Welcome to today's round-up of business news from The Times: what we're
saying, what they're saying
Top stories
The Times: Lehman Brothers will slash
its dividend , sell assets and consider a takeover after the US
investment bank lost $3.9 billion (£2.2 billion) in the quarter.
New York Times: Saudi Arabia vowed to ignore
Opec’s call to stick to the oil cartel’s quotas and will continue
to pump plenty of oil.
Reuters: Shares in Washington Mutual, the biggest savings and loan bank
in the US, fell 30 per cent on
fears it will not find a buyer or be able to cover its mortgage losses.
Comment
David Wighton in The Times: Lehman Brothers’ boss Dick Fuld has much to
be proud of, but pride could hinder him
doing what may have to be done – selling the bank quickly.
Jeremy Warner in The Independent: There's a gallows humour about the
City as the purges become relentless and few
expect to survive for long.
John Gapper in the Financial Times: Hank Paulson, the US Treasury
secretary, should take the weekend off
after his energetic interventions in financial markets.
Upside
The Times: Barratt Developments, the UK’s largest housebuilder, will
cover capital losses and pay stamp duty in a bid to sell
more homes in a slow market.
The Times: E.ON, the German energy group, plans to build a £4 billion
($7 billion) nuclear power station
beside the River Severn in Gloucestershire by 2020.
Daily Telegraph: Thorntons, the chocolate-maker and retailer, increased
annual profit by 20 per cent to £8.5 million ($14.9 million) on new
products and up-market tastes.
Downside
The Times: Britain will plunge into
recession this year to join the ranks of the worst-performing economies
in Europe, the European Commission predicts.
The Times: Opec will send a
delegation to Russia to forge closer ties; the prospect alarms other
countries as the two control half the world’s oil.
Daily Telegraph: Credit Agricole, the French financial services group,
will axe 500 jobs at its Calyon
investment bank arm.
Mergers and shakers
The Times: RAB Capital, the embattled hedge fund, will
liquidate its losing $900 million (£512 million) Special Situations
fund unless investors lock themselves in for three years.
New York Times: ImClone Systems is
considering a $70 a share bid from an unnamed pharmaceutical company
that trumps Bristol-Myers Squibb’s offer for the drug maker.
The Independent: Charles Allen, the former chief executive of
broadcaster ITV, joined the board of
Virgin Media , increasing speculation of a takeover bid for ITV.
Around Asia
Bloomberg: New Zealand cut interest
rates by a half point to 7.5 per cent, more than expected, saying the
economy was in a recession and inflation would slow.
Financial Times: Chi-X, the equities trading platform, will start
operating in Australia early next year and plans to expand into Asian
markets.
Financial Times: Indonesia was forced
to cancel an auction of bonds because investors demanded higher returns
than it could afford to pay.
Look ahead
The Times: Julian Roberts, the new chief executive of Old Mutual, says
he will fix the insurance giant’s troubled US life division within two
months or sell it.
The Times: The Walt Disney Company may mount
a challenge to BSkyB by bidding for Premier League football
broadcasting rights for its ESPN channel next year.
Reuters: The next US president will decide a $35 billion (£20 billion) air-refueling
defence contract that was awarded to Northrop and Europe's EADS but
withdrawn.
MARKETS
FTSE 100 5,366.20 down 0.9% (Wednesday close)
Dow 11,268.92 up 0.3% (close)
S&P 500 1,232.04 up 0.6% (close)
Nasdaq 2,228.70 up 0.9% (close)
Nikkei 12,196.89 down 1.2% (latest)
Hang Seng 19,674.35 down 1.6% (latest)
Currencies
Sterling $1.7522/1.2540 euros (latest)
Euro $1.3974 (latest)
Commodities
West Texas crude $103.90 up $1.32 (latest)
Gold $760.70 down $1.80 (latest)
New York
Reuters: US stocks rose on
Wednesday as OPEC's move to shore up oil prices boosted energy shares. Among
the oil majors, Conoco Phillips rose 5.2 per cent and Exxon Mobil rose
2.7 per cent. Technology shares also rose on relief that chip maker Texas
Instruments did not cut its earnings outlook. Texas Instruments rose 0.6
per cent and tech bellwether IBM rose 2.6 per cent. Financial shares,
however, were broadly lower. Troubled investment bank Lehman Brothers
lost another 6.9 per cent, while Washington Mutual lost 30 per cent. Wachovia
Corp fell 2.5 per cent, Merrill Lynch fell 3.8 per cent and American
International Group, the world’s biggest insurer, fell 4.7 per cent.
Asia
Bloomberg: Asian stocks fell
for the third day, driving the benchmark index to its lowest level since
June 2006. Financials suffered in the wake of Lehman Brothers’ losses, with Mitsubishi
UFJ, Japan's biggest bank, down 4.3 per cent, Mizuho Financial Group,
Japan's second-biggest, down 3.8 per cent, Kookmin Bank, South
Korea's biggest, down 3.2 per cent and ANZ, Australia's
fourth-largest, down 3.5 per cent. Carmaker Mazda, which gets more
than half of its profit in Europe, fell 7.2 per cent on poor European growth
predictions. The MSCI Asia Pacific Index lost 1 per cent to 116.59 in early
trade.
Michael Beh
michaelwbeh@gmail.com
London
The FTSE 100 closed down 49.4 points at 5,366.2 as losses at Lehman Brothers,
the US investment bank, hit London's blue chip financial stocks. Barclays
lost 5.3 per cent and Lloyds TSB fell 5 per cent. Insurers also lost
ground after Old Mutual, down 3.5 per cent, said it expects its US
life business to make a $135 million writedown on the value of its holdings
of Freddie Mac and Fannie Mae preference stock. Retailers also weighed on
the index after results and updates from some of the high street’s biggest
names painted a bleak picture for shop owners. Next lost 2 per cent
despite better than expected first half results, after it gave a downbeat
trading outlook.
Peter Stiff
peter.stiff@thetimes.co.uk
AGENDA
INTERIMS
Faroe Petroleum
Financial Objects
Hilton Food Group
John Lewis Partnership
Wm Morrison Supermarkets
Premier Farnell (Q2)
PRELIMINARY RESULTS
Dunelm Group
Galliford Try
Swallowfield
Tenon Group
FINALS
Gartmore Growth Opportunities
TRADING STATEMENTS
Home Retail Group
AGMs
Anite
Artemis Alpha Trust
EGMs
PGNiG SA (Polskie Gornictwo Naftowe i Gazownictwo SA)
Scotty Group
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