BANKING & INSURANCE
Not so great for Katherine as losses hit £100mLOSSES at investment company Alliance Trust have reached almost £100 million as the value of its assets are hit hard by the global downturn (
Scotsman). Katherine Garrett-Cox, chief executive of the FTSE-100 group, told The Scotsman she was "vexed" that the Dundee company's shares were also being traded at a discount to the value of its assets, which are currently about £2.6 billion. Yesterday, the investment trust revealed a £95m loss in the six months to 31 July compared to a £117m pre-tax profit in the same period last year. The deficit was attributed to a £138.5m writedown in the value of the firm's assets, most of which are listed equities. However, revenues from assets were up on the same period in 2007. Excluding writedowns, the trust made a profit of £41.7m compared to £31.4m last time.
Read all today's banking news from scotsman.comECONOMY
HBOS £3.5bn shy of Lloyds' offer as City scents bid cutBanking group HBOS's stock market worth had by last night fallen to nearly £3.5bn below the £9.94bn value of Lloyds TSB's take-over bid - reflecting growing scepticism in the City that the deal will go ahead on the current terms (
Herald). Shares in Bank of Scotland and Halifax parent HBOS dropped by a further 19.6p, or 14%, to 122.4p yesterday to value the Edinburgh-headquartered institution at about £6.45bn, even as the value of Lloyds TSB's all-paper bid rose with a 4% rise in the London bank's stock price. HBOS shares fell more than 20% to 113p at one point during the session. HBOS shares were last night about 35% adrift of the near-189p-a-share value of Lloyds TSB's bid. The London-based bank is offering 0.833 of its shares for every one in its bid target. Shares in HBOS had ended September 18 - the day on which the terms of what the City regards as a rescue takeover by Lloyds TSB were announced - at a discount of slightly more than 12% to the offer. On Monday night, HBOS shares were 39p, or about 21.5%, adrift of the value of Lloyds TSB's bid at that stage. By last night, they were about 66p adrift. However, HBOS last night insisted it was "full steam ahead" on the deal and Lloyds TSB said it was "proceeding" on the terms announced". Prime Minister Gordon Brown expressed his confidence that the takeover of HBOS would be completed.
London and New York rebound as optimism returnsShare prices in London and New York rebounded yesterday after Wall Street's worst day of carnage in 20 years, as investors piled into cheap equities, optimistic that Congress will eventually pass a plan to rescue distressed banking assets (
Herald). A report that showed a stronger-than-expected reading in a gauge of US consumer confidence also boosted sentiment among traders on both sides of the Atlantic although demand for US Treasury bills as a safe haven investment remained strong. Most stock markets on mainland Europe also closed higher even though investors remained worried over the health of the financial sector after Dexia became the second Belgian-based bank to be rescued by a bail-out package this week. The rise in stocks did not come as a complete surprise because heavy falls on Wall Street and other bourses often attract bargain hunters, though questions remain about how investors will proceed. Without a bail-out plan in place to absorb soured mortgage debt and other bad loans from banks' balance sheets, investors are wondering what might restore confidence in lending. Oil jumped by about $2 a barrel toward $98 after posting nearly a 10% drop the previous session as investors were less fearful of a major meltdown in capital markets. The dollar gained against the pound, euro and a basket of other current while gold fell to $884.50 a troy ounce, down from $905.00 late Monday. Talk that US congressional leaders may reach some kind of agreement by the end of the week and speculation that central banks could cut interest rates lured speculators back into markets.
Read all today's economics news from scotsman.comRETAILTesco looks to cash in on the mortgage crisisTESCO may begin offering home mortgages and current accounts to compete with the major lenders as a result of "opportunities" arising from the credit crisis (
Scotsman). Britain's largest retailer yesterday claimed it was "at its best" in difficult trading conditions as it shrugged off the impact of a consumer slowdown to report an 11.3 per cent rise in pre-tax profits to £1.44 billion in the six months to 23 August. Tesco said that as part of its plans to expand its financial services offering it was considering a range of new products. In July, the high street giant announced plans to buy out Royal Bank of Scotland, its joint venture partner, from Tesco Personal Finance, for £950 million, with the deal expected to be completed in November. While Tesco had previously resisted offering mortgages on the grounds that the margins were so tight that they were unprofitable, finance director Andrew Higginson said yesterday that the credit crunch appeared to have created an opportunity. "It hasn't been good for the consumer, but we have seen the return of rational pricing in mortgages and that would potentially offer us the opportunity to get in there," he remarked. Difficulties in the wholesale credit markets have driven up the cost of mortgages.
Read all today's retail news from scotsman.comTECHNOLOGY
Cash shortage won't prevent us selling says MED chairmanMICROEMISSIVE Displays, the micro screen maker, yesterday insisted it was making progress towards product sales despite being in a race against time to secure extra cash (
Scotsman). The Edinburgh-based company warned in August that sales were taking longer to materialise than it had expected and that it would need to raise cash to continue trading. Yesterday, chairman George Elliott said the board had completed cash flow projections which predicted it had resources until the end of 2009. However, Elliot admitted that this projection assumed there would be a transaction to refinance the company. Elliot warned: "Although the directors are in discussions with interested parties, there can be no certainty that a transaction will occur, and should it not go ahead, the group's existing cash resources are likely to be exhausted by mid-December 2008." Chief executive Bill Miller declined to comment on the company's attempts to raise cash other than it was "a work in progress". But he insisted that talk of a sale had not dampened interest of potential customers.
Read all today's technology news from scotsman.comTRANSPORTFirstGroup finds cost-conscious travellers are getting on boardFirstgroup yesterday reported revenue rises of 7.5% on buses and 9.8% on trains and said growing numbers of car drivers were reacting to the increase in petrol prices (
Herald). It said its new "fuel for thought" and "fuelbuster" promotions had highlighted the cost advantages of bus travel, its rail franchises were holding up well, and it was increasing its own hedging against next year's fuel costs. The transport giant, updating the market ahead of analyst meetings next week, said trading since its last bulletin in early had remained strong. Its shares rose 16.5p to 532.5p in response. On its rail performance during the period, FirstGroup said: "Overall passenger volume growth supports the view that customers are being attracted to rail services as a result of the increasing costs of motoring." It went on: "In the current uncertain economic climate we continue to closely monitor the performance of our rail businesses for changing patterns of customer behaviour." It said its First Capital Connect franchise, which has a high proportion of central London commuters, had slowed only marginally with revenue growth still topping 8%.
Read all today's transport news from scotsman.com
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