Welcome to today's round-up of business news from The Times: what we're
saying, what they're saying
Top stories
The Times: French plans for a €300 billion (£235 billion, $415 billion)
European bank bailout collapsed as Greece guaranteed
all deposits amid rumours of a run.
The Times: Northern Rock may have to stop
taking deposits after a surge put it is close to breaking competition
rules imposed after its nationalisation.
New York Times: The credit crisis has cast a pall over
Silicon Valley – technology stocks have been hit hard and expect worse
to come.
Comment
Gerard Baker in The Times: The drama queens of politics and the media
are peddling the myths that
capitalism is dead and America has gone socialist.
Floyd Norris in the New York Times: Raising deposit guarantees magnified
the scale of the 1980s savings and loan crisis and could have the same
effect now.
Lex in the Financial Times: When bankers moan about unequal
opportunities, hollow laughter is
often the automatic, and sometimes appropriate, response.
Upside
The Times: The European Central Bank kept interest rates steady at 4.25
per cent but signalled it was ready to
make its first cut in more than five years.
The Times: UBS, the Swiss bank, expects to make
a small profit in the third quarter in the first hint about how banks
have fared through recent market volatility.
New York Times: Microsoft will set
up research centres in London, Paris and Munich employing hundreds of
people to improve its internet search technology.
Downside
The Times: British high street banks will make loans even harder
to secure in the build-up to Christmas, which will further fuel the
downturn in the economy.
Financial Times: Investors withdrew
$95 billion (£54 billion) from the US commercial paper market this
week, the biggest fall since tracking began in 2001.
The Times: Marks & Spencer will cut
capital expenditure in half and step up cost savings after sales fell
6.1 per cent in the past quarter to 2005 levels.
Mergers and shakers
Daily Telegraph: Royal Dutch Shell has
proposed a $1.2 billion (£600 million) takeover of Regal Petroleum,
founded by the controversial Frank Timis.
The Times: Deminor, the Brussels investor rights group, began
a legal action aimed at recouping billions of dollars lost through the
collapse of Lehman Brothers.
The Times: John Thain, the head of Merrill Lynch, will head
investment banking in the group created through his company’s merger
with Bank of America.
Around Asia
Financial Times: Mitsubishi UFJ, Japan’s biggest bank, bought
a 9.9 per cent stake in Aberdeen Asset Management, the Scottish fund
manager, and is set to buy more.
Bloomberg: Mitsubishi UFJ denied
reports it would merge its brokerage unit with a local subsidiary of
Morgan Stanley, the US bank.
Nikkei: Toyota cut its contracted workforce in Japan by 20 per cent in
the past six months as the carmaker moved to cut production as sales fell.
Looking Ahead
The Times: National Grid gave warning that electricity prices could
rise sharply in winter as supply was squeezed, with next month to be
particularly tight.
The Independent: Large numbers of British companies may
fail as credit tightens over the next three months, the Bank of England
warns.
The Independent: Woolworths is one of the most
vulnerable listed retailers in the run-up to a Christmas that could be
the worst on the high street since the 1970s.
MARKETS
FTSE 100 4,870.34 down 1.8% (Thursday close)
Dow 10,482.85 down 3.2% (close)
S&P 500 1,114.28 down 4% (close)
Nasdaq 1,976.72 down 4.5% (close)
Nikkei 11,012.13 down 1.3% (latest)
Hang Seng 17,788.99 down 2.3% (latest)
Currencies
Sterling $1.7652/1.2783 euros (latest)
Euro $1.3809 (latest)
Commodities
Brent crude $90.20 down 36 cents (latest)
West Texas crude $93.69 down 28 cents (latest)
Gold $835.70 down $8.60 (latest)
New York
Reuters: US stocks slid on
Thursday as tight credit markets and bleak economic data forced investors to
focus on the rocky road still ahead. Insurance stocks fell after a US
lawmaker questioned whether a well-known insurer could be in trouble. Hartford
Financial fell 32 per cent, Principal Financial fell 16.3 per
cent and MetLife fell 14.9 per cent. Technology stocks were punished.
Chipmaker Intel fell 7.1 per cent, IBM fell 4.9 per cent and eBay
fell 8.2 per cent. Giant conglomerate General Electric fell 9.6 per
cent as it announced a discount share offering. Economic bellwether Caterpillar,
which makes heavy equipment, fell 8.3 per cent.
Asia
Bloomberg: Asian stocks fell in morning trade, driving the region's
benchmark index to its worst week in 13 months. Toyota, the world's
second-largest carmaker, lost 4.6 per cent after US factory orders plunged.
Taiwan's Hon Hai Precision Industry, the world's largest contract
electronics manufacturer, fell 4.8 per cent. Rio Tinto, the world's
third-largest miner, fell 4.7 per cent as commodity prices tumbled. Newcrest
Mining, Australia's largest gold producer, fell 6.4 per cent and Japan’s Mitsubishi
Corp, which generates more than half of its profit from commodities,
fell 3.4 per cent. Fast Retailing, the operator of Japan's Uniqlo
casual clothing store chain, rose 14 per cent on strong sales. The MSCI Asia
Pacific Index fell 1.8 per cent to 105.29 in morning trade. Markets in
China, South Korea, Indonesia and Pakistan were shut for holidays.
Michael Beh
michaelwbeh@gmail.com
London
Yell, the publisher of Yellow Pages rose 12 per cent amid chatter that it was
close to winning new terms on its £3.8 billion debt.
Having touched as high as 5052, up 92.41, the FTSE 100 ended down 89.25 at
4870.34 with mining and oil stocks leading the way on fears of a global
slump in demand for commodities.
HBOS gained 15 per cent and Lloyds TSB 5 per cent as traders
began to assume that the Lloyds rescue was on.
Vedanta Resources, the Indian miner, shed 12 per cent following a
Goldman Sachs downgrade from buy to sell. It cautioned that the miner may
struggle to raise the debt for its costly power plant and aluminium smelting
expansion plan. The plans made Moody’s last month put Vedanta’s rating on
review for a downgrade.
The oil price slid as the dollar rose against most currencies, leaving Tullow
Oil down 10 per cent.
Robert Lindsay
robert.lindsay@thetimes.co.uk
AGENDA
TRADING STATEMENTS
United Drug
TRAFFIC FIGURES
British Airways
EGMs
Advanced Medical Solutions
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