Welcome to today's round-up of business news from The Times: what we're
saying, what they're saying
Top stories
The Times: Tesco's customers are
defecting to its supermarket rivals Asda and Morrison at record rates,
suggesting its discount-focused marketing backfired.
New York Times: The National Bureau of Economic Research officially
declared the US went into recession
in December 2007 as shares fell 9 per cent.
The Independent: Mortgage lending fell
70 per cent in October, a fall that seems set to ensure the housing
slump will worsen.
Comment
Anatole Kaletsky in The Times: By replacing incompetent outgoing
Treasury Secretary Henry Paulson, Barack Obama may
have stopped the Doomsday Machine.
Ambrose Evans-Pritchard in the Daily Telegraph: Joining the euro would
not have prevented the current crisis in Britain. It would have made
matters worse .
Lex in the Financial Times: It is odd that gloomy news still surprises
markets; it could signal that investors are lining up to bet on a full-scale
depression .
Upside
The Times: Pontin’s, the holiday park operator, says bookings for
Christmas are up 11 per cent and
summer 2009 bookings are up 20 per cent.
New York Times: Iceland and Poland are
rethinking their opposition to the euro after market turmoil nearly
destroyed their currencies.
Bloomberg: Bank of America, the biggest US retail bank, raised $9
billion (£6 billion) in the largest
bank bond sale since regulators agreed to guarantee the debt.
Downside
The Times: A worldwide slump in
manufacturing caused global stock markets to plunge and increased
pressure for interest rate cuts in Britain and Europe.
Daily Telegraph: New Star Asset Management shares fell
43 per cent after the City watchdog rejected its pleas to suspend
trading in its shares.
The Times: Another 2,000 British jobs were cut
or threatened with the axe as HSBC, Aston Martin and Halfords responded
to the economic downturn.
Mergers and shakers
The Times: Discount airline Ryanair halved
its takeover offer for state-owned Aer Lingus to €748 million (£617
million, $919 million); it was again rebuffed.
The Times: Ford is prepared to sell
Volvo in its bid to convince the US Government that it deserves a $25
billion (£17 billion) emergency loan.
Financial Times: The value of cancelled
merger deals for this quarter is closing in on the value of deals
actually completed for the first time since 1987.
Around Asia
The Times: Japanese car sales fell
23.7 per cent , faster than any time since the 1970s.
Financial Times: Tata Motors, India’s third-largest carmaker and owner
of Jaguar and Land Rover, is asking
the Indian public for cash and offering 11 per cent.
Daily Telegraph: Kohlberg Kravis Roberts, the US private equity house,
is about to buy China’s largest
dairy farm in a £200 million ($298 million) deal.
Look ahead
Reuters: JPMorgan Chase will sack
9,200 staff at the former Washington Mutual, the failed US savings and loan
giant, 4,000 of them by January.
The Times: Essentially Group, sports marketing and management group,
warned that annual profits would be less
than expected and said it was cautious about 2009.
Reuters: The UN predicts world economic growth will
slow to 1 per cent in 2009 from 2.5 per cent this year, and may
contract if stimulus packages do not work.
MARKETS
FTSE 100 4,065.49 down 5.2% (Monday close)
Dow 8,149.09 down 7.7 per cent (close)
S&P 500 816.21 down 8.9% (close)
Nasdaq 1,398.07 down 9% (close)
Nikkei 8,037.30 down 4.3% (latest)
Hang Seng 13,475.84 down 4.5% (latest)
Currencies
Sterling $1.4895/1.1803 euros (latest)
Euro $1.2620 (latest)
Commodities
Brent crude $46.50 down $1.47 (latest)
West Texas crude $48.25 down $1.03 (latest)
Gold $775.10 down $1.70 (latest)
New York
Bloomberg: US stocks slid on
growing concern the global economic slump is deepening and consumers’ access
to credit is shrinking. General Electric, the world’s biggest maker
of power-generation equipment, fell 9.7 per cent. Caterpillar, the
largest maker of bulldozers, fell 10.8 per cent. American Express,
the largest US credit card company, fell 15.7 per cent on a negative
analyst’s report for the industry. Goldman Sachs fell 17 per
cent and Morgan Stanley fell 23 per cent on predictions of a slowdown
in banking. Freeport-McMoRan Copper & Gold, the world’s largest
publicly traded producer of copper, fell 13 per cent on lower metals prices. Pilgrim’s
Pride, the largest US chicken producer, filed for bankruptcy protection.
Its shares have fallen 98 per cent this year and were halted at 62 cents. Limited
Brands, the owner of Victoria’s Secret lingerie, fell 19 per cent.
Asia
Bloomberg: Asian stocks
tumbled in morning trade as a deepening global recession drove down oil and
metal prices. Australian oil producer Woodside fell 6.5 per cent, Inpex,
Japan's biggest oil explorer, fell 9.1 per cent, BHP Billiton, the
world’s biggest miner, fell 6.4 per cent and China Petroleum &
Chemical Corp, Asia's largest refiner, fell 5.6 per cent. JFE Holdings,
the world's third-largest steelmaker, fell 8.8 per cent and Kobe Steel,
Japan's fourth-biggest, fell 6.2 per cent. Sun Hung Kai Properties,
Hong Kong's second-largest developer, fell 6.4 per cent after HSBC Holdings
raised rates on new home loans. Among carmakers, Honda fell 6.9 per
cent, Fuji Heavy Industries, the maker of Subaru cars, fell 6.7 per
cent and Hyundai, South Korea's largest automaker, fell 4.9 per cent.
The MSCI Asia Pacific Index fell 3.3 per cent to 79.92 in morning trade.
Michael Beh
michaelwbeh@gmail.com
London
Lonmin, the South African platinum miner, dropped 18 per cent to a nine-year
low as dire figures for car sales around the world raised renewed fears over
its profitability.
The hope that Xstrata, which has built a 25 per cent Lonmin stake,
might bid again when its lock-out expires in March, is rapidly diminishing.
Xstrata, down 13 per cent, has to bring its own debt down and is beset by
worries that Glencore, its main shareholder, may be forced to sell down its
stake.
The FTSE 100 fell 249.56 to 4,038.45 with not a single stock in the black.
Offical figures showing that China’s November manufacturing output had
fallen at the fastest rate since records began three years ago triggered
fresh fears over a global recession.
That hurt mining stocks the most. Kazakhmys, the copper miner, fell 16
per cent and Vedanta Resources lost 16 per cent. Rio Tinto
lost another 11 per cent on worries over whether it could complete its $7
billion asset sale programme in these markets.
Standard Chartered weakened 14 per cent after Morgan Stanley cut its
target price from 820p to 665p, warning that its recent £2.8 billion equity
issue would not be enough in the global downturn.
Falling oil prices hurt oil service groups Petrofac, down 12 per cent
and John Wood Group, down 9 per cent. Both are likely to be ejected
from the blue chip index next week.
AGENDA
INTERIMS
Greene King
Datong
May Gurney
Park Group
Telford Homes
FINALS
ITE
OMG
Sarantel
Thomas Cook
TRADING STATEMENT
Game Group
Tesco (Q3)
AGMs
SCI Entertainment
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