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
Friday, December 5, 0730 GMT
Top stories
The Times : Britain's recession is deepening despite tax cuts and bank bailouts, the Bank of England said as it cut interest rates to their lowest in over 50 years.
http://tinyurl.com/5hbr6l
Daily Telegraph : The Bank of England is developing plans to fire up the printing presses and inject cash directly into the economy when interest rates near zero.
http://tinyurl.com/5zarl6
The Times : Central banks cut interest rates; Europe cut 75 basis points to 2.5 per cent, Sweden cut 175bp to 2 per cent and New Zealand cut 150bp to 5 per cent.
http://tinyurl.com/6q5ol5
Comment
David Wighton in The Times : The fall in the pound should be seen as part of the solution not part of the problem.
http://tinyurl.com/6mbzuw
Tracy Corrigan in the Daily Telegraph : Despite the efforts of the Government and the Bank of England, only optimists think the housing market has bottomed out.
http://tinyurl.com/6lx97c
Lex in the Financial Times : When interest rates reach zero, central banks must switch their focus from the price of money in the system to its quantity.
http://tinyurl.com/6qullf
Upside
The Times : A top UK law firm distributed profits to partners early because it believes that the money is safer in private rather than corporate bank accounts.
http://tinyurl.com/67uv85
The Times : Woolworths will hold its biggest ever sale after Theo Paphitis, the Dragons' Den entrepreneur, abandoned his bid for the collapsed retail chain.
http://tinyurl.com/5m9xf4
Reuters : Sales at Wal-Mart, the world's biggest retailer, rose a larger-than-expected 3.4 per cent in November.
http://tinyurl.com/6ha3kv
Downside
The Times : Many banks have refused to pass on the full 100 basis point cut in interest rates to their customers.
http://tinyurl.com/5d4lnl
New York Times : Most US retailers began the holiday shopping season with double-digit sales declines.
http://tinyurl.com/6o4vz4
The Times : New car sales in Britain fell 37 per cent year-on-year in November, the seventh consecutive fall.
http://tinyurl.com/6lyjv9
Mergers and shakers
The Times : Goldman Sachs has snubbed a second, and increased, offer by Panasonic for the US bank's stake in struggling electronics rival Sanyo.
http://tinyurl.com/6q7b9s
Daily Telegraph : Up to 20,000 jobs will be lost in the looming merger of Merrill Lynch and Bank of America, and other investment banks cut a further 10,000 jobs.
http://tinyurl.com/5kaya9
Daily Telegraph : Former WorldCom boss Bernie Ebbers wants a presidential pardon over the $11 billion (£7.5 billion) fraud that brought down the company.
http://tinyurl.com/6yb24v
Around Asia
Financial Times : Senior Chinese officials urged the US to stabilise its economy, boost its savings rate and protect Chinese investments.
http://tinyurl.com/6n3jt7
Bloomberg : Japan is considering waiving taxes that companies pay on profits returned from abroad, in an effort to help the economy emerge from a recession.
http://tinyurl.com/6cpzsu
Financial Times : Japanese carmaker Honda will disband its Formula One team unless it can find a buyer in the next three months.
http://tinyurl.com/5qxvqv
Look ahead
The Times : AT&T, the US's biggest telephone company, will sack 12,000 staff, raising fears unemployment could hit 7 per cent by the end of the year.
http://tinyurl.com/5sqt8n
Financial Times : Oil prices could fall to $25 a barrel next year if the recession affecting the US, Europe and Japan extends to China.
http://tinyurl.com/566bqy
The Times : Nokia, the biggest maker of mobile phones, expects global handset sales to fall 5 per cent next year - the first fall in eight years.
http://tinyurl.com/5o6k7p
MARKETS
FTSE 100 4,163.61 down 0.2% (Thursday close)
Dow 8,376.24 down 2.5% (close)
S&P 500 845.22 down 2.9% (close)
Nasdaq 1,445.56 down 3.1% (close)
Nikkei 7,977.77 up 0.7% (latest)
Hang Seng 13,818.84 up 2.3% (latest)
Currencies
Sterling $1.4652/1.1484 euros (latest)
Euro $1.2759 (latest)
Commodities
Brent crude $42.13 down 15 cents (latest)
West Texas crude $43.59 down 8 cents (latest)
Gold $768.90 up $3.40 (latest)
New York
Bloomberg: US stocks fell for the first time in three days. General Motors lost 16 per cent on reports the largest US automaker may file for bankruptcy. All 40 energy stocks on the S&P 500 fell on predictions oil could fall to $25 a barrel. Southwestern Energy fell 15 per cent, EOG Resources was down 14 per cent and Exxon Mobil, the world's largest oil company, declined 3.4 per cent. Apple, the maker of the iPhone, fell 4.7 per cent on predictions mobile phone sales will fall 5 per cent next year. Wal-Mart, the world's largest retailer, rose 1.3 per cent on better-than-expected sales. DR Horton, the US's largest homebuilder, rose 8 per cent while rivals Lennar rose 10 per cent and Centex rose 9 per cent.
http://tinyurl.com/5c5bd9
Asia
Bloomberg: Asian stocks rose in early trade as speculation that falling oil prices would spur consumer spending countered a retreat by mining and energy companies. Entertainment conglomerate Sony rose more than 2 per cent. Korea Electric Power, South Korea's only electricity utility, rose 5.4 per cent. Inpex, Japan's largest oil explorer, fell 5.2 per cent. BHP Billiton, the world's largest miner, fell 5 per cent as copper and aluminum slumped by the daily limit in Shanghai. Felix Resources , an Australian coal producer, rose 43 per cent on takeover speculation. The MSCI Asia Pacific Index gained 0.4 per cent to 79.78 in early trade.
http://tinyurl.com/68lg4x
Michael Beh
michaelwbeh@gmail.com
London
The FTSE 100 ended down by just 1.23 points at 4,168.73 as the gains of insurers and banks outweighed falling miners.
Xstrata, the mining group controlled by Glencore, the secretive Swiss metals trader, will breach bank covenants next year if metals prices do not rebound, according to an analyst, sending its shares down 61p at 629.5p.
Simon Toyne, a Numis analyst, calculated that the miner's total debt will reach $16.3 billion (£11.1 billion) by the end of next year, while its underlying cash earnings will fall by some 75 per cent to $3.6 billion. That puts its debt at 4.5 times its earnings, well above the maximum four times that its creditors allow.
Rio Tinto lost another 61p at £10.87 as Mr Toyne predicted that it could avoid a rights issue, but only by drastically cutting capital expenditure. Of the major miners, only BHP Billiton , down 15p at £10.60, could avoid dividend cuts, he said, and earnings forecasts would have to drop by another 50 per cent across the mining sector before they bottomed.
Stagecoach fell another 10.1p to 133.1p after its warning on Wednesday about falling commuter numbers, despite Sir George Matthewson, a director, buying shares.
Mapeley lost another 12.25p to 107.75p after its controlling shareholder, Fortress, the US hedge fund, stopped investors cashing out of a key fund.
The Bank of England's interest rate cut helped to lift some of the housebuilders. Barratt Developments rose 5p to 58.5p on talk that the sale of its commercial portfolio would raise the £200 million it needs. Bellway gained 27.5p to 526p as its trading statement was no worse than gloomy expectations.
Robert Lindsay
Agenda
INTERIMS
Berkeley Group
FINALS
Edinburgh Worldwide
Marston
Widney Results
TRADING STATEMENTS
Sthree
AGMs
Associated British Foods
Ceres Power Holdings
Fidelity Asian Values
Oxus Gold
Waterman Group
EGMs
Volex Group
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