the main headlines..........
World markets continue recovery
Markets rose in the US and Asia, continuing this week’s rally, as the authorities in Japan and China committed more resources to support their countries’ economies. In the US yesterday the Standard & Poor’s 500 Index leapt another 4.1 per cent, for its third day of gains, and in Asia the advances continued, with the MSCI Asia Pacific Index jumping 3.5 per cent. Shares in Tokyo saw their biggest increase for three months, rising 4.9 per cent after the news that Sony and Seiko-Epson were forming an alliance. In London the FTSE 100 Index was set to open 1.5 per cent higher.
Madoff pleads guilty, goes to prison
Bernard Madoff told a Manhattan court on Thursday that he was “deeply sorry and ashamed” as he pleaded guilty to 11 charges, reported theFinancial Times. Speaking at length for the first time since his arrest in December he said he “turned to fraud” when his business did badly in the recession of the early 1990s. He also said he believed his Ponzi scheme would be short-lived and he would be able to “extricate” himself. The scheme has revealed big holes in the US regulatory system, catching out both lawmakers and investors.
FSA boss flags tougher regulation
The chief executive of the Financial Services Authority warned the City yesterday of its increasingly “tougher stance” and possible action against top executives at failed banks, reported the Independent. Hector Sants talked about a more “direct and intrusive” approach to its supervision, supported by prosecution of wrongdoers including former bosses at UK banks which have received government support. Previously the watchdog left companies to act according to its “principles”, but now it will “question business models and strategies”.
RBS admits £500m tax avoidance
State-supported bank Royal Bank of Scotland tied up £25bn in “complex international tax-avoidance schemes” in the boom, costing the UK and US “more then £500m” in lost revenue, reported the Guardian. For the first time, a major bank has admitted its participation in schemes of this kind, but now the new management has “disbanded the department”, putting an end to the practice. Sir Fred Goodwin presided over “massive expansion” of these structures, put in place across national borders to profit legally from tax avoidance.
Morrisons plans ambitious growth
Wm Morrison, the UK’s fourth-biggest supermarket, is set to embark on its biggest growth programme for five years, reported the Daily Telegraph. In its most aggressive move since it took over Safeway in 2004, the group’s chief executive Marc Bolland said that he has identified “over 100 UK locations” where he plans to open new stores. They will be focused in the south-east, London and Scotland and include city-centre “convenience-style” stores, which will be smaller than the group’s normal shops.
BoE and Mandelson in credit clash
The car industry has “lined up” with Lord Mandelson against the Bank of England amid growing tensions over the failure to agree a scheme to provide credit lines, reported the Times. After the Bank issued an “unusual” statement saying it was “puzzled” by criticism over its slow response, the Business Secretary defended his right to speak for the industry. For several weeks ministers have been attempting to secure a deal to allow car companies to access the government’s credit schemes while Bank Governor Mervyn King is “opposed” to groups other than banks benefiting.
...in brief..................
Argos reports recovery and Evening Standard owner points to flotation
Home Retail Group, the owner of Argos and Homebase, saw a “recovery” in the months after Christmas, benefiting from the demise ofWoolworths, reported the Independent. Like-for-like sales at Argos fell 1.6 per cent over the two month period, but the outlook is still “bleak” for the group’s DIY arm…………
Air safety authorities have ordered Rolls-Royce to “urgently modify” the type of engines involved in the Heathrow crash last year, said theGuardian. After a second aeroplane in the US suffered the same fuel icing problems, leading to loss of power, the US watchdog has warned of further possible cases…………
Standard Life yesterday gave “much-needed” hope to the insurance sector yesterday after reporting a higher than expected profit of £933m, reported the Times. The insurer, the UK’s fourth-largest, also reported that its “capital cushion” stood at £3.3bn, down just £100m since the end of 2008…………
General Electric, a “bellweather” for the US economy, has had its AAA credit rating stripped from it, reported the Daily Telegraph. The industrial group has held the top rating since the 1950s but now ratings agencyStandard & Poor’s has cut it to AA+, with a “negative outlook”…………
Billionaire investor Warren Buffet was offered “two chances” to support troubled insurer American International Group shortly before it was rescued by the US government, reported Bloomberg.com. Buffet “opted not to bid” since the sums needed were “more than we could supply by far”…………
Alexander Lebedev, the new owner of the Evening Standard, is considering floating it on the stock market, reported the Daily Telegraph. He said he would be “keen” to offer journalists on the newspaper shares in the business, but also that he currently has “no spare cash”…………
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