...the main headlines..........
Stocks rise on regional stimulus
Markets around the world rose as governments took further steps to support their economies. In New York yesterday the Standard & Poor’s 500 Index closed up 0.56 per cent, while in Asia this morning the MSCI Asia Pacific Index gained 3.5 per cent. Japan’s Nikkei 225 Stock Average was a big factor in the move, jumping 4.9 per cent, for its biggest gain since December 15th. Earlier the Japanese government had agreed its state-owned bank would buy guaranteed stakes in struggling companies. In London the FTSE 100 Index opened 0.44 per cent lower, after a 3.86 per cent rise yesterday.
Barclays triggers banks rally
Barclays triggered a “sharp rally” in banking shares yesterday after it said it would not be forced to raise fresh capital, reported the Financial Times. Barclays shares surged 73 per cent to 88.7p after chairman Marcus Agius and chief executive John Varley “took the unusual step” of publishing an open letter confirming it made a £5.3bn profit last year and did not need further capital. The move sparked a recovery across Europe, with BNP Paribas reassuring shareholders over its position and ING revealing government support measures.
Pfizer buys Wyeth for $68bn
The world’s biggest drugs company, Pfizer, confirmed "the worst kept business secret” of the past few days, by announcing that it is to buy rival Wyeth for $68bn, reported the Independent. The takeover, funded by both shares and cash, will create one of the “most diversified” companies in the pharmaceutical sector. Analysts were critical of the deal, however, saying it was the “easy option” for Pfizer, giving it a quick fix for the problems it faces as its biggest-selling drug Lipitor nears the loss of its patent protection in two years' time.
76,000 jobs cut around the world
Bellweather companies around the world “slashed” more than 76,000 jobs to try to cope with the worsening economic downturn, in one of the most “brutal” days yet for workers, said the Financial Times. US corporates like Caterpillar, General Motors and Texas Instruments led the moves, while Pfizer said a number of jobs would be lost after its takeover of Wyeth. Companies in Europe followed suit, with Philips, ING and Corus unveiling plans to axe staff. Caterpillar alone talked about 20,000 job cuts.
BA loss threatens merger talks
British Airways’ negotiating position with Spanish carrier Iberia has been hit by the UK airline’s profit warning, reported the Daily Telegraph. The British flag-carrier’s shares tumbled eight per cent after the news that it now expected a £150m operating loss in the year to march 31. Declining passenger traffic and the weakness of the pound contributed to the revision from a small profit. Chief executive Willie Walsh is due to meet Iberia chairman Fernando Conte this week, with the Spanish airline’s market value now bigger than BA’s.
Independent up for sale
Sir Anthony O’Reilly has said that he is “willing to consider offers” for struggling newspaper the Independent, reported the Times. The title loses around £10m a year, not helping the €1.4bn of debt which the Irish businessman is currently battling to finance. A potential buyer is thought to be former KGB officer Alexander Lebedev, who recently bought the Evening Standard. The Independent and Sunday sister title have “racked up losses” each year since O’Reilly’s takeover and the parent company will need to repay a €400m bond in May.
...in brief..................
Paulson makes £270m shorting RBS and Merrill boss to fund refurb
Hedge fund Paulson & Co, one of the world’s biggest, has made a profit of “at least £270m” betting on the drop in Royal Bank of Scotland shares in the past four months, reported the Financial Times. The scale of the profit is likely to “reinvigorate” the debate over short-selling…………
Shoe seller Barratt became the latest casualty on the high street yesterday, entering administration after “slumping sales”, reported the Independent. The business is continuing to trade while it is “restructured” and accountant Deloitte hopes to sell the chain as a “going concern”…………
The yen weakened for a second day against the world’s major currencies as gaining stockmarkets “reduced demand” for the currency as a safe haven, said Bloomberg.com. Speculation over the poor state of the UK banking system receded, bolstering sterling’s value against the Japanese currency…………
Dow Chemical’s $15bn takeover of rival Rohm & Haas is “on the verge of collapse” after legal proceedings were started by the latter, reported the Daily Telegraph. Dow appears to have “balked” at the purchase price agreed to last July and due to be paid today…………
Disgraced Lehman Brothers chief executive Richard Fuld “sold” his $14m Florida mansion to his wife for $100 in a “possible attempt” to move assets beyond the reach of creditors of the collapsed bank, said the Times. The property is one of five luxury homes owned by the couple…………
Former Merrill Lynch boss John Thain has apologised for spending $1.2m on an office re-fit last year, reported the Guardian. The money was spent on antique furniture, carpeting and curtains and Thain has promised to “pay back the money personally”…………
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