KILL THE COMPETITION
Welcome to today's round-up of business news from The Times: what we're saying, what they're saying, from Michael Beh
Tuesday, December 2, 0730 GMT
Top stories
The Times: Tesco's customers are defecting to its supermarket rivals Asda and Morrison at record rates, suggesting its discount-focused marketing backfired.
http://tinyurl.com/6p6hd4
New York Times: The National Bureau of Economic Research officially declared the US went into recession in December 2007 as shares fell 9 per cent.
http://tinyurl.com/5srcgf
The Independent: Mortgage lending fell 70 per cent in October, a fall that seems set to ensure the housing slump will worsen.
http://tinyurl.com/5aa932
Comment
Anatole Kaletsky in The Times: By replacing incompetent outgoing Treasury Secretary Henry Paulson, Barack Obama may have stopped the Doomsday Machine.
http://tinyurl.com/5lntpw
Ambrose Evans-Pritchard in the Daily Telegraph: Joining the euro would not have prevented the current crisis in Britain. It would have made matters worse.
http://tinyurl.com/5s6tt6
Lex in the Financial Times: It is odd that gloomy news still surprises markets; it could signal that investors are lining up to bet on a full-scale depression.
http://tinyurl.com/68r6ox
Upside
The Times: Pontin's, the holiday park operator, says bookings for Christmas are up 11 per cent and summer 2009 bookings are up 20 per cent.
http://tinyurl.com/6y25z7
New York Times: Iceland and Poland are rethinking their opposition to the euro after market turmoil nearly destroyed their currencies.
http://tinyurl.com/5eg4q6
Bloomberg: Bank of America, the biggest US retail bank, raised $9 billion (£6 billion) in the largest bank bond sale since regulators agreed to guarantee the debt.
http://tinyurl.com/56evpm
Downside
The Times: A worldwide slump in manufacturing caused global stock markets to plunge and increased pressure for interest rate cuts in Britain and Europe.
http://tinyurl.com/6jvkj8
Daily Telegraph: New Star Asset Management shares fell 43 per cent after the City watchdog rejected its pleas to suspend trading in its shares.
http://tinyurl.com/5bhan5
The Times: Another 2,000 British jobs were cut or threatened with the axe as HSBC, Aston Martin and Halfords responded to the economic downturn.
http://tinyurl.com/6mj84c
Mergers and shakers
The Times: Discount airline Ryanair halved its takeover offer for state-owned Aer Lingus to €748 million (£617 million, $919 million); it was again rebuffed.
http://tinyurl.com/6awgsb
The Times: Ford is prepared to sell Volvo in its bid to convince the US Government that it deserves a $25 billion (£17 billion) emergency loan.
http://tinyurl.com/5q486m
Financial Times: The value of cancelled merger deals for this quarter is closing in on the value of deals actually completed for the first time since 1987.
http://tinyurl.com/5ovckb
Around Asia
The Times: Japanese car sales fell 23.7 per cent, faster than any time since the 1970s.
http://tinyurl.com/5tpcze
Financial Times: Tata Motors, India's third-largest carmaker and owner of Jaguar and Land Rover, is asking the Indian public for cash and offering 11 per cent.
http://tinyurl.com/5sjm4p
Daily Telegraph: Kohlberg Kravis Roberts, the US private equity house, is about to buy China's largest dairy farm in a £200 million ($298 million) deal.
http://tinyurl.com/5bhylg
Look ahead
Reuters: JPMorgan Chase will sack 9,200 staff at the former Washington Mutual, the failed US savings and loan giant, 4,000 of them by January.
http://tinyurl.com/6q3zxz
The Times: Essentially Group, sports marketing and management group, warned that annual profits would be less than expected and said it was cautious about 2009.
http://tinyurl.com/5c74te
Reuters: The UN predicts world economic growth will slow to 1 per cent in 2009 from 2.5 per cent this year, and may contract if stimulus packages do not work.
http://tinyurl.com/5dbu93
MARKETS
FTSE 100 4,065.49 down 5.2% (Monday close)
Dow 8,149.09 down 7.7 per cent (close)
S&P 500 816.21 down 8.9% (close)
Nasdaq 1,398.07 down 9% (close)
Nikkei 8,037.30 down 4.3% (latest)
Hang Seng 13,475.84 down 4.5% (latest)
Currencies
Sterling $1.4895/1.1803 euros (latest)
Euro $1.2620 (latest)
Commodities
Brent crude $46.50 down $1.47 (latest)
West Texas crude $48.25 down $1.03 (latest)
Gold $775.10 down $1.70 (latest)
New York
Bloomberg: US stocks slid on growing concern the global economic slump is deepening and consumers' access to credit is shrinking. General Electric, the world's biggest maker of power-generation equipment, fell 9.7 per cent. Caterpillar, the largest maker of bulldozers, fell 10.8 per cent. American Express, the largest US credit card company, fell 15.7 per cent on a negative analyst's report for the industry. Goldman Sachs fell 17 per cent and Morgan Stanley fell 23 per cent on predictions of a slowdown in banking. Freeport-McMoRan Copper & Gold, the world's largest publicly traded producer of copper, fell 13 per cent on lower metals prices. Pilgrim's Pride, the largest US chicken producer, filed for bankruptcy protection. Its shares have fallen 98 per cent this year and were halted at 62 cents. Limited Brands, the owner of Victoria's Secret lingerie, fell 19 per cent.
http://tinyurl.com/65kqgu
Asia
Bloomberg: Asian stocks tumbled in morning trade as a deepening global recession drove down oil and metal prices. Australian oil producer Woodside fell 6.5 per cent, Inpex, Japan's biggest oil explorer, fell 9.1 per cent, BHP Billiton, the world's biggest miner, fell 6.4 per cent and China Petroleum & Chemical Corp, Asia's largest refiner, fell 5.6 per cent. JFE Holdings, the world's third-largest steelmaker, fell 8.8 per cent and Kobe Steel, Japan's fourth-biggest, fell 6.2 per cent. Sun Hung Kai Properties, Hong Kong's second-largest developer, fell 6.4 per cent after HSBC Holdings raised rates on new home loans. Among carmakers, Honda fell 6.9 per cent, Fuji Heavy Industries, the maker of Subaru cars, fell 6.7 per cent and Hyundai, South Korea's largest automaker, fell 4.9 per cent. The MSCI Asia Pacific Index fell 3.3 per cent to 79.92 in morning trade.
http://tinyurl.com/5b7o9f
Michael Beh
michaelwbeh@gmail.com
London
Lonmin, the South African platinum miner, dropped 18 per cent to a nine-year low as dire figures for car sales around the world raised renewed fears over its profitability.
The hope that Xstrata, which has built a 25 per cent Lonmin stake, might bid again when its lock-out expires in March, is rapidly diminishing. Xstrata, down 13 per cent, has to bring its own debt down and is beset by worries that Glencore, its main shareholder, may be forced to sell down its stake.
The FTSE 100 fell 249.56 to 4,038.45 with not a single stock in the black. Offical figures showing that China's November manufacturing output had fallen at the fastest rate since records began three years ago triggered fresh fears over a global recession.
That hurt mining stocks the most. Kazakhmys, the copper miner, fell 16 per cent and Vedanta Resources lost 16 per cent. Rio Tinto lost another 11 per cent on worries over whether it could complete its $7 billion asset sale programme in these markets.
Standard Chartered weakened 14 per cent after Morgan Stanley cut its target price from 820p to 665p, warning that its recent £2.8 billion equity issue would not be enough in the global downturn.
Falling oil prices hurt oil service groups Petrofac, down 12 per cent and John Wood Group, down 9 per cent. Both are likely to be ejected from the blue chip index next week.
AGENDA
INTERIMS
Greene King
Datong
May Gurney
Park Group
Telford Homes
FINALS
ITE
OMG
Sarantel
Thomas Cook
TRADING STATEMENT
Game Group
Tesco (Q3)
AGMs
SCI Entertainment
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