Shares slid worldwide as investors took a step back on concerns that recent rallies had gone too far. In the US on Monday the Standard & Poor’s 500 Index dropped 0.8 per cent, with Treasury bonds rising for the first time in four days. In Asia today the MSCI Asia Pacific Index lost 0.6 per cent after a four-day advance during which it gained 7.6 per cent, as investors took profits. Commodities declined after Rio Tinto slumped 9.2 per cent on worries over a possible share sale. In London the FTSE 100 Index was 0.70 per cent higher in early trade. Car sales in the UK have fallen by more than 200,000 in the first three months of the year, reported the Guardian. The decline comes despite the new March 09 number plates, with March numbers down 30.5 per cent, according to figures from the Society of Motor Manufacturers and Traders. This takes car sales down 29.7 per cent in the first quarter, “triggering fresh calls” for a car scrappage scheme from the auto industry. The SMMT has been urging the UK government to introduce such a scheme, offering buyers £2,000 for trading in their old car. The “fragile” state of the economy is highlighted by the British Chamber of Commerce today which predicts unemployment will “soar” to 3.2m, reported the Independent. That level hasn’t been seen since the 1980s and the forecast is designed to remind ministers preparing the Budget, due on April 22nd, that the recession is still “very serious”. In contrast to other recent comments the BCC says the credit crunch “shows no signs of abating”, but given the parlous state of public finances, the scope for additional spending is “very limited”. Ford Motor is to cut its debt by “almost 40 per cent” with a debt-for-equity swap, improving its financial position versus struggling rivalsGeneral Motors and Chrysler, reported the Financial Times. Ford looked the “weakest” of the Detroit triumvirate a year ago but yesterday announced that holders of $4.3bn of senior convertible notes, 88 per cent of the total, had agreed to its offer comprising shares and cash. The deal will cut its debt from $25.8bn to $15.9bn and reduce interest payments by $500m a year. Ford shares rose 16 per cent. George Soros, the veteran hedge-fund manager who made money last year as others suffered losses, believes the recent market rally “isn’t the start of a bull market”, reported Bloomberg.com. He said the rally in US stocks, which has led other markets worldwide, shouldn’t be a cause for bullishness since the country’s economy “is still shrinking”. Soros, 78, also said that the current financial crisis was unlike any others that the world has experienced in his lifetime, although his review of President Barack’s administration was “mostly positive”. Toxic debts accumulated by the financial industry could reach $4tr, according to new IMF forecasts, reported the Times. The IMF said in January that it expected the deterioration in US assets to reach $2.2tr by the end of next year but it is thought to be looking at downgrading that to $3.1tr and adding another $900bn for European and Asian assets. Banks and insurers are facing “increasing losses” due to the worsening recession, on top of the previous exposure to sub-prime mortgages and the new figures will “come as a blow”. Australia cut its benchmark rate to a “49-year low” after it signalled that its economy is facing its first recession since 1991, reportedBloomberg.com. The rate was lowered to three per cent, a decline of a quarter of a point, as the global recession dampens demand for the country’s natural resources………… ITV believes it can raise up to £500m through a rights issue, after meeting with “leading shareholders”, reported the Daily Telegraph. The ailing broadcaster believes it can raise the funds even without largest investor BSkyB and “may need cash” for liquidity as it owes £730m………… Japan is to inject Y10tr, or £67bn into its economy to try to improve its “worst recession since the Second World War”, reported the Independent. The new figure, equivalent to more than two per cent of its output and double the previous amount, will be “welcomed” by other major economies………… Struggling car company General Motors is to auction “hundreds” of classic cars to save storage costs, reported the Guardian. Nearly 100 vehicles will go under the hammer this week alone, including a Chevrolet Model T truck and a Chevrolet Camaro used in the film Runaway Bride………… In a “teary” TV interview, Sir Allen Stanford has denied allegations against him of running a Ponzi scheme, reported the Daily Telegraph. In his first interview since his troubles emerged he said he would “die and go to hell” if it was proven that he had been involved in such activities………… Art prices “plunged” during the first quarter, as collectors looked to cash in on works that had earlier benefited from the boom, reported the Financial Times. The Mei Moses Index, set for release later today, will show that prices dropped 35 per cent in the first quarter, after holding up last year…………...business headlines...
Global rally falters as buyers pause
UK car sales fall 30% in March
BCC warns jobless to reach 3.2m
Ford strikes deal on debt
Soros predicts further market falls
IMF says toxic debt could top $4tr
...in brief..................
Australia cuts rates to new low and art prices plunge
Tuesday, 7 April 2009
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