Britannia Radio

Monday September 1, 2008... the main business headlines:

Crude oil up on hurricane approach
Oil prices rose as the approach of Hurricane Gustav forced the closure of eight US Gulf Coast refineries and almost all offshore oil production in the area, said Bloomberg.com. With the hurricane due to make landfall later today a total of ten per cent of US capacity is “offline”, with another five sites “operating at reduced levels”. Crude oil for October delivery was up 2.2 per cent at $118 per barrel on the New York exchange, with trading further affected by the US Labor Day market holiday today.

Chancellor’s future in doubt
Chancellor Alistair Darling’s future was “in question” last night amid talk that he might be replaced in a cabinet reshuffle, said The Times. In the controversial interview which appeared in The Guardian at the weekend, he claimed that the UK could be heading for its worst economic situation for 60 years. Darling has now launched a “damage-limitation exercise” after his comments threatened to divert attention from the government’s imminent announcements on housing and energy initiatives.

FTSE slumps with sterling
Shareprices fell in early trading as the City digested Mr Darling's interview. Consumer stocks led the way as worries re-surfaced on the state of Britain's economy. The chancellor's comments also weighed heavily on the pound, as it fell to a record low against the euro, and a two year low versus the dollar. Retailers and other groups exposed to consumer spending were among the worst affected, while the weakness of the pound hit companies earning foreign currency revenues.

Dresdner takeover confirmed
Commerzbank agreed the £9 billion acquisition of Dresdner Bank on Sunday, creating the biggest banking operation in Germany and leap-frogging top player Deutsche Bank. Commerz agreed to sell its Cominvest Asset Management unit to Allianz as part of the deal, which is expected to be completed by 2012. The group will divest 9,000 of its combined 67,000 employees, 1,000 of which will be in London, as part of cutbacks in the Dresdner Kleinwort investment banking business.

Alitalia requests bankruptcy
Italian flag carrier Alitalia finally sought bankruptcy protection on Friday after a decade of poor performance and government intervention. The move paves the way for the break-up of the airline and its sale to a consortium of Italian investors. The group of more than twelve buyers is led by Roberto Colaninno, a turnaround specialist who runs Piaggio and who will be chairman. Colaninno will be one of the three largest shareholders, alongside the Benetton and Aponte families, who are each investing 150m euros of a total of around 1bn euros.

Signs of recovery at Carrefour
Shares in the European supermarket were up 7 per cent on Friday, after the group announced its best first-half numbers in three years. Chief executive Jose Luis Durn said that sales in July and August were even better, and the retailer reiterated its 2008 targets. Operating profits for the half were up 5.5 per cent, with a fall of 0.8 per cent in France more than offset by rapid growth in emerging markets. Mr Duran said that he planned to accelerate openings in the emerging markets area.

In brief:

LSE cuts fees and Metro cuts titles
The London Stock Exchange is introducing cuts in fees to try to defend itself against competitors, reported the Financial Times. The move comes as new entrant Nasdaq OMX Europe ties up with Citigroup in electronic order routing, and several more platforms are to come…

Microsoft said it has agreed to buy online price comparison site Ciao.com’s parent, Greenfield Online for $486 million. The offer is worth $17.50 a share, a small premium to Thursday’s closing price, signifying the company’s eagerness to compete in Europe with rival Google…

Vodafone has attacked European commissioner Viviane Reding over her plan to force mobile operators to reduce the fees they charge each other. It said the companies will have to raise charges as a result and failure to do so “risks bankruptcy”…

The biggest shareholder in retailer Woolworths has advised it to reject the offer from Iceland’s Malcolm Walker and focus on reviving its ailing fortunes. Ardeshir Naghshineh owns 10.2 per cent of the company and is said to be considering a bid himself…

GDF Suez, the world’s second biggest utility reported a 14 per cent rise in first half profit on higher electricity and gas prices. The company is a combination of Gaz de France and Suez, which finally merged last month after a process lasting almost 2 ½ years…

Metro International, the world’s largest free newspaper group, is finding life in New York tough. If it cannot find willing partners it may have to close its US papers including the New York edition, amid a slump in advertising revenues which has helped push the group into the red…