Economics
Retail sales are tipped to have grown only slightly in February.
Figures due out on Thursday are expected to show that sales grew by 0.l per
cent, after a 0.8 per cent rise in January. This will push the annual rate
of growth down to 3.9 per cent, from 5.6 per cent.
Inflation figures, due out tomorrow, are tipped to show that the
consumer price index rose by an annual rate of 2.5 per cent in February,
from 2.2 per cent in January and above the Bank of England’s target of 2 per
cent. Retail price index inflation is tipped to have risen by 0.7 per cent,
after falling by 0.5 per cent in January, although the annual rate of 4.1
per cent is expected to stay the same.
Interest rates On Wednesday the Bank of England’s Monetary Policy
Committee will release the minutes of this month’s decision to hold interest
rates at 5.25 per cent.
Unemployment data, due out on Wednesday, are expected to show that the
number of claimants fell by 5,300 in February, after a fall of 10,800 in
January, keeping the unemployment rate at 2.5 per cent.
Wages are tipped to have increased by 3.8 per cent in January. Data due
out on Wednesday are expected to show that the rise was the same as in
December. Wages excluding bonuses are expected to have risen by 3.8 per
cent, against 3.7 per cent in December.
German producer prices figures, due out on Thursday, are expected to
show that prices rose by 0.3 per cent in February, compared with January’s
0.8 per cent rise. The annual rate of growth is tipped to be unchanged at
3.3 per cent.
Eurozone manufacturing in the purchasing managers’ index for February,
due out on Thursday, is tipped to have fallen from 52.3 to 52. Services are
forecast to be unchanged at 52.3. Any figure above 50 indicates activity.
US interest rates The US Federal Reserve is forecast to make another
sharp cut in US interest rates tomorrow by half a point to 2.5 per cent.
US housing starts are forecast to have fallen sharply in February to
995,000, from 1.01 million in January. Figures due out tomorrow are also
expected to show that building permits fell to 102,000, from 106,100 in
January.
US prices data, due out tomorrow, are tipped to show that the producer
prices index rose by 0.4 per cent in February, down from a 1 per cent
increase in January. This brings the annual rate of growth down to 6.8 per
cent, from 7.4 per cent.
US industrial production figures, due out today, are tipped to show a
fall of 0.1 per cent in February, after a 0.1 per cent rise in January.
Industrial capacity is expected to have fallen to 81.3 per cent, from 81.5
per cent.
Banking
& finance
Northern Rock Denmark’s biggest banks have written to the European
Commission to complain about the behaviour in the savings market of
Britain’s newly nationalised Northern Rock bank. (The Sunday Times)
Tullett Prebon, the interdealer broker, is understood to have agreed to
pay about $40 million (£19.7 million) for Primex energy, the London-based
oil broker whose business has grown alongside the surge in oil prices. (The
Sunday Telegraph)
HSBC, the bank group, is examining a sale of its train leasing division
as it faces pressure to offload noncore assets to raise cash after exposure
to the US sub-prime loan market. (The Sunday Times)
Flotations for the London stock market have dried up, with investment
bankers predicting no sign of a recovery until the autumn. Figures from the
London Stock Exchange show there were just three flotations of UK companies
in January and February, raising a total of £29 million.
Bear Stearns, the stricken US bank, is being acquired by the rival
JPMorgan Chase in a $240 million deal at $2 a share, against a close on
Friday at $30. The US Treasury felt a quick deal was vital to avoid strain
on other banks. Henry Paul-son, the Treasury Secretary, said Washington will
“do what it takes” to stabilise the US banking system.
Construction
& property
Countrywide Apollo Management, the US private equity group, may have to
pump millions of pounds into Countrywide, Britain’s biggest chain of estate
agents, to shore up its investment in the company. (The Sunday Telegraph)
Shaftesbury Laxey Partners, the activist investor, is believed to have
bought an 11.8 per cent stake in Shaftesbury, the £775 million property
group, which owns a large part of Chinatown and Carnaby Street in the West
End of London. (The Sunday Times)
Consumer
goods
Imperial Tobacco, the maker of Davidoff and Lambert & Butler
cigarettes, is expected to update the market on its planned rights issue
worth £4.5 billion to £5 billion to bankroll its acquisition of Alt-adis,
its Spanish peer, when it gives a trading update on Wednesday.
Engineering
Aero Inventory, the maker of aircraft parts, is to report interim
results today. Analysts expect it to report a strong performance, possibly
leading to upgrades, after contract wins and organic growth.
Health
Allergy Therapeutics, the pharmaceuticals group, is expected to update
the market today on a delay to development of its experimental grass allergy
products when it reports first-half results.
Industrials
Interpipe, the Ukrainian steel company, is preparing for what is likely
to be one of the biggest floats in London this year, which should value the
group at about $4.5 billion (£2.2 billion). London has become the favoured
market for listings by former Soviet bloc countries. (The Sunday Times)
Leisure
Mitchells & Butlers, the pub operator, is to consider selling a
minority stake to private equity groups in return for an injection of cash
to help it to repair its balance sheet. (The Sunday Telegraph)
Whitbread, the leisure group, is in talks to create the dominant force
in the UK budget hotel market by merging its Premier Travel Inn chain with
the rival Travelodge, which is owned by Dubai International Capital. It is
thought a combined group could be worth up to £3 billion.
Media
Aegis, the media buying group, is expected on Wednesday to report a 9
per cent rise in full-year pretax profits to £126.2 million and to give a
relatively upbeat outlook for the year ahead, despite the turmoil in the
financial markets.
Centaur Media, the owner of Marketing Week and The Lawyer magazines, is
calling in advisers to carry out a strategic review that could lead to a
mangement bid to take the company private. The business is valued at about
£118 million. (The Sunday Times)
EMI Guy Hands, the new chairman of EMI, the music group, has sent a
letter to every member of the company’s UK recorded music division telling
them that their jobs are officially under scrutiny. (The Sunday Times)
Natural
resources
Royal Dutch Shell, the Anglo-Dutch oil and gas group, is to cut its
reserve figures from last year by more than half, taking about 1.3 billion
barrels of oil off its books, equivalent to about a year’s production. (The
Observer)
BHP Billiton Alberto Calderon, chief commercial officer of BHP
Billiton, the mining group, who is charged with winning over the
shareholders of Rio Tinto, BHP’s bid target, has mocked Rio’s assessment of
its aluminium business, claiming the valuation is about $50 billion (£24.6
billion) too high.
Retailing
Tesco Jit Siratranont, a former MP in Thailand who is secretary-general
of the Thai chamber of commerce, is facing a £16 million legal claim from
Tesco for criticising the supermarket group in his home country. (The
Observer)
Marks & Spencer Lord Burns, chairman of Marks & Spencer, will
embark on a charm offensive this week to persuade investors that promoting
the chief executive, Sir Stuart Rose, to executive chairman is the best
solution for the retailer. (The Independent on Sunday)
Debenhams John Lovering, chairman of Debenhams, the department store
group, is believed to be considering stepping down, This would be a blow to
the chain, whose shares have lost two thirds of their value since it floated
in 2006. (The Sunday Telegraph)
Support
services
Premier Farnell, the electronics distributor, is expected to report an
8 per cent rise in full-year pretax profits on Wednesday, helped by growing
internet sales.
Pims Group, the waste water support services company, has been acquired
in a management buyout led by Inflexion Private Equity, the mid-market
private equity investor.
Speedy Hire, the tool-hire group, is considering the sale of Speedy
Space, one of its best-performing businesses, which provides storage space
and portable accommodation. Analysts say that a sale could generate more
than £100 million. (The Sunday Times)
Technology
Yahoo! Microsoft’s offer to buy Yahoo!, the US internet search engine,
will probably succeed, but it may not be the best use of its cash reserves,
according to a poll of analysts by Reuters. It is six weeks since the
world’s largest software maker went public with its proposal, which values
Yahoo! at about $41.4 billion (£20.4 billion). Yahoo! said that the bid
“substantially undervalued” the company.
Telecoms
China Mobile, the world’s largest mobile phone carrier, is to report
its full-year results on Wednesday, with a 19 per cent rise in net profits
forecast after subscriber growth.
Transport
Forth Ports is expected today to report an 11 per cent drop in
full-year pretax profits to £27.1 million while it waits for planning
permission to develop its land bank at Leith Docks near Edinburgh.
London City airport has made a surprise bid in the £100 million auction
of Southend airport, its rival. (The Independent on Sunday)
Alitalia, Italy’s loss-making, debt-laden and partly state-owned
air-line, has agreed to a €138 million (£106 million) takeover offer from
Air France–KLM, one of the world’s biggest carriers.
Utilities
Utility meters Plans to install a “smart meter” in every UK home will
cost up to £20 billion, the Government will announce this month, four times
the estimates of energy companies. Officials and campaigners have also
warned that companies will pass on the costs of the meter installations for
consumers by raising utility bills again. (The Observer)
Share tips
The Sunday Telegraph: buy Cad-bury Schweppes (consumer goods), Chime
Communications (media) ISG (construction and property)
The Mail on Sunday: buy Cookson (industrials) Salamander Energy (natural
resources)
