Economics
Inflation stayed at 2.5 per cent in March, unchanged from February,
according to figures from the Office for National Statistics, still well
above the Bank of England’s 2 per cent target for the sixth month running.
The annual rate of retail price index inflation — which includes housing
costs — fell to 3.8 per cent, from 4.1 per cent in February, the lowest rise
since July 2007.
House prices slid by 1.6 per cent in February, according to figures
from the Department of Communities and Local Government. The annual rate of
house price growth slowed to 6.7 per cent, the lowest rate in 19 months,
down from 8 per cent in January. The average price of a property sold during
February was £217,737, down from £221,278 in January.
The pound fell to a record low against the euro, which hit an all-time
high of 80.65p. Sterling also lost 0.8 per cent against the dollar, dropping
to $1.9619, pushing its trade-weighted index to an 11-year low of 91.6.
German investor confidence has been dented by sharp price rises during
April. The monthly sentiment indicator from the ZEW institute stood at minus
40.7 points, down from minus 32 points in March.
French inflation The French consumer price index for March rose by 0.8
per cent from February and was up by 3.2 per cent year-on-year, the
statistics office said. Underlying “core” inflation rose by 0.4 per cent
month-on-month and by 2.1 per cent year-on-year.
US wholesale prices rose by 1.1 per cent in March, and the price of
goods, excluding energy and food, rose by a more modest 0.2 per cent, the
Producer Price Index showed. Headline PPI inflation in the year to March was
up by 6.9 per cent, and the core rate was 2.7 per cent higher.
Banking
& finance
Bear Stearns, the US bank which has disclosed that its profits fell by
almost 80 per cent in the three months to February, is under investigation
by two of America’s top regulators. The Securities and Exchange Commission
has opened an inquiry over alleged anti-competitive practices and the
Federal Trade Commission has said that the bank broke federal laws that
protect consumers.
Temasek, the Singapore sovereign wealth fund, has exercised an option
to buy an extra $600 million (£305.9 million) of Merrill Lynch shares in
February, raising its investment in the US bank to $5 billion.
UBS, the Swiss bank, should ignore short-term pressure from investors
to split off its investment bank from the rest of the group, according to
Joerg Wolle, a board member.
State Street, the American financial services group, said that it faced
unrealised losses of $3.2 billion on its portfolio and a $2.5 billion loss
on conduits.
HSBC Paul Thurston, chief executive of HSBC’s Mexico business, will
take over as managing director of UK banking for the group. He will report
to Dyfrig John, who will become deputy chairman of HSBC Bank and will
continue to run the European business.
New Star Asset Management Richard Pease, a director of New Star Asset
Management, remained one of the highest-paid fund managers in the City,
lifting his 2007 remuneration to £5.7 million, from £4.7 million in 2006.
GLG Partners, the London-based hedge fund, was fighting to hold on to
one of its star managers after Greg Coffey moved to resign from the $24
billion company to set up his own business.
Construction
& property
Carillion, the construction group, said that its joint venture with WSP
Group had secured a five-year £85 million contract with the Highways Agency.
Low & Bonar, the textile and flooring manufacturer, has formed a
joint venture with Abu Dhabi Basic Industries Corporation to produce
artificial grass yarns.
Taylor Wimpey, the housebuilder, said that Ian Sutcliffe, chief
executive of its UK housing division, had resigned to join Segro, the
property investment trust.
Consumer
goods
Hilton Food Group, the meat packer, reported a fall in full-year
pre-tax profits to £13.7 million, reflecting a one-off flotation charge of
£1.8 million. The company said that it had made an encouraging start to the
year and was confident about its future.
Engineering
Siemens, the German engineering group, together with its works council,
has agreed a package for 1,200 employees at its Siemens Enterprise
Communications unit in Germany, where it plans to lay off 3,800 workers.
Carmakers in Europe have suffered their worst month in more than four
years as the impact of the credit crunch begins to be felt by the industry.
The market in Western Europe fell by 10.2 per cent in March.
Health
SSL International, the maker of Durex condoms and Scholl sandals, said
that it expected its full-year adjusted sales to be up by 7 per cent at £532
million.
Roche Holdings, the Swiss pharmaceuticals group, said that it would buy
Piramed, the privately owned UK-based biotech group, for $160 million (£81.5
million) in an attempt to strengthen its oncology and arthritis pipelines.
Shire Pharmaceuticals, the drugs maker, is to move its headquarters to
Dublin to limit its tax bills. It will incorporate its holding company in
Jersey and hold all board meetings in Dublin. Its operations and 300 staff
will remain in Basingstoke, Hampshire.
AstraZeneca, the Anglo-Swedish drugs group, has settled a legal battle
with Ranbaxy Laboratories, the Indian generic drugs maker, over the rights
to produce Nexium, AstraZeneca’s ulcer treatment.
Johnson & Johnson, the US healthcare group, reported better than
expected quarterly earnings of $3.6 billion, up from $2.57 billion a year
earlier.
Industrials
Evraz, the Russian steelmaker, said that its first-quarter crude steel
output had risen by 3.9 per cent to 4.5 million tonnes.
Leisure
InterContinental Hotels Group has signed four more hotels in the Middle
East — two Staybridge Suites properties in Kuwait and
InterContinental-branded hotels in Kuwait and Damascus.
Hallmark Hotel Group, a new company backed by Zeus Private Equity, has
acquired four hotels in Carlisle, Bournemouth and Derby for a total of £25
million.
Media
Chrysalis, the media group, said it had rejected a 155p-a-share cash
bid for the company and added that it expected to report first-half earnings
in line with expectations. It said that it had ended talks with potential
buyers because market conditions meant that it could not get the price it
wanted.
Natural
resources
BG, the oil exploration group, saw its shares rise after the National
Petroleum Agency, of Brazil, said that an oil find in which BG has a 30 per
cent stake may be the world’s biggest discovery in 30 years. The agency said
the find could contain 33 billion barrels of oil equivalent.
Premier Oil has signed three agreements to supply a total of 125
billion British thermal units of gas a day from its Natuna fields in the
South China Sea.
Opec, the oil cartel, has kept its 2008 global oil demand growth
forecast unchanged at 1.2 million barrels per day, as an economic slowdown
in the industrialised world offset growing demand in developing nations.
Retailing
Tesco, the supermarket group, reported a 12 per cent rise in full-year
underlying pre-tax profits to £2.8 billion on revenue of £47.3 billion, up
by 11.1 per cent, and announced plans for 30,000 new jobs across the group.
John David Group, the sports retailer, said that it was cautious about
future earnings growth despite reporting a 103 per cent increase in
full-year pre-tax profits to £35 million, helped by an 11 per cent rise in
like-for-like sales.
Debenhams, the department store group, reported a 12.4 per cent drop in
half-year underlying pre-tax profits to £94 million, down from £107.4
million last year, and said that conditions would remain challenging.
Carphone Warehouse, the mobile phone retailer, saw its shares slump
after its TalkTalk operator reported fewer than expected broadband
connections and revealed a substantial spending programme.
Ethel Austin, the discount fashion chain, has collapsed into
administration but its 300 stores could be sold soon, with the most likely
buyer being Elaine Gray, a former executive at MK One, the rival fashion
chain.
Support
services
Mears Group, the maintenance services business, said its social housing
division had won new contracts worth £57 million, adding that it was in a
strong position to benefit from its bid pipeline.
Technology
Playtech, the gaming software company, has signed a licensing agreement
to supply its casino products to Betsson, one of the largest online gambling
operators for the European market.
Infosys, the Indian IT services group, confirmed that it expected its
earnings growth to slow sharply during the next year because of the meltdown
in the American financial sector, its largest source of revenues.
Telecoms
Blue Star Mobile Group, the AIM-listed company, has signed a
conditional agreement to sell two of its four trading subsidiaries, Blue
Star Mobile and Blue Star Sport, for £225,000 in cash.
Transport
Ryanair and easyJet, the low-cost airlines, have said they will
withhold the higher charges imposed by BAA, the airports operator, at
Stansted and Gatwick respectively. Ryanair said it had written to BAA
objecting to the increase and easyJet said it intended to apply for a
judicial review.
Delta Air Lines More American airline mergers are being predicted after
Delta Air Lines agreed a $3 billion (£1.53 billion) takeover of Northwest
Airlines. It will create the country’s largest air operator, which will fly
under the Delta flag.
British Airways has dismissed two of its longest-serving managers for
their part in the shambolic opening of Terminal 5 at Heathrow. More than 500
flights were cancelled and 28,000 bags were lost.
Utilities
Clipper Windpower, the London-listed wind energy group, reported a
full-year loss of $192.5 million (£98.17 million), compared with a loss of
$20.3 million last year, mainly because of a delay in turbine deliveries
that held back revenues.
British Energy, the nuclear power group, told an investor day that its
Heysham 1 and Hartlepool reactors had still not been given regulatory
approval to restart after the closure of their boiler units in October. The
reactors are expected to be running again later in the year.
