Welcome to today's round-up of business news from The Times: what we're
saying, what they're saying
Top stories
The Times: Panic sweeps through
the world's financial markets, wiping $2,500 billion (£1,400 billion) from
share values, amid concern that regulators and politicians are struggling to
get a grip on the worsening crisis of confidence.
The Times: The British Government could end up with sizeable
stakes in Barclays, Royal Bank of Scotland, Lloyds TSB and HBOS in a
£40-50 billion ($70-$87 billion) taxpayer-funded life-belt for banks.
The Times: Bankers across Europe throw aside strategic planning as they rush
to complete mergers and win government backing for emergency rescue
packages.
Comment
David Wighton in The Times: Lenders
are nervous and this is where a government capital scheme could come
into play. A plan being floated by Hugh Osmond, the financial entrepreneur,
could be worth trying.
Damian Reece in the Daily Telegraph: The more a government does to
commit taxpayer funds to shore up its banks, the
more responsibility it must take for running those institutions.
Gerard Baker in The Times: The patient has experienced multiple
organ failure and the monetary policymakers have been called in give
mouth to mouth.
Upside
The New York Times: The Internal Revenue Service will allow US
corporations to ramp up use of
tax-free loans from overseas subsidiaries, helping ease the credit crisis.
The Independent: Neel Kashkari, who has spent four years working in
finance, is entrusted with saving the
global banking industry from implosion as head of the US Office of
Financial Stability.
The New York Times: After predictions oil could reach $200 a barrel by
2010, prices have fallen below $90
for the first time since February.
Downside
The Times: Financial panic has set in throughout Iceland as the Government
seizes control of the country's biggest banks, sparking fears in Britain
for savers and City staff.
The Daily Telegraph: Balfour Beatty, the engineering and construction
group, must pay a £2.25 million ($4
million) penalty after admitting payment irregularities with a library in
Egypt.
The Times: Investors in the Bric stock markets suffered their worst
one-day losses in history. Russian and Brazilian markets halted trading
while India's Sensex index lost almost 6 per cent.
Mergers and shakers
The Times: The merger of British Airways and Iberia, the Spanish flag
carrier, is delayed , probably until
the middle of 2009, because of slow BA seat sales.
The New York Times: Internet company eBay is laying
off 10 per cent of its 16,000 workers but will pay $1.35 billion (£775
million) for web payment firm Bill Me Later and two Danish classified
advertising companies.
The Times: The survival of JJB Sports is under
a further cloud after credit insurers withdrew cover to its suppliers,
sending its shares to a record low.
Around Asia
The Daily Telegraph: Taro Aso, Japan's new prime minister, has no
plans to call a snap election, instead focusing his attentions on
boosting the ailing economy.
The Financial Times: Mitsubishi Corporation, the Japanese conglomerate,
has bought a stake in Capula
Investment Management, the $4 billion (£2.3 billion) London hedge fund.
The Financial Times: Asian shipbuilders are facing
bankruptcy as ship owners cancel or postpone orders. The problems could
be particularly acute in China, where many of the new yards are privately
owned and rely on additional funding for their expansion.
Look ahead
The Times: Frenchman Thierry Falque-Pierrotin, chairman of Recats, will
succeed fellow countryman Jean-Noel Labroue in January as chief executive of Kesa Electricals, the owner of Comet.
The Independent: The car industry estimates full year sales in Britain
will be 2.26 million, the lowest since
2000 , and 2.5 per cent down last year.
The Financial Times: Bank of America, the largest US bank, will
raise $10 billion (£5.7 billion) in capital and halve its dividend in an
effort to ride out the credit crisis.
MARKETS
FTSE 100 4,589.19 down 7.8% (Monday close)
Dow 9,955.50 down 3.6% (close)
S&P 500 1056.89 down 3.8% (close)
Nasdaq 1862.96 down 4.3% (close)
Nikkei 10,148.46 down 3.1% (latest)
Hang Seng 16,803.76 down 5% (latest)
Currencies
Sterling $1.7434/1.2914euros (latest)
Euro $1.35 (latest)
Commodities
Brent crude $84.30 down 0.62 (latest)
West Texas crude $88.92 down $1.11 (latest)
Gold $866 down 0.20(latest)
New York
Reuters: US stocks slid for a
fourth straight day, leaving the Dow below 10,000 for the first time in four
years. But the market cut almost half its losses in the final hour of the
session as traders speculated the sell-off may trigger a coordinated global
response to thaw credit markets. The Dow plummeted as much as 800.06 points,
a record intra-day point drop for the blue-chip average, as it slid 7.75 per
cent to its session low at 9525.32. By the closing bell the Dow had
recovered 430.18 points to end down 3.6 per cent. After the closing bell,
there was more tough news for the banking sector. Bank of America cut
its dividend, unveiled plans to sell $10 billion of new stock and said
third-quarter profit was cut in half from a year ago. Wells Fargo
slipped 2.7 per cent to $33.64, Wachovia dropped 6.9 per cent to
$5.78 and Citigroup fell 5.1 per cent to $17.41. Among shares of
energy companies, Chevron Corp lost 3.2 per cent to $76.84.
Asia
Bloomberg: Asian stocks slumped
in morning trade on concern the seizure in credit markets will deepen a
global economic slowdown. Toyota Motor slumped 5.9 per cent, yielding
its spot as the world's largest automaker by value to Volkswagen AG, as the
yen traded close to a three-year high versus the euro. Sharp tumbled
10 per cent after cutting its profit forecast while National Australia Bank
lost 2.2 per cent after Japanese and Australian central banks pumped more
than $11 billion into the financial system to ease record-high money-market
rates. Mitsubishi, which generates more than half its profit from
trading commodities, declined 4.7 per cent after metals tumbled. The MSCI
Asia Pacific Index fell 1.9 per cent to 98.55 in morning trade.
Myles McIvor
mjclub@bigpond.com.au
London
Royal Bank of Scotland lost 20 per cent, dropping to its lowest level
for more than ten years amid growing fears about its exposure to toxic debt
and worries that its auction of assets would fail to raise the £4 billion it
needs. Standard & Poor’s downgraded its credit rating.
The FTSE 100 lost 391.1 or 8 per cent to 4,589. with every stock in the red.
Even heavyweights such as BP fell 38p to 429p, levels it last reached
when oil was $30 a barrel.
Fears of an economic slowdown in China - late on Friday China cut steel
production at several key plants - and a recession in Europe and the US
meant mining stocks were even worse hit than banks, with Kazakhmys,
the Kazakhstan copper miner, falling below its 540p float price for the
first time, losing 27 per cent.
In the FTSE 250, short closing as hedge funds met margin calls meant Johnston
Press, up 23 per cent was the solitary gainer.
Robert Lindsay
robert.lindsay@thetimes.co.uk
AGENDA
PRELIMINARIES
Anglo & Overseas
Henderson Morley
Mouchel
Perpetual Japanese
Scroder Japan Growth Fund
INTERIMS
N Brown
RESULTS
Michael Page Intl (Q3)
AGMs
IG Holdings
TRADING STATEMENTS
Northern Foods
Victrex
OTHER
Index of Production (August)
BCC Quarterly Economic Survey - Q3
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