Investors bought stocks across the globe as a sense of optimism returned to the markets. In New York yesterday the Standard & Poor’s 500 Index gained 1.2 per cent as the Treasury talked about injecting funds into the life insurers, and after the close futures added another 0.8 per cent. In Asia the MSCI Asia Pacific Index rose for the first time in three days on Japanese government stimulus plans, moving 2.5 per cent ahead at the close in Tokyo. In London the FTSE 100 was 0.70 per cent higher in early trade, reversing yesterday’s 0.13 per cent fall. The Bank of England is “almost certain” to leave its base rate at its current level of 0.5 per cent, a historic low, reported the Daily Telegraph. Instead the Bank’s Monetary Policy Committee is expected to use its meeting today to commit to “spending billions more” on government bonds, in order to bring down long-term rates. The move is expected amid growing speculation that the Bank is “quietly considering” cutting back the sum of money that it is has said it will create through quantitative easing, a process it started a month or so ago. HSBC is to offer £1bn of new mortgages to borrowers who can afford a 10 per cent deposit, “prompting speculation” that the problems in the home loan sector may be easing, reported the Independent. The bank will launch a range of variable, fixed and tracker mortgages next week and is the first major lender to provide “sizeable sums” to this end of the market for more than a year. Experts in the mortgage market “welcomed the move” as further evidence that the logjam in home loans was beginning to ease. The Bank of England is looking into “formally” separating the UK’s biggest banks’ investment banking and retail banking operations, reported theTimes. George Osborne, the Shadow Chancellor has also hinted that a Conservative government would break up the banks, triggering the “biggest change” since 1986, when Margaret Thatcher deregulated the industry in a process known as Big Bang. Any such move would send “shudders” through the industry, still feeling the effects of toxic debt and the credit crunch. Barclays, the third-biggest British bank, is nearing agreement to sell itsiShares unit to CVC Capital Partners for around £3bn, reportedBloomberg.com. According to sources close to the negotiations, the deal to boost Barclays’ capital may be announced “as early as today” and would see it retaining a 20 per cent stake in the fund manager, the biggest manager of exchange-traded funds in the world. The transaction would also see London-based Barclays lending CVC “two-thirds” of the purchase price, according to the sources’ information. Germany has “dramatically boosted” its car scrappage scheme by more than trebling the cash offered to owners of older vehicles to scrap them and buy new cars, reported the Times. The government is now planning to make €5bn available, after first putting €1.5bn into the scheme, meaning two million people can now take part, a million having already applied. Each customer receives €2,500 for a scrapped car and the plan will put more pressure on the UK to follow suit after it saw sales of cars fall by 30 per cent in March. Insurance group Pearl is planning to raise £500m from investors and float on the London Stock Exchange, reported the Daily Telegraph. The company was set up by entrepreneur Hugh Osmond and announced its plans as the “debt-funded” model it used in the past was now not “appropriate”………… French workers released four managers of Scapa, a UK-based tape manufacturer, in the latest case of “bossnapping”, reported the Financial Times. The action, taken in a dispute over severance pay, was a “direct challenge” to President Sarkozy’s assurances that he would end the practice………… Japan may unveil a Y15.4tr, or $154bn, stimulus package to help revive its economy, reported Bloomberg.com. As the country heads for its worst recession since World War II, the ruling Liberal Democratic Party is to propose spending “about three per cent” of GDP in its third package since September………… Karmann, the maker of the Ghia and one of the “most famous names” in the auto industry filed for bankruptcy yesterday, reported the Financial Times. The family-owned contract manufacturer and parts maker said a “sharp drop” in revenues had led to it being “blown up”………… Private equity group Change Capital was “nursing losses” of almost £30m after selling its interest in Robert Dyas, reported the Guardian. A team of Dyas executives “stumped up” around £1m to buy the company from Change, which has seen its investment of £29m “almost wiped out”………… Media rights company Chorion is in talks to sell its crime division, which includes the Agatha Christie estate, to AIM-listed Coolabi, reported theTimes. Coolabi owns the rights to Purple Ronnie and Bagpuss and is thought to be intent on buying the properties for £30m-£50m…………...business headlines....
Markets recover as optimism grows
BoE to hold rates steady
HSBC to offer 90% loans again
King considers banks split
Barclays closes in on iShares sale
Germany trebles scrappage scheme
...in brief..................
Pearl to raise funds and list and Christie estate to be sold
Thursday 9 April 2009
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