Welcome to today’s round-up of business news from The Times: what we’re saying, what they’re saying, what you should be thinking
Top of the home pages
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The Times: British Energy, the UK’s biggest electricity generator, is considering a £5.5 billion break-up plan that would involve creating a new company focused on building nuclear power plants.
The Wall Street Journal: News Corp is in talks with Yahoo! to swap ownership of MySpace and other online properties for a 20 per cent stake. The talks could spur Microsoft to raise its bid for Yahoo!.
Financial Times: Disney is sounding out possible replacements for EMI as the international distributor of Hannah Montana, the High School Musical soundtrack and other bestselling albums.
From the commentators
Antonia Senior in The Times: If the US housing market has been painful for UK banks this reporting season, there are growing signs that our domestic market could prove agonising next year.
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Lex in Financial Times: The worst thing about Shanghai’s exalted p/e ratios of 37 is that they understate how expensive Chinese stocks really are.
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Hamish McRae in The Independent: The bottom of the cycle will not be this year, as the Bank expects, but the middle of 2009, though quite possibly no actual recession in the technical sense.
Good day
BBC: US retail sales rose an unexpectedly strong 0.3 per cent in January, bolstered by sales of new cars and petrol.
Financial Times: More than a third of City staff received higher bonus payments than last year while 70 per cent said that payouts either matched or exceeded their expectations.
The Daily Telegraph: Reckitt Benckiser, the maker of household products, managed to improve profits 22 per cent in the fourth quarter last year, despite consumer weakness.
Bad day
The Times: Growth will slow sharply this year but there is only limited room for further interest rate cuts, the Bank of England said.
The Daily Telegraph: Liberty International, the UK’s biggest shopping centre owner, saw profits wiped out on the back of a £245 million slide in the value of its property.
The Daily Telegraph: Morgan Stanley is shutting down its UK mortgage lending arm, Advantage Home Loans, with the loss of 160 jobs.
Mergers and shakers
The Times: Tom Albanese, the chief executive of Rio Tinto, has indicated that the second-largest miner could look for new acquisitions this year, with Anglo American heading the wish-list.
Financial Times: The German Government is to lead a €1.5 billion (1.1 billion, $2.18 billion) bailout of IKB in a third attempt to save the small-business lender.
The Daily Telegraph: The entertainment retailer Play.com is to challenge Apple’s iTunes in the digital download market by offering tracks which can be used on any MP3 player.
Around Asia
Bloomberg: The Japanese economy grew a more-than-estimated 3.7 per cent last quarter as exports to Asia and emerging markets helped companies to weather a US slowdown.
Financial Times: A Singapore sovereign wealth fund is expected to be the lead investor in a $6 billion fund that TPG, the private equity firm, is raising to invest in troubled financial firms.
International Herald Tribune: The WTO issued its first condemnation of Chinese commercial practices, finding that China was breaking trade rules by taxing imports of car parts at the same rate as foreign-made finished cars.
Coming up
The Times: Magazines including Bauer’s Heat and Closer and IPC’s Now are among those predicted to suffer in the half-yearly ABC magazine circulation figures to be released on Thursday.
The Daily Telegraph: BAE Systems is expected to face damaging allegations in court on Thursday that it lobbied the Government to drop the SFO’s Saudi arms sales bribery investigation.
The Times: The fate of Northern Rock could be decided within days after the Government told bidders that it wanted to make an announcement “soon after this weekend”.
MARKETS
FTSE 100 5,880.10 down 0.5% (Wednesday close)
Dow 12,552.24 up 1.5% (close)
S&P 500 1,367.21 up 1.4% (close)
Nasdaq 2,373.93 up 2.3% (close)
Nikkei 13,433.04 up 2.8% (latest)
Hang Seng 23,961.30 up 3.4% (latest)
Sterling $1.9624 (latest)
West Texas crude $93.33 up 6 cents (latest)
Gold $910.40 up 20 cents (latest)
New York
Reuters: US stocks rallied for a third session on Wednesday after a surprise gain in January retail sales suggested consumer spending - which fuels 70 per cent of US economic activity — was solid. Industrial companies such as 3M, which are particularly dependent on economic growth, were among the top-weighted gainers. The Dow Jones industrial average rose 1.45 per cent, the S&P 500 index gained 1.4 per cent and the Nasdaq rose 2.3 per cent.
Asia
Bloomberg: Asian stocks advanced, led by exporters and raw material producers, as concerns eased that growth is contracting in the two largest economies. Mizuho Financial gained for the first time in seven days after Japan’s GDP expanded at the fastest rate in three quarters. Toyota and LG.Philips LCD climbed after buoyant US retail sales. Rio Tinto rose after reporting higher profit. The MSCI Asia Pacific Index was up 2 per cent and Japan’s Nikkei had risen 2.8 per cent in intraday trading.
Paul Larter
London
Alliance & Leicester, the mortgage bank, tumbled seven per cent to a seven-year low after its rival mortgage lender Bradford & Bingley took a big write down on its exposure to toxic debt.
While B&B lost 56.25p to 187p amid fears about further write downs to come, A&L fell 42p to 559p. The FTSE 100 ended down 29.9 at 5880.1 hurt by a warning from the Bank of England that interest rate cuts would be difficult with inflation above target.
B&B’s fellow mortgage lenders were also under pressure on grim RICS figures on house sales with Northern Rock down 9.5p at 95.5p and HBOS off 8p at 665p.
Paul Measday, of Cazenove, gave warning that Barclays, down 2p at 453.5p, would have more write offs from its Barclays Capital arm with its full-year results next week although earnings should be in line.
Wolseley ended up 1p at 697.5p despite Morgan Stanley cutting its price target from 624p to 530p and warning that there was probably worse to come for the builders’ merchant as the US repair and commercial construction market hits the buffers.
British Energy was the top blue-chip performer, up 44p at 533p buoyed by excitement over its plans to cash in on plans to build new nuclear stations.
Experian, the credit checker, jumped 18.25p at 453.75p on high volume as short sellers closed out. The shares have been on the rise since a positive road show at the end of last month.
Robert Lindsay
AGENDA
INTERIMS
Diageo
Hargreaves Services
FINALS
None scheduled
AGMs
Arana
Greencore Group
Rotala
Shaftesbury
EGMs
None scheduled
TRADING STATEMENTS
Thomas Cook Group
Electrocomponents
Halma
Southern Cross Healthcare Group
Dawson Holdings
Shaftesbury
ECONOMICS/COMMODITIES
Weekly US gas inventory data (1530 GMT)
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