The Times
Gilts: U.K. Government bonds nudged higher as investors continued to fret about European debt problems. The June gilt future settled 15 ticks higher at 115.61, but still lagged German bunds because the Bank of England is likely to halt its bond-buying programme. In the cash market, the yield on ten-year gilts dipped one basis point to 2.11%.
Bet of the day: Spread-betters pecked at Next’s share price before the update on trading between February and April. Punters backed still more buoyant sales online and at its telephone Directory business to have offset those at its 520 stores, which may have struggled despite the March heatwave.
Deal of the day: Although the shares eased by 1/4p to 5p, canny punters kept a close eye on Plethora Solutions. Daniel Stewart, broker to the specialist in erectile dysfunction, reckoned the market had overlooked decent 2011 results at the end of last month, its significantly better sales and the possibility for its premature ejaculation treatment to go mass-market once approved.
Households feel the pinch as mortgage rates increase: More than one million homeowners will see their mortgage payments jump by hundreds of pounds a year from as lenders, including two state-backed banks, raise borrowing costs. Borrowers with other banks and building societies face similar increases in the months ahead, experts have warned, with the Eurozone crisis and lenders’ funding problems driving up the cost of home loans.
Microsoft invests $300 million in Barnes & Noble’s Nook: Microsoft has thrown down the gauntlet to Apple and Amazon with a $300 million investment that it believes could revolutionise reading habits. The software giant said that it would acquire a stake in the digital operations of Barnes & Noble, the world’s largest bricks and mortar book chain, in a direct challenge for supremacy in the digital books market.
Boardroom’s revolving door spins again: The Chairman of RSM Tenon stepped down, paving the way for a second boardroom reshuffle this year. Adrian Martin took control of the troubled accountancy firm in January after Tenon’s two top Directors left abruptly amid mounting losses and questions about the company’s accounting.
Barclays bets $1.5 billion of its own funds on unlisted companies: Barclays has $1.5 billion of its own capital invested in unlisted mining and energy companies in emerging markets, the bank disclosed. The scale of its illiquid bets on resources companies was revealed as it announced that it had secured the Government of Qatar as a co-investor in the projects.
London on the wrong side of Golden Gate: London has been toppled by San Francisco as the world’s second-most important private equity hub. The Californian city boasts 32 private equity firms in the global top 300, as measured by fundraising success in the past five years, against 24 in London. New York — home to 72 leading firms — remains top.
The Independent
Boss of Starbucks quits board of Groupon: Howard Schultz, the Boss of coffee chain Starbucks, has quit the board of Groupon, the fledgling daily deals company that has been embroiled in accounting problems since its flotation last year.
Spain back in recession as fears grow of another bailout by the Eurozone: The battered Spanish economy has officially slumped back into recession, as figures showed that the Eurozone laggard shrank by 0.3% over the first three months of the year.
FSA launches scheme for Arch Cru funds victims: The Financial Services Authority has launched a redress scheme for 15,000 victims of the Arch Cru funds mis-selling scandal. It could lead to investors being paid compensation of more than £100 million by the financial advice firms which sold the funds.
Fidessa finds bright spots in a tough market: Fidessa, which creates and operates trading software for City firms, warned investors that growth would be slower than last year as conditions would “remain difficult for some time”.
Hedge fund Boss to cut LightSquared role: The hedge fund manager Philip Falcone has agreed to scale back his role at the tottering wireless internet venture LightSquared as he fights to save the company from bankruptcy. Mr Falcone’s Harbinger Capital has sunk around $3 billion (£1.8 billion) into LightSquared, only to find that U.S. regulators blocked its plans because they risked interfering with important GPS systems.
Failed merger costs hurt NYSE Euronext: NYSE Euronext, the shares and futures exchanges group, saw its profits plunge 44% in the first three months of this year as it was hit by the costs of its blocked merger with Deutsche Börse and lower trading volumes in the U.S. Post-tax profits dropped to $87 million (£53 million) from $155 million, lower than most analysts had forecast.
The Daily Telegraph
Lloyds and RBS could see profits slashed as Moody’s plans downgrades: Britain’s taxpayer-backed lenders, Lloyds and Royal Bank of Scotland, could see their profits slashed following a downgrade of their credit ratings. Lloyds and RBS are set to be among the banks hardest hit by the planned downgrades by Moody’s, the most important of the three established ratings agencies.
King a ‘disaster’ as Bank Governor, says Standard Life: Sir Mervyn King has been a “disaster” as Governor of the Bank of England, one of the country’s top fund managers has declared. David Cumming, head of equities at Standard Life and one of the most influential figures in the City, said the Treasury must improve on Sir Mervyn when his second term expires in June 2013.
China to cut trade tariffs as U.S. visit looms: China has announced plans to cut import tariffs just days before U.S. Treasury Secretary Timothy Geithner arrives in Beijng for the latest round of talks between the two superpowers.
Sirius Minerals to develop £3.6 billion potash mine in North Yorkshire: Plans for a massive $6 billion (£3.6 billion) investment programme to develop a potash mining venture in North Yorkshire and create up to 1,100 jobs have been announced after studies showed the ambitious development was viable.
Stagecoach’s Network Rail deal gives it a say in how tracks are maintained: Stagecoach claims to have opened a new era in the management of Britain’s railways after striking a deal that will give it a say in how the country’s train tracks are maintained.
Adidas to restructure business amid ‘irregularities’ in Reebok brand: Adidas has replaced the top management in its Indian subsidiary and ordered a restructuring of the business after the discovery of what it described as “commercial irregularities” involving its Reebok brand.
The Guardian
Pound hits two-year high against Euro: Sterling climbed to its highest level against the Euro in almost two years on Monday as concerns grew in the financial markets about the deepening crisis in the single currency. A pound at one stage bought more than €1.23 on the foreign exchanges – making foreign holidays cheaper but U.K. exports to the single-currency zone more expensive.
Australian Owner axes 1,400 jobs at Yorkshire and Clydesdale banks: Union officials have reacted furiously to news of 1,400 job cuts at Yorkshire and Clydesdale banks after the Australian Owner of the loss-making operations announced a major restructuring.
BP to start three new Gulf of Mexico oil rigs: BP is planning to start three new oil drilling rigs in the Gulf of Mexico this year. The launch of the new rigs will bring the number of BP rigs in the Gulf to eight – more than the oil giant had before the devastating Deepwater Horizon disaster three years ago.
Apple and Samsung to discuss putting an end to lawsuits: Apple Chief Executive Tim Cook will meet his opposite number at Samsung, Gee-Sung Choi, to discuss ending their bitter litigation over smartphones and tablets, which has become a globe-spanning war taking in 50 lawsuits in 10 countries.
Daily Mail
Lloyds denies private equity firm bid for Scottish Widows: Lloyds has denied receiving a multi-billion pound bid for Scottish Widows from a private equity firm, stressing its insurance arm is not for sale. According to reports the state backed bank has received an approach from Edmund Truell, the founder of private equity firm Duke Street, who is preparing to bring his £500 million bid vehicle Tungsten to market.
Qatar tempts NHS Bosses with double pay and perks: Qatar is preparing to poach Britain’s top NHS brains to run its own health service as the Gulf state looks to spend its oil money on medical expertise. With government changes to the NHS set to make executives’ jobs less secure, many will be tempted to sunnier climes with promises of double pay and further perks such as free family accommodation.
U.K. engineering group Cobham wins £24 million U.S. Navy contract: The U.S. Navy has commissioned British defence technology group Cobham to design, build and supply radio-jamming kits for two of its combat aircraft. The £24 million contract, which will see Cobham (down 3.3p at 226.5p) ship the parts by the end of 2014, is the second such order from the U.S. Navy for the U.K. engineering group.
Broker Views:
Plant Health Care: Nomura Code Securities initiates the stock with “Buy” rating and a target price of 100.00p
Sirius Minerals: Macquarie maintained an “Outperform” rating on the stock, with a target price of 75.00p
Sylvania Platinum Ltd: RBC Capital Markets maintained an “Outperform” rating on the stock, with a target price of 70.00p
ENK: Investec maintained a “Buy” rating on the stock, with a target price of 34.00p
Morgan Crucible Co: Jefferies upgraded the stock to “Buy” and increased the target price to 365.00p
AstraZeneca: JPMorgan upgraded the stock to “Neutral” and increased the target price to 2800.00p
Daily Express
Aviva tries to quell fury at Bosses’ pay: Aviva moved to ward off a major bust-up with shareholders angry about executive pay and “golden hellos” just three days ahead of its annual meeting. The insurance giant launched a review into whether it pays too much to compensate new executives for missing out on bonuses at their previous jobs. Chief Executive Andrew Moss also agreed to waive his 4.8% pay rise, worth an extra £46,000 to his current £960,000 salary.
Hands up for health: Private equity group Terra Firma is snapping up care home operator Four Seasons Health Care for £825 million to cash in on long-term growth in care for the elderly. It is buying Four Seasons from private investors and Royal Bank of Scotland, which has a 40% stake and had been seeking to refinance some £780 million of debt before a September repayment deadline.
WPP rewards Sorrell with 30% increase: Advertising and marketing group WPP increased the basic pay of its Boss by nearly a third after what the company labelled a strong performance. Sir Martin Sorrell received a 30% rise in his base salary to £1.3 million in 2011, according to the company’s annual report.
The Scotsman
Standard & Poor slashes ratings on 11 Spanish banks: Ratings agency Standard & Poor’s downgraded the credit ratings of 11 Spanish banks, including Santander, as it was confirmed the country had fallen into its second recession in just over two years. With concerns about the banking sector mounting, S&P warned a further five banks that their ratings could also be cut.
New partners at Dundas & Wilson: Four lawyers at Dundas & Wilson – which last month announced 28 job losses – have been promoted to partners. Banking specialist Craig McGinn, litigator Graeme Macleod, Grigor Milne of the corporate team and energy and infrastucture lawyer Mark Kirke will become partners as from.
Wood Group wins £61 million contract for Aussie gas rig: Energy services heavyweight Wood Group has won engineering and support contracts worth an estimated £61.5 million for the world’s largest semi-submersible production facility. The Aberdeen-based group’s Mustang subsidiary will carry out the “topsides” work for South Korea’s Samsung Heavy Industries, which is building the facility for the Ichthys gas field, some 125 miles off the north-west coast of Australia.
Now Wiseman cuts price it pays for milk: NFU Scotland last night described the decision by Robert Wiseman Dairies to drop the price they pay dairy farmers by 2p per litre as “hugely disappointing”. Union milk policy manager George Jamieson said the cut, coming days after Dairy Crest announced an identical and immediate cut in the price it paid its non-aligned producers, would plunge a significant number of Scottish dairy farmers into a hole where the farmgate price they would receive for their milk is 3-4p per litre adrift of what it was costing them.
Caithness meat processing firm in administration: A major meat processing plant with state of the art equipment which has never actually been in full production has been brought to the market following Caithness Beef & Lamb being placed in administration.
Spelman calms some Scottish fears over CAP reform: Last week, NFU Scotland had harsh words of criticism for the U.K. negotiators on their stance in the Common Agricultural Policy (CAP) reform talks, with the union saying it wanted support to continue to be funnelled into directly supporting farmers and not through environmental schemes and rural development.
Caman get it: Alba’s Freeview slot ‘a threat’ to Scottish local TV stations: Companies bidding for licences to run local television stations in Edinburgh and Glasgow are in danger of being “sidelined” by communications regulator Ofcom, according to an industry expert. Freeview plans to place local stations south of the Border in slot number eight in its line-up of channels, but Scottish stations will be demoted to number 45 because BBC Alba occupies the channel eight berth in Scotland.
City A.M.
Interbank debt markets drying up once again: Lending between banks appears to be drying up again as data out showed that bond issuance by British banks has fallen to its lowest level since 2008. Despite a rush to sell debt in January that saw volumes surge briefly to their highest level in six months, overall bond issuance by British banks so far in 2012 is down 39% on last year.
Cameron hauled back to defend Jeremy Hunt over BSkyB probe: David Cameron was forced to return to parliament to defend his culture secretary Jeremy Hunt and his handling of News Corp’s bid for the rest of BSkyB. Cameron pulled out of a local election campaign trip to Buckinghamshire so he could field an urgent question from the Labour party on Hunt, who has already faced calls for his resignation.
Lion Capital set to buy French glasses retailer Alain Afflelou: Private Equity firm Lion Capital said it is close to clinching a deal to buy rival Bridgepoint’s majority stake in Alain Afflelou, the French eyewear retailer.
Palamon gets set for payout with debt deal: Private Equity firm Palamon has completed the refinancing of its English language school group Cambridge Education, the first time in more than a year that a private equity house has effectively tapped British banks to pay itself a dividend on an investment.
RBS to spin off M&A advisory to create an independent firm: RBS is planning to spin off its M&A advisory unit into a standalone business to be run by its current staff. Simon Penney, Head of RBS’s investment bank in the Middle East and Africa, told Reuters: “The M&A bankers plan to form a boutique business... It’s not clear as to which regions would join in but that’s the plan.”
HKEx considers bid for London Metal Exchange: The parent company of the Hong Kong Stock Exchange confirmed that it is considering a bid for the London Metal Exchange (LME), which is estimated to be worth between £500 million and £1.5 billion.