BANKING & INSURANCEBanking stocks hit new lowsRoyal Bank of Scotland and HBoS shares hit new lows yesterday amid fears that the Scottish banking giants are suffering in the troubled economic climate. RBS is curre
ntly attempting to kickstart an auction for its insurance arm while HBoS is embroiled in the woes of the US mortgage market. The drop saw RBS shed 11 per cent before recovering to close down 7 per cent at 167.3p while HBoS lost 7 per cent before rallying to close down 4 per cent at 260p. One city analyst told the Scotsman: "RBS is under the cosh because the sale of the insurance division does not seem to be progressing smoothly."
(The Scotsman)Golf failure leaves HBoS in the holeThe collapse of a golf course resort in California has left HBoS owed some $20 million. The vineyard, golf course and housing resort was championed by US tycoon Don Panoz but has now been forced into bankruptcy with HBoS named as a major creditor in the collapse. The Edinburgh banking giant provided an extra $1 million loan last Thursday in a bid to keep the resort operating but the development has now fallen victim to the credit slump in the US. General manager of the Diablo Grande's two golf courses Dan Bacci told the Scotsman: "People are worried. The housing market in California started to dip around two years ago and it is perhaps a tiny bit worse here than elsewhere. People want the resort to be finished – so there are the shops and the hotel and so on which were planned when they bought their homes. I think this place was maybe a little ahead of its time. It has the potential to be a wonderful place eventually, but it was maybe too early." Analyst at Edinburgh stockbroker Bell Lawrie White, Bryan Johnston commented: "It is not uncommon in times of a recession that banks end up owning a lot of property because of debt problems. In the last recession, HBoS ended up owning the Balmoral Hotel, before selling it to Rocco Forte. Developers like Panoz have a double whammy of getting hit with servicing costs at a time when their sales are dropping off because their prospective customers don't have any money."
(The Scotsman) Read all today's banking news from scotsman.comECONOMYInflation figures another nail in rate cut coffinInflation hit nearly double the 2 per cent Bank of England target in June, sparking a surge in the pound against the dollar and further reducing the chance of rate cut from the central bank's Monetary Policy Committee. The ONS figures showed consumer inflation leaping to 3.8 per cent fuelled by higher prices for energy and food. Michael Saunders of Citigroup said: "The UK economy is probably slipping into recession or about to. Even so, it seems very unlikely the Monetary Policy Committee will cut rates near term given the extent to which inflation is surging. The MPC would probably hike rates if the economy were not anyway heading into a sharp slowdown or recession. They may yet do so." Howard Archer at Global Insight added: "This is yet more deeply worrying news on the inflation front, which will make very uncomfortable reading for the Bank of England. The rise in consumer price inflation to a series high of 3.8 per cent in June was significantly above expectations. The rise was primarily due to sharply higher food and energy prices. Nevertheless, core inflation continued to creep up, rising to 1.6 per cent in June, from 1.5 per cent in May and 1.2 per cent in March. While core inflation is still pretty muted, June's further rise nevertheless maintains concern that higher energy and food prices are starting to increasingly filter through to have second-round effects."
(The Herald) Read all today's economics news from scotsman.comENERGY & UTILITIESSSE takeover rumouredScottish & Southern Energy is rumoured to be in the sights of Swedish-owned utility Vattenfall. Shares in SSE rose by up to 2.2 per cent on the back of speculation the Scandinavian group is considering a takeover bid. SSE had earlier this year been the subject of intense speculation it was to be acquired by German utility giant RWE but the expected bid never materialized. Vattenfall chief executive Lars Josefsson did nothing to dispel the rumours, commenting: "We are generally interested in the UK, and our interest has not diminished."
(The Herald) Read all today's energy and utilities news from scotsman.comINDUSTRYFerguson thrivingShipbuilders Ferguson, the last independent commercial shipyard on the Clyde, has reported a thriving business with 150 people employed. However, managing director Richard Deane has revealed he was rather the yard was building a ship than working on refurbishment and general fabrication. The yard has lost out in tender battles to Polish shipyards which are heavily subsidized, however, that situation may soon change with the European Commission expected to rule Polish shipyards must repay up to £800 million in illegal state aid. Deane said: "Some of the stuff we are doing is very interesting, but if you ask our people what they want to do, they want to build ships. The problem before was there a shortage of demand for ships. Now there is a demand but the equipment isn't there. We hope that somewhere along the line it may come back into equilibrium."
(The Herald) Read all today's industry news from scotsman.comTRANSPORTRail line to shutThe Kilmarnock to Dumfries rail line is to be closed for two weeks for major upgrade works, it has been announced. The line will close from 19 July until 3 August while a £35 million project to eliminate the eight mile bottleneck between Gretna and Annan is completed. The closure will affect all services between Glasgow Central and Carlisle with replacement bus services being brought into operation. Network Rail route director in Scotland David Simpson commented: "The Gretna to Annan route is a vital rail link for both freight and passenger trains and the upgrade is an important part of Network Rail's vision to modernise and grow the railway in Scotland. We are working closely with First ScotRail to provide alternative transport arrangements while this work is completed and would like to thank the local communities for their continued support and patience."
(BBC Scotland Online) Read all today's transport news from scotsman.comPROPERTYHousing market slump forces builders into rental marketScottish estate agents and housebuilders are being forced into letting properties rather than selling them as the faltering housing market continues to suffer. The announcement by Clyde Properties that it had axed three directors and made a number of redundancies reinforced the impact of the slump in the sector. Clyde chairman Bill Cullens told the Scotsman: "Along with other agencies there have been redundancies on the estate agency side. It would be foolhardy not to do these things. Last year we had 1500 let and managed properties, today we are sitting on over 18000. We are looking to expand our lettings business either through acquisition or organic growth. We see that really growing in the next couple of years." Gordon Cunnigham, head of residential property at Tods Murray added: "More people are going to be forced to let, such as first time buyers, and I suppose even the short-term purchase people who plan to be in Edinburgh for a few years. It is going to be better because the way prices are going, 'to buy not rent' has turned on its head. No-one will consider a short term purchase. A good proportion of the people who initially rent homes from them will want to stay on as owner-occupiers once the mortgage situation eases."
(The Scotsman) Read all today's property news from scotsman.com
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