Only registred members can create thier own customized alerts.
Newspaper Briefing, including 'Doubt over IMF’s Eurozone lifeline' - Daily Telegraph
The Times
Gilts: U.K. Government bonds edged higher as investors looked for safer assets ahead of the resumption of talks about restructuring Greece’s debts in an effort to stave off a disorderly default. The March gilt future settled eight ticks higher at 117.26. In the cash market, the yield on ten-year gilts eased less than one basis point to 1.96%.
Bet of the day: Spread-betters nibbled on Cairn Energy’s share price ahead of a trading update on Monday. After selling control of its Indian business last year to concentrate on finding oil off Greenland, the explorer has thus far has come up dry.
Deal of the day: A fresh agreement with Rio Tinto, one of the Big Five miners, to delve further into port, rail and other infrastructure options to export coal from the Ncondezi project in Mozambique spurred the eponymous miner 20.4% to 59p. Ncondezi Coal, whose shares touched 235p a year ago, intends to be exporting coal from Tete Province there by 2015.
RBS fined £2 million over staff who tampered with complaint files: Royal Bank of Scotland was fined £2.17 million after Managers in its insurance division encouraged junior employees to alter closed complaint files. The Financial Services Authority imposed the penalty on the Churchill and Direct Line insurance operations for failing to conduct their businesses with “due skill, care and diligence”.
Prison Service makes late bid to run private jails: The controversial £2 billion privatisation of nine English prisons took a surprise turn after the Prison Service put in a late bid to run the jails in a joint venture with the private sector. The Prison Service is to team up with Mitie Group, the facilities management company, to bid to operate each of the nine prisons. The competition process has been ordered by Kenneth Clarke, the Justice Secretary.
Surge in online shopping lifts eBay: EBay beat Wall Street forecasts, benefiting from the sale of Skype and strong growth from PayPal, its online payments business. For the three months to 31 December the company reported net income of $1.98 billion, compared with $559 million for the same period a year earlier.
French railways’ debt downgraded: The creditworthiness of France’s state railway has been downgraded a day before the company comes under scrutiny over a bid to run the West Coast train franchise. SNCF is bidding to topple Virgin Trains from the lucrative long-distance rail network. It is the first time that it has bid in its own right to run part of the British railway system. The Department for Transport is expected to announce details of the new franchise specification.
Takeover of Tarmac in doubt as OFT calls for investigation: Clearance for the £1.8 billion takeover of Tarmac by the French rival Lafarge looked increasingly doubtful after the Office of Fair Trading called on the Competition Commission to launch an investigation into the construction materials industry.
Demand for oil falls as slowdown spreads out: Global oil consumption fell in the final three months of last year for the first time since the end of the credit crunch. The International Energy Agency said that demand dropped by 300,000 barrels per day in the last quarter of 2011 compared with the previous year because of the economic slowdown.
Obama poised to reject $7 billion pipeline: North America’s oil industry was braced for a formal rejection by President Obama of a $7 billion plan to build a key pipeline from Canada to Texas. Shares in TransCanada Corp, which planned to build the 1,600-mile oil pipeline through Nebraska, fell 1.5% to $41.14 as speculation gathered about an imminent announcement.
Carrefour tries to end losing run with Spanish sweetener: Europe’s biggest grocer has offered Spanish pensioners a cut price deal as it seeks to recover from a miserable run that has included a profit warning and legal action. Carrefour says that customers over the age of 65 will not have to pay the equivalent of VAT on most food. The rate in Spain varies between 4 and 8% and it is understood that the savings will amount to an annual average of €250 (£210).
Oxfam sheds tweed to shine at Christmas: The charity said that riffling through second-hand jumpers and paperbacks no longer carried a stigma. Like-for-like sales were up by 11% in the last five weeks of the year, which it said was a result of it shedding its once dowdy reputation and doing a better job of picking out the rare gems from the clutter of tweed, gaudy vases and all-but-forgotten Hear’Say CDs.
The Independent
Jobs crisis forces 1.3 million to work part-time: The number of people being forced to take precarious part-time work has shot up to new records as the economic slump deepens. A total of 1.31 million people who want to work full-time are only in part-time positions. Many are designated as self-employed, which often means they are simply unable to find an employer to take them on and are forced to take whatever odd jobs they can.
Italian PM says City will not get special protection: The Italian Prime Minister, Mario Monti, insisted that David Cameron’s demands for special protection for the City of London at last month’s European Union summit were unacceptable. Speaking on a visit to London, Mr Monti said even those who, like him, were ready to consider Britain’s requests – which included a guarantee that future decisions on financial regulation would have to be taken unanimously – were “very clear in saying that is not an acceptable condition”.
Supermarket staff live ‘in poverty’: The four largest supermarket chains are paying their staff “poverty” wages while making huge profits and raising executives’ salaries, research suggests. A report by the Fair Pay Network (FPN) – a coalition of charities and non-governmental organisations including Oxfam and the Trades Union Congress – says hundreds of thousands of workers at Tesco, Sainsburys, Asda and Morrisons are not paid the “living wage”.
‘Vital’ for big firms to help Earth: Sir David Attenborough has called on big businesses to help protect the natural world from the rapidly expanding human population. The broadcaster said the increase is unstoppable and that action must be taken to stop the natural world from being paved over.
Back seat for Noam Gottesman at cost-cutting Man Group: Noam Gottesman is taking a back-seat role at Man Group, the FTSE 100 firm that bought his Mayfair-based hedge fund business for $1.6 billion (£1.04 billion) just over a year ago. Man is set to cut about 150 jobs, a tenth of its workforce, as it aims to reduce costs by $75 million over the next year after the assets it manages fell by $6.1 million, or 9.5%, in the last three months of 2011.
BHP banks on China: The mining giant BHP Billiton said it was eyeing record iron-ore production this year, allaying fears of a slowdown in China. An outstanding performance from its operations in Pilbara, Western Australia, saw production up by more than a fifth to 41 million tonnes of iron ore in last three months of 2011.
Financial Times
Cairn investors take aim at Chief’s pay award: Some of the biggest shareholders in Cairn Energy, the oil group, are marshalling support to vote down a pay award worth nearly £2.5 million for the Edinburgh-based oil group’s Chief Executive-turned-Chairman. The move to block a proposal by the FTSE 100 group’s board to award Sir Bill Gammell share options comes as shareholders face increasing political pressure to beef up their scrutiny of executive pay.
Sorrell looks to U.S. election for WPP boost: WPP saw a stronger than expected finish to 2011, according to Sir Martin Sorrell, Chief Executive, as the marketing services group looks forward to improving conditions in the U.S. ahead of a lucrative period of election campaign spending.
Rio Tinto clear for Ivanhoe takeover: Rio Tinto is free to take over Toronto-listed Ivanhoe Mines and consolidate control of one of the world’s biggest new copper projects after two restrictions on a takeover fell away. A five-year-old standstill agreement had prevented Rio, which owns 49% of Ivanhoe, from moving to a majority stake.
RBS remains flashpoint in bonus row: Attempts by the government to rein in executive pay have reached into all corners of the corporate world. But it is the banks that remain the real flashpoint in the bonus dispute – and none more so than the 83% state-owned Royal Bank of Scotland. RBS has been the clear target of the Chancellor’s repeated calls for restraint when the banks announce their bonus awards next month.
Weir knocked as U.S. rival warns on growth: Weir Group was a casualty in a flat London market on Wednesday after a profit warning from one of its rivals. U.S. engineer SPX Corp said 2012 earnings would be lower than expected due to slow growth in the Americas and the cautious outlook in Europe. The group also said earnings from Clyde Union Pumps, its recently acquired U.K. division, would be at the bottom end of previous guidance.
Coalition split over airport policy: A rift has opened at the top of the coalition government over the future of Britain’s airports after Nick Clegg vowed to oppose any new runways in the south-east of England. The determination of the Deputy Prime Minister and Liberal Democrat leader to stop new runways in the region could make it hard for supporters of a new Thames estuary airport to achieve their goal.
Peer pressure matters with Executive pay: The government’s accusation of “crony capitalism” and its plan to bar executives at one company setting pay at another suggest an image of an insular group deciding each other’s salary and bonuses without regard to the wider world. Although remuneration committees (RemCos) at FTSE 100 companies contain some serving executives, the real charge of insularity relates not to these individuals, but to the pressures to conform.
Private sector struggles to offset public job losses: The private sector is struggling to create enough jobs to offset those lost in the public sector despite the latest data showing a modest rise of 18,000 in total employment in the three months to November. “Though a small increase, it does mark a shift from a few months back when the data were reporting declines of nearly 200,000 per quarter,” said Allan Monks, economist at JP Morgan Chase.
Lex:
Goldman Sachs: paying through the nose: The investment adage that you’re better off working for a bank than owning shares in one is mostly true. Indices of global banks, including sexy developing-world lenders, have gone exactly nowhere over the past decade. Ditto the stock price of the mighty Goldman Sachs, which released full year results on Wednesday. Yet Goldman, for example, has paid its employees $125 billion during the past 10 years (doubling along the way), twice what it made in net profits. Hence, some hope that a possible route to boosting low bank returns on equity is a structural cut to industry compensation ratios. At Goldman, lowering 2011’s full year wage bill by a third would have increased its ROE from 7 to 12%, all other things being equal. The reality, however, is that banks also support a thick layer of second tier executives, as well as legions of pen-pushing, meeting-loving, middle- and back-office workers who are paid multiples of their worth and contribution, especially compared with other industries.
Energy: think outside the barrel: In hindsight, BP’s much-ridiculed “beyond petroleum” campaign may merely have come a decade too early. The company’s annual long-term energy forecast, one of the most detailed and insightful reports of its kind, expects oil to lose its starring role in the world’s fuel mix over the next couple of decades. Indeed, if it were not for the developing world then there would be hardly any growth in energy consumption period and an outright decline in oil use, reckon BP’s economists. Some 96% of energy demand growth will come from non-OECD countries while per capita energy consumption in the developed world falls. The only bright spot for traditional fossil fuels will be natural gas, spurred by liquefaction and hydrofracturing. The latter technology will usher in big changes, helping North America to become a net exporter of fossil fuels by 2030.
Italy: game on for super Mario: After a decade of government-as-cabaret-act under Silvio Berlusconi, the era of Mario Monti should be more like one of those classic 1970s Italian movies that had subtitles and dealt with matters of life and death. He has made a good start; pension reform is in place and he is starting to tackle entrenched rigidities in the economy. Italy’s 10-year bond yield, at 6.4%, remains higher than Spain’s. For a country that, in the past six months, has voted through some €80 billion of spending cuts and revenue measures to target a primary surplus of 5% of gross domestic product next year, the optimists ought to be on top. But they are not, mostly because Italy’s fiscal position remains precarious. After last week’s downgrade, it now has the second lowest credit rating (triple B plus) in the Eurozone bar Cyprus and the three bail-out countries. That is a slender limb on which to undertake a €650 billion gross funding requirement up to 2014. Italy’s 10-year bond yield is below the 7.5% hit last November. But Spain can borrow at 5%. Rome could reduce funding costs by borrowing at the shorter end – two-year money can be had at 4%. But that would shorten the maturity profile, which, at about seven years, is one of the few reassuring things about Italy’s €1.9 trillion of net sovereign debt.
Lombard:
Cairn’s gushing praise puts Gammell in the line of fire: Rugby players have worthy qualities. Tact is rarely one of them. Former Scotland international Sir Bill Gammell, Founder and Chairman of Cairn Energy, is preparing to trouser share options worth £2.5 million ($3.9 million), no strings attached. Only a prop forward who recites “Eskimo Nell” at a funeral could have judged the mood worse. Workers are angry because Bosses’ pay is rising when their own is falling in real terms. Sumptuary vigilante and Business Minister Vince Cable is readying proposals intended to tame the fat cats. Cairn, the oil company that he founded, struck the black stuff in Rajasthan in 1999. Last year the towering Scot steered the sale of a 40% stake of an Indian affiliate past political obstacles in Delhi. This will trigger an investor pay-out that, at $3.5 billion, is worth almost a thousand times more than the big tip that Cairn is readying for him.
X (chromosome) factor: Frank Meysman, incoming Chairman of beleaguered travel agent Thomas Cook, has no time for feeble weebles who claim that a lack of female talent precludes boardroom gender balance. He is currently recruiting a Chief Executive and two or three non-execs. Headhunters Egon Zehnder and Spencer Stuart have strict instructions. They are to present the no-nonsense marketer with strong male and female candidates for each job. Mr Meysman’s yin and yang approach is a sensible way of stopping executive search agencies from merely rounding up the usual suspects, most of them luminaries of the Y Chromosome Club. The big Belgian does not resemble the typical tofu-gobbling north London new man. But he is easing out a slew of Male Directors, with the result that Thomas Cook’s body of NEDs could wind up evenly balanced.
The Daily Telegraph
Doubt over IMF’s Eurozone lifeline: Traders were unconvinced by a radical proposal by the International Monetary Fund (IMF) to deploy $1 trillion (£648 billion) to stem the European debt crisis and its impact on the global economy.
British Airways won’t abandon Heathrow for ‘Boris Island’: The Chief Executive of BA-Owner International Airlines Group said he did not believe the £50 billion project – £20 billion for the airport and the rest for related infrastructure – could be financed.
RBS Chief Hester in line to collect £1 million bonus despite share price fall: The Government is preparing to take on public opinion by sanctioning a £1 million-plus bonus for Royal Bank of Scotland Chief Executive Stephen Hester. Senior Government sources said Mr Hester could receive as much as £1.2 million in shares as recognition for his work selling off assets and reducing the bank’s balance sheet.
China’s property price slide gathers speed: Average prices fell 0.3% in December from a month earlier, the third successive fall. The National Bureau of Statistics recorded declines in 53 of China’s 70 biggest cities. Used homes in Wenzhou dropped at an annualised rate of 45%.
U.S. manufacturing sector keeps growing: America’s manufacturing industry expanded for the tenth quarter in succession in the final three months of last year, underlining the resilience of a key sector of the economy. Industrial production rose 0.4% in December, according to the Federal Reserve, after a 0.3% drop in November.
The Questor Column:
Buy IG Group for income and growth: IG now has a mobile app for all the main mobile platforms – iPhone, iPad, Android, Windows Phone 7 and Blackberry – and its international roll-out is well under way. These apps now account for 16% of all client-initiated deals. Interim results were good, with trading revenues up 28% to £195.5 million and pretax profits up by the same amount to £103.2 million. Underscoring the fact that this is an income play as well as a growth play, the interim dividend, which will be paid on 28 February, was increased by 9.5% to 5.7p a share. The growth in revenues was driven by a 15% increase in client numbers. First tipped at 254p on 10 May 2009, the shares were upgraded to a buy from hold at 440p on 10 June last year. They are up 11% from this level compared with a market down 2%. The prospective yield in the year to May 2013 is a very healthy 4.8%. IG Group at 488p +7.4p. Questor Says “Buy”.
DS Smith looks to wrap up deal that should pay off: The Company has agreed to buy the packaging assets of Swedish company Svenska Cellulosa Aktiebolaget (SCA) Group for €1.6 billion (£1.3 billion). The purchase will also deliver annual cost synergies from procurement and operational efficiencies of “at least” €75 million within three years and cumulative capital expenditure and working capital benefits of at least €40 million a year in about the same time frame. Smith is now focusing on recycled packaging for fast-moving consumer goods companies such as Procter & Gamble, Mars and Reckitt Benckiser. These are businesses with a massive geographical footprint and the pan-European nature of the enlarged business means it will be able to serve these customers better. Smith also reaffirmed its commitment to a progressive dividend policy, with a plan to maintain dividend cover at between 2 and 2.5 times earnings throughout the cycle. The current prospective yield for the year to April 2013 is 4.6%. The equity part of the deal will be financed through a £466 million discounted nine-for-eight rights issue at 95p a share. Based on the closing price on Monday evening, the company calculated the TERP as 146.1p. Taking an average of the five times Questor has recommended buying the shares since 2010, gives an average entry price of 210.9p for the shares. The nine-for-eight issue at 95p means the amended TERP for Questor’s tip is now 149½p. DS Smith at 210.2p +6.6p. Questor Says “Take Up Rights”.
The Guardian
U.K. unemployment rises to 2.68 million: November’s pensions strike by public sector unions wiped out 988,000 working days, according to official figures – the most time lost to industrial action in a single month since Margaret Thatcher was in power. The Office for National Statistics, which published its assessment of the impact of the strike on the labour market alongside the latest unemployment figures, said the last time a strike had such an impact was in 1989.
Tesco still searching for magic formula to make America pay: When Tesco was planning its foray into the U.S. grocery market five years ago, the unlovely box of a building it took over in Hemet, in the far eastern suburbs of Los Angeles near the Mojave desert, seemed the embodiment of everything it hoped to achieve. The plan was that Fresh & Easy, the brand Tesco launched in America, would spearhead economic revival in a ruggedly unfashionable stretch of exurban boulevard known mostly for its panhandlers and streetwalkers.
U.K. credit binge pushes debt above 500% of GDP: Britain faces a difficult challenge over the next decade as it slowly adjusts to an economy less dependent on debt-fuelled growth, according to new research by consultancy McKinsey. An international study found Britain had the highest level of debt after Japan, that the debt had risen over the past three years to more than 500% of national output, and that on current trends it would take until 2020 for U.K. households to return debt levels to the pre-bubble trend.
Shale oil and gas ‘will make U.S. self-sufficient’: Growth in shale oil and gas supplies will make the U.S. virtually self-sufficient in energy by 2030, according to a BP report published on Wednesday. In a development with enormous geopolitical implications, the country’s dependence on oil imports from potentially volatile countries in the Middle East and elsewhere would disappear, BP said, although Britain and western Europe would still need Gulf supplies.
Unilever row over pensions, profits and executive pay at Port Sunlight: The industrialist and Liberal politician William Hesketh Lever began building the Wirral village of Port Sunlight in 1888, 42 years before his family’s company amalgamated with a Dutch margarine firm to become Unilever.
Daily Mail
RBS slammed for pulling plug on Peacocks rescue: Fashion group Peacocks, which employs 10,000 staff and has 700 stores, has fallen into administration in one of the biggest retail collapses since the 2008 Woolworths downfall. The firm, which announced the appointment of KPMG as administrators, went to the wall after Royal Bank of Scotland backed away from a plan to restructure the company’s borrowings.
Goldman Sachs bankers get huge pay packets despite profits dive: Staff at investment banking giant Goldman Sachs continues to receive huge pay packages despite a slump in profits, figures showed. Salaries, bonuses, benefits and other handouts to the bank’s 33,300-strong global workforce averaged £240,000 for 2011, Goldman Sachs disclosed.
Canary Wharf spreads its wings with new phase of development: The landlord of the Canary Wharf business district in east London paved the way for the next phase of its development. Canary Wharf Group paid £90.4 million to take full control of the Wood Wharf site next to its Docklands estate – increasing its size by a third.
ABI in second warning over Mitchells & Butlers turmoil: Mitchells & Butlers is closing in on a new Boss and Independent Non-Executives, as a shareholder body slapped its harshest warning on the company. The Association of British Insurers issued a ‘red-top’ alert, citing a seemingly endless boardroom merry-go-round that has left M&B as the only FTSE 350 firm with no Independent Non-Executives.
Broker Views:
WPP: Exane BNP Paribas upgraded the stock to “Outperform” and increased the target price to 900.00p
National Grid: Nomura upgraded the stock to “Buy” and increased the target price to 700.00p
Ortac Resources Ltd: Seymour Pierce maintained a “Buy” rating on the stock, with a target price of 4.00p
Globo: Daniel Stewart & Co maintained a “Buy” rating on the stock, with a target price of 100.00p
EMED Mining Public Ltd: Fairfax I.S. Limited maintained a “Buy” rating on the stock, with a target price of 32.00p
Diploma: Numis Securities Ltd downgraded the stock to “Add” and decreased the target price to 425.00p
Daily Express
Change of gear for Lotus as Malaysians race in: The Owner of iconic sports car firm Group Lotus said it was “business as usual” despite its parent company Proton being bought by Malaysian conglomerate DRB-Hicom Berhad. The Malaysian group said it was keeping its options open about selling Lotus, which made a pretax loss of £26.1 million in the year to March 2011. It made a loss of nearly £12 million in 2010.
Shell in Tullow tie-up: Royal Dutch Shell is to team up with leading independent explorer Tullow Oil in the hope of forging major new discoveries in the Atlantic. Tullow said the partnership would seek “trans- formational” discoveries in “underexplored frontier basins” with speculation centring on deep water off the coasts of Latin America, Greenland and the Arctic Circle.
Global recession fear: The World Bank slashed its global growth forecasts, warning the Eurozone debt crisis could spark a global downturn as bad as the post-Lehman slump three years ago. Europe was probably already in recession, the Bank warned in a report, adding the “global economy had entered a dangerous phase. The financial system of the largest economic bloc in the world is threatened by a fiscal and financial ¬crisis that has so far eluded policy-makers’ efforts to contain it”.
Britons back pubs in tax battle says Wetherspoon: JD Wetherspoon said the public was behind its call for a VAT cut to save British pubs but the Government was “deaf” to the damage higher tax bills was doing to its and the industry’s profits. Chairman Tim Martin said the tax disparity between pubs and supermarkets, alongside rising excise duty, business rates and carbon tax had led to its profit margins falling in the 12 weeks to 15 January despite a 3.6% sales rise.
Toy firm the Character Group hit as parents go for cut-price gifts: Shares in toy and merchandising firm The Character Group fell as its Christmas sales were hit by parents hunting for discount presents. Executive Chairman Richard King said it lost £10 million in sales over the festive season compared to last year as it reduced selling prices from as much as £50 to £19.99 to tempt cash-strapped mums and dads. It also reduced stock to struggling high-street shops such as Argos to meet the expected downturn in demand. The shares dropped 11p to 132½p.
The Scottish Herald
Economic output grew by 0.5% in third quarter: Scottish economic output grew by 0.5% in the third quarter of last year, matching expansion U.K.-wide, as manufactured exports rose 0.2%, official data have revealed. The figures provide some reassurance about the health of the Scottish economy up to the end of September.
More Scots firms in distress: The number of Scottish businesses in critical distress rose 17% in the final quarter of 2011 compared to the previous three months. That was far higher than the 1% increase reported across the U.K. in Red Flag Alert statistics produced by restructuring specialist Begbies Traynor.
Lawyer in warning over proposed property laws: The commercial property sector could be facing more difficulties if new legislation is passed, according to a Senior lawyer. The draft of the Climate Change (Scotland) Act contains proposals for Property Owners to bring all buildings up to 2002 energy efficiency standards if selling, letting or renewing a lease.
The Scotsman
Yahoo co-founder Jerry Yang quits, leaving way open for ‘transformation’ deal: Yahoo co-founder Jerry Yang has surprised investors by quitting the troubled firm, opening the way for a potential deal to transform the once-leading internet player. Yang had been unpopular with many investors for turning down a takeover attempt by Microsoft which valued the firm at $47.5 billion (£31 billion) in 2008.
Rig shortage cuts North Sea drilling to eight-year low: Drilling activity in U.K. waters has fallen to its lowest level since 2003 due to a lack of oil rigs and the knock-on effects of the 2008-9 recession, according to a report published. The number of exploration wells sunk on the U.K. continental shelf (UKCS) fell by 34% year-on-year in 2011, worse than the 12% fall for north-west Europe as a whole.
Low-interest environment means Airdrie is lending more: Airdrie Savings Bank increased its lending by a third last year as it sought new avenues for its capital in the current low interest rate environment. The 176-year-old institution lent £48.5 million in 2011, up from £36 million the year before, figures showed. At the same time, deposits rose 5.4% to £137.6 million and it upped its reserves slightly to £15.3 million.
Fidelity demands controls for boardroom pay: The U.K. government’s campaign to curb excessive executive pay through shareholder power has drawn support from one of the world’s biggest asset managers. Fidelity Worldwide Investment has called for all bonuses to be approved in advance and each year by at least 75% of shareholders.
Germany slows but avoids recession: The German government has scaled back its forecast for economic growth to just 0.7% this year but still believes Europe’s biggest economy will avoid a recession. Official predictions suggest Germany will grow 0.1% in the first quarter of 2012 on the back of a strong labour market, but the government cut the full-year figure from the 1% expansion previously forecast.
ScottishPower to sell on open market: Utilities giant ScottishPower vowed to sell at least 30% of the electricity it produces on the open market to give smaller suppliers a chance to buy power for their clients. The Glasgow-based company said it would also sell electricity on the wholesale markets in smaller bundles to make it easier for other companies to buy the energy, which they would then sell on to domestic and business customers.
