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Friday's news and tips

Created:

10 October 2008

Written by:

Tanya Malick

BANKING CRISIS LATEST: Prime minister Gordon Brown denounced the "unacceptable" behaviour of the Icelandic authorities, who froze the accounts of hundreds of thousands of British savers, accusing them of taking illegal action. For his part, an angry Geir Haarde, his Icelandic counterpart, accused Britain of performing an "unfriendly act" against his country by using antiterrorist legislation to seize Icelandic accounts, reports the Times.

Continues below...

Icelandic bank Kaupthing has blamed Britain for its collapse, claiming the Treasury's refusal to allow it to participate in the £500bn rescue package for UK lenders triggered its downfall, writes the Telegraph.

HSBC raised the stakes surrounding the Government's £500bn banks recapitalisation programme yesterday by announcing that it had injected £750m into its UK business. HSBC's speedy compliance with the Government's demand on Wednesday that all banks bolster their Tier 1 capital - a measure of financial strength - heightens the pressure on its rivals to respond, writes the Times.

The Belgian government yesterday offered to guarantee all new bank financing for one year after it joined forces with France and Luxembourg for the second time in a fortnight to come to the aid of Dexia, the Franco-Belgian bank, reports the Financial Times.

Citigroup has called off its battle for control of Wachovia as the US government appeared to be extending plans to buy shares in ailing financial institutions. Talks between Citigroup and Wells Fargo fell through after the two banks failed to come to an agreement over how to carve up Wachovia, the Telegraph reports.

KEY COMPANY ANNOUNCEMENTS:

■ Gas storage group Portland Gas says funding discussions are progressing and potential investment terms have been discussed with a range of parties for its flagship project in Dorset. (IC COMMENT)

■ Insurance software group Innovation confirmed that Paul Hemsley has, by mutual agreement, agreed to step down as the group's finance director. (IC COMMENT)

■ Indian outsource group Infosys will not raise its 600p offer for business software group Axon, seemingly leaving the way clear for a higher rival offer from HCL. (IC COMMENT)

■ Oil & gas facilities service provider Petrofac says demand remains robust over the past three months with a continuing positive outlook for new project awards.

■ Admiral is on track to "hit or exceed" analysts' consensus profit estimates for 2008 following a good third quarter, the car insurance giant claimed today.

■ Sales dropped 0.5% at the department store business of John Lewis last week, although that was much better than the 8.3% slump a week earlier.

■ Turbo Power Systems is set to lose out on millions of dollars in production revenues after agreeing to scrap a contract with Hamilton Sundstrand.

■ Gas storage group Portland Gas says funding discussions are progressing and potential investment terms have been discussed with a range of parties for its flagship project in Dorset.

■ Energy and environmental consultancy group RPS has acquired Paras, a company that provides strategy consultancy advice to oil and gas companies such as BP and BG Group, for a maximum of £6.4m.

■ Abacus Group has agreed terms a recommended offer from US giant Avnet Inc worth 55p a share in cash, valuing the electronic components distributor at £42.2m.

■ IT services company Xploite said its managed services and storage unit Anix has bagged a £2.8m contract with an unnamed leisure firm.

■ Gold producer Uruguay Mineral Exploration (UME) missed its production targets for the first quarter of the year due to delays in obtaining permission to open a new pit.

■ E2V's first half will show good progress with the good growth in electronic tubes offsetting slower growth from sensors and semiconductors.

■ Russian food retailer X5 saw a sharp rise in like-for-like sales over the third quarter but has scaled down its expansion plans to cope with the worsening economic environment.

■ Engineer Renishaw said trading for the three months to end September had been strong and while worldwide economic conditions are uncertain the group remains confident of prospects for the current year.

■ Strategic Thought is nearing profitability after revenues from its core enterprise risk management operations increased by 67% to £3.4m in the six months to 30 September 2008.

■ AIM-listed personal security and training group Red24 said trading has been in line with forecasts and remains confident of meeting market expectations.

FOR A SUMMARY OF LATEST MOVEMENTS IN EQUITY, COMMODITY AND CURRENCY MARKETS, SEE FT.COM'S MARKETS PAGE.

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NEWSPAPER SHARE TIPS (10 OCTOBER 2008)

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

OTHER PRESS HEADLINES:

Tony McNulty, the new Work and Pensions Minister, yesterday became the first government minister to acknowledge that Britain was heading for recession. He said the success of moves to shore up Britain's banks "will be the precursor to how deep and how long the recession will be", according to the Independent.

Vodafone yesterday moved closer to securing control of South Africa's leading mobile phone operator in a deal that will cost the British group 22.5bn rand (£1.4bn). Vodafone's partner, Telkom, indicated it was willing to sell 15% of its mobile arm Vodacom, which would take Vodafone's holding to 65% in a business with 34.6m subscribers, according to the Times.

Sir Alan Sugar, the millionaire founder of Amstrad computers, has acquired a near-4% stake in Woolworths, the troubled retailer. The stake building is tentative evidence of bottom fishing, following weeks of stock market turmoil which has wiped billions of pounds off the value of quoted companies, writes the Telegraph.

Consumers are being hit by excessively high gas and electricity prices, Tesco has said, as it criticised Ofgem, the regulator, for not going far enough with the inquiry into energy markets it published this week. Tesco feels that companies are paying too much for their energy, and is trying to drive its costs down as it and other retailers compete to cut prices, according to the Financial Times.

Asset manager Henderson Group is understood to be looking at a fresh round of cost cuts and a further round of redundancies after cutting 30 jobs earlier this year, writes the Independent.

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