Comment & Analysis

Wednesday November 18, 03:57 AM
Glance-PRESS DIGEST - Financial Times - Nov 18

Financial Times INFLATION JUMPS AS FALL IN FUEL PRICES SLOWS According to official statistics, the rate of inflation increased in October, ending more than 12 months of declining indices. The consumer prices index (CPI (NYSE: CPY - news) ) stood at 1.5 percent last month -- up from 1.1 per cent in September. The Retail Prices Index (RPI), an alternative measure of inflation, also rose from minus 1.4 percent in September to minus 0.8 percent in October. The rise in both indices was attributed to the fact that last year's steep fall in petrol prices had dropped out of annual comparisons. BANK SETS OUT IDEAS ON LIVING WILLS FOR LENDERS Andrew Bailey, head of banking services at the Bank of England, said on Tuesday that banks will be forced to adopt so-called 'living will' arrangements in order to avoid future financial collapse. In a speech, Bailey outlined the elements that would be required under the recovery and resolution plans. Bailey said the first element of a plan should relate to a lender's internal blueprint for recovery in a crisis, adding that the proposals 'should encompass contingency funding plans and the use of contingent capital instruments as well as the sale of assets and/or business lines'. OFCOM CLEARS WAY FOR 'WHITE SPACE' NETWORKS Ofcom published a discussion paper on Tuesday on the use of spare television and radio frequencies to provide broadband and other services to rural locations. The communications regulator invited the industry to press forward on developing technology that makes use of the so called 'white space' spectrum -- the buffer radio spectrum between television channels. Ofcom said however that it could be between three and five years before products and services using the technology would come on to the market. ENTERPRISE TUMBLES AND OFFERS LITTLE CHEER Ted Tuppen, chief executive of Enterprise Inns (LSE: ETI.L - news) , reported a 95 percent fall in annual profits at the pub group. For the 12 months to September 30, the company's pre-tax profits fell to 11 million pounds from 209 million pounds, on revenue which was down seven percent to 880 million pounds for the 12 month period. The fall in pre-tax profit was attributed largely to 200 million pounds of exceptional charges that included a 151 million pound writedown in the value of the group's properties. ISIS DRUG STAKE SET FOR SOLID RETURNS ScriptSwitch has been acquired by UnitedHealth, the leading American healthcare operator. The sale of the provider of drug comparison software for use by doctors' surgeries is due to be announced on Wednesday and values ScriptSwitch at around 50 million pounds, representing a four-fold return for the company's private equity backers Isis Equity Partners who bought a one-third stake in ScriptSwitch in May 2007. ScriptSwitch currently supplies software to 60 percent of UK primary health trusts and generates revenue of around 10 million pounds. BARCLAYS RETAIL CHIEF WARNS NEW ENTRANTS Antony Jenkins, the new head of global retail banking at Barclays (LSE: BARC.L - news) , has said that supermarkets and other consumer companies may be underestimating the difficulty of breaking into the banking market. Jenkins said: 'The series of disruptions in the global financial system has created opportunities for other players to enter the market and it's going to make it an interesting landscape. But actually running a bank is different from some of the other industries that (these) players are in and I suspect people will find it is more difficult than they originally thought.' BRITISH LAND LOOKING TO REBUILD ITS PORTFOLIO British Land (LSE: BLND.L - news) chief executive Chris Grigg said on Monday net income from the property firm's retail portfolio had risen 2.7 percent in the six months to September 30 as fewer retailers faced administration. However, a 2.3 percent decline in office income meant that overall like-for-like rental income growth was just 0.7 percent over the period. Net asset value was down 6.5 percent over the six months, despite rebounding 3.1 percent in the second quarter. MINERVA REJECTS KIRSH BID AS 'UNDERVALUING PROSPECTS' Property firm Minerva (LSE: MNR.L - news) has dismissed a 50 pence-per-share hostile bid by leading investor, South African businessman Nathan Kirsh, as 'opportunistic and unwelcome'. Kirsh's investment vehicle KiFin already controls 29.9 percent of Minerva along with three minority shareholders. KiFin said the offer represented a 6.2 percent premium on Minerva's diluted net asset value of 47.1 pence a share. The Minerva board said the offer 'significantly undervalues the company and its future prospects'. BURBERRY RETRENCHES VIA SOCIAL NETWORK Burberry is hoping the launch of its new artofthetrench.com website will lead to a rise in trench coat sales. Sales at the fashion retailer increased from 539.1 million pounds to 572.4 million pounds in the six months to September 30 with a rise in sales at its own outlets offsetting the weaker demand seen in department stores. Pre-tax profit was down from 97 million pounds to 78.4 million pounds. Underlying operating profit was down from 98.4 million pounds to 86.3 million pounds, beating the 80 million expected by analysts. EASYJET BRACED FOR TOUGH WINTER AFTER FUEL COSTS EAT INTO PROFITS Profits at EasyJet (LSE: EZJ.L - news) halved after the airline hedged its fuel prices at higher rates than the spot price over the year, leading to an 'adverse variance to market rates' for fuel of around 330 million pounds for the full year. Pre-tax profit for the year to September 30 was down 50 percent to 54.7 million pounds. Revenue was up 13 percent at 2.67 billion pounds. The company predicted that, after a tough winter, 2010 would see a substantial profit improvement on this year. Prepared for Reuters by Durrants Keywords: PRESS DIGEST Financial Times Nov 18

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