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 mystery foreign bidder is considering trumping
Lloyds TSB’s takeover offer for troubled rival bank HBOS.
New York Times: The US Treasury rejected
a request by General Motors for up to $10 billion (£6.1 billion) to
help the carmaker’s possible merger with rival Chrysler.
The Times: Three million homeowners could end up with mortgage
debts larger than the value of their properties, as house prices
continue to plunge.
Comment
Anatole Kaletsky in The Times: The US economy could recover surprisingly
quickly under a competent new Administration with a clear economic
mandate.
Ambrose Evans-Pritchard in the Daily Telegraph: We must assume that the
whole governing machinery of the US will soon
be hostile to laissez-faire thinking.
Sean O’Grady in The Independent: It has not taken long to
determine who is responsible for the current financial crisis –
ineffective regulators or stupid bankers.
Upside
The Times: Real ale has defied the
beer slump ; sales of locally made beers rose 8 per cent so far this
year while total beer sales fell 7.2 per cent in the past quarter.
The Independent: Amanda Staveley’s boutique advisory firm, PCP Capital
Partners, will get £40 million
($65 million) after it brokered a £3.5 billion ($5.7 billion) cash injection
for Barclays.
Reuters: Gordon Brown, the Prime Minister, expects Saudi Arabia to pump
money into the IMF, which could run out of cash as countries line up to
be rescued.
Downside
The Times: The credit drought is
undermining international trade in goods and raw materials, causing
costs to rise for exporters and denying funds to buyers.
The Times: If post offices lose the government contract to handle
pension and benefits payments, 3,000 may have
to close .
The Times: BT wants to reform its
pension scheme by increasing the retirement age from 60 to 65 and
basing payouts on career average instead of final salaries.
Mergers and shakers
The Times: Panasonic, the Japanese electronics group, is expected to
this week unveil plans to buy
Sanyo, its smaller rival, to create a “battery superpower”.
The Times: European regulators are this week expected to threaten
to stop the proposed takeover by BHP Billiton, the world’s largest
miner, of rival Rio Tinto.
Daily Telegraph: Greg Coffey, the star trader who left hedge fund GLG
Partners at the weekend, will join
Louis Bacon's rival Moore Capital Management in the same building.
Around Asia
The Times: British Airway’s planned £600 million ($972 million)
takeover of Go Air, a leading Indian airline, has
been derailed by industry-ownership laws.
Financial Times: The Reserve Bank of India took emergency
action to help the local banking system, cutting interest rates by 50
basis points to 7.5 per cent.
Bloomberg: The pound may drop
18 per cent against the Japanese yen because Britain's banks will have to
“drastically” cut lending, Citigroup predicts.
Look ahead
The Times: Business leaders called on the Bank of England to slash
interest rates by up to a full percentage point on Thursday to head off
a deep recession.
The Times: Britain’s top law firms are
gloomy about this week’s half-yearly results reports, with most of the
top 30 firms expecting revenues to be flat or down.
Bloomberg: The economic slowdown in China was
quickening and demand would not rebound until 2009, the head of Rio
Tinto, the world’s third largest miner, said.
Unfinished business - last week wrapped up
Last Monday
The pound plummeted close to a
six-year low, and London stocks followed it down.
Volkswagen’s shares rose 147
per cent after Porsche moved to cement its control of Europe’s biggest
carmaker, catching hedge funds short.
Tuesday
Wall Street had one of its biggest rallies
in 69 years, with the Dow Jones rising almost 11 per cent - 9 per cent in
the last two hours.
BP , the British oil giant, reported a
record three-month profit of £6.4 billion ($10.2 billion), as the Prime
Minister called for petrol prices to fall.
Wednesday
The US Federal Reserve cut interest rates
by 50 basis points to 1 per cent, paving the way for further cuts to
unprecedented lows.
Alistair Darling, the Chancellor, said the Government would
borrow to see Britain through the recession and raise taxes or cut
spending later.
Thursday
The US teetered on the brink of recession
after a slump in consumer spending saw its gross domestic product fall 0.1
per cent in the last quarter.
Exxon Mobil , the world’s largest oil
company, set another US record with quarterly profit of $14.8 billion, but
it may be its last.
Friday
Freedom Bank , a small Florida-based
bank, became the 17th US bank to fail this year.
The British Government gave the go-ahead to Lloyds TSB's takeover
of rival bank HBOS despite concerns about the merger's impact on
competition.
MARKETS
FTSE 100 4,377.34 up 2% (Friday close)
Dow 9,325.01 up 1.6% (Friday close)
S&P 500 968.75 up 1.5% (Friday close)
Nasdaq 1,720.95 up 1.3% (Friday close)
Nikkei 8,576.98 down 5% (Friday close, market closed Monday for a holiday)
Hang Seng 14,638.64 up 4.8% (latest)
Currencies
Sterling $1.6238/1.2652 euros (latest)
Euro $1.2834 (latest)
Commodities
Brent crude $65.46 up 14 cents (latest)
West Texas crude $68.16 up 35 cents (latest)
Gold $733.30 up $15.10 (latest)
New York
Reuters: US stocks rose on
Friday as financial shares gained on optimism over further signs of thawing
in the credit markets, but the Dow remained on track to log its worst month
in a decade. JP Morgan Chase led financial stocks, rising 6.2 per
cent. Computer giant IBM rise 2.9 per cent. On Nasdaq, video game
publisher Electronic Arts fell 16.7 per cent after it chopped its
full-year profit forecast. Oil company Chevron reversed course to
rise 1.7 per cent after quarterly profit beat expectations. Express
Scripts rose 9.4 per cent after the pharmacy benefit manager topped
profit predictions.
Asia
Bloomberg: Asian stocks rose
in early trade, extending last week's rally, as South Korea pledged to pump
$10.8 billion into its economy and India cut interest rates. Hyundai
Marine & Fire Insurance rose 9.8 per cent on an analyst’s upgrade. James
Hardie Industries, the biggest seller of home siding in the US, rose 6.4
per cent in Sydney. Expectations of a rates cut in Australia saw its banks
rise. National Australia Bank rose 2.6 per cent, Westpac rose
3.2 per cent and ANZ rose 3.9 per cent. BHP Billiton, the
world’s largest miner, rose 3 per cent and Rio Tinto, the
third-largest, rose 2.5 per cent on higher metals prices. The MSCI Asia
Pacific excluding Japan Index rose 4.3 per cent to 254.12 in early trade.
Japanese markets were shut for a holiday.
Michael Beh
michaelwbeh@gmail.com
AGENDA
INTERIMS
Chloride
WSP Group
RESULTS
Ryanair (Q2)
AGMs
Feedback
Hargreaves Services
TR European Growth Trust
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