Business news and markets:live

Business news and markets:live

Brenda Kelly, senior market strategist at IG, said this move constituted a “warning shot” to the US that markets are starting to question its creditworthiness:

Quote News that Hong Kong has raised collateral haircuts on US treasury bills appears to be something of a warning shot to US politicians. The implications are that US treasury bonds are considered broadly more risky and the Hong Kong exchange is clearly preparing for the worst case scenario – a US default. The more likely explanation is that Hong Kong is simply telling the US to get its act together.

Analysts divided on Informa break-up

11.01 In the FTSE 250, Inmarsat, the satellite communications group, has slumped 1.3pc after analysts at Societe Generale told clients to “sell” the shares. Meanwhile, Informa is still in the red and is off 1.7pc following news of the departure of its finance director Adam Walker. The group is regularly the subject of bid speculation, and analysts are divided this morning as to what this development means for any potential takeover approach.

Ian Whittaker at Liberum Capital said:

QuoteThis now means that Informa have lost both their CEO and FD within the past 3-4 months. There will be spec this move could be due to Mr Walker being disappointed at now being appointed FD but, whatever the reason, it is not positive. To us, it also suggests that a short-term break-up of Informa is unlikely (we think Mr Walker would have stayed around to guide this).

However, Alex DeGroote at Panmure Gordon argued:

QuoteIn our view, the market should now discount an increased probability of break-up at Informa over the next year or so. Rigby and Walker, to a lesser extent, were the architects of the current group conglomerate structure/strategy.

Greek unemployment hits 27.6pc

10.48 Joblessness in Greece climbed again in July, edging up to 27.6pc compared with a revised 27.5pc a month earlier. The figures come a week after the country’s biggest labour union, GSEE, predicted that unemployment will breach the 30pc mark in the next few years.

Unemployment among young people, the hardest hit group, rose to 55.1pc in July, from 54.9pc in July.

Markets sniff resolution in Washington

10.23 Markets across Europe are in the green this morning, with the FTSE 100 up 0.84pc, the Dax in Germany rising 0.95pc, and the French Cac climbing 1.3pc. Here’s Mike van Dulken of Accendo Markets:

Quote Hopes of a thawing in the Washington deadlock given markets reason for cheer, with speculation of a solution to raise the debt ceiling, at least in the short-term, and Republicans possibly softening on the Obamacare element of the budget, reducing fears of a prolonged partial government shutdown and worse, a technical sovereign default.

Filipino restaurants ranked on tax payments

10.07 Weekly government-sponsored advertisements in Filipino newspapers are ranking restaurants, but not on the quality of the food. In an attempt to shame tax dodgers into paying up, the government is publicising how much tax they pay. Finance secretary Cesar Purisima said the move was aimed at getting the public to question the practices of the businesses they patronise.

Quote We want to raise awareness about tax payments and ask the public if the numbers we observe make sense.

Chinese state media criticises ‘pitiful’ brinkmanship in US

09.34 An editorial in the government-controlled China Daily newspaper has urged Congressmen in Washington to “stop manufacturing crises” that threaten the global economy. China would be in a very precarious position in the event of a US government debt default – it is the world’s largest holder of US debt, holding $ 1.277 trillion in Treasury bills in July.

QuoteFive years after the start of the global financial meltdown triggered by the bankruptcy of Lehman Brothers, it is pitiful that the US is now putting the fragile global recovery under renewed threat with its mind-boggling political infighting.

As the world’s largest economy and the home of the global reserve currency, the US surely has the wherewithal to fund its government and avoid a catastrophic default by raising its self-imposed debt ceiling.

Yet the astonishing failure of the US Congress to put national needs before their partisan interests has sparked fears among investors and governments around the world that maybe it is time to think about the unthinkable.

Budget stand-offs don’t just happen in the Washington

09.21 Dutch finance minister Jeroen Dijsselbloem has cancelled his trip to the IMF and World Bank annual meeting in Washington today to stay home and resolve a budget dispute in his own parliament. Dijsselbloem, who also heads up the Eurogroup of eurozone finance ministers, is struggling to win approval for his austerity-focussed budget from the upper house.

Dutch finance minister Jeroen Dijsselbloem is preoccupied with his own budget impasse

GKN, Ladbrokes and WH Smith top risers on FTSE

09.02 Back in the stock market, Lloyd’s List publisher Informa has fallen 2.5pc on news its finance director, Adam Walker, is moving to FTSE 100 car parts maker GKN, which has gained 2pc on the appointment. Elsewhere among the risers, Ladbrokes has gained 5.8pc on news Playtech founder Teddy Sagi is thought to have bought a near-3pc stake in the bookmaker. WH Smith has gained 8.3pc on strong full-year results, in which the group disclosed it was launching a fresh £50m share buyback.

Oil prices rise amid Libya PM kidnap

08.50 Concerns that the political upheaval stoked by the kidnap of Libyan prime minister Ali Zeidan will impact oil output has sent prices up this morning. Brent for November settlement climbed 72 cents to $ 109.78 a barrel, while West Texas Intermediate for November delivery gained 51 cents, or 0.5pc, to $ 102.12 a barrel.

Mr Zeidan has been taken to an unknown location by armed men from a hotel in the capital, Tripoli, in what appears to be retaliation for the capture by American forces of a wanted al-Qaeda-linked operative at the weekend.

FTSE rises in early trade

08.18 Signs that US politicians are making progress on resolving their differences over the US debt ceiling have helped the FTSE 100 rise 0.4pc, or 23 points, to 6,361 in early trade. The mid-cap FTSE 250 has also advanced 62 points, or 0.4pc, to 14,701.

BAE warns that US government shutdown could impact business

08.06 BAE Systems has said that the ongoing US government shutdown has not yet “been material to the group’s financial performance” but it has warned that there could be “some progressive impact” to its US operations if the stand-off continues, reports Louise Armitstead in the City Briefing email.

Some 1,200 BAE employees have been ordered not to work. Otherwise the defence giant says its outlook remains unchanged and it expects “double-digit growth in underlying earnings per share” for 2013, including its share buy back programme.

WH Smith profits rise again despite falling high street sales

08.00 Stephen Clarke, WH Smith’s new chief executive, has pledged to carry on with predecessor’s strategy as profits rise. Our retail correspondent Graham Ruddick has more details.

WH Smith has demonstrated its resilience on the high street with a rise in annual pre-tax profits despite sales falling.

The stationery retailer reported that like-for-like sales fell by 5pc in the year to August 31, but pre-tax profits rose 6pc to £108m, better than expected by the City.

The new chief executive of WH Smith, Stephen Clarke, pledged to press ahead with the strategy laid out by his predecessor Kate Swann, who left the business this summer after a decade in charge.

WH Smith has focused on cutting costs in its high street stores where sales have been falling, while growing its travel business and returning cash to shareholders through share buy-backs and a steadily increasing dividend.

Mr Clarke said that £18m of cost savings were found in the year and that WH Smith plans to cut another £22m over the next three years, ahead of the company’s initial target.

SSE hits out at Government for soaring energy prices

07.50 Big Six energy firm SSE has announced it must raise charges for electricity and gas by an average of 8.2pc next month, blaming a 13pc increase in “Government-imposed levies on energy bills” as well as smaller jumps in wholesale and network costs. Here’s Will Morris, boss of SSE’s retail division, in a statement this morning:

Quote We know we will come in for a great deal of criticism for this decision and politicians will no doubt be lining up to condemn us. But over many years policymakers themselves have failed to highlight adequately the cost to consumers the policies they have pursued in government.

Best of the rest

07.30 The Home Office is mulling plans to incentivise whistleblowers to come forward on economic crime issues with a US-style payment-for-information system, according to the Financial Times.

The Times reports that a Chinese state-controlled energy group is set to take a 49pc stake in the Somerset new nuclear project, in order to ease the financial burden of French giant EDF, which has already said it will build new plants on the site.

The textile mill in Bangladesh where at least seven workers died and more than 50 injured on Tuesday was not inspected under new safety rules because it did not deal directly with brands – even though it made fabric used by names such as H&M, George at Asda, Primark, Next and Morrisons, writes the Guardian.

Top stories

07.10 Leading our finance page this morning is news that shares in Royal Mail will be priced at 330p after heavy demand and many small investors will not get all the Royal Mail shares they asked for. Louise Armitstead reports that Royal Mail has warned that job losses are likely after its historic privatisation.

US business editor Katherine Rushton’s reports on Janet Yellen’s nomination for chairman of the US Federal Reserve. As he named Ms Yellen as the candidate, US President Barack Obama hailed her as a “jobs champion” for the people.

The International Monetary Fund has cautioned that the UK government’s Help to Buy scheme risks creating a house price bubble if measures are not taken to ensure a sufficient supply of new properties, write Harry Wilson and Rebecca Clancy.

G20 meeting to be hijacked by talk of looming US debt crisis

07.05 Finance leaders from the Group of 20 nations gather in Washington today and tomorrow as part the IMF and World Bank annual meetings. The stated purpose is to discuss “financial sector vulnerabilities, the international financial architecture’s reform, financing for investment an strengthening the G20 process”, but attention is expected to sit squarely on the looming US debt crisis. “The situation in the US is likely to dominate the talks,” one official told Reuters.

Good morning

07.00 Good morning and welcome to our daily business and markets live blog, your one stop shop for all the breaking business stories of the day.

Finance News – Business news from the UK and world


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