Welcome to today's round-up of business news from The Times: what we're
saying, what they're saying
Top stories
The Times: More than £30 billion ($60 billion) was wiped off the value
of Britain’s biggest companies as hysteria in the US banking crisis hit
new levels .
Bloomberg: The US Securities and Exchange Commission has banned naked
short selling of shares in mortgage giants Freddie Mac and Fannie Mae.
The Times: BT announced a £1.5 billion ($3 billion) plan
for super-fast broadband . It will suspend its share buyback and is
seeking concessions from regulators.
Comment
Carl Mortished in The Times: The US has declared
war on drug dealers - Pfizer, Merck and Britain's GlaxoSmithKline.
Damian Reece in the Telegraph: Key markets are capitulating in the face
of an inevitable recession and the
only thing that can stop quarters of negative growth is a rates cut.
Jeremy Warner in The Independent: This is a bad
and scary banking crisis, but it doesn't have to end in calamity.
Upside
New York Times: Intel, the world’s largest chip maker, reported
profit rose 25 per cent to hit a record.
Financial Times: The head of Crédit Agricole, France’s biggest retail
bank, bet his job and won after
forcing a vote of confidence from the board.
Telegraph: Burberry, the luxury goods retailer, reported sales rose
by 22 per cent over the three months to June 30.
Downside
The Times: British Airways is set to increase
fares as its annual fuel bill tops £3 billion ($6 billion).
The Times: Spain’s largest property developer, Martinsa-Fadesa, filed
for bankruptcy , sparking panic in the nation’s financial community.
The Independent: Jessops, the troubled camera retailer, issued yet
another profit warning and its
shares fell almost 30 per cent.
Mergers and shakers
New York Times: Rupert Murdoch, the boss of News Corporation, and
Mortimer Zuckerman, owner of The Daily News, are considering
merging business functions of their New York newspapers.
Bloomberg: InBev NV may sell
Anheuser-Busch’s theme-park and beer-can divisions for up to $4.6 billion
(£2.3 billion) to help pay for its takeover of the US brewer.
The Times: As headline inflation hit its highest level in 15 years,
Alistair Darling, the Chancellor, pleaded again for pay
restraint .
Around Asia
Bloomberg: Virgin Blue, Australia's second-biggest airline, surged
20 per cent on speculation its spinoff from Toll Holdings may lead to a
takeover bid.
Reuters: Air China will buy 45
planes from Boeing with a total list price of $6.3 billion, but it
expects to get a discount.
New York Times: Wilbur L. Ross Jr invested $80 million (£40 million) in
the flailing Indian airline SpiceJet
based on a belief the oil-price bubble should pop in the next year.
Look ahead
The Times: Pension trustees at Cable & Wireless will meet
next week to again consider whether to offload about £1 billion ($2
billion) of risks associated with its pensions scheme.
Financial Times: Thailand and the Philippines are expected to raise
interest rates this week to fight surging inflation.
Bloomberg: Analysts expect Nokia, the biggest maker of mobile phones,
to reveal the slowest growth in
almost four years when it reports on Thursday.
MARKETS
FTSE 100 5,171.90 down 2.4% (Tuesday close)
Dow 10,962.54 down 0.8% (close)
S&P 500 1,214.91 down 1.1% (close)
Nasdaq 2,215.71 up 0.1% (close)
Nikkei 12,681.17 down 0.6% (latest)
Hang Seng 21,100.52 down 0.4% (latest)
Currencies
Sterling $2.0019/1.2597 euros (latest)
Euro $1.5892 (latest)
Commodities
West Texas crude $139.00 up 26 cents (latest)
Gold $971.80 down $6.90 (latest)
New York
Reuters: The Dow industrials
closed below 11,000 for the first time in two years as doubts about the US
plan to rescue Freddie Mac and Fannie Mae hurt financial
stocks and tumbling oil prices hurt energy shares. Freddie and Fannie shares
plunged more than 25 per cent. Lehman Brothers bucked the banking
sector trend, surging 6.6 per cent after a report that it was considering
ways to go private. Microsoft rose 4 per cent and Intel gained
up to 2.4 per cent in after-hours trade on record results. Among energy
shares, Exxon Mobil fell 3.8 per cent.
Asia
Bloomberg: Asian stocks fell
for a third day, led by energy and mining companies. BHP Billiton
dropped 1.8 per cent to a three-month low while Mitsubishi, which
makes more than half of its profit from commodities, fell 2.8 per cent.
Australian supermarket giant Woolworths climbed 3.6 per cent on
rising sales. In Korea, Samsung rose 1.5 per cent and in Japan, Advantest,
the top maker of memory-chip testers, gained 2.9 per cent. In early trade,
the MSCI Asia-Pacific Index dropped 0.9 per cent.
Michael Beh
michaelwbeh@gmail.com
London
Trinity Mirror shares collapsed by nearly a fifth amid fears that extra
payments to its pension fund and a continuing slide in advertising revenues
would make it breach its bank covenants.
The publisher of the Daily and Sunday Mirror, down 12.5p to
54.75p, issued a warning two weeks ago about a sudden downturn in ad demand
in May which worsened in June. It boasted that it had obtained a new five
year bank loan of £210 million, but did not say that the terms of the new
loan are much tighter. Jonathan Barratt of Kaupthing said: “Just another 5
per cent fall in ad revenue in 2009 would imply they have breached
covenants.”
He said banks can call in the loan when debt rises above 3.25 times its
earnings compared to 4 times under the earlier loan. Trinity’s first half
results on July 31 are likely to warn about another cash injection into its
underfunded pension scheme, further raising its debt, and possible asset
write offs. But a rights issue looks unlikely to succeed, given that UTV
Media revealed yesterday that its issue was only 41 per cent subscribed.
UTV lost 5.5p to 123p.
Gannett, which owns several UK regional papers, is due to reveal second
quarter figures today while a trading update from DMGT, down 13p to
261p, is due next Wednesday and could show that the sales fall in June had
accelerated in July.
The FTSE 100 meanwhile, fell 128.5 to 5171.9 - its lowest level since July
2005 - as fears over the imminent collapse of several US regional banks,
such as Wachovia, weighed on the banking sector.
Royal Bank of Scotland, which owns Citizens retail bank in the
Northeastern US, plunged 12.7p to 167.3p on heavy volume. Its value has now
halved in three months. There was talk that an institution was looking to
offload 160 million shares. There are mounting concerns that it will not be
able to sell its insurance division for the money it wants. Its wholesale
bank is heavily exposed to US mortgage assets.
One sales trader said yesterday: “There are three stages to a bear market - a
fall in stocks, downgrades by analysts and then blind panic, we seem to be
entering the third stage.”
Robert Lindsay
robert.lindsay@thetimes.co.uk
AGENDA
INTERIMS
Holders Technology
FINALS
None scheduled
AGMs
Aquarius Platinum
BTG
BT Group
Designcapital
Experian
ICAP
Innovision Research
Invesco English and International Trust
Luminar
Wynnstay Properties
EGMs
Nature Technology Solutions
TRADING STATEMENTS
Bluebay Asset Management (Q4)
BTG
Land Securities
Luminar
JD Wetherspoon
Wolseley
PRODUCTION FIGURES
Hochschild Mining (Q2)
OPERATIONS REVIEW
Rio Tinto (Q2)
KEY PERFORMANCE INDICATORS
Playtech
ECONOMICS
UK labour market report (0930 BST)
Sign up for The Times
To receive Kill the Competition click here
To sign up for Top stories you missed while you were away click here
Keep up with the day's top stories click here
Need to Know, the essential daily business guide sector by sector click here
