...the main business headlines..........
Asian markets give back Freddie & Fannie gains
Shares in Asian markets fell overnight, giving up the gains they made in the wake of the rescue of Freddie Mac and Fannie Mae by the US government. There was widespread concern in the region over slowing global growth and mining and shipping stocks were weak. Analysts say problems in the US are not over, as demonstrated by the continuing uncertainty over broker Lehman Brothers, and the MSCI Asia Pacific Index fell 2.3 per cent. Credit Suisse’s chief global strategist, Andrew Garthwaite, said investors should sell into any rally.
Scandal of the Freddie and Fannie bail-out 
UK inflation fears ease
There was support yesterday for those who expect inflation to start to decline in the next few months, with the release of UK factory gate price data. The Office for National Statistics said the producer price index fell at its fastest rate for 22 years last month, with raw materials costs also declining more than expected. The output price index was down 0.6 per cent month on month, a 9.7 per cent rise on the year, but below the 10.3 per cent registered in July. Falling oil prices were the biggest contributing factor to the decline, with some foods and metals prices also down.
Shell in Iraqi gas deal
Royal Dutch Shell is to become the first Western oil company to enter into a deal with the Iraqi government since the 2003 US invasion, reported the Financial Times. The agreement could be “worth up to $4 billion” and centres on the gas created by the oil industry in the south of the country. The gas is flared off in the oil production process, for safety reasons, and the Iraqi government wants Shell to capture the gas and make it commercially viable. Shell will have 49 per cent of the project and Iraq’s oil ministry 51 per cent.
Robert Fox: Basra, Iran... it all comes down to oil
Flybe takes knife to growth
Flybe has become the latest airline to announce drastically reduced plans for growth this winter. The economic downturn means that the company, based in Exeter, is carrying 400,000 fewer seats than it planned between October and March, after reducing capacity. Instead of capacity growth of 16 per cent it is now planning a 6 per cent increase, blaming a slow-down in corporate spending on flights. Yesterday Spanish carrier Futura filed for bankruptcy, illustrating the severe problems facing the airline industry in the current environment.
Resolution to seek listing
Resolution, the takeover entity relaunched by insurance market veteran Clive Cowdery, is looking to float on the stock market this November, said the Financial Times. The company plans to raise an initial £1 billion and then spend £5 billion buying up assets in life assurance, asset management and savings sectors. Cowdery initially formed the company in 2003 but most of its business was taken over by Hugh Osmond’s Pearl in April after a lengthy bidding battle. Resolution was rumoured to be interested in acquiring insurer Friends Provident this month.
Altria buys UST
Altria, owner of Marlboro cigarette-maker Philip Morris USA, has announced that it is buying US chewing tobacco manufacturer UST for $11.7 billion. Altria is using the purchase to strengthen its position in a declining cigarette market, by increasing the range of alternative tobacco products it can offer. UST makes Copenhagen and Skoal tobacco and also owns a wine distribution business. The company is paying $69.50 a share, an almost 30 per cent premium on the recent average price.
...in brief..................
Trading troubles at LSE and UK jobs outlook gloomy
Trading at the London Stock Exchange was brought to a halt for seven hours on Monday on what should have been one of its busiest days. 1.3bn shares were traded in the end – less than half Friday's total – with competitor Chi-X likening the debacle to the T5 opening…………
Shares in United Airlines collapsed yesterday on a six year old news story. Shares in the airline fell by almost three quarters at one stage on the article, which was found on Google by an investment newsletter. There is disagreement over whether it in fact appeared on a Tribune website…………
Estate agents are selling properties at the slowest rate since records began in 1978, according to the Royal Institution of Chartered Surveyors. It said that estate agents are barely selling one property a week, a 50 per cent drop over last year’s figure and a fifth of the peak in 1988…………
Housebuilder Redrow added to the gloom surrounding the property market after it took a £259.4 million exceptional provision which pushed it into loss for last year. The company cancelled its dividend, but has secured £450 million of bank funding in a new 3 year deal…………
GlaxoSmithKline’s top North American director has quit, foregoing £2.5 million in retention payments. Chris Viehbacher, who was passed over for the job of chief executive earlier this year, resigned after 20 years at the firm. The other internal candidate who lost out has already left…………
The outlook for the UK jobs market is the weakest for a decade according to a survey by recruitment company Manpower. It found that employers are freezing new recruitment in the wake of falling business confidence, with job losses expected in the Christmas run-up…………
Posts
