Economics
Mortgage approvals fell by 56 per cent in May, compared with the same
month a year ago, figures from the British Bankers’ Association showed.
Approvals had fallen from 34,752 in April to 27,986 in May, below a
six-month average of 40,570.
French consumer spending on manufactured goods jumped by 2 per cent
during May, the biggest monthly increase since January 2004, official data
showed. Spending on manufactured goods had declined by 0.9 per cent in April
and by 1 per cent in March.
German consumer confidence has fallen to a 30-month low, the GfK
Institute said. The latest barometer of consumer sentiment slipped to 3.9
points in June, from a revised figure of 4.7 points.
US consumer confidence has fallen to its lowest level in more than 16
years. The Conference Board’s consumer confidence index declined to 50.4 in
June, down from 58.1 in May, and is the lowest reading recorded since
February 1992.
US house prices fell by 15.3 per cent in April, compared with the same
month a year ago, according to the Standard & Poor’s/Case-Shiller home price
index of 20 US cities.
US economy Henry Paulson, the US Treasury Secretary, said that surging
oil prices had placed the US economy under significant strain, although he
sought to reassure that the worst of the economic pain inflicted on
consumers would be over by Christmas.
Banking
& finance
The London Stock Exchange has lost out to NYSE Euronext, its rival, in
a race to provide the necessary technology and management to help the stock
market in Doha, the capital of Qatar, to develop into a financial centre.
UBS, the Swiss bank and the world’s largest wealth manager, saw its
shares rise amid rumours that HSBC, the British bank, might make a bid of
$80 billion (£40.6 billion) for the group.
Bradford & Bingley, the embattled mortgage bank, was poised to
agree to open its books to Resolution after the investment vehicle tabled a
revised £400 million bailout proposal.
Barclays is close to sealing a deal with the Qatar Investment Authority
to support the banking group’s £4 billion fundraising. A statement to the
stock market is expected within the next two days.
Construction
& property
Office rents in London’s key financial districts of the City and Canary
Wharf will not grow in the next decade and commercial property could fall by
another 20 per cent, according to James Brent, global head of real estate
banking at Citigroup, the US investment bank.
Trillium The Investment Corporation of Dubai, the country’s sovereign
wealth fund, is expected to make a bid for Trillium, the £1.4 billion
property outsourcing division of Land Securities, after ruling out a joint
offer with Vincent Tchenguiz, the property entrepreneur, and aAIM, the
property fund manager which is part-owned by HBOS.
Consumer
goods
Diageo, the world’s biggest drinks group, will build a distillery in
the US Virgin Islands that will supply the rum used to make its Captain
Morgan branded products for the United States.
Coffee prices in Vietnam, the world’s biggest exporter of robusta
beans, rose nearly 5 per cent in the past week because of reduced stocks and
gains in London future prices. In Daklak, the country’s main coffee growing
province, the price of robusta beans has risen by 4.9 per cent to $2.22 per
kg.
Maize The South African Government will probably boost its estimate of
the country’s 2007-08 corn output season to 11.525 million tonnes, from the
previous estimate of 11.328 million tonnes, because good rains have helped
to create higher yields.
Engineering
Chemring, the British military defence engineering group, said that it
would buy Martin Electronics, the US ammunition and fuse maker, for $70
million (£35.5 million), its second US pyrotechnics purchase in the past
month.
Volvo, the Swedish carmaker and the world’s second-largest truck maker,
said that shipments of its heavy-duty trucks rose by 15 per cent in May,
compared with last year, as US deliveries increased. However, shipments in
Europe, the group’s biggest market, had remained steady.
Health
Minster Pharmaceuticals, the drug development company, which is based
in Essex, said that the current year had started well, adding that its Phase
IIb study of tonabersat for the prevention of migraine is fully enrolled.
Industrials
Metalloinvest Alisher Usmanov, the owner of Metalloinvest, the Russian
mining and ferrous metals group, said that he had invited Oleg Deripaska and
Viktor Vekselberg, his fellow Russian metals barons, to pool their
production assets to form a metals and mining holding company.
Leisure
Sportech, the football pools operator, is to target millions of online
poker and casino players because of a “milestone” deal signed with 888, the
internet gaming giant. Sportech, which is based in Liverpool, said that its
New Football Pools games, comprising the Littlewoods, Vernons and Zetters
brands, will be marketed across 888’s gaming database.
Millennium & Copthorne Hotels said that its CDL Hotels (Labuan)
unit had agreed to sell all its stake in CDL Hotels (Korea) to Kangho AMC
for £232.6 million.
Media
WPP, the advertising group, said in a trading update before its annual
meeting that Western Europe had shown some softening in March, but that
April and May had seen some improvement, especially in Germany, although
Spain remained difficult. The company added that organic revenue had
increased by 4.5 per cent in the first five months of the year, while total
sales, including acquisitions and currency fluctuations, had risen by 15.6
per cent.
Creston, the marketing group, reported a 16 per cent rise in sales and
improved full-year profits. The group, which provides marketing services for
clients such as AstraZeneca and Barclaycard, said full-year sales were £80.5
million.
Natural
resources
BG Group, the British oil and gas giant, has gone hostile with a A$13.8
billion (£6.7 billion) offer for Origin Energy, the Australian group,
directly to shareholders. BG has offered A$15.50 a share — the same price
that the board of Origin rejected less than a month ago when talks between
the two groups broke down.
Imperial Energy said that it remained on track to deliver its target of
25,000 barrels of oil a day by the end of the year, adding that the drilling
of production wells continues ahead of expectations.
Regal Petroleum, the oil and gas company, said it would develop oil
fields in Ukraine alone rather than with a partner. The company added that
its new Ukrainian development will reduce its 2007 losses of $22 million
(£11.2 million).
Lukoil, the Russian oil giant, has teamed up with ERG, of Italy, to
form a €2.75 billion (£2.17 billion) refining joint venture. Lukoil will pay
nearly €1.3 billion to gain a 49 per cent stake in a new company that will
have control over ERG’s refinery in Sicily.
Chevron, the US oil and gas exploration group, along with Cairn Energy,
the FTSE 100 oil and gas group that is based in Edinburgh, has made a deal
to run gas exploration and seismic survey works in southwest Bangladesh. Two
years ago Chevron found three potential hydrocarbon zones in the region.
Royal Dutch Shell, the Anglo-Dutch oil and gas group, along with Qatar
Petroleum International, has signed a letter of intent with Petro China to
assess the feasibility of setting up a refinery and petrochemical complex in
China.
Saipem, the Italian oilfield services company, has signed a contract
worth more than €1 billion to build the Nord Stream gas pipeline that will
link Vyborg, in Russia, with Griefswald, in Germany, across the Baltic Sea.
The project, to begin in 2010, will consist of two parallel 1,220km
pipelines that will have the capacity to carry 27.5 billion cubic metres of
gas a year.
Retailing
Debenhams, the department store group, sought to reassure investors
concerned about its high debt levels by bringing forward its interim
management statement. The statement, which was due to appear on July 3, said
that like-for-like sales for the past ten weeks were up by 1 per cent. The
retailer also claimed that it was taking market share from its rivals and
added that its £1 billion debt levels were under control.
Kesa Electricals, the retail group behind Comet, is deferring a share
buyback programme and considering a freeze on recruitment after a slowdown
in sales. Shares in the company fell nearly 10 per cent to a record low of
157.75p as it said there had been a marked deterioration in trading
conditions over the past six weeks.
Baugur, the Icelandic investment group, has raised more than £100
million by selling its 31.4 per cent stake in Booker, the rapidly growing
cash-and-carry business. The deal sparked fresh speculation about the health
of Baugur’s finances, given the recent decisions to sell MK One, the fashion
chain, and Julian Graves, the UK’s largest retailer of organic foods.
Support
services
Ashtead Group, the equipment rental company, beat analysts’
expectations with a 51 per cent rise in full-year profits, and said it was
well placed to cope with the difficult trading conditions forecast for the
coming year.
Lamprell, the Dubai-based support services group for the oil industry,
said that it had secured a $204.5 million (£103.8 million) contract from
BassDrill, the US group, to build two self-erecting tender assist drilling
units, with the first one scheduled for delivery in September 2009 and the
second one for delivery in 2010.
Safestore, the self-storage group that is based in Hertfordshire,
reported an 18 per cent increase in half-year pre-tax profits to £28.4
million, despite the downturn in the housing sector.
Technology
Nokia, the Finnish mobile phone maker, is to buy out minority
shareholders in Symbian, the UK mobile phone software developer, and also
plans to create a free mobile phone operating system to compete with rivals
such as Google. Nokia will pay €264 million (£208.4 million) for the 52.1
per cent stake in Symbian that it does not already own.
Telecoms
Vyke Communications, the voice-over-internet service provider, reported
a wider full-year pre-tax loss of £3.6 million and said that it expected to
become profitable on a month-to-month basis in the fourth quarter. The
company said that its active paid-customer accounts had increased by more
than 300 per cent in the last quarter of 2007, compared with the same period
in 2006.
Transport
British Airways said that it had reached an agreement to sell its 10.5
per cent stake in Air Mauritius for £3.2 million to existing shareholders.
Utilities
Centrica, the owner of British Gas, and Scottish & Southern Energy
admitted to MPs that UK customers faced a further increase to their energy
bills, adding to the 15 per cent rise that both companies had imposed on
millions of Britons this year. Sam Laidlaw, chief executive of Centrica,
told the Commons Business and Enterprise Select Committee that the rise in
wholesale gas prices would have to be passed on to customers.
