Today's market overview
Asian markets fell back marginally overnight as the initial euphoria over the Spanish bank bail-out evaporated on realisation that the deal does nothing to address the underlying problem of Spain's structural deficit.
Admittedly, the Spaniards have made genuine progress in paring back central government spending, so there's a limit to how much pressure could be realistically exerted on Madrid to cut public sector spending. Like commentators across the Atlantic, Asia’s markets obviously found to difficult to appreciate why propping up the balance sheets of Spain's banks would allow the country to fare any better in international bond markets. Benchmark indices in Singapore, Taiwan and Shanghai fell, along with Japan's Nikkei 225 and Hong Kong's Hang Seng – the falls were hardly precipitous but they show that the bank bail-out has done nothing to divert attention from the broader European debt crisis that is dragging on world markets.
The president of the European Commission thinks that the only way out of the mess is for all 27 EU countries to submit their big banks to a single cross-border supervisor as part of a banking union. Naturally, José Manuel Barroso fails to mention that the European debt crisis wouldn't have occurred in the first place if the European Commission hadn't turned a blind eye to repeated breaches by member states of existing budgetary covenants set out within the Maastricht Treaty.
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High-tech manufacturer Oxford Instruments (
) has turned in strong full year results with adjusted pre-tax profits of £42.0m, up 60 per cent on the previous year and ahead of consensus estimates. Revenue rose 28.6 per cent to £337.3m as Oxford Instruments reported record performance across all three of its sectors.
By contrast, Terrace Hill (
), the indebted AIM-traded property developer, recorded an £8.36m pre-tax first-half loss of £8.36m – compared to a £1.9m profit in the first-half of 2011. The company is in the process of exiting the residential investment property market, by selling a large portfolio to Swedish property investor Akelius for £75.4m.
Upmarket fashion brand Ted Baker (
) has cited its expansion within overseas market as a critical factor in another strong rise in sales. Revenues from its store portfolio, including outlets in the US and Hong Kong, rose 16.2 per cent in the 19 weeks to last Saturday. Stockbroker Seymour Pierce maintained its profit forecast for the year to January at £29.5m and said the overseas expansion strategy could boost earnings growth over the medium term.
UK supermarket giant J Sainsbury (
) is to take on Amazon after buying a majority stake in the online e-book seller Anobii. Sainsbury bought the stake from music retailer HMV for just £1. Anobii sells e-books for a range of devices, including e-readers, tablets such as the iPad and various smartphones. It has more than 600,000 users around the world and a library of 60,000 ebooks. After an initial capital injection, Sainbury expects to own 64 per cent of the business. The deal follows the grocer’s entry into digital music downloads earlier this year.
) is to acquire Basilea's new eczema drug Toctino for an initial £146m to boost its Stiefel dermatology business. The Swiss biotech company is also entitled to further payments of up to £50m if the drug is approved by the US FDA, as well as percentage payments on US sales beginning three years after its commercial launch.