Economics
House prices The balance of surveyors reporting that house prices had
fallen rather than risen increased to 95.1 per cent last month, from 79.4
per cent in March, the biggest margin since figures were first compiled in
1978. The Royal Institution of Chartered Surveyors said that property
transactions also slowed sharply, with surveyors reporting an average of
18.3 property sales in April, down from 22.2 in March.
UK factory gate prices and producers’ costs rose at a record pace in
April. The Office for National Statistics said that output prices had risen
by 1.4 per cent in April, taking the annual rate to 7.5 per cent. Both rates
were the highest since the series began in 1986. Input prices rose by 2.4
per cent in April, taking the annual rate up to 23.1 per cent.
Corporate tax The Treasury has agreed to water down controversial
proposals to change the UK corporate tax regime in the face of sustained
protests from big business. Several companies have said they were prepared
to move their headquarters from the UK amid concerns the Treasury was
preparing to tax overseas profit.
Britain’s trade gap narrowed by more than expected in March,
according to official data. The global deficit on trade in goods and
services fell to £4 billion from £4.3 billion in February. The goods deficit
fell to £7.4 billion, from £7.6 billion, while the underlying deficit on
goods, after excluding oil and erratic items, was little changed at £7.1
billion.
Oil prices reached a new high, with benchmark US light crude reaching a
high of $126.40 before falling back to levels below $126.
Banking
& finance
HSBC Knight Vinke, the activist investor, launched a fresh attack on
HSBC, accusing Europe’s biggest bank of flattering its US sub-prime losses
by failing to writedown $30 billion (£15 billion) of mortgage assets. The
broadside came as HSBC revealed a $3.2 billion first-quarter writedown on
loans by its business in the United States to poor Americans.
Northern Rock The number of mortgage borrowers falling behind on
repayments at the nationalised bank has risen by two thirds in the past four
months. Arrears grew from 0.57 per cent of all mortgage borrowers at the end
of December to 0.95 per cent at the end of April. The bank said that it had
700,000 mortgage borrowers, implying that 6,650 were now in arrears.
Westpac Banking Corporation, Australia’s oldest company, is in talks
with a smaller rival to create a A$64 billion (£31 billion) institution with
a customer base equivalent to about half the country’s population. A merger
of Westpac and St George Bank, a former building society, would create
Australia’s biggest bank by market value and would have almost ten million
individual and business customers in Australia.
Debt crisis The middle class are sleepwalking into a debt crisis and
the Government is failing to act, a leading City investment bank said.
Ministers must implement a “personal finance awareness” campaign to improve
the financial literacy of Middle England, according to JPMorgan Asset
Management. It is to send a report to the Department for Work and Pensions
this week.
Merrill Lynch has announced 4,000 job cuts worldwide, not 40,000 as we
reported on Monday.
Construction
& property
London offices The amount of unlet office space in the City and Canary
Wharf is set to double to 10 per cent over the next year as a glut of new
buildings without tenants come on the market, research reveals. The latest
half-yearly London construction report from Drivers Jonas, the property
agents, advises developers to be braced for a “tidal wave” of new unlet
space equivalent to 14 Swiss Re “Gherkin” skyscraper buildings coming on to
the market between now and 2011.
Colliers CRE The real estate advisory company said that
investment activity in Britain was likely to remain at its present depressed
level for at least the rest of this year. It reported a fall in
first-quarter revenues of £15.9 million, down from £16.3 million.
Consumer
goods
Farepak The liquidators of the Christmas savings club are suing the
company’s former directors over its collapse two years ago. BDO Stoy Hayward
said that legal proceedings had been issued against “a number of former
parties” in a bid to secure more money for Farepak’s creditors.
Diageo, the drinks giant, had its Smirnoff vodka and Johnnie Walker
Scotch whisky named as the top brands in the annual league table of the
world’s most powerful spirits and wine brands, produced by Intangible
Business, the brand consultancy.
Engineering
Chloride Group, the power supply protection company, has rejected a
£657 million bid approach from Emerson Electric, an American rival. Its
shares rose 26 per cent after it announced that it had turned down the
offer.
Renault-Nissan and Bajaj Auto, an Indian motorcycle manufacturer, are
joining forces to make an “ultra-low-cost” car that will compete with Tata’s
£1,250 Nano. The move is the latest effort to put the Third World on wheels
by selling cars that cost about the same as a laptop computer.
Health
Southern Cross Healthcare Group Britain’s biggest care home operator,
has reported first- half sales up 28.2 per cent to £431.2 million, as it
increased the number of beds it has by 14.4 per cent to 37,084.
Industrials
Metal-Tech, the specialist metal producer and recycler, reported a fall
in annual pre-tax profit to $3.4 million (£1.73 million), down from $14.4
million, due to a one-off writedown of $7.6 million over a dispute in
Uzbekistan, start-up costs in Mongolia and a weak US dollar.
Leisure
CryptoLogic The internet gaming software group reported a 21 per cent
jump in first-quarter customer revenues to $18.3 million (£9.3 million).
Earnings fell by 60 per cent to $600,000 mainly because of a $1.8 million
payment to Javaid Aziz, who resigned as chief executive in February.
Bar Sport, the chain of four sports bars founded by Scott Murray, a
former amateur boxing champion from the Midlands, is to step up the pace of
expansion.
Media
Informa, the international information, publishing and events business
behind titles such as Lloyd’s List, is being circled by private equity
groups. Carlyle and Apax are among those considering a bid for the group,
which has a market capitalisation of £1.64 billion. No approaches are
understood to have been made.
Clear Channel A settlement in the Clear Channel Communications case
appeared to be imminent last night as a judge in New York postponed the
scheduled beginning of the trial. The case, which centres on a dispute over
the funding of a $20 billion (£10.2 billion) buyout of America’s biggest
broadcaster, was held over to today.
Cablevision, the television and telecoms giant that owns New York’s
Radio City Music Hall, has seized control of Newsday, the American tabloid
newspaper, in a takeover deal estimated to be worth $650 million.
Natural
resources
Royal Dutch Shell has apparently caved in to political pressure from
the United States and backed out of a $10 billion (£5.1 billion) gas project
in Iran. The company and its partner, the Spanish oil firm Repsol, are not
going ahead with phase 13 of the giant South Pars project on the border with
Qatar. The two companies signed a deal last year with the Iranian national
oil company to develop phases 13 and 14 of South Pars.
Retailing
Land of Leather The sofa retailer has been hit with a £210,000 fine
from the City watchdog for putting thousands of customers at risk from lax
controls over the selling of payment protection insurance. (PPI). The
Financial Services Authority said that the company sold PPI for nine months
until February 2007 “without any effective check on its sales force” to
ensure it was being sold fairly.
DSG International The new chief executive of DSG International, the
group behind Currys and PC World, is expected to cut 400 head office jobs
this week. It is understood that John Browett, who joined DSG from Tesco in
December, will announce that nearly one role in four will go.
Support
services
Dignity The funeral services group said that first-quarter revenues had
risen 8.6 per cent to £46.9 million and that trading since the end of the
quarter continues to be in line with expectations.
Technology
Tiscali BT, Vodafone and Carphone Warehouse are understood to have made
offers to buy all or part of Tiscali, the Italian broadband operator.
Sources close to the deal said Vodafone had put in a bid for both the
Italian and UK businesses.
Hewlett-Packard is believed to be in final discussions to acquire
Electronic Data Systems, the technology outsourcing group, for at least $12
billion (£6 billion). The printers giant is in talks about taking over EDS
to compete better with IBM, the world’s biggest computer services company.
Telecoms
Mobile Streams, the mobile media specialist, expected to trade at or
near break-even each month this year, with revenues in the first four months
of the year up about 15 per cent on 2007.
Nokia Siemens Networks has won a $150 million (£76.5 million) contract
from Zain, Iraq’s mobile operator, to upgrade its network and increase
capacity.
Transport
Stobart Group, the logistics operator, has reported a pre-tax profit of
£3.5 million for the 14-month period to February 29 and said that its latest
acquisitions will help it to deliver strong profit growth in the next
financial year.
Utilities
British Gas Average UK household energy bills could rise by almost half
this year, market experts say. Already, millions of homeowners face a second
rise in their gas and electricity bills this year as Centrica, the British
Gas owner, grapples with falling profits and rising energy prices.
