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Wednesday's news and views

Created:

18 June 2008

Written by:

Tanya Malick

• Like-for-like sales at Woolworths' high street shops fell 2.2% in the first 19 weeks of its financial year, as it disposes leasehold interests in four London stores to Waitrose for around £25.5m. (IC COMMENT)

• PV Crystalox Solar, which makes silicon wafers for the solar electricity industry, has won a deal with newly formed Intel spin-off SpectraWatt. (IC COMMENT)

• Like-for-like sales excluding fuel rose 3.4% at Sainsbury's in the first quarter, in-line with its expectations, but down on the previous quarter and less than many analysts had been hoping for. (IC COMMENT)

• Media and exhibitions group United Business Media (UBM) said merger discussions with business publisher Informa have ceased, although it still believes a tie-up will deliver value to both groups. (IC COMMENT)

• Financial software group Misys expects to report good revenue and operating profit growth for the year to May, with no significant impact so far from the credit crunch.

• Cash is slowly dwindling away at cash-shell Falkland Gold and Minerals as the board searches in vain for a new exploration project.

• Road and infrastructure support group Mouchel said trading in the year to date has continued to be in-line with company expectations with demand in its core market remaining strong.

• Investors have welcomed news that Aim-quoted shipping group Goldenport has made a book profit of US$20.3m on the sale of its bulk carrier vessel 'Samos'.

• Electronic tagging specialist Dmatek has had its home detention systems contract with the Ministry of Home Affairs in Singapore renewed for five years.

• Cadogan Petroleum has bagged net proceeds of £139m from its London float, valuing the Ukraine focused oil and gas firm at £531.5m.

• Latin America-focused Hochschild Mining has beefed up its investment in Lake Shore Gold from 19.99% to 35%.

• Credit crunch problems are pushing more businesses towards home credit lender S&U, which expects another good year in 2008.

• Shares in property fund manager Braemar fell over 11% after it said full-year pre-tax losses widened following losses at the group's Armchair Property Investor business.

FOR A SUMMARY OF LATEST MOVEMENTS IN EQUITY, COMMODITY AND CURRENCY MARKETS, SEE THE 'MARKETS' PAGE

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NEWSPAPER SHARE TIPS:

Full round-up of newspaper share tips (sourced from Sharecast).

PRESS SUMMARY:

Informa, the exhibitions group, has received a takeover approach from a private equity consortium understood to be led by Providence. The news came after the announcement that Informa's £3.4bn merger talks with United Business Media, its rival, had collapsed.

The Times disclosed on May 13 that Informa was being circled by a number of private equity groups. Others to have run their rule over Informa include Candover, Cinven and Apax. Informa did not disclose details of its latest approach, but it is thought that Carlyle, another private equity group, is also part of its consortium.

American regulators are heading for a direct confrontation with the Financial Services Authority after trying to slap new trading restrictions on the London oil market without the approval of the British watchdog. The Commodity Futures Trading Commission announced new disclosure requirements yesterday for trading in West Texas Intermediate (WTI) oil futures contracts on the City's ICE Europe exchange, which controls 30% of the global market. A spokesman for the FSA said that the step had been taken without its approval and ICE Europe said that it would agree to the CFTC's request only subject to FSA acceptance, reports the Times.

The new management of Northern Rock has launched an investigation into whether there are grounds for bringing legal action against the board who presided over the bank's near collapse last September. Ron Sandler, the executive chairman, told the Financial Times that he and Northern Rock's lawyers, Freshfields, were conducting a review of the conduct of the previous board to see if action should be taken against executives including Adam Applegarth, the bank's former chief executive.

Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. "A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist. A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September, reports the Telegraph.

Deutsche Bank has been privately scolded by the Financial Services Authority for advising clients to short rights issues at Britain's embattled banks to cash in on a collapse in their shares. The note to clients from its equity trading desk is understood to have infuriated the regulator and been one of the catalysts for its sudden clampdown last week on short-selling during rights issues, on which it provided more detail yesterday, reports the Telegraph.

Global Payments, the card payment processing giant, is to push into the UK market in a $439m (£224m) deal with banking conglomerate HSBC. The Atlanta-based group will take a 51pc share of a new business spun out of HSBC, with the bank keeping the balance, writes the Telegraph.

Whitbread, the pub and hotel group, yesterday ruled out an asset swap with rival Mitchells & Butlers as it posted credit crunch-defying sales for its first quarter. Whitbread's chief executive, Alan Parker, said: "We have absolutely no intention of moving out of the pubs restaurant business," reports the Independent.

Investors have scaled back their expectations for interest rate rises at the fastest speed in 14 years after Meryvn King indicated that borrowing costs may remain on hold for some time. Markets are now pricing in only one rate hike before the end of the year, compared with the three borrowing cost increases they were anticipating only yesterday, reports the Telegraph.

Hundreds of thousands of public sector workers are threatening to tear up agreements and demand higher pay as the cost of living surges. Inflation figures released yesterday were worse than expected, prompting Unison, one of the biggest public sector unions, to call for the reopening of a pay deal for 500,000 health workers clinched only two weeks ago, reports the Times.

Food & Drink Group, owner of the Jamies wine bar chain in the City, has become the latest victim of the downturn in corporate activity in the Square Mile. The company, which had to issue a profit warning earlier this year following a sharp deterioration in trade, had its shares suspended on Tuesday as it confirmed that it was in talks with lenders to secure the funding needed to keep its business running, reports the FT.

Britain became the world’s largest arms exporter last year, according to government figures released on Tuesday, overtaking the US, which normally occupies the top slot. The UK won £10bn of new defence orders in 2007 from overseas, giving it a 33 per cent share of the world export market, according to figures released on Tuesday by the Defence and Security Organisation, set up to promote Britain's defence exports. Export orders totalled £5.5bn in 2006, reports the FT.

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