markets is
affecting its financial performance and that the outcome for the year is
subject to change, but added that the company’s trading performance is
broadly in line with its expectations.
Société Générale executives’ bonuses were boosted
by successful investments of the rogue trader Jérôme Kerviel, his lawyer
claimed yesterday.
Borse Dubai said that it would complete its £3 billion offer for OMX,
the Nordic stock exchange operator, after receiving acceptances for 68.6 per
cent of the shares. The exchange said that it would extend the acceptance
period for the offer to February 29.
Construction
& property
The property market is showing signs of life again ahead of the spring
buying season, as agents herald the return of bargain-hunting first-time
buyers and City professionals with bonus cash to spend. Hamptons
International has reported a steady stream of City bonus purchasers
registering to buy in London, with particular interest in property in
Kensington, Belgravia, Clapham and Fulham.
Consumer
goods
Waterford Wedgwood, the fancy glass and fine china maker, said that it
would shed nearly 5 per cent of its workforce and that it would make
“substantially” worse losses than previously expected. The company said that
a delay to a €57 million (£42 million) share-raising scheme had led to a
breakdown in the supply chain for the vital Christmas market.
Tate & Lyle, the sugar refiner, said that a strong performance in
the Americas had resulted in profits for the four months to January 31
exceeding expectations. Tate, the company behind Splenda sweeteners, saw
nearly £750 million wiped off its market value in one day in September, when
it issued its third profit warning in a year.
Tea prices are expected to leap this year, with tea supplies
tightening and China’s consumption surging past that of India.
SSL International, the maker of Durex condoms, has agreed to invest in
two businesses that will distribute condoms, including the Contex condom
brand, and medical disposables in Eastern Europe and the CIS.
Engineering
Rolls-Royce will supply engines to Singapore Airlines’ follow-on order
for nine additional Airbus A380s. The contract includes a TotalCare
long-term services agreement. The airline previously chose the Trent 900 to
power its initial fleet of ten A380s, of which two have entered commercial
service.
Hampson Industries, the aerospace engineer, said it is confident of
meeting expectations for the full year. The company said that its order book
remains strong and that it will continue to pursue opportunities for further
growth.
The Serious Fraud Office felt the UK was powerless to resist Saudi
Arabia’s threat that it would end co-operation on security issues unless
corruption investigations into a BAE Systems’ arms deal with Saudi Arabia
were dropped, a court was told yesterday.
Health
GlaxoSmithKline’s rotavirus vaccine is associated with increased
pneumonia-related deaths and other adverse reactions, according to a review
by US regulatory staff. The news comes ahead of a Food and Drug
Administration advisory meeting next week to consider approval of the oral
vaccine to prevent the most common cause of severe diarrhoea and dehydration
among infants and young children in the world.
Industrials
Metso, the Finnish supplier of systems to the papermaking industry,
said it has agreed to buy the paper machinery technology operation of
Mitsubishi Heavy Industries in a deal that will bolster its presence in
Japan. The company’s paper division already operates in Japan and is to
absorb the business once the transaction, which is subject to regulatory
approval, goes through.
Leisure
Punch Taverns QVT Financial, the American hedge fund, has lifted its
stake in Punch Taverns, the pub operator, to 8.58 per cent, or 22.84 million
shares, after buying 1.24 million shares at 648p each. QVT has been upping
its stake in Punch since it confirmed a merger with the rival Mitchells &
Butlers earlier this month and has voiced concerns over the takeover plan.
Food & Drink Group, the owner of Jamies Bars, has appointed
McQueen, the corporate finance boutique, to help it to assess its strategic
options, including a possible sale or merger.
Media
Taylor Nelson Sofres, the market research company, has acquired
Sweden-based Prospera Research. The company said that the deal would allow
it to build further syndicated services in the finance sector and to extend
these across the Nordic region and other markets in Europe.
Centaur Media said that it expects to report satisfactory underlying
growth in revenue and margins in its marketing and creative division in the
first half. The company also said that three of its senior publishing
directors will leave to pursue other opportunities after a strategic review
of its publishing operations.
Guinness World Records, the publisher, has changed hands.
Natural
resources
Anglo Platinum said that a minor slag runout occurred on Wednesday at
its Polokwane smelter in Limpopo province, South Africa. The smelter has
been shut and examination has started. Repair work has begun on the
equipment and is expected to be completed in four to six weeks.
Retailing
Tesco, Britain’s biggest supermarket group, last night attacked
proposals from the Competition Commission that could curb its dominance of
retailing in towns across the UK.
John Lewis Partnership, the employee-owned retailer, said its sales in
the week to February 9 at its 26 UK department stores rose by 5.8 per cent
year on year to £45.1 million, and sales in its chain of 187 Waitrose
supermarkets rose 6.9 per cent to £76.2 million. Total partnership sales
rose by 6.5 per cent to £121.3 million.
Support
services
Thirdforce, the e-learning group, said that it expects 2008 growth
levels to fall short of expectations, blaming the global decline in economic
confidence and sterling and dollar weakness.
Hydrogen, the recruitment group behind Finance Professionals, has won
the auction for Imprint, owner of the Morgan McKinley financial recruitment
business. Imprint’s board has recommended Hydrogen’s revised bid valuing
Imprint at £42.9 million, trumping a rival bid from OPD valuing it at £37.5
million.
Technology
Detica Group, the IT services company, said its revenues for the nine
months to December grew by 31 per cent, and added that its third-quarter
performance was in line with its expectations. The company said that its
outlook remains good and its expectations for the current year remain
unchanged.
Telecoms
The Office of Fair Trading has sent out thousands of fake scam text
messages to 18 to 24-year-old mobile phone users to raise awareness of
scams. The text message, sent as part of Scams Awareness Month, reads:
“Urgent! U may have won £1k cash with 2 Good 2 B True”. It is followed
shortly afterwards by a second text that makes clear that there is no prize
and that the message has been sent by the OFT to warn about scams.
Transport
British Airways and Virgin Atlantic have agreed to pay up to £100
million in compensation to passengers affected by price-fixing on fuel
surcharges for transatlantic flights. Confirming a report in The Times, both
airlines said that they had agreed in principle to settle a US class-action
lawsuit pending in a Californian court.
Go-Ahead said that it expects operating profits for the full year in
its rail business to be lower than last year’s figures. Fears of job cuts
among City of London commuters and reduced rail subsidies also took the
shine off otherwise strong half-year results from the transport group.
Pickfords, England’s largest and oldest removals firm, is in the final
stages of a fire sale to the rival Team Relocations.
Australia and the US have reached an “open skies” agreement on aviation
between the two countries, opening the way for more competition on some of
the world’s most lucrative long-haul routes. It ends a virtual duopoly of
Qantas and United Airlines.
Deutsche Post’s chief executive, Klaus Zumwinkel, resigned
yesterday as a tax-evasion investigation that snared him widened to hundreds
of individuals.
Utilities
Centrica has agreed to buy, for $70 million (£35 million), a 50 per
cent stake in the North Sea gasfields held by Sojitz Energy Project. The
investment, after associated capital expenditure, is expected to add a
further 32 billion cubic feet of reserves to Centrica’s portfolio over the
next three years.
