Welcome to today's round-up of business news from The Times: what we're
saying, what they're saying, what you should be thinking
Top stories
The Times: Bradford & Bingley and its underwriting advisers Citigroup
and UBS were accused of failing B&B
shareholders through the former building society's botched
capital-raising.
Financial Times: The dollar surged while oil and gold tumbled after Ben
Bernanke surprised markets by making
clear that the Federal Reserve does not want the US currency to weaken
any further.
The Daily Telegraph: Texas Pacific Group plans to use
its investment in Bradford & Bingley as a springboard for stake-building
in other banks.
Comment
David Wighton in The Times: The dollar's decline has become
America's problem. But Mr Bernanke has made the right move, not only for
the United States but for its friends in Europe.
Lex in Financial Times: With fear still in the air and a premium being
placed on strong balance sheets, Lehman could remain under selling pressure
unless it acts to remove uncertainty.
Jeremy Warner in The Independent: Inflation left unaddressed will only
succeed in returning Britain to its post-war
history of economic malaise.
On the rise
The Daily Telegraph: The chief executive of Nissan, the Japanese
carmaker, has announced a £55 million
investment in the company's plant in Sunderland.
The Independent: UK consumers defied
the credit crunch to spend a record amount online with retailers last
year, up 35 per cent to £14.7 billion.
BBC: The soaring cost of oil is welcome because it sends
a clear signal to consumers and firms to curb their use of fuel, the
head of the OECD said.
Downside
The Wall Street Journal: Lehman Brothers, facing a sharp decline in its
shares that will make it more difficult to raise fresh capital, may look
overseas for a strategic partner.
Bloomberg: The risk of default
on debt used in leveraged buyouts is rising in Europe as companies struggle
to meet the record amounts borrowed, according to Standard & Poor's.
Reuters: US vehicle sales tumbled in May as consumers spurned
pickup trucks and SUVs, driving General Motors, Ford and Chrysler to
double-digit declines.
Mergers and shakers
The Times: Sir Martin Sorrell will have
to bid at least 300p a share - £1.2 billion - for Taylor Nelson Sofres
to prevent its proposed £2.2 billion merger with Germany's GfK, analysts
said.
Financial Times: The relationship between Qatar Investment Authority
and Three Delta, its UK investment adviser, has broken
down.
The Daily Telegraph: Smiths Group, the engineer, will consider
moving its headquarters overseas if the Government presses on with
proposed tax changes.
Around Asia
Bloomberg: Australia's economy grew
twice as fast as economists forecast in the first quarter, driving the
nation's currency higher on speculation the central bank may raise interest
rates.
The Nikkei: Surging raw material costs helped to suppress combined
pre-tax profit at Japanese companies by 17.5 per cent in the January-March
period compared with a year before.
South China Morning Post: Sinosteel, the Chinese metals trader, raised
its stake in Midwest from 20 to 28 per cent as it seeks to take over the
Australian iron ore prospector.
Look ahead
The New York Times: Carl Icahn, the billionaire activist investor, vowed
to remove Jerry Yang as chief executive of Yahoo! if he succeeds in
replacing the company's board with his own directors.
The Times: Michael O'Leary, the chief executive of Ryanair, has welcomed
high oil prices, claiming that it will drive "crappy competitors" out of
business.
Financial Times: Energy consumers must be
prepared for structurally higher prices as a result of the investment
needed to cut emissions while keeping the lights on, a supplier has warned.
MARKETS
FTSE 100 6,057.70 up 0.8% (Tuesday close)
Dow 12,402.85 down 0.8% (close)
S&P 500 1,377.65 down 0.6% (close)
Nasdaq 2,480.48 down 0.4% (close)
Nikkei 14,382.11 up 1.2% (latest)
Hang Seng 24,314.75 down 0.3% (latest)
Currencies
Sterling $1.9637/1.2711 euros (latest)
Euro $1.5449 (latest)
Commodities
West Texas crude $124.13 down 18 cents (latest)
Gold $884.20 down $1.30 (latest)
New York
Reuters: US stocks fell for a
second day on Tuesday after a report that Lehman Brothers may have to
raise more capital. Major indices managed to finish the day well off their
lows after Lehman denied rumours that it had borrowed directly from the US
Federal Reserve. Fears over financial shares contributed to a big shift out
of stocks and into safe-haven government bonds.
Asia
Bloomberg: Asian stocks rose,
led by exporters of cars and electronics, after Japanese and South Korean
carmakers increased sales in the US and the dollar rallied. Honda
advanced to a six-month high. Sony gained after Ben Bernanke,
Chairman of the US Federal Reserve, signalled an end to cuts in interest
rates, driving the dollar to near a three-month high against the yen. The
MSCI Asia Pacific Index had fallen 0.7 per cent in intraday trading.
Paul Larter
paul.larter@thetimes.co.uk
London
Barratt Developments plunged 11p to a 13-year low of 156.5p as Cazenove
added its weight to the growing talk that it would have to raise some £600
million in a deeply discounted rights issue.
Taylor Wimpey, down 0.25p to 82.25p, with £1 billion, are most at risk
and Cazenove estimates that a £580 million fund raising from Barratt would
drive its share price down to 112p while an £866 million issue from TW would
send its price to 55p.
Persimmon lost 11.25p to 456p and Galliford Try, the firm with a
housebuilding arm, fell 4.25p to 39.5p.
Royal Bank of Scotland was the top gainer in a bank mini-rally, up
18.75 to 244.75p on talk that activist hedge fund TCI (The Children's
Investment Fund) was building a stake. The rumour helps the underwriters to
the rights issue since the shares begin trading this Friday.
But HBOS - exposed to the buy to let market - was down 8.25p to 351.75p
and Alliance & Leicester off 2.75p to 400.25p. Paragon,
the buy to let specialist, fell 2.75p to 84p.
The FTSE 100 ended up 50.1 at 6057.7.
Eurasian Natural Resources lost 77p to £13.67 on talk that Kazakhmys,
up 27p to £17.63, had suggested at a mining conference that it was looking
at selling its 14.6 per cent stake in ENRC. Its lock in expires on Friday.
Vedanta Resources, the Indian miner, lost 81p to £24.24 on fears of an
imminent collapse in the price of zinc, which accounts for a third of its
earnings.
Informa, the Lloyd's List publisher, gained 17.75p to 386.75p as talk
of Apax and Carlyle bid interest continued. JP Morgan upgraded the stock
with a 525p price target, saying it thought a bid was likely.
Robert Lindsay
robert.lindsay@thetimes.co.uk
AGENDA
INTERIMS
OJSC Novolipetsk Steel
Sportingbet
FINALS
600 Group
FKI
Hampson Industries
Michelmersh Brick Holdings
Northumbrian Water
AGMs
China Biodiesel International
Entertainment Rights
Hiscox
Nautilus Minerals
Oakdene Homes
Orad Hi-Tec Systems
Wolfson Microelectronics
EGMs
None scheduled
TRADING STATEMENTS
IG Group Holdings
Kingfisher (Q1)
TRAFFIC FIGURES
British Airways (May)
ECONOMICS
UK May Nationwide consumer confidence survey (0001 BST)
UK May services PMI
UK May BRC shop price index
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