*Has soap operas’ bubble been popped by the web?: *Video killed the radio star 30 years ago. Now Facebook and reality TV are poised to bump off another icon of U.S. popular culture: the daytime soap. ABC, one of America’s big three television networks, dismayed millions of fans last week when it cancelled All My Children and One Life to Live.
*Where Groupon led, more and more intend to follow: *Just as it is hard to keep up with Groupon’s exploding user numbers and revenues, it is becoming hard to count the three-year-old company’s growing list of competitors.
About 200 Groupon rivals exist. These include Living Social, Bloomspot, Scoutmob, Tippr and BuyWithMe — not to mention the likes of Google, Facebook, Microsoft and Yahoo! — all of which want a piece of the social discounts market.
*Ripples from tsunami spread around world: *Take a short walk from the Sony factory and the intensity of Japanese industry becomes apparent, even in a relative backwater. Along one side road is a vending-machine factory, part of the complex that has put 5.5 million machines on Japan’s streets and was making inroads across Asia.
*Households feel the pain as cuts take effect: *Households are facing the biggest squeeze on their finances in more than two years as the cost of living continues to soar. The financial researcher Markit found in its monthly survey of 1,500 Britons that 36% of households said that their financial situation had worsened in April, while only 7% reported an improvement.
*China steps up inflation fight with bank reserves hike: *China stepped up moves to head off inflation by raising bank reserve requirements for the fourth time this year. The move, which comes after an increase in benchmark interest rates at the start of April, is the seventh since Chinese monetary authorities began tightening policy in October.
*Multi-channel retailers cash in on online trend: *Online shopping has gone from being an occasional exercise among a select group of shoppers to the routine method for growing ranks of increasingly picky consumers, according to a survey published this morning. The PricewaterhouseCoopers' poll of over 1,000 consumer underscores the importance for retailers to supplement their real-world shops with an online presence, with the survey results showing that, when going online, shoppers are eschewing choice in favour of consolidating their spending with their favourite retailers.
*Saudi Arabia says oil market is oversupplied: *Saudi Arabia reduced its oil production in March, the Kingdom’s oil Minister, Ali al-Naimi revealed, claiming the world oil market was oversupplied. "The market has overbalanced," he said, revealing that in March, the Kingdom – the most influential member of the Opec oil cartel – produced 8.292 million barrels per day, down from 9.125 million in February.
*NHS sues Reckitt for £89 million over Gaviscon supply: *The Health Secretary Andrew Lansley and the National Health Service are suing the consumer-goods group Reckitt Benckiser for £89 million over the supply of Gaviscon, the company’s heartburn medicine.
*U.S. debt limit will be raised, Geithner says: *Congress will have to raise the country’s debt limit, and may need to do so before a deal on future budget deficits is agreed, the U.S. Treasury Secretary Timothy Geithner has said. In a television interview yesterday, Mr Geithner said: "Congress is going to have to raise the debt limit. The responsible people [on Capitol Hill] understand that. And I'm very confident they'll do this."
*Call for new set of sustainability rules: *A lack of meaningful benchmarks often stands in the way of companies making progress in their corporate sustainability strategies, according to a new survey from KPMG.
*Glencore’s banks value trader at up to $69 billion: *Glencore, the commodities trader which is planning to raise up to $11 billion (£6.7
billion) in a flotation planned for next month, is already worth as much as
$69 billion (£42.3 billion), with its earnings set to double in two years, according to research from two banks underwriting the Swiss firm’s potentially record-breaking listing.
*Huawei ends its board secrecy: *Huawei has for the first time made public the members of its board, in an attempt to improve transparency in order to address U.S. concerns about its alleged links to the Chinese military.
*Costs of the BP oil spill: *BP has estimated that this will cost $13.6 billion, including stopping the leak from the well and cleaning up the spilt oil.
*U.K. dividends set for an 8% rise in 2011: *U.K. dividends grew faster in the first quarter of this year than at any time since the collapse of Lehman Brothers, according to research from Capita Registrars.
*Hospitality provides trade for U.K. potteries: *Britain’s ceramic manufacturers may have missed out to China in the competition to supply the official porcelain to be used at this month’s royal wedding.
*Loophole fears over Vickers bank rules: *European banking groups could take advantage of a loophole to escape higher capital requirements recommended by the Vickers Commission report on U.K. bank restructuring, fuelling concerns they will secure a competitive advantage in high street banking.
*Testing times await disaster response units: *Standing on a steel pad surrounded by gravel on the outskirts of Houston is the piece of the puzzle that eluded BP last year as its Macondo disaster unfolded.
*Carbon emissions insurance to be launched: *Investors in the fast-developing market for carbon credits will for the first time be able to buy insurance to protect them from the political uncertainty that underwriters believe has held back emissions trading in Europe.
*Competition and the banks: *Britain has long struggled to make its banks more competitive, and a series of official reports in recent years has counselled measures that might bring this about. Most have foundered on the rock of consumer apathy. Few bank customers seem to know or care greatly how much they pay for their accounts – preferring to believe in the dubious and untransparent concept of “free banking”.
*Luxury carmakers eye India’s super-rich: *Global ultra-luxury carmakers are pouring into India. The country that is home to almost half a billion of the world’s poorest citizens, as well as the largest national group of billionaires outside the U.S., has become the next key market for sports cars worth more than $1 million.
*OFT fears narrowing range of powers: *The Chairman of the Office of Fair Trading, which is facing a merger with the Competition Commission, is calling for the new combined authority to retain its consumer protection powers so it can continue to tackle complex cases.
*RBS set to sell real estate debt: *Royal Bank of Scotland is preparing to sell large portfolios of real estate debt in Germany and the U.S. as it continues to dispose of non-core businesses.
*Japan’s resilience: *Just over five weeks on from the horrendous east Japan earthquake, the nation’s recovery is well under way. Equities have clawed back about half of the ground lost as investors have taken more rational views of the impact on profits (scaffolders, grouters and dam-builders have done well; banks and electronics companies badly). Little can be said about the ultimate damage to the economy, though, except to note that it will be significantly worse than after the localised Kobe quake of January 1995, when real gross domestic product did not fall. According to cabinet office estimates, damage to Japan’s gross capital stock this time is in the range of ¥16,000 billion to ¥25,000 billion, or 3 to 5% of nominal GDP, compared with Kobe’s ¥9,900 billion, or 2%. Beyond that, a shortage of hard-to-replace components is hitting industrial production in non-affected areas. Shutdowns of nuclear and thermal power plants are curbing output in areas that depend on them (Tokyo Disneyland reopened on Friday but closed early to conserve power). On current trends electricity supply may be about 15% short of peak demand in Tokyo and Tohoku over the summer.
*Turkey: overheated: *Durmus Yilmaz has been something of a riddle as Governor of Turkey’s central bank (CBRT). He has had a steady hand on the inflation tiller and he staked his independence from the government early on after it mishandled the 2006 succession. But, as he retires this week, he bequeaths an unorthodox monetary policy on his successor that has highlighted the imbalances that threaten Turkey’s economy. With an election looming, the current account deficit widening and banks screaming that monetary policy is biting into their profits, new Governor Erdem Basci has an overflowing in-tray. Turkey’s gross domestic product grew at an annual rate of nearly 9% in 2010 after shrinking 4.7% the previous year. The CBRT has chosen to cool soaring lending and domestic demand by raising banks’
reserve requirements steeply rather than by the more direct step of lifting interest rates. It reckons that this type of measure will drain enough liquidity from the market to restrain lending, which is expanding at an annual 35% clip against a target of 25%. The CBRT thinks the liquidity squeeze will begin to take effect from the second quarter of 2011. Some $33 billion of liquidity may already have been sterilised, according to BGC Partners.
*Vallar: raising the stake: *Who would true Vallar see, let him come hither.
When the London-listed cash shell announced its $3 billion purchase of 25% of Indonesia’s Bumi Resources and 75% of Berau Coal Energy in November, it was not quite the acquisition investors expected. Established by Nathaniel Rothschild and seasoned mining executive James Campbell, Vallar’s mission was “to acquire a single major company active in the global metals, mining and resources sector” and seize “opportunities to acquire controlling interests”. Instead, its maiden deal was a reverse takeover that gave coal producer Bumi’s shareholder Bakrie Group 43% of Vallar and Berau’s main vendor 25%. That, however, was only the start: the pack is being reshuffled.
Vallar wants to lift its stake in Bumi via a further share exchange to between 40 and 51%, drawing key Bumi investors on to its own register.
Indonesia-centric Bumi shareholders may be restricted by their mandates from holding London-listed shares. But foreign shareholders are likely to be lured by the significant increase in index-tracker demand for shares in Vallar that should accompany its eventual inclusion in the benchmark FTSE 100 index.
*Banks’ claims they will move abroad are ‘empty threats’ says Financial Stability Board Boss Svein Andresen: *Claims by banks that they will relocate to foreign shores in protest at strict new rules are largely empty threats, the global financial regulator has suggested. Big banks in the UK and US have threatened to "migrate" if they are subjected to strict new regulations, taking tax revenues and future investment with them.
*Glencore Chairman Simon Murray hits back at Lord Browne over corporate governance claims: *Glencore has no corporate governance problems, its new Chairman Simon Murray has declared, blaming reports to the contrary on Lord Browne, his one-time rival for the job of steering the commodities miner and trader through Britain’s biggest stock market flotation.
*Burberry to invest in London ahead of Olympics: *Burberry, the luxury goods brand, is planning to “aggressively reinvest” in London by reconfiguring its store portfolio and opening new retail space, according to Chief Executive Angela Ahrendts. The company, which is based in London but makes only a third of its sales in the European market, aims to make the city its “greatest flagship market”, she said. Next year’s Olympics have also spurred Burberry’s decision to boost its London presence.
*Government picks U.S. companies over U.K. firms to operate flagship
website: *David Cameron’s “Start up Britain” enterprise campaign has been criticised after it emerged that two U.S. companies operate one of its flagship small business engagement websites.
*U.K. bankers take Bahrain to court over human rights ‘violation’: *Three British bankers detained in Bahrain for more than a year are taking the Gulf kingdom to the United Nations Human Rights Council (UNHRC) over what they describe as “serious and systemic violations” of their rights.
*Goldman Sachs tells investors to take profits from oil, cotton and copper:
*“Sell oil, cotton, copper, soybeans and platinum!” urged the commodities oracles at Goldman Sachs, in a surprise note this week. It was remarkably ironic timing, for investors have been drooling for the past few days over the prospect of further exposure to the booming commodities market through Glencore, the trading house that has finally announced its intention to launch one of London's biggest ever flotations.
*Fancy a dip in emerging markets? Try Templeton: *The Templeton Emerging Markets Investment Trust is one of the best ways to play growth in emerging markets. Mark Mobius, the emerging markets guru who founded the fund, has a very bright team around him that has enjoyed significant success. “There is a growing realisation that, given what is happening in Greece, Portugal, Spain and Ireland, maybe the developed markets are not as safe as they may appear,” he said. “Trust in emerging markets is growing.” He also said that no investors could ignore India, despite recent weakness, and that China’s recent underperformance was because of a raft of company flotations that soaked up liquidity from the market. He is more interested in so-called “red-chip” stocks listed in Hong Kong rather than those listed in China itself. The unaudited net asset value (NAV) of the fund including income on
11 April was £2.397 billion, representing a NAV per share of 726.54p. The trust was first recommended on 05 January, 2009 at 284p. Templeton Emerging Markets IT. 672p. Questor Says “Hold”.
*SFO looks into scam that fooled North Korea: *The Serious Fraud Office is looking into an elaborate scam that took in the former England Football Manager Sven Goran-Eriksson, former spymaster Sir John Walker and the North Korean government. Investigators are also looking at how the same fraudster took control of almost half of a London investment bank without paying for the shares.
*IMF raises alarm over exchange traded commodities funds: *One of the most successful investment vehicles of the last decade could be sowing the seeds of the next financial crisis, a global financial watchdog warned. Pension funds and retail investors could lose billions of pounds in investment schemes sold widely in the US and Europe with the promise of low costs and higher returns than bank deposit rates.
*BA and union Chiefs to hold talks this week: *Senior figures at British Airways and the Unite trade union will meet this week in the latest attempt to solve the long-running cabin crew industrial dispute. BA chief executive Keith Williams and the general secretary of Unite, Len McCluskey, will hold face-to-face talks at an undisclosed location on Tuesday. In a move described by a trade union source as "very positive", the meeting will also be attended by representatives from Bassa, Unite's main cabin crew branch.
*Morrisons joins supermarket petrol war: *Morrisons has joined the supermarket petrol war by knocking 6p a litre off petrol and diesel prices at its 296 garages for three weeks from Monday 18 April. This takes the average price of unleaded petrol to around 126.72p – but customers will only receive the discount if they spend £40 or more in store.
*Bank shake-up could hit share values: *Leading bank shareholders have warned that Independent Commission on Banking plans to ring-fence retail operations could have a serious effect on their share values, despite early claims that it had let them off the hook.
*Goldman accused of ‘the big short’: *At the time it seemed just like any other meeting on the 30th floor of Goldman Sachs’ New York headquarters. But now it is revealed as a pivotal moment for the most famous of investment banks - and the financial meltdown that still grips the world. About 20 executives gathered for the meeting on December 14, 2006. At the time, most countries were enjoying a massive boom in housing markets and investment banks were making huge profits.
*Care home firms seek more NHS patients: *The Bosses of Britain’s four major private healthcare groups are to meet next month to set new standards for looking after NHS patients in an attempt to persuade the Government to use their services more. Dr Peter Calverley, chief executive of Four Seasons Healthcare, is working with Martin Green of English Community Care to come up with a set of standards for the care home industry.
*AstraZeneca to sell £1.3 billion dental unit: *Pharmaceuticals giant AstraZeneca has begun a £1.3 billion auction of its dental implants and medical devices division as it looks to focus on its core medicine business.
*Bidding race is on for RAC: *The private equity Owner of Europe’s largest second-hand car dealer is gearing up to buy motor rescue firm the RAC, which was recently put up for sale by insurance giant Aviva. Clayton Dubilier & Rice, which bought British Car Auctions last year and also owns a stake in car rental firm Hertz, is one of several buyout groups in the running. It could find itself fighting it out with Carlyle, another Hertz investor.
*U.K. growth depends on firms splashing the cash: *British firms must splash their cash to take advantage of an improving world economy and boost dividend payouts to investors or run the risk of being taken over “on the cheap”, a leading economic forecaster warns.
*Waste is a burning issue at Powerhouse: *A renewable energy firm planning to turn tyres and sewage into power is joining Aim via a reverse takeover.
PowerHouse Energy will float on April 28 with a market value of £51 million after taking control of cash shell Bidtimes with the advice of Merchant Securities.
*BT rings in changes with much improved profits: *There are signs that BT is “turning around”. Investors may be familiar with its headline-grabbing £9 billion pension fund deficit in December 2008 and less so with its compelling story.
*Oracle moves over from plus this week: *A coal miner planning to develop a £200 million open-cast pit in Pakistan is expected to debut on Aim this week. Oracle Coalfields will complete its move from the Plus Market this Wednesday. Advised by Libertas, it will be have a value of £21.4 million after a £3 million fund raising.
*Alliance Trust costs up as Chief given 34% rise: *Alliance Trust has revealed that Chief Executive Katherine Garrett-Cox enjoyed a 34% pay hike last year and that its battle with activist shareholder Laxey Partners has added significantly to £1 million to the company’s expenses.
*Dynamic duo set sights on power of the sea: *While banks insist they are playing fair by small firms, some sector watchers complain that the technology hopefuls Scotland is relying on to power economic growth in future are finding it ever harder to raise funding from newly risk-averse lenders.
*Survey points to better times in labour market: *The improvement in Scottish labour market conditions continued to gather pace last month with the demand for permanent staff rising at the fastest pace since September 2007, an influential survey has revealed.
*Dismantling the Lloyds empire: *More than two- and-a-half years after the notorious City cocktail party at which Gordon Brown and Sir Victor Blank cooked up possibly the unhappiest takeover in history, Sir John Vickers’
Independent Commission on Banking (ICB) last week took its turn to rub salt in the wounds of Lloyds Banking Group.
*Red alert for endowment mortgage holders: *A leading independent analyst has warned that many homebuyers who took out endowments 25 years ago to pay off their mortgages are likely to be shocked to find themselves short of cash to pay off their home loans when their policies mature this year.
*Vacancies on the rise but pay increases are kept in check:* Demand for staff has increased at its fastest pace since September 2007 as the recovery from the recession extends into the jobs market, figures show. Vacancies for permanent staff have risen at their fastest rate for three and a half years, while demand for temporary staff increased for the 14th consecutive month, according to the Bank of Scotland's monthly jobs report. All eight economic sectors monitored by the bank reported rising requirements for staff during March, with the information technology (IT) and computing industry leading the charge for permanent workers.
*Investors mull further asset sale at BP if Rosneft's Arctic deal collapses:
* Some of BP's biggest shareholders will press for the oil giant to ramp up its $30 billion (£18.4 billion) asset disposal programme if the $16bn Arctic joint venture with Russian state-controlled Rosneft is derailed. But both the company and fund managers threw doubt on reports that there was a ground-swell of institutional opinion that the asset sell-off should be doubled to $60 billion irrespective of whether the Russian deal, currently snarled up in the courts, goes through. Assets worth $24 billion have already been sold off by BP since last summer to help cover the costs of the Gulf of Mexico Macondo well disaster, in which 11 workers died, last April.
*Barclays, HSBC and Standard Chartered face domicile move chatter:* A top City fund manager has revealed institutional investors are in "regular talks" with Barclays, HSBC and Standard Chartered over possibly shifting their tax domiciles from the UK - but that most still favour the status quo.
It comes amid weekend reports that investors speaking for a combined 10.0% of Barclays have told the board they would prefer the bank to be domiciled abroad given the regulatory and capital clampdowns in the UK, with New York apparently the preferred choice.
*Beijing increases banks' reserve level:* China raised banks' required reserves for the fourth time this year, extending the fight against liquidity and stubbornly-high inflation in the world's second-largest economy. By increasing the amount cash lenders need to hold by 50 basis points to 20.5%, China's central bank aims to reduce the amount of cash banks have to loan to customers, curbing inflation, which rose from 4.9% in February to 5.4% in March.
*Horta-Osorio eyes St James's sell off:* Lloyds Banking Group is again reported to be considering selling off its majority stake in up-market financial services group St James's Place as it offloads parts of HBOS. The bank owns 60% of St James's Place, which offers wealth management services to high net worth individuals and is worth about £1 billion, but is thought to be seen as non-core by new Chief Executive Antonio Horta-Osorio.
*Head of Institute of Directors has his own take on Scotland's election
promises:* Though keenly interested in politics and current affairs since he was a boy growing up in Kilmarnock, David Watt is holding out little hope that the forthcoming Scottish Parliamentary elections will have any significant impact on the economic climate. According to the head of the Institute of Directors (IoD) Scotland, what politics in this country needs is a healthy injection of realism. While every business and household is carefully considering the necessity of nearly any outlay, politicians are talking far too much about how to spend diminishing public resources.
*New tax data suggests we 'stop abusing City workers':* City workers pay £
11 billion a year through income tax and national insurance - the same as the entire population of Scotland - according to figures published. The data prompted calls for commentators to "stop abusing" workers in the Square Mile and instead acknowledge their contribution to the economy.
*Time to devolve meat inspection say processors:* A blueprint for a devolved meat inspection service in Scottish abattoirs and meat processing plants will be on the desk of the cabinet secretary for rural affairs within days of next month's parliamentary elections in Scotland. That was the pledge given at the week-end by Alan Craig, President of the Scottish Association of Meat Wholesalers (SAMW), at the association's annual meeting and conference in Glasgow. Meat wholesalers are up in arms about the cost and bureaucracy of the current inspection system operated by the UK Food Standards Agency.
*Cherry on top for fruit farmers following Waitrose's UK-only pledge:*Waitrose, the up-market grocery chain owned by John Lewis, committed itself to selling only UK-grown cherries for five weeks at the height of the fruit's season. The chain - which has three stores in Scotland and is opening a fourth at Newton Mearns - will stock only British cherries during July and August. Imported fruit - from North America, Spain and Turkey - will continue to be used at the start of the season in May and again in late August and September.
*McLaren takes moral high ground over beef:* The production of beef from Scotland's uplands was defended at the SAMW conference by Jim McLaren, the new Chairman of the red meat industry promotional body, Quality Meat Scotland. McLaren, who stood down as president of NFU Scotland in February, dismissed claims that producing meat was an inefficient way of utilising protein which could be consumed directly by humans. Research by Professor Mike Wilkinson at Nottingham University had exposed the fallacy of the argument frequently promulgated by the anti-meat lobby.
*Little Chef, big chef: Blumenthal renews links with motorists' favourite restaurant chain:* Triple Michelin-starred chef Heston Blumenthal is to return to restaurant chain Little Chef to help with a revamp, three years after he shot a television documentary with the company. Takeaway sandwiches are to be added to menus, although braised ox cheeks are not expected to replace Little Chef's Olympic breakfast fry-ups.
*Esporta deal should work out for Virgin:* Sir Richard Branson's Virgin Active gym chain is near to clinching a deal to buy its smaller rival, Esporta, City sources said. The pair have been in advanced talks on price, and it is thought a deal could be announced within weeks. A deal would take Virgin Active, in which Branson has a 76% holding, to more than 120 clubs in the UK, compared with about 70 outlets currently.
*High street on the front line as retail heavyweights report:* Full-year results from Tesco and Argos-owner Home Retail Group keep the embattled high street centre-stage this week. Tesco's performance last year will be presented by new Chief Executive Philip Clarke, who took over from Sir Terry Leahy at the supermarket giant a month ago. Britain's largest supermarket recently went head-to-head with Asda in a £200 million price war and promised to pay shoppers "double the difference" on products found cheaper at the Wal-Mart owned rival. Tesco has been upping the ante since a poor Christmas left it trailing behind its biggest rival.
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