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Tuesday's news and tips

Created:

20 October 2009

Written by:

ShareCast

■ Lloyds Banking has continued to divest its peripheral businesses with the sale of the Bank of Scotland Portfolio Management Service and two other private client businesses

■ Qatar Holding is to sell 379m shares in Barclays, netting a £600m profit and stoking speculation that a Qatari sovereign wealth fund will bid for supermarket group Sainsbury.

■ Education group and FT publisher Pearson has upped its estimate of full year earnings after trading better than expected in recent weeks.

■ Swiss mining company Xstrata said its operating and financial performance in the third quarter remained strong.

■ Assets managed by private client stockbroker and fund manager Hargreaves Lansdown jumped by more than 20 per cent in the past three months

■ Fast growing software company Autonomy had another spell of strong organic growth in the third quarter.

■ Electronic payments firm Earthport announced changes at the top after full-year pre-tax losses doubled.

■ AIM-listed oil explorer Global Petroleum has had a positive result on the fifth well of its part-owned Leighton project.

■ Restructuring costs and adverse currency movements put a bit of dent in profits at public relations firm Next Fifteen Communications (IC COMMENT).

Continues below...

■ Eclectic Investment Trust saw NAV rise 22.2 per cent in the period from 31 May to 30 September, outperforming the FTSE All Share Index, which rose 17 per cent in the same period.

■ Oil and gas exploration company Sterling Energy has sold off its US business for an initial $90m.

■ Welsh TV Group Boomerang Plus has acquired Welsh TV production company Indus for up to £2.4m.

■ Shares in Petroceltic International surged this morning after the company said a post-fracture stimulation had substantially increased the flow rate at its AT-1 well.

■ Bakery chain Greggs served up a 2.5 per cent rise in third quarter sales and said it is on track to deliver full results in line with company expectations.

■ The loss of a major client has proved the final straw for management of Homeserve, which has decided to close down its property repairs operations.

■ Lower interest rates hitting investment revenues cut income at fund manager Rathbones in the three months to September.

■ Car dealer Inchcape full-year results are expected to be significantly ahead of previous expectations, but cautioned that conditions are expected to remain challenging

■ Aerospace and engineering group Hampson Industries today announced its aerospace tooling division has been awarded a new contract worth £18m.

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 (20 OCT 2009):

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

PRESS HEADLINES:

The Government has backed away in the face of speculation that it will impose a windfall tax on banks to punish them for paying excessive bonuses.

The move came yesterday as City lawyers warned that rushing through legislation to crack down on bonuses would be unworkable and a legal minefield. Downing Street distanced itself from a controversial one-off windfall tax, telling banks that it was up to them to ensure that they were acting appropriately, but the Conservatives have said that they may impose a one-off levy, the Times writes.

Anger over bank bonuses gathered a new head of steam yesterday as the country's top regulator urged lenders to pare back their payouts and news emerged of a £5m "golden hello" for 11 traders at the state-backed Royal Bank of Scotland, the Telegraph adds.

Apple shrugged off the global downturn to report the company's most profitable quarter thanks to record sales of iPhones and Macintosh computers. An updated iPhone in June and a new version of its operating system for its Mac computers in August helped the company to raise profits by nearly 50 per cent on the same quarter a year ago. The net profit was $1.67bn (£1.01bn), or $1.82 a share, in its fourth quarter to September 26, up from $1.14bn, or $1.26 a share, in the year-ago period, the Times writes.

Nicholas Levene, the financier who faces millions of pounds of legal claims from investors, has resigned from the board of Leyton Orient Football Club. The well-know City figure telephoned Barry Hearn, chairman of Leyton Orient, on Sunday evening. It was the first time Mr Levene, who was vice-chairman of the club, had been in touch since mid-August when fears about clients' investments started to engulf him, the Telegraph reports.

Bob Diamond, the president of Barclays, has turned down the opportunity to try out for one of America's biggest banking jobs, after he was approached by the board of Bank of America (BoA) to replace Kenneth Lewis, its retiring chief executive. Mr Diamond, 58, was shortlisted by BoA's recruitment committee and was invited to attend an interview, a bank source said, but declined to take part, the Times reports.

Ben Bernanke said on Monday that it was "extraordinarily urgent" that the US and Asia adopt policies that prevent a revival of global economic imbalances as the financial crisis ebbs. The Federal Reserve chairman warned that global imbalances – the big gaps between national saving, consumption and investment rates reflected in large trade deficits and surpluses – had helped cause the crisis and needed to be corrected, reports the FT.

Fears are growing that General Motors is planning swingeing job cuts throughout its European operations if lawmakers in Brussels block its sale of GM Europe (GME) to a consortium led by Magna International. Sources close to Vauxhall dismissed as "pure speculation" claims that the proposed sale of GME – including Opel in Germany and Vauxhall in the UK – to Magna, the Canadian car parts maker, might fall though as a result of pressure from the European Commission, the Independent reports.

The winding-up of Lehman Brothers in Europe, one part of the largest-ever global bankruptcy, is heading into record territory for accountancy and legal fees in the region, as well as the size of the claims made against the overseas parent company. The joint administrators, in a report to creditors, revealed that they are readying a new claim of $90bn (€60.2bn) against the US parent of the failed bank, bringing the claims by its European arm against different Lehman entities globally to $208bn. In the report, PwC revealed that in their first year working on the case they have charged £154m (€168m) in fees for work on the company's winding up, the FT reports.

UK companies looking to restructure debts have had their plans thrown into doubt after the Treasury tightened up tax rules around debt buy-backs. The changes – which follow fears that the government was thought to be losing hundreds of millions of pounds of lost revenue – will force companies that buy back debt at a discount to recognise immediately any profit on the buy-back. Marcus Rea, director at Deloitte, said the number of debt buy-backs could fall significantly as a result, the FT reports.

Gannett, the largest newspaper publisher in the US and owner of the UK's Newsquest, said advertising revenues are still skidding downwards on both sides of the Atlantic. But the group highlighted a modest slowdown in the rate of decline, and said that lay-offs and other cost-cutting had kept the company in the black over the past three months, the Independent reports.