Commodities stage biggest rally since 1975
Commodity prices are heading for their biggest weekly gain for over 30 years, with oil at its highest level in 2 weeks, reported Bloomberg.com. A weaker dollar has contributed to yesterday's 3.7 per cent jump in the Reuters/Jefferies CRB commodities index, which tracks 19 major materials. Investors are speculating demand will increase from China "as the country resumes work" after Olympic factory closures.
B & B underwriters count losses
Underwriters in the Bradford & Bingley rights issue, have confirmed that they have been unable to sell on the 72 per cent of stock not taken up by investors. Lead underwriters Citigroup and UBS, together with the other sub-underwriters, will have to take on just short of £300 million of shares in the troubled mortgage lender. Shares closed on Thursday at 51.5p, versus the 55p level of the rights issue and underwriters will be unable to sell the new shares for 20 days.
Alstom raided in corruption probe
Alstom, the third-largest power plant maker in the world, has had offices in Switzerland raided, reported Bloomberg.com. The searches form part of an investigation into bribery at the company, focusing on whether it paid hundreds of millions of dollars to gain contracts in Asia and South America via Alstom offices based in Baden, Germany. One person was arrested in the raid, carried out by "more than 50 officers" from the Swiss police force.
Rentokil sees profits slide
Rentokil Initial announced that profits at the company more than halved in the first half of the year. Pre tax profit was down 55.3 per cent as the group embarked on a long-term recovery plan. The company said that the outlook remained poor, with higher interest costs likely to offset any possible gains. Rentokil is now being managed by ex ICI executives, and Alan Brown, the chief executive, is targeting a "three to five year journey to profit recovery".
Investors head for the exit in Russia
Investors are quitting Russia "at the fastest rate since the 1998 rouble crisis" in the wake of the conflict in Georgia, reported the Financial Times. Russian debt and equity markets have fallen sharply since the fighting began and President Dmitry Medvedev is under pressure to address tight credit conditions, exacerbated by the flight of foreign capital. He has room for manoeuvre: the country has one of the world's strongest national balance sheets.
Retail sales figures provoke head-scratching by experts
Experts voiced their concerns yesterday, as retail sales figures showed a rise in spending despite plenty of evidence to the contrary. Government figures showed a rise of 0.8 per cent in July, but the British Retail Consortium reacted sceptically to the announcement. The success of discount supermarkets may go some way to explaining the divergence in the numbers, with the likes of Aldi and Lidl playing host to price conscious shoppers while high-street shops suffer.
...in brief..................
WPP profits up and UK debt rises
WPP announced a 14 per cent rise in first half net profit, on increased sales in Brazil, Russia, China and India. The world's second largest advertiser has used acquisitions to counter the slowdown in more developed markets............
Cineworld, the UK's second biggest cinema chain, has bucked the credit crunch with first half rises in sales and profits. Summer blockbusters like Indiana Jones and Sex and the City have done a roaring trade, according to the company............
RAB Special Situations, the hedge fund that toook a bet on Northern Rock, is considering a share buyback, according to the Daily Telegraph. The fund's price has halved this year, prompting the review, with the company calling the Northern Rock investment "very regrettable"............
Power companies E.ON and Scottish & Southern have announced price rises of up to 30 per cent. The utilities blamed the higher cost of wholesale energy for the lastest increases, which will push the number of households in 'fuel poverty' above 5 million for the first time in a decade............
Business investment in the UK fell by £700m in the second quarter of 2008. The Office of National Statistics said that total investment in the period was £35.8bn, down 1.9 per cent. Business organizations used the numbers to press the government to lower interest rates............
The total amount of personal debt in the UK exceeds the country's entire GDP, according to accountants Grant Thornton. It is the second year in a row the figure has been higher, at £1.44tr in the year to June, versus GDP estimated to be £1.41tr............
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