Welcome to today's round-up of business news from The Times: what we're
saying, what they're saying
Top stories
The Times: A computer failure
shut down the London Stock Exchange for seven hours on what promised to be
one of the most profitable days of the year.
New York Times: The US Government
takeover of troubled mortgage giants Fannie Mae and Freddie Mac saw
stock markets around the world rally.
Reuters: United Airlines shares fell 76 per cent after a six-year-old
bankruptcy news report resurfaced ;
the airline closed down 12 per cent after trading was suspended.
Comment
David Wighton in The Times: If the rescue of Fannie Mae and Freddie Mac
is to mark the end of the credit crunch, the UK Government will
have to do its bit .
Damian Reece in the Daily Telegraph: The US Government’s rescue plan
may eventually prove a success, but it will
not come cheap and everyone will pay.
Lex in the Financial Times: While world markets rallied on the US
rescue, China celebrated by
dropping 4 per cent, proving the US cannot stop the rot elsewhere.
Upside
The Times: The Government will pay
one man £4.5 million ($7.9 million) to work out how much Northern
Rock shareholders should get for the bank’s nationalisation.
The Independent: Annual profit at PricewaterhouseCoopers, the world’s
biggest accountancy firm, rose 7 per cent
to £664 million ($1.17 billion).
Daily Telegraph: British factory gate prices fell at their sharpest
monthly rate since records began in 1986, easing inflation concerns.
Downside
The Times: A former London manager at Moore Capital, the US hedge fund, was
fined £52,500 ($92,000) and will stay out of the market for a year
for market abuse.
Bloomberg: Wholesale gasoline along the Gulf Coast jumped more than 12
per cent as Hurricane Ike approached
the region that does 48 per cent of US oil refining.
Daily Telegraph: Trinity Mirror, the UK's largest regional newspaper
group, will close seven local papers
and nine offices in North Wales and the North West.
Mergers and shakers
The Times: The takeover by Nationwide, Britain’s biggest building
society, rescued Derbyshire Building
Society from “material financial uncertainties” from sub-prime lending.
The Times: BG Group may abandon
its $11 billion (£6.2 billion) hostile bid for Australia’s Origin Energy,
which landed an $8 billion coal-seam gas deal with US oil giant
ConocoPhillips.
New York Times: Altria Group, formerly Phillip Morris, finalised its
$10.2 billion (£5.8 billion) takeover
of UST , the maker of Skoal and Copenhagen smokeless tobacco.
Around Asia
Daily Telegraph: South Korean regulators warned the Korea Development
Bank against investing in Lehman
Brothers, threatening the troubled US investment bank’s lifeline.
The Times: Dubai is examining a $200 billion (£114 billion) canal to bypass
the Strait of Hormuz and reduce Iran’s influence on oil flows from the
region.
Nikkei: Total deposits at Japanese private-sector banks hit a record
¥145 trillion (£767 billion, $1.35 trillion) above their outstanding loan
balances.
Look ahead
The Times: Alistair Darling, the Chancellor, will draw
up plans to intervene in Britain’s housing market after he receives a
key report at the end of the month.
Financial Times: Royal Dutch Shell will next month sign a $4 billion
(£2.3 billion) deal to tap waste
gas in Iraq , the first by a Western oil firm since the 2003 invasion.
New York Times: The New York Times Company will shut
down a distribution subsidiary in January, eliminating the equivalent
of 550 full-time jobs.
MARKETS
FTSE 100 5,446.30 up 3.9% (Monday close)
Dow 11,510.74 up 2.6% (close)
S&P 500 1,267.79 up 2.1% (close)
Nasdaq 2,269.76 up 0.6% (close)
Nikkei 12,436.89 down 1.5% (latest)
Hang Seng 20,439.47 down 1.7% (latest)
Currencies
Sterling $1.7540/1.2456 euros (latest)
Euro $1.4082 (latest)
Commodities
West Texas crude $105.70 down 64 cents (latest)
Gold $802.10 down 40 cents (latest)
New York
Reuters: US stocks rose on
Washington's bailout of mortgage finance giants Fannie Mae and Freddie
Mac. The bailout could wipe out the pair’s investors and common stocks
of both traded at less than $1 a share, more than 80 per cent below Friday's
close. Elsewhere in the financial sector, Bank of America rose 7.8
per cent and Citigroup rose 6.6 per cent, but Lehman Brothers
fell 12.7 per cent on reports it was meeting potential buyers for its asset
management unit. The Nasdaq gyrated throughout the session, at one point
falling into negative territory before a late afternoon surge. Google
fell 5.5 per cent and Apple fell 1.4 per cent. But Cisco Systems rose
5 per cent on a ratings upgrade.
Asia
Bloomberg: Asian stocks fell
as investors found yesterday’s rally was overdone. Mitsubishi UFJ
Financial Group, Japan’s largest bank, fell 2.7 per cent as analysts
predicted larger writedowns at Lehman Brothers. Macquarie Group,
Australia's biggest investment bank, fell 5.7 per cent. BHP Billiton,
the world's largest miner, fell 3.1 per cent and Japanese commodity dealer Mitsui
fell 6.3 per cent. Mitsui OSK Lines, Japan's largest operator of
iron-ore ships, fell 5.1 per cent as shipping rates fell. The MSCI Asia
Pacific Index fell 1.5 per cent to 119.53 in early trade.
Michael Beh
michaelwbeh@gmail.com
London
Trading in London was hit by a seven-hour blackout yesterday as a technical
glitch paralysed the London Stock Exchange on what was destined to be one of
the busiest days of the year. Shares surged as the market opened and traders
reacted to news that the US Government would bail out the troubled mortgage
giants Fannie Mae and Freddie Mac. However, less than an hour’s dealing was
done before connectivity problems forced the LSE to halt trading. Traders
were left twiddling their thumbs for most of the day with little to do until
the market reopened for the last 30 minutes. Overall the FTSE 100 index
closed nearly 4 per cent higher, up 205.6 points, at 5,446.3, with the
financial sector making the most ground after the overnight news from across
the Atlantic. Barclays gained 11.9 per cent, HBOS rose 11.4
per cent and Royal Bank of Scotland was up 11.3 per cent. Wolseley,
up 10.7 per cent, also gained on hopes of a recovery for the US housing
market. GlaxoSmithKline led only 2 fallers, down 1.6 per cent, after
its head of North American, Chris Viehbacher, decided to step down.
Peter Stiff
peter.stiff@thetimes.co.uk
AGENDA
INTERIMS
Advanced Medical Solutions
Fairpoint
Johnson Service Group
KBC Advanced Technologies
PRELIMINARY RESULTS
Interior Services Group
Morse
Redrow
AGMs
VP plc
OTHER
BRC retail sales monitor
CML - detailed data on July lending figures
RICS figures on housing market
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