Crude oil price sees gains
The price of crude oil rose for a second day in New York trading, after OPEC said it may “deepen output cuts” to support its level, reported Bloomberg.com. Analysts saw the comments as putting a floor beneath prices but said they needed to see how the moves panned out over the next few months. Crude oil for February delivery rose $1.47, or 3.9 per cent, to $39.25 a barrel after Saudi Arabia’s oil minister Ali al-Naimi said that the country’s February output would be “lower than the target” set at OPEC’s December meeting.
Barclays axes 2,100 jobs
Barclays is cutting 2,100 positions worldwide in its investment banking and asset management businesses, reported the Financial Times. The bank is slashing costs in the wake of swallowing up some of the operations of failed investment bank Lehman Brothers. Barclays is cutting 1,300 staff from Barclays Capital, 500 from the Barclays Wealth private banking arm and 330 from Barclays Global Investors, its asset management business. The cuts, although large, amount to only seven per cent of the divisions’ staff levels.
Equitable policyholders expected to receive compensation
Equitable Life policyholders are set to be paid compensation, with a government announcement expected this week, reported the Times. MPs will be told that an independent tribunal will establish the level of payouts, according to a report last night, and ministers “may also formally apologise” for regulatory failings in the run-up to the insurer’s collapse nine years ago. The failure led to losses for policyholders of £4bn and Yvette Cooper, Chief Secretary to the Treasury, is expected to make an announcement on Thursday, while not admitting “culpability”.
Mandelson unveils business plan
Lord Mandelson will today reveal plans to commit £21bn of taxpayers’ money to guaranteeing bank lending to small and mid-size companies, said the Financial Times. Business leaders gave a “guarded welcome” to the proposed government move, which will guarantee the loans until 2011. The three measures being looked at include up to £10bn of guarantees to medium-sized companies, £1.3bn to small companies and a £50m fund to provide share capital to “over-indebted” small companies with “high growth potential”.
US Fed chairman warns Obama over fiscal spending package
Ben Bernanke, chairman of the US Federal Reserve, warned yesterday that Barack Obama’s planned recovery package may not succeed, reported the Independent. Speaking in London, Bernanke issued a “clear challenge” to the US President-elect, over his planned $775bn stimulus package. He said that fiscal action was “unlike to promote a lasting recovery” unless it was backed up by measures to stabilise the financial system. Bernanke recommended further recapitalisation of financial institutions and purchase of “toxic debt”.
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RBS sells off Bank of China stake and Aga issues warning
Royal Bank of Scotland has raised around $2.4bn by selling its stake in Bank of China, reported the Financial Times. RBS became the “leading foreign shareholder” in the Chinese lender after buying 4.3 per cent of the bank in 2005, and sold at an eight per cent discount to yesterday’s close price…………
The Financial Services Authority has launched an investigation into share sales at JJB Sports after it revealed previously undisclosed share sales, said the Daily Telegraph. JJB is thought to have broken two regulations after a company jointly-controlled by its chief executive sold a 27.5 per cent stake…………
Brewer and pub operator Marston’s confirmed yesterday that it had extended its £400m debt facility by three years taking it through to 2013, said the Times. The refinancing was agreed with a syndicate of half a dozen lenders and “appears to remove any continuing uncertainty” over future dividends…………
Indian police have searched the offices of PricewaterhouseCoopers, the auditors of troubled outsourcing giant Satyam Computers, said the Independent. The auditor did not respond to enquiries but has said it acted “in accordance with applicable auditing standards”…………
Citigroup chief executive Vikram Pandit is “unravelling his empire to save his bank”, said Bloomberg.com. Yesterday Pandit said he would sell broker Smith Barney to Morgan Stanley and he is thought likely to divest Tokyo-based Nikko Asset Management as he dismantles his “behemoth”…………
Aga Rangemaster, the company behind the Aga cast-iron cooker, has warned over its current trading, reported the Times. It has already cut its production levels and eliminated 12 per cent of its workforce over the last year and expects second half profits to be “appreciably below” the first half…………
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