What Do You Mean, 'No'?

By Heather D'Alton Dec 14, 2005

*** Oil price zooms in on $60 a barrel

*** Regal's ever-growing slip-ups

*** Drinksmakers still in business...Bolivia's impact on the world...space can keep the EU constitution...and more...       

-------------------   – Oil-dependent stocks took their toll on the blue chip index on Monday, pulling down the FTSE 100 from Friday's three-year high.

– With chemicals group ICI down 3% – oil forms the basis of its products – and fuel-guzzler British Airways falling 2%, the blue chip index slipped 5 points to close at 5,072. The FTSE 250 fell 0.3% to trade at 7,335.

– The oil price meantime continued to inch closer to $60 a barrel: Nymex traded at $58.70 by London's close, while Dated Brent traded just below $57 per barrel. And talking of bullish commodities, gold traded above $440 an ounce – its highest level since mid-March this year.

– Bad news for the leisure sector: pubs groups pushed the sector down 1% as the government started consultation on proposals to potentially ban smoking in public places in just three years from now. Both Enterprise Inns and JD Wetherspoon fell more than 1% after Public Health Minister Caroline Flint reckoned that smoking will be prohibited in 99% of workplaces by the end of 2008.

– Tobacco firms were also unloved yesterday: BAT and Gallaher closed 1% in the red on Monday.

– At least drinksmakers are still in business, as SABMiller closes in on cutting a deal with Columbia's biggest brewer Bavaria for $7bn. The race between SAB and Dutch group Heineken NV is now heating up: both are trying to woo the Santo Domingo family, which holds a 70% stake in Bavaria. The two rivals are now in limbo as the Santo Domingo's weigh up the two offers. SABMiller closed 1.5% in the black on Monday.

– Meanwhile the banking sector slipped 0.5%, as Lloyds TSB warned that, like Barclays last month, the consumer slowdown would lead to higher retail banking debts. Lloyds fell 0.4%, while Barclays closed 0.5% down. But just how badly will the slowdown affect the banker? Probably not all that much...if the bank can maintain its delicate balancing act.

– And Regal Petroleum's list of messy faux-pas seems to grow ever longer. After announcing that its key well in Greece would probably not be all that key after all, the group's former chairman and CEO Frank Timis forgot to check with his co-directors before agreeing on an option to sell off a subsidiary which holds production licenses in the Ukraine. Timis resigned earlier this month, but not before allegedly granting Peak Resources the option. Regal shares, which have fallen some 80% in the past 3 months, slumped a further 5%.         

-------------------    – Bolivia is not investing sufficiently in its oil and gas industry, with the result that the entire energy supply of the South American continent could be under threat. This would not only impact on the continent...but on the energy markets across the world. Moreover, foreign investment in the country has just about come to a standstill – largely because most Bolivians refuse to see their country raided – even though foreign investment may just be the answer to the country's problems…  

– It seems rather laughable now that 'a gold-bound copy' of the European Union constitution had been loaded aboard a recent rocket launch from Kazhakstan, which was on its way to the International Space Station. 'The cynic in us is tempted to remark that this was perhaps the single best thing that could have been done with this depressingly positivist and relentlessly centralizing tract,' says Sean Corrigan of Sage Capital.

– Ireland: once a poor agricultural economy; today it has the fourth highest effective GDP per head in the industrial world. So what is the secret behind Ireland's economic miracle? What it's not is the common misconception that the country's success was due to fund transfers from the EU. Instead it can be attributed to the 'radical course of slashing public expenditure, abolishing agencies and cutting taxes and regulations,' says Brian Durrant in the Fleet Street Letter. And finally the Irish are slowly starting to return home...

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