Welcome to today's round-up of business news from The Times: what we're
saying, what they're saying
Top stories
The Times: EDF, France’s biggest energy company, looked set
to pull out of a £12 billion ($23.8 billion) takeover of British
Energy, the nuclear generator.
New York Times: Exxon Mobil, the oil giant, again set
the record for US quarterly profit, at $11.68 billion (£5.9 billion),
but disappointed the market.
Financial Times: Russia will create a state grain trading company to
control up to half of its exports, intensifying
fears it will use food exports as a diplomatic weapon.
Comment
Martin Waller in The Times: Taxing windfall energy profits may — like
bear-baiting — offer a spectacle
, but not an improving one.
Floyd Norris in the New York Times: The fear with which Merrill Lynch
dumped securities this week could be the kind of capitulation that will
later be seen as marking the bottom of
the market .
Alister Bull in Reuters: Economic growth doubled in the second quarter,
the reality for ordinary Americans is
very different because of the deflator.
Upside
The Times: HBOS, Britain's biggest mortgage lender, reported a 51 per
cent fall in profit to £1.4 billion
($2.8 billion), but markets feared worse and its shares rose 7 per cent.
New York Times: Motorola reported an unexpected
profit of $4 million (£2 billion), but mobile phone sales remain slow
and it is tipped to sell off this business.
Telegraph: Strong sales in
emerging markets and a weak dollar helped AstraZeneca, Britain’s No.2
pharmaceutical group, increase profit 14 per cent to $2.28 billion ($4.5
billion).
Downside
The Times: Alistair Darling, the Chancellor, is considering a one-off
tax on windfall energy profits to fund a subsidy for the nation’s
poorest.
The Times: UBS will seek a High
Court injunction to stop new wealth manager Vestra Wealth, which has
recruited 52 staff from the Swiss bank, from poaching clients.
Telegraph: BT reported a 15 per cent fall
in first quarter profit to £513 million ($1 billion) and shares in the
British telecommunications giant fell 12 per cent.
Movers and Shakers
The Times: Philip Morris, the world’s largest tobacco company, has
offered C$2 billion (£99 million, $1.95 billion) for Rothmans, Canada’s
second biggest cigarette maker.
New York Times: Bristol-Myers Squibb, the pharmaceutical company,
offered $4.5 billion (£2.3 billion) to
buy the 83 per cent of ImClone, the biotechnology firm, it does not
already own.
The Times: A top options trader who accepted a job with Tullett Prebon
but then changed his mind has been ordered
to pay the broker £603,000 ($1.2 million).
Around Asia
Bloomberg: CapitaLand, Southeast Asia's largest property developer,
reported a 44 per cent fall in
second-quarter profit to S$515.2 million (£190 million, $377 million)
as sales fell.
Bloomberg: Chinese regulators are restricting
approvals for share floats to prevent extra pressure on a stock market
that has fallen 47 per cent this year.
Financial Times: Shares in BrisConnections, which will build an airport
toll road in Brisbane, fell 60 per cent in one of the worst
Australian stock market debuts.
Look ahead
Bloomberg: HSBC, Europe's biggest bank, is expected
to announce a 33 per cent fall in profit when it reports on Monday,
August 4.
Financial Times: Despite eurozone inflation hitting 4.1 per cent, the
European Central Bank is expected to leave
rates on hold when it meets on Thursday, August 7.
Wall Street Journal: Alan Schwartz, the former CEO of Bear Stearns who
was forced to sell it to JP Morgan Chase in March, will leave combined
company this month.
MARKETS
FTSE 100 5,411.90 down 0.2% (Thursday close)
Dow 11,378.02 down 1.8% (close)
S&P 500 1,267.38 down 1.3% (close)
Nasdaq 2,325.55 down 0.2% (close)
Nikkei 13,080.93 down 2.2% (latest)
Hang Seng 22,377.82 down 1.6% (latest)
Currencies
Sterling $1.9808/1.2731 euros (latest)
Euro $1.5558 (latest)
Commodities
West Texas crude $123.25 down 83 cents (latest)
Gold $918.90 down $3.80 (latest)
New York
Reuters: US stocks fell as
disappointing economic data revived fears of a recession. Exxon Mobil
led the plunge, dropping 4.7 per cent after its earnings fell short of
expectations. Big manufacturers were hit, with Caterpillar falling
3.5 per cent and Boeing falling 4.3 per cent. Bristol-Myers Squibb’s
offer to buy the rest of ImClone saw ImClone shares rise 37.7 per
cent. Walt Disney fell 4.2 per cent after reporting flat park bookings.
Asia
Bloomberg: Asian stocks fell
in early trade on the back of reported profit slumps. Sumitomo Mitsui,
Japan's second-largest bank, fell 5.4 per cent and Mitsubishi UFJ,
Japan’s largest, fell 3.1 per cent. NEC, the largest Japanese
personal-computer maker, fell 11 per cent and Australian bank Suncorp-Metway
fell 14 per cent. All four firms reported that quarterly profit halved.
Falling commodity prices saw Mitsui, Japan's second-biggest trading
company, fall 4.3 per cent, mining giant Rio Tinto fall 1.6 per cent
and Inpex, Japan's largest oil explorer, fall 3.8 per cent. The MSCI
Asia Pacific Index fell 1.2 per cent in morning trade.
Michael Beh
michaelwbeh@gmail.com
London
Investors in booze, betting and cigarettes had their fingers burnt yesterday
as updates from companies behind some of the finer things in life failed to
impress the market.
Although first-quarter figures from SABMiller were not as bad as some
had feared, a 1.6 per cent fall in like-for-like lager volumes, combined
with a warning of challenging conditions in South Africa, were enough to
discourage shareholders. The brewer of Miller Lite, Peroni Nastro Azzurro
and Pilsner Urquell blamed the dip, compared with volume growth of 13 per
cent last year, on a 5 per cent fall in volumes in China. However, with the
country accounting for 30 per cent of group volumes, but less than 2 per
cent of profits, the impact on the bottom line will be muted.
SAB also blamed the “moderation of consumer spending” in some markets. Volume
falls in more profitable growth markets such as Colombia, down 4 per cent,
and South Africa, down 3 per cent, are of most concern, although the company
was up against tough comparatives. The shares fell 54p, or 4.9 per cent, to
£10.49 as analysts voiced concern over the impact of slowing sales and
rising costs.
First-half earnings from William Hill and Rank Group also
disappointed, with the gaming companies reporting profit falls and mixed
trading outlooks.
William Hill dropped after posting a 16 per cent fall in first-half underlying
pretax profits, as more punters managed to beat the bookie. Charles Scott,
the chairman, said the group had seen little evidence so far of the business
suffering from the economic downturn, although the real test will come when
the football season kicks off, with analysts noting that the rest of the
year is likely to be more tough.
Peter Stiff
peter.stiff@thetimes.co.uk
AGENDA
INTERIMS
Alliance & Leicester
BAE Systems
British Airways (Q1)
Flying Brands (Q1)
Jardine Lloyd Thompson
Travis Perkins
FINALS
Top Ten Hldgs
AGMs
Legg Mason Institutional Funds
EGMs
None scheduled
NEW BUSINESS FIGURES
Just Retirement (Holdings) (Q4)
ECONOMICS
UK July CIPS manufacturing PMI (0930 BST)
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