MW_ArticlePageView
*** House price inflation at a 10-year low
*** More woe for M&S
*** What next for the FTSE...an alternative oil opinion...dotcom hysteria...and mor --------------------- – The capital markets environment is “one of the worst we have seen in years”. That’s according to Citigroup CEO Charles Prince, trying to explain the some 5% year- on-year fall in net income in the group’s second quarter, which tumbled to $5.4bn.
– Yet Citigroup is not alone: first it was Morgan Stanley and Goldman Sachs who preceded the world’s biggest financial firm to report a hefty fall in profits. So what’s going on? It seems that for one, higher US bankruptcies have hurt credit card revenue, as more US customers filed for bankruptcy protection before US bankruptcy laws are amended. Fixed-income trading revenue also fell.
– And the news was enough to send Citi’s share price down by some 2% by London’s close. Yet if you take a moment to compare Citi with rivals such as Morgan Stanley and Goldman Sachs, perhaps things don’t look all that bad after all.
– The news didn’t help boost the markets: the FTSE 100 shed 16 points to trade at 5,214 while the FTSE 250 closed 0.5% in the red, at 7,435. But the City was fairly empty on Monday, as only 2.4bn shares changed hands.
– ITV closed as the biggest market loser yesterday, on reports that Time Warner and Apax – who were considering forming a consortium to bid for the telly group – pulled out after spotting ITV’s roaring pension fund deficit. The shares closed more than 3% in the red, at 121p.
– And Kingfisher suffered much the same fate yesterday, as potential bidder Wolseley said that it was looking to broaden its professional tradesman business and not its DIY business. Kingfisher is the owner of DIY specialist B&Q, and saw its share price slump 2% on the news.
– Meantime retailer Marks & Spencer’s share price fell some 1% after yesterday’s news that CEO Stuart Rose was to lose his right-hand man, Charlie Wilson. Wilson leaves M&S after just one year in the job, to go to Baugur-owned Booker.
– And now the question is: does Wilson know something about M&S that investors don’t? ponders John Foley on Breakingviews.com. Wilson has been granted some 600,000 options, which could be worth around £300,000 were Rose to boost M&S’s share price to the 400p target. So if the turnaround were working for M&S, wouldn’t Wilson want to hang around to enjoy his share of the rewards?
– And on the upside, Cable & Wireless said it’s in talks to buy rival Energis for some £700m. While talks were at an early stage, investors liked what they heard, pushing shares up 3%, to close atop the FTSE leaderboard -------------------- Waiting For The Day– Market analysts are all increasingly calling for interest rate cuts – the first said to be on its way in August. Yet is this the right move? asks F&C economist Steven Andrew. There’s been an overreaction to the UK’s economic newsflow: while there’s indeed been weakness in consumer spending, the consumption of services by the personal sector is still looking just fine, so a rate cut could be pre-emptive.
The Smart Money in Russia– Russia is currently seeing a rapidly growing middle class...who happen to sport nifty disposable incomes, says Sven Lorenz in The Profit Hunter Files. As a result of this, property investors are starting to take notice, with regional cities now at the same developmental stage that both Moscow and St Petersburg were at five years ago. For investors, it’s not so easy to invest in commercial property in regional Russia...but there are a number of other opportunities available…
What the events of 7/7 say about Britain’s capital– London’s position in the “global league” is emphasised by the choice of the capital for both the Olympic Games and by the awful Al Qaeda inspired bombings, says William Rees-Mogg in The Fleet Street Letter. Yet now there has been a “shift back towards the trading city” and away from the nation state as the economic unit. Great cities don’t break away from national links, but “that is where the money is to be made”.
Published in
| More
articles
by
Heather D'Alton
MW_RelatedArticlesFooter
Related articles
-
By John Stepek, Oct 07, 2008
-
By John Stepek, Oct 02, 2008
-
By Dominic Frisby, Oct 01, 2008
MW_MoneyMorningSubscribeFooter.ascx
