 | May 13, 2010 |
Kill the Competition: King’s praise ... Breakup commission ... Interest-only loansThursday, May 13, 0730 GMTTop stories The Times: The immediate £6 billion ($9 billion) cut in public spending proposed by the new Government won support from Mervyn King, the Governor of the Bank of England. http://tinyurl.com/35n6tex The Daily Telegraph: The new Government pledged to start an independent commission to decide whether to break up Britain’s biggest banks. http://tinyurl.com/32ejkrr The Times: Lloyds Bank, the UK lender, is cutting back on interest-only mortgages as it seeks to mitigate the increased risks posed by such deals. http://tinyurl.com/3xzemh6 Comment David Wighton in The Times: The compromises made by the coalition might seem unsettling for business. But on closer inspection, the picture is fairly benign. http://tinyurl.com/2vku9so Jeremy Warner in The Daily Telegraph: As Mervyn King, Governor of the Bank of England, said, the pain must begin now for the UK and Europe. http://tinyurl.com/32yy63w Caroline Baum on Bloomberg: Europe’s leaders must have been snoozing in the back row when the teacher reviewed the US Troubled Asset Relief Program. http://tinyurl.com/2v78bvm Upside The Times: Oil companies face an immediate tax rise of 1 cent per barrel to help pay for the clean-up in the Gulf of Mexico under proposed US legislation. http://tinyurl.com/294ojac The Daily Telegraph: Spain imposed drastic wage cuts to slash the budget deficit, complying with European Union demands for further austerity. http://tinyurl.com/2v8pe2u Wall Street Journal: Cisco Systems, the computer networking products maker, reported a 63 per cent surge in profit. http://tinyurl.com/352zoo4 Downside The Times: Morgan Stanley’s shares fell more than 5 per cent over fears that it would be the next US bank to be charged with fraud over the sale of toxic mortgage products. http://tinyurl.com/2ww49mb The Times: Cattles accused its former directors of providing misleading information about its finances as the doorstep lender reported a loss. http://tinyurl.com/3328xr5 The Times: The building of new offices in Central London slumped to a record low in the past 12 months, sparking fears of a supply shortage and higher rents. http://tinyurl.com/37dq9nv Mergers and shakers The Times: Jón Ásgeir Jóhannesson, the owner of the Icelandic investment company Baugur, was accused of leading a $2 billion (£1.3 billion) "looting" of an Icelandic bank. http://tinyurl.com/3ammyyl Wall Street Journal: SAP, the German database maker, agreed to buy Sybase, a rival business software maker, for $5.8 billion (£3.9 billion). http://tinyurl.com/2v455yw The Times: Standard Chartered, the UK bank, approached Old Mutual with an informal plan to buy its rival’s stake in Nedbank, the South African bank. http://tinyurl.com/3x492yt Around Asia The Times: An Indian outsourcing company that claims Royal Bank of Scotland and Goldman Sachs as clients will use Indian prisoners to help to process bank paperwork. http://tinyurl.com/2w53npm Wall Street Journal: Japan's current account surplus rose 65 per cent in March from a year earlier. http://tinyurl.com/2wgt29m The Times: Vodafone, the mobile phone operator, may be forced to pay a retrospective fee for use of radio frequencies in India. http://tinyurl.com/38eev73 Look ahead Wall Street Journal: The top tier of the Greek shipping industry is poised for a strong year due to its focus on tankers that transport commodities. http://tinyurl.com/32q8qwf The Times: Marks & Spencer, the retailer, will pay £36 million ($53 million) a year for the next three years to plug its gaping pensions deficit. http://tinyurl.com/2uaaz55 Wall Street Journal: The European Commission endorsed Estonia's bid to join the euro zone, paving the way for the country to become a member later this year. http://tinyurl.com/3yxm5f2 MARKETS FTSE 100 5,383.45 up 0.9% (Wednesday close) Dow 10,896.91 up 1.4% (close) S&P 500 1,171.67 up 1.4% (close) Nasdaq 2,425.02 up 2.1% (close) Nikkei 10,549.41 up 1.5% (latest) Hang Seng 20,333.81 up 0.6% (latest) Currencies Sterling $1.4857/1.174 euros (latest) Euro $1.2655 (latest) Commodities Brent crude $81.41 up 21 cents (latest) West Texas crude $75.52 down 13 cents (latest) Gold $1238.10 down $5 (latest) New York Reuters: US stocks rose after Spain unveiled an austerity plan reassuring investors. Technology shares posted the most gains. Computer maker IBM rose 4.6 per cent on good forecasts. Chipmaker Intel rose 3.6 per cent a day after it said it expects earnings growth to double over the next few years. Chinese internet search engine Baidu rose 9.6 per cent after a 10-for-1 share split. Retailer Macy's rose 3.4 per cent on good results. Entertainment company Walt Disney fell 1.8 per cent after analysts said results at its television network division were disappointing. Banking giant Morgan Stanley fell 2 per cent on reports of an investigation into its mortgage derivative products. iPhone maker Apple rose 2.2 per cent, despite a patent infringement case filed by rival phone maker HTC. Gold producer Freeport-McMoRan Copper and Gold rose 3.9 per cent on a surge in gold prices. http://tinyurl.com/2bzkmta Asia Bloomberg: Asian stocks rose in morning trade as good results by computer-related companies boosted the sector. Tokyo Electron, the world’s second-largest maker of semiconductor equipment, rose 5.6 per cent after forecasting a return to profit. Tencent, the Chinese Internet firm, rose 3 per cent on good results. Samsung Electronics, Asia’s biggest chipmaker, rose 2.4 per cent and Hynix Semiconductor, the world’s second-largest maker of memory chips, rose 4.3 per cent in Seoul. Elpida Memory, Japan’s biggest maker of computer-memory chips, rose 3.1 per cent on reporting a return to profit. Advantest, the maker of memory-chip testers, rose 3.3 per cent. Hyundai, South Korea’s largest carmaker, rose 4.1 per cent to a record on an analyst’s upgrade. Isuzu Motors, the maker of light-duty trucks, rose 5.3 per cent and Yamaha Motor rose 4.2 per cent in Tokyo. The MSCI Asia Pacific Index rose 1.2 per cent to 120.18 in morning trade. http://tinyurl.com/2u9mecn Michael Beh michaelwbeh@gmail.com London After five days of horse-trading by politicians, stock markets finally applauded a new coalition Government. Though the FTSE 100’s 49.24-point improvement to 5,383.45 looked a touch underwhelming in light of recent wild swings, the FTSE 250 did better. That index, seen as better barometer of the domestic economy, rose more than 2 per cent to 10,186.92 points. Sentiment towards shares was further bolstered by fresh austerity measures in debt-laden Spain, and an encouraging inflation forecast from the Bank of England. Among those to improve most were aerospace and weapons companies, marked higher on hopes that the new defence minister, Liam Fox, would fight hard for his department. Rolls-Royce added 31p to 611p, while BAE Systems advanced 5p to 347p. Relief at the greater political stability also spurred Capita Group 37p to 812p and Serco 23p to 641p. Both outsourcing companies are heavily reliant on Government contracts. However, it was a difficult day for the banks in which the taxpayer holds big stakes, amid concerns for a new banking levy, a crack down on bonuses and the imposition of tougher competition. Banks aside, oil producers trimmed gains by London’s leading index after the America revealed that it had bigger-than-expected oil stockpiles. Royal Dutch Shell B shares eased 6p to £18.09p. Goldman Sachs told clients to buy Soco International shares, which advanced 143p to £17.61p. The broker reckoned drilling later this year in the Democrat Republic of Congo and Vietnam would give the oil explorer a fillip. However, Goldman played down prospects of a bid for Soco any time soon. Another day and rumours of another positive statement from Rockhopper Exploration, the British company that has struck oil off the Falkland Islands. Gary Parkinson Gary.Parkinson@thetimes.co.uk |
