PRESS DIGEST – Financial Times – Jan 26

Financial Times

HSBC CHAIRMAN HITS AT BIG BONUSES

HSBC (HSBA.L: ) chairman Stephen Green has criticised the
distorted structure and inflated level of bonuses. On the eve of
the World Economic Forum’s opening day in Davos, Green, who is
also chairman of the British Bankers’ Association, predicted
that future payouts would be lower and more rationally
calculated. The debate about bankers’ bonuses has intensified in
recent weeks following the super-taxes announced in Britain and
France to be levied on bonus pools. Bumper Wall Street profits
revealed just last week further stoked the controversial issue.

BA CABIN CREW START STRIKE BALLOT

Thousands of British Airways (BAY.L: ) cabin crew began voting
on Monday about whether to strike over staff cuts. The
development forced the airline to begin training pilots and
other staff as flight attendants. Unite, the union representing
BA’s cabin crew, said only 216 people had responded to last
week’s call from the airline’s chief executive Willie Walsh for
volunteers to help keep his company flying in the event of a
strike. The ballot will close on February 22, and Unite must
then give seven days’ notice of industrial action. This means a
walk-out could be held from the first week in March.

LENDING FACILITY FOR SMALLER BUSINESSES UNUSED

A programme set up by the Bank of England to support lending
to less creditworthy companies has still not spent any money.
The Bank said its programme had yet to acquire any high-quality
short-term debt, despite evidence that smaller businesses are
still struggling to gain access to credit. Credit rating
agencies have complained the scheme was so restrictive, limited
and expensive to set up that companies do not see much point in
using it.

INSOLVENCIES TO PEAK AS SLUMP ENDS

Insolvency body R3 has said this year will see record
company collapses and that the level will remain high in 2011.
Government figures are expected to mark the official end of the
recession on Tuesday. However, R3’s research, which predicts
insolvencies would peak at 28,000 in 2010 compared with 22,800
in 2009, suggests the announcement would be a false dawn for
many businesses. Peter Sargent, chairman of R3, said although
the country went into recession sharply, it is expected to come
out of it “through a long, slow drag”.

STANDARD LIFE GETS YOUNGER

Standard Life (SL.L: ) is launching an entry-level pension
product in an effort to attract a younger client base. The life
assurance company is seeking to win more customers from a
younger demographic with an eight-week advertising campaign on
Dave TV, the digital channel of mostly comedy repeats. The Dave
campaign is part of a two million pound national push that will
mix traditional, online and social media activity. Standard Life
said its campaign was targeted at 28-40 year olds for whom a
simplified, low-cost, online pension was likely to be the most
relevant entry point.

MATURE CRUISER KEEPS ALL LEISURE AFLOAT

All Leisure (ALGP.L: ), operator of cruises for mature
passengers, has seen summer bookings soar four percent alongside
annual profits ahead of expectations. Roger Allard, founding
chairman of the Aim-listed company, said the market was in good
shape. Total revenue for the year to October 31 increased to
73.6 million pounds from 67.5 million pounds. Pre-tax profits
dropped to 2.6 million pounds from 9.1 million pounds, but the
figures were distorted by derivatives used to counter fuel price
and currency fluctuations. Excluding derivative charges, profits
dropped to 4.5 million pounds from 6.3 million pounds.

U.S. NURSE SHORTAGE BOOST FOR LOCUM SUPPLIER

Healthcare Locums (HLO.L: ), the biggest supplier of
short-term healthcare professionals in the UK, is set to benefit
from increasing demand for nurses in the United States, should
Congress pass President Barack Obama’s health reform bill. By
2014, more than 1.2 million new nurses will be needed in the
United States. This shortage could be exacerbated if a potential
46 million people gain access to the healthcare system for the
first time. Its shares closed up one penny at 270 pence, after
rising 112 percent in the past 12 months.

JAMES HALSTEAD TO PAY EARLY DIVIDEND

Industrial flooring supplier James Halstead (JHD.L: ) has
revealed advances in first-half turnover and profits. The
company’s investors have also been rewarded with a tax-busting
commitment to paying an early interim dividend, as James
Halstead said sales of its range of non-slip vinyl flooring
continued to increase. Chairman Geoffrey Halstead said he would
bring forward payment of its interim dividend, up from 7.25
pence to eight pence, to March 31 instead of the usual late-May
date. Its shares closed down 2.5 pence at 575 pence.

TAX GROUP WARNS ON CODING ERRORS

A new computer system at HM Revenue & Customs could have
given “huge numbers” of workers the wrong tax codes. According
to the Chartered Institute of Taxation, if the error was not
corrected it could cost taxpayers hundreds of pounds. The tax
group revealed many people with only one job were being sent two
or more notices with different tax codes. Employers and pension
companies could end up deducting too much tax if the error was
not corrected by the time the new codes came into force in
April. The group said that in the worst case scenario people
could pay 108 pounds a month too much.

TAX PLAN AIMS TO EASE MULTINATIONAL FEARS

The Treasury will unveil sweeping proposals on Tuesday to
overhaul a controversial anti-tax avoidance regime for
multinationals. The government hopes a change in focus will
defuse complaints about the onerous and complex controlled
foreign companies (CFC) regime, designed to prevent
multinationals diverting taxable profits to low-tax
jurisdictions. The move is being made in an attempt to
discourage more large companies from relocating overseas.

Investment Analysis

Prepared for Reuters by Durrants

PRESS DIGEST – Financial Times – Jan 26