PRESS DIGEST – Financial Times – Feb 5

Financial Times

BUYERS SOUGHT FOR PUBLIC DEBT AS BANK BOWS OUT

The Bank of England has made the decision to put its
quantitive easing programme on hold. The initiative was designed
to stimulate economic growth by buying up bonds – mainly gilts –
and the Debt Management Office, which is responsible for issuing
a record number of bonds to pay off the public deficit, is now
expected to face difficulty in finding buyers. DMO chief
executive Robert Stheeman has said that the agency will continue
to use new methods of issuing debt, including syndications.

PROJECT CANVAS TRIGGERS INDUSTRY ALARM

The Digital TV Group, a consortium of broadcasters,
technology providers and set top box manufacturers, has
expressed widespread industry concern about a new venture which
aims to market a 200 pound set-top box, bringing internet
services to the television later this year. Project Canvas, a
joint venture between the UK’s public sector broadcasters and
two of the country’s broadband providers, has won initial
approval from the BBC Trust but, in a submission to the BBC
Trust’s consultation, the DTG, whose members include Sony
(6758.T: ), BSkyB (BSY.L: ) and Virgin Media [VMEDL.UL], expressed
concern that Canvas’ members had not engaged fully with the
industry. The BBC Trust’s final ruling is due in the next few
months.

BUSINESS ATTACKS LIMITS ON PRODUCT PLACEMENT

Government plans to restrict product placement on commercial
television shows have drawn accusations of “nanny stateism” from
the advertising industry. Last September’s decision to allow
product placement had been seen as a shot in the arm for the
struggling industry, but next week culture secretary Ben
Bradshaw will announce restrictions on the placement of alcohol
and high fat, salt and sugar products. Hugh Burkitt of the
Marketing Society has said that the government failed to grasp
the difference between marketing individual brands and promoting
eating or drinking in a more general way.

PACE OF GROWTH IN HOUSE PRICES SLOWS

There are signs that the pace of the housing market recovery
may be slowing -with a number of recent indicators supporting
the view. The closely watched Halifax survey revealed that
January saw house prices rise 0.6 per cent, the slowest pace in
six months, and down from December’s figure of 0.8 per cent.
Fewer estate agents have been reporting price rises, while the
Bank of England reported a fall in mortgage approvals in
December for the first time in 13 months. Nationwide’s house
price index showed house price rises falling to 0.5 per cent in
December, from 1.4 per cent a month in July and August.

LIBERTY TO SPLIT SHOPPING CENTRES FROM LONDON PROPERTY
PORTFOLIO

Liberty International (LII.L: ), Britain’s largest shopping
centre owner, is to undergo one of the largest corporate
restructurings ever seen in the UK’s listed real estate sector.
The firm is in the final stages of splitting its 2.8 billion
pound business in a demerger process overseen by Rothschild.
Liberty’s 6.1 billion pound UK property portfolio will be
divided into two listed companies. Its shopping centres, worth
4.4 billion pounds, will be split off into a new real estate
investment trust, while the other new business will own the
company’s 1.7 billion pounds of London properties.

UNION SAYS IT IS ‘NOT MILES APART’ FROM BA

The Unite union has indicated emerging signs of a settlement
in the dispute between airline British Airways (BAY.L: ) and its
cabin crew. On Thursday, Unite’s national officer for aviation,
Steve Turner, said that although the two sides still disagreed
over BA’s decision to remove at least one crew member from most
of its long-haul flights, he was optimistic that the dispute
could be resolved. BA is preparing to announce record pre-tax
losses on Friday for the three months to the end of December.
Analysts believe its full-year pre-tax loss will approach 600
million pounds.

DOUBT CAST ON EMI’S VIABILITY

Accountants KPMG have questioned EMI’s ability to continue
as a going concern in a report exposing the fragile state of
Terra Firma’s 4.2 billion pound investment in the music company.
A review of accounts for the year to March 2009 show Terra Firma
will face another “significant shortfall” against a test on
covenants in its loans by March 2011, even if it is successful
in its present attempt to raise 120 million pounds in equity
funds from investors. EMI’s accountants also pointed out that
investors may need to add an additional sum of 10 million pounds
to 200 million pounds to finance its pension scheme, which is
currently in deficit and the subject of a dispute with trustees.

RESOLUTION EYES MOVE ON RBS BRANCHES

London-listed investment vehicle Resolution Group and US
private equity group Blackstone have emerged as frontrunners
alongside National Australia Bank in bidding for bank branches
being sold by Royal Bank of Scotland (RBS.L: ). According to
industry insiders, the disposal of 318 branches by RBS is likely
to be an arduous task. The Australian bank has received support
from backers seeking a foothold in the UK banking market, while
most of the major UK banks have been prevented from entering
bids on competition grounds.

GALA STARTS TALKS OVER DEBUT BOND

UK gambling group Gala Coral is holding negotiations over a
possible 500 million pound bond issue, which would see it
reaching out to institutional investors to help refinance two
billion pounds of bank debt. Industry sources say the bond issue
will only happen if the company’s restructuring talks are
favourable. Gala has been in discussions with the Royal Bank of
Scotland (RBS.L: ), Credit Suisse and Deutsche Bank (DBKGn.DE: )
about a potential debut bond, but no plans have been finalised.
The mooted plan comes ahead of a meeting with Gala’s banks on
Tuesday to review proposals by a group of holders of its
mezzanine debt to take control of the company.

MCBRIDE ADVANCES ON THRIFTY SENTIMENT

McBride (MCB.L: ), a leading supplier of private-label
household and personal care products, posted a near-fourfold
rise in interim profits spurred by strengthening demand for
retailer-branded goods. The firm, which supplies retailers
ranging from Tesco (TSCO.L: ) and Waitrose in the UK to Carrefour
(CARR.PA: ) in France, saw pre-tax profits advance from five
million pounds to 22.5 million pounds. Chief executive Miles
Roberts said sales reflected a growing willingness by consumers
to sample own-brand products, which increasingly compete with
established brands on quality and price.

Stock Investing

Prepared for Reuters by Durrants

PRESS DIGEST – Financial Times – Feb 5