Need to know

The US Securities and Exchange Commission has given warning that Middle Eastern and Chinese government-controlled sovereign wealth funds pose “a number of securities law enforcement issues”.

Pending US home sales fell 1.5 per cent in December to the second-lowest reading on record. The National Association of Realtors said its index of pending sales for existing homes fell to a reading of 85.9, from a downwardly revised November figure of 87.2.

US unemployment benefit applications fell by 22,000 last week, but the number of workers remaining on jobless aid rose to its highest in more than two years. Government data showed that continued claims rose by 75,000 to 2.79 million in the week ended January 26.

Banking & finance

Soci?t? G?n?rale’s rogue trader, J?rôme Kerviel, who lost the French bank about €4.9 billion (£3.7 billion), could be taken into custody when he appears in court in Paris today. Morgan Stanley, JPMorgan, Merrill Lynch and Credit Suisse are understood to have formed a syndicate to raise €5.5 billion to offset SocGen’s losses.

Barclays bought Discover’s UK credit card business, which includes the Goldfish brand, for about £35 million. The business, which includes about 1.7 million credit card accounts, will be integrated with Barclaycard.

Deutsche Bank’s chief executive sent Germany’s stocks into retreat yesterday after predicting that troubles in monoline insurers could be a “tsunami” comparable to last year’s sub-prime mortgage crisis.

Abbey reported profits of £822 million for 2007 and said that it planned to open 300 new branches over the next five years. The bank’s provision against losses on loans fell 19 per cent to £213 million. Abbey has no sub-prime mortgage exposure.

Santander, Europe’s second-largest bank, reported a 19 per cent jump in full-year pretax profits, to €9 billion (£6.7 billion).

Construction & property

British Land, the property group, has taken a £1.39 billon writedown on its portfolio’s value for its third quarter to December 31, but Stephen Hester, chief executive, said he thought the worst in falling values was “probably behind us”. Excluding writedowns, underlying trading pretax profits rose 12.5 per cent to £72 million. lands developer, has signed up Moody’s, the rating agency, to take 170,000 sq ft of space over six floors in its One Canada Square building. Moody’s will move out of its various City office buildings to take the space, once occupied by Telegraph Media Group, paying rent of £45.50 per square foot. Canary Wharf has also let new space to Abbey Business Centres and the Financial Services Authority, totalling another 55,000 square feet.

Chagala Group, the largest Kazakh property developer listed on the London Stock Exchange, has agreed a $53 million (£27.3 billion) credit agreement with HSBC and Raiffeisen Zentralbank ?sterreich to build serviced apartments, offices and hotel projects in Atyrau and Aktau in the west of Kazakhstan near the Caspian Sea, which serve the oil industry.

Canary Wharf Group, the docklands developer, has signed up Moody’s, the rating agency, to take 170,000 sq ft of space over six floors in its One Canada Square building. Moody’s will move out of its various City office buildings to take the space, once occupied by Telegraph Media Group, paying rent of £45.50 per square foot. Canary Wharf has also let new space to Abbey Business Centres and the Financial Services Authority, totalling another 55,000 square feet.

Consumer goods

Diageo, the world’s biggest drinks company, has won a three-year distribution and joint marketing deal from the Guatemalan owner of Zacapa rum plus an option to buy a 50 per cent equity stake in the brand, subject to performance during that period.

Engineering

Rolls-Royce, the engine maker, has amassed what is believed to be the largest order book achieved by a British company, at £46 billion. The company has benefited from an aviation boom in Asia and the Middle East. Nearly half its total order book now comes from these two regions.

BMW reported a drop in sales, by 1.6 per cent to 92,629 vehicles in January. The company sold 4.1 per cent fewer cars of its main BMW brand at 77,156. However, sales of the Mini, which is made in Britain, rose 13.3 per cent, to 15,432.

Health

GlaxoSmithKline reported sliding 2007 profits and said that earnings this year were under pressure from falling sales of its diabetes drug Avandia and competiton from makers of generic treatments. Jean-Pierre Garnier, chief executive, said this year’s earnings per share would be less.

Industrials

ArcelorMittal, the world’s largest steelmaker, is to spend $18 billion (£9.3 billion) building two steel plants in India. The investment by ArcelorMittal eclipses plans for a $12 billion steel plant by its South Korean rival, Posco, in Orissa, a state in the east of India.

Leisure

Ladbrokes, Britain’s biggest bookmaker, has taken the No 1 spot in Northern Ireland’s betting market after acquiring Eastwood Bookmakers for £117.5 million.

Harrah’s Entertainment, the American casino behemoth that owns London Clubs International (LCI), is understood to have made a tentative approach to Gala Coral Group, the betting and gaming operator, about the possibility of merging LCI with Gala Casinos.

Media

Yell, the owner of Yellow Pages, yesterday became the first media company to say that weakening market conditions had affected revenues.

Ofcom rejected requests for commercial radio stations to be able to reduce their local programming. As part of the communication regulator’s review into the future of radio, FM local radio stations will be required to broadcast at least ten hours of locally made programmes each weekday.

Natural resources

BHP Billiton, the world’s largest mining company, will begin a road-show next week to convince shareholders of its bid of more than £70 billion for Rio Tinto. Marius Kloppers, the chief executive, is expected to brief investors in Australia and the US, and Alex Vanselow, the chief financial officer, will brief London-based shareholders. BHP increased its offer for Rio to 3.4 BHP shares for every one of Rio’s.

Royal Dutch Shell said that it would not be able to honour its export contracts from one of its key terminals in Nigeria’s volatile delta. Shell said that it was halting contracts from its Bonny terminal throughout March because it is unable to repair a leak due to security concerns. The leak has halted the flow of 130,000 barrels of crude per day, the company said.

Retailing

Halfords, the cycles and car parts retailer, is set to lose Ian McLeod, its chief executive, who is quitting at the end of this month to run Coles, the struggling Australian supermarkets group owned by Wesfarmers, the conglomerate. The retailer revealed a 2 per cent increase in like-for-like sales for the 17 weeks to 25 January, and said it is on course meet analysts’ expectations of £88.5 million of pretax profits for the year to March 31.

Timberland reported a drop in profit, citing lower sales of boots and children’s footwear, as well as restructuring charges. The bootmaker said that fourth-quarter earnings fell to $24.1 million (£12.4 million) from $36.2 million, a year ago.

Wal-Mart Stores, the US retailer, will open instore medical clinics under its own brand name after leasing space in dozens of stores to outside companies that operate the quick-service health stops. The world’s largest retailer said it will open “The Clinic at Wal-Mart” as a joint venture with local hospital systems in Atlanta, Dallas and Little Rock, starting in April.

Support services

Mitie Group said in a trading update that it continues to perform in line with management expectations and is on track to complete another “successful” year, helped by the trend to out-source services in its markets. Mitie added that its order book has continued to grow and has now secured 97 per cent of revenue for the year. Updating the market on four month trading to the end of January, the facilities, property and engineering services company said that conditions remain “favourable” in all its chosen markets.

Technology

Google announced that it was expanding its free software suite, Google Apps, to allow coworkers or students to collaborate on documents, calendars or presentations and to chat via instant messaging. Google Apps Team Edition, as the web service is known, adds teamwork features to the 18-month-old software, which initially allowed users to share documents only with other individual users. “We basically removed the notion of an administrator,” said Matthew Glotzbach, product management director for Google Enterprise

Telecoms

British Telecom reported a 30 per cent drop in its third-quarter profits. It attributed the decline to fierce competition in the broad-band sector and to the fallout from the premium rate telephone scandal. Third-quarter profits were down to £446 million, from about £639 million a year earlier.

Transport

EasyJet, the low-cost airline, said that its profits forecast remained unaltered. The airline carried 9.1 million passengers in the three months to the end of December, up 12.4 per cent on the same period a year before. The airline is in the middle of a rapid expansion, having spent $4 billion (£2 billion) on 104 new Airbus aircraft. Available seat kilometres, the industry measure of total capacity, grew faster than passenger numbers, up 17.7 per cent. This resulted in emptier aircraft and the carrier’s load factor fell a percentage point to 80.8 per cent.

Utilities

British Energy looks set to keep control of Eggborough, its last remaining coal-fired power station, after a court blocked a proposed takeover plan organised by Credit Suisse, the investment bank. The Court of Appeal has upheld the decision of the High Court that effectively said that Credit Suisse could not club together with a group of hedge funds to buy Eggborough, without giving British Energy the right to intervene.

E.ON, the energy provider, has become the latest in the sector to reveal price rises above the level of inflation. It is adding 15 per cent to the price of gas and 9.7 per cent to electricity with immediate effect. impacting almost five million customers.