Stocks gained worldwide as investors continued to see signs of improvements in the global economy. In the US the Standard & Poor’s 500 Index was up one per cent on Friday after US factory orders gained for the first time in seven months. In Asia, trading was also buoyant, with markets there rising for the fourth day in a row, as the yen traded at a five-month low. The MSCI Asia Pacific Index finished the day up one per cent, 24 per cent higher than its March low. In London the FTSE 100 Index was over one per cent higher in early trade. A raft of extra tax rises are under consideration after the Chancellor admitted under-estimating the seriousness of the recession, reported theDaily Telegraph. Alistair Darling said last autumn that the UK would emerge from the downturn this summer but he admitted yesterday that this was now “unlikely” before the end of the year. As a result and despite already announcing a new 45p higher rate of income tax and a rise in National Insurance, a “range” of future tax rises are now being considered, including a rise in Vat. US Treasury Secretary Timothy Geithner said that he is prepared to “oust” executives and directors at banks needing “exceptional” government aid, reported Bloomberg.com. In an interview on CBS he stressed that the government will do everything it can to help the troubled banking sector including making a “change in management”. He noted that at American International Group, Fannie Mae and Freddie Mac, top executives had already been removed in the wake of state aid, with the government having to do “exceptional things”. Troubled motor group Jaguar Land-Rover “looks set” to receive a European bail-out package that will safeguard a number of UK jobs, reported the Independent. JLR, which is owned by India’s Tata Group has suffered from the decline in the UK car market, which has seen sales drop 22 per cent over the last year. After applying for government aid it has recently put its workforce on a four-day week and it is thought that the package provided by the European Investment Bank could save as many as 14,500 jobs in Britain. Halifax reported a fall in house prices, “dampening hopes of a recovery” in the market, prompted by Nationwide’s earlier figures, said the Guardian. Halifax said prices had fallen by 1.9 per cent in March, while Nationwide’s report said that prices rose 0.9 per cent over the same month. It is “not the first time” accounts have varied however, with volatility common when transaction levels are so low. The quarterly numbers are a “better reflection” of the true state of the market and both are indicating price declines. The International Monetary Fund believes European Union states in central and eastern Europe should consider “scrapping their currencies” in favour of the euro, said the Financial Times. According to the IMF the eurozone should “relax its entry rules” so that countries can join as quasi-members without European Bank board seats. Disclosure of the month-old report could stimulate “fierce debate” over strategy for the region, with challenges remaining in eastern Europe in spite of global leaders hailing the G20 summit as a success. HSBC has gained 96.6 per cent support for its “record” £12.9bn rights issue, reported the Daily Telegraph. The scale of the take-up confirms early signs of its success and the share price closed on Friday at 434.5p, 10.5 per cent higher than the original price when the issue was launched………… IBM’s talks to buy Sun Microsystems for $7bn have “collapsed” after the companies failed to agree on a price, reported Bloomberg.com. Sun’s board said it was breaking off “exclusive” negotiations, according to sources close to the deal, and rejecting an offer of “about $9.40 a share”………… Sacked workers are “falling victim” to investment scams which promise big returns on redundancy payouts, reported the Independent. “Millions of pounds” are at risk of being lost in Madoff-type Ponzi schemes which are increasingly being uncovered by the Financial Services Authority………… Rio Tinto is set to go ahead with a $10bn rights issue if its agreed $19.5bn stake sale to Chinese miner Chinalco falls through, reported theFinancial Times. If the deal is “blocked” by regulators or shareholders, plans for the rights issue, codenamed Project Glasgow, will come into effect………… A pawnbroker has opened in the City of London and is thought to be the first there for nearly a century, reported the Guardian. In a “grim sign of the times” the shop used to be a recruitment consultant, but at Nikolas Michal it is Rolex watches and diamond necklaces which are now to be found………… More than 200 MPs have signed a parliamentary motion to help the “beleaguered” pub industry by scrapping plans for an increase in beer duty, reported the Times. The early day motion comes amid growing public support for the “Axe the Beer Tax – Save the Pub” campaign…………...the main headlines...............business headlines.....
Markets continue relief rally
Darling admits error on recession
Geithner will axe bank chiefs
Jaguar Land-Rover gets £270m
Halifax contradicts Nationwide house price rise report
IMF pushes euro for eastern EU
...in brief..................
HSBC rights issue a success and MPs get behind pub industry
Monday, 6 April 2009
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