The Special Report:
*The iron-ore Klondyke – Australia’s iron ore bonanza.
The Agenda Column:
*Disaster game rampages off the board - There are more write-offs to come from investment banks, more defaults and more economic pain. But we want these headlines to come thick and fast. The quicker we get through this, the more inured we will become to bad news. That is the point where the bottom will be reached.
*Sweetened value – It’s worth taking a look at Tate & Lyle (TATE), the food-ingredient group, to see what happens when an investor finally starts to see value in a company’s shares.
*A sorry estate - In most cases, the funds were run by second-rate managers who spent the money buying second-rate property at inflated prices. It doesn’t take an Einstein to work out what happened next.
*Haunted honeymoon – The new chief executive of Gcap (GCAP), Fru Hazlitt, has had a short honeymoon in both senses. She married yesterday in Mayfair, but the celebration will be short-lived. She has only got three weeks to present a strategic vision to convince her investors to reject a takeover proposal from Charles Allen’s Global Radio.
The Economic Outlook Column:
*Don’t bank on €uro as the pound slides.
Business Focus:
*How safe is your bank?
The Andrew Davidson Interview:
*Jean-Bernard Lévy, chief executive of Vivendi (VIV).
Feature:
*US carmakers still on the wrong road.
Feature:
*Pearson (PSON) teaches the world a lesson – The educational publisher is rapidly expanding its reach and services outside America.
The Inside the City Column:
*Man Group (EMG) - Man looks a pretty compelling growth story.
*Premier Foods (PFD) - There’s no doubt that Premier’s share price was ludicrously overinflated in the immediate aftermath of the RHM deal. But now irrational alarm has taken hold. Things are bad, but not that bad.
The Director’s Deals Column:
*Signet (SIG) boss wades in after Christmas flop - Chairman Malcolm Williamson bought 100,000 shares in the jeweller on 17th January, more than doubling his stake to 173,000 shares.
*easyJet (EZJ) director Sir David Michels and chairman Colin Chandler increased their stakes in the budget airline after its shares tumbled following a disappointing trading update.
Further news:
*Guy Hands is throwing down the gauntlet to the rest of the music industry to match his much-criticised turnround plan for EMI.
The City Editor Comment Column:
*Labour crawls out from under a Rock (NRK) - While Alistair Darling will claim he has found a way to deliver a private sector solution to Northern Rock; it will be nothing of the sort. Although under the Goldman Sachs plan the Government will get all its cash back in one fell swoop, taxpayers' money will remain very firmly on the hook.
*A dog’s life - Bryan Sanderson, the new chairman of Northern Rock (NRK), was drafted into a job at a struggling institution seen by many as being impossible to save. Treasury officials may now feel they're faced with filling a similarly tricky post as they begin the task of replacing Sir Callum McCarthy as chairman of the Financial Services Authority.
*Brown’s failure on China - UK Trade & Investment, the body responsible for promoting external trade and inward investment, has long been under-resourced. Just as crucially, the level of commitment in our education system to teaching Mandarin - which, make no mistake, will emerge as the new international language of commerce in the 21st century - is laughable. Brown has a responsibility to oversee a reversal. At the moment, it isn't only British Airways (BAY) flights that fall short of the runway when it comes to our connections with China.
*Sachs of Schadenfreude - Seemingly unscathed by the credit crunch, Goldman’s is nonchalantly raising $130-million for a new philanthropic fund, called Goldman Sachs Gives.
The Economic Agenda Column:
*We mustn’t pull the plug on fight against inflation.
Feature:
*Branson pounces in Beijing (The PM and Northern Rock (NRK)).
Feature:
*FSA likely to get beefed up role when the dust settles.
Feature:
*Is Davos our last resort?
Feature:
*WPP’s (WPP) Sorrell won’t feel Alpine chill until 2009.
Feature:
*“This is the worst business day of my life” – John Duffield of New Star (NSAM).
Feature:
*The prospect beyond Peter – Who will replace Peter Sutherland as chairman of BP (BP.)?
The Real Business Column:
*Managing director gets in training for a downturn (Ian Johnson’s Xpertise Group (XPG)).
Profile:
*James Burton, chief executive of World Gold Council.
Further news:
*BHP (BLT) prepares to go hostile in Rio Tinto (RIO) bid battle.
*GE (GEC) seeks to bag Biffa (BIFF) with £1.5-billion offer.
*Spurned bank, ACP Capital (APL), plans Davenham (DAV) joint venture.
The Lead Story of the Business Section:
*Forth Ports (FPT) flings down gauntlet as Babcock buys on - The Australian group now holds almost a quarter of the British firm's shares, yet seems in no rush for a formal offer. What price a bidding war?
Feature:
*Between a Rock (NRK) and a hard place: Sale or State?
The Business Analysis Column:
*Trains and buses and a transport of delight in the City.
The Business Editor’s Column:
*For Labour’s sake, it must try to sell the Rock (NRK).
*Rose and the three R’s - Sir John Rose, chief executive of the aforesaid Rolls-Royce (RR.), the aerospace-engines business, brilliantly describes how wealth is created: you either dig it up, grow it or convert something in order to add value. Anything else is merely moving it about. To prove his point, he points out that, pound for pound, an aircraft engine is six times more valuable than silver – whereas, pound for pound, a motor car has the same value as a hamburger. Rolls-Royce's Derby plant shows just how much value comes from having a hi-tech manufacturing business: more young people in Derby get five good GCSE’s than in any of the cities around, average salaries are higher than elsewhere in the Midlands, and its apprenticeship and graduate schemes are oversubscribed. But Sir John has had to go overseas to find people to work in his fuel-cell business, because people with those skills just can't be found here.
The Expert View Column:
*Admit you’re not green enough... people might trust you – How many firms would say their processes aren’t sustainable. UK companies should think about following Patagonia’s painfully honest lead.
The Hamish McRae Economic View Column:
*The financiers are flustered but the business men are upbeat, and in Scandinavia they can’t stop smiling - Despite the grim warnings for 2008, the message hasn't spread to the real economy. A slowdown is coming but not yet and we won't fall off a cliff.
*If things were really tough would companies be hiring more staff?
*The slowdown will start later and be less deep. But it may be protracted.
The City Eye Column:
*We talk up a crisis and then set the house ablaze - The mid-cap market is just horrible: the FTSE 250 was off 7.2 per cent in the first week of trade this year, and no one noticed. Big stocks have it even worse. You could feel the shudder in the City when Merrill Lynch announced a $4-billion loss on Thursday. The FTSE 100 folded like a deckchair. Next up, a storm of rhetoric on the dire future for the property market.
*Last chapter for books - A survey from Publishing Technology (which monitors sales and collects royalties for, among others, JK Rowling) says 30 to 50% of publishers' income will come from downloaded digital files, not books, in 5-years.
Interview:
*Guy Hands.
Feature:
*‘Stuff it under the mattress if you want, but the smart money isn’t holed up like the rest of us’ – The likes of Warren Buffet are ploughing capital into equities. ‘Foreign funds are prowling. If we don’t eat our home cooking, others will’.
The Lead Story of the Financial Mail:
*Europe’s price for Rock’s (NRK) rescue – European officials may demand tough restrictions on the way our domestic bank, Northern Rock, does business, as a price for approving a British Government plan to avoid nationalising the stricken bank.
Feature:
*Watchdogs of war – OFGEM and energywatch bosses are at each other’s throats.
Interview:
*Gavin Patterson of BT Vision.
The Midas Column:
*Mama Group (MAMA) – Buy a few and watch this space.
*Prudential (PRU) – Buy.
Special Report:
*E-tail vs Retail: Is this the end of High Street shopping?
Further news:
*Spendthrift Britain in the red by £65-billion.
*Littlewoods Direct eyes fading Empire.
From The Sunday Times
*Branson prepares to sweeten his Northern Rock (NRK) offer (Business p1)
*BHP (BLT) lines up seven banks for Rio (RIO) bid (B1)
*JC Flowers has built a secret stake in Friends Provident (FP.), fuelling suggestions they could launch a £4-billion takeover bid (B1)
*Phytopharm (PYM), the quoted Cambridgeshire drug developer that makes products from medicinal plants, is to receive a $1.2-million (£613,000) grant from the Michael J Fox Foundation to help to fund its research into treatment of Parkinson’s disease. Mr Fox suffers from Parkinson’s disease himself (B2)
*Billionaire rag-trade tycoon, Richard Caring, has clinched a £105-million deal to buy a majority stake in the luxury private-members’ club group, Soho House (B2)
*Predators circle John Duffield’s troubled New Star (NSAM) (B3)
*The private-equity giants CVC and 3i (III) are the mystery bidders that have approached Nestor Healthcare (NSR), the provider of out-of-hours GP services (B3)
From The Sunday Telegraph
*A new special purpose company is to be at the heart of government plans to secure a private sector future for Northern Rock (NRK). The plan will see the Treasury receive a one-off, £25bn cash payment but remain as the ultimate guarantor of the stricken bank's future (Business p1)
*Chris Flowers stalks Friends Provident (FP.) by building secret stake (B1)
*This weekend, the finance director of Tesco (TSCO), Andrew Higginson, launched a surprise attack on City analysts, accusing them of failing to properly understand the supermarket giant's business model and suggesting investors should interpret their views "with a pinch of salt" (B1)
*China Goldmines founder, Karl Watkins, threatens to pull AIM listing, unless the LSE and FSA take urgent steps to improve liquidity and stamp out alleged insider trading on the AIM market (B2)
*Icelandic raider, Baugur, hit by losses on High Street woes (B3)
*Sir Michael Bishop, the chairman of Bmi British Midland, has been approached about a potential sale of his stake in the company by Jet Airways, the Indian airline that is one of the world's fastest-growing passenger carriers (B3)
From The Independent on Sunday
*Guy Hands challenges music industry to find new ways to sell (B1)
*Sovereign wealth funds will prop up UK economy, says Ernst & Young’s Item Club (B2)
From The Mail on Sunday
*SMG (SMG) to sell Virgin Radio (p63)
*S&N (SCTN) to raise white flag to Continentals (p64)
*Aviva (AV.) windfalls under threat (p64)
From The Sunday Express
*Protesters win access to secret BAE (BA.) data (F1)
*‘Fudge’ planned for Rock (NRK) nationalisation (F2)
*Cenkos pays out £1.5-billion for Close Bros (CBG) (F2)
*Morrisons (MRW) declares Christmas victory (F3)
SOME ITEMS THAT COULD INFLUENCE SHARE PRICES
*The Prime Minister was accused last night of a “final slap in the face to taxpayers” over Northern Rock (NRK) in a move that could lead to Sir Richard Branson buying the troubled bank at a knockdown rate.
*Home Secretary, Jacqui Smith says, the streets of London are safe, but says she wouldn't walk around after dark, even in relatively affluent areas.
*Great Britain’s economy will avoid recession this year but faces a necessary “rebalancing” that will at times be painful, according to a new forecast from the Ernst & Young Item club, to be published this week. The forecasters warn that the public finances are “in a mess” and will deteriorate further as the economy weakens. Peter Spencer, Item’s chief economic adviser, said Chancellor Alistair Darling had been left with a “grim” set of public finances by Gordon Brown, after the Treasury failed to take advantage of years of good growth to put our public finances on a sounder basis, so our ability to respond [to the slowdown] by easing fiscal policy has been compromised.
*The battle over the EU Reform Treaty has been reignited after an influential committee of MPs said that the document is no different to the defunct EU Constitution.
*Tributes were paid Saturday night to war hero Squadron Leader Bertram “Jimmy” James, who has died. The RAF pilot took part in the prison camp breakout immortalised in the film, The Great Escape. He was described by one military historian as Great Britain's greatest war hero, he escaped from 13 German prisoner-of-war camps and was one of 76 officers who escaped from Stalag Luft III on the night of 24th March 1944. The veteran, who left the RAF in 1954, leaves a wife, Madge.
*Democrat Hillary Clinton and Republican John McCain are celebrating wins in presidential contests in the US states of Nevada and South Carolina. Mr McCain saw off a close challenge by Mike Huckabee to win by 33% to 30% with nearly all votes counted. Mrs Clinton beat Barack Obama by 51% to 45% in Nevada, based on 98% of returns.
*The European Union's Development Commissioner has urged both sides in Kenyan's disputed presidential poll to stop exacerbating tensions. Louis Michel, in Kenya to help find a solution to the crisis, held separate meetings with President Mwai Kibaki and ODM opposition leader, Raila Odinga. Mr Odinga's party says it will resume protest rallies on Thursday.
Compiled in association with HB PLC and WH Ireland Ltd
