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Friday Papers: Barclays’ firestorm rages

And JP Morgan faces $5bn ‘whale’ loss.

 
Friday Papers: Barclays’ firestorm rages

Top stories

  • Financial Times: Bob Diamond, chief executive of Barclays, was engulfed in a political firestorm on Thursday following revelations of his bank’s attempts to rig market interest rates for financial gain, sending shares in Britain’s biggest bank down almost 16%.
  • The Independent: More than £4 billion was wiped from the value of Barclays on Thursday.
  • Financial Times: JP Morgan Chase is expected to announce losses of about $5 billion related to trades by the so-called London whale at its second-quarter earnings presentation in two weeks.
  • The Daily Telegraph: Royal Bank of Scotland and Lloyds have been accused of systematically rigging financial markets in a growing international scandal which wiped billions off the value of shares in Britain’s biggest banks.
  • Daily Mail: Tesco is set to become the latest firm to face pressure from its shareholders over pay and performance when it holds its annual general meeting on Friday.
  • Financial Times: German officials gave their clearest indication to date that they were prepared to intervene to shore up Italian and Spanish borrowing costs, saying eurozone leaders should use existing powers of their €440 billion rescue fund for short-term help.
  • Financial Times: Airbus is close to finalising plans for its first aircraft factory in the US, in a move that would dramatically ramp up its battle with Boeing.

Business and economics

  • The Guardian: A war of attrition over Xstrata is being predicted as its major shareholder and proposed merger partner, Glencore, retired to consider its next move after its £16 billion deal was rejected by the mining group's second largest shareholder from Qatar.
  • The Daily Telegraph: Glencore's finance director has moved shares worth £200 million into trusts, at least one of which is based in Cayman Islands, as the commodity giant's merger with Xstrata stands on the verge of unravelling.
  • Financial Times: Rupert Murdoch’s decision to split the media empire he has led for almost 60 years has nothing to do with a desire to hand it to his children or the UK phone hacking scandal, News Corp’s 81-year-old chairman and chief executive insisted on Thursday.
  • The Guardian: Dutch banking and insurance group ING bowed to public calls for restraint on banking pay on Thursday, abolishing bonus payments for most of its Netherlands-based banking staff.
  • Financial Times: China plans to create a special zone to experiment with currency convertibility in Shenzhen, the city where it introduced key economic reforms three decades ago.
  • The Daily Telegraph: House prices have fallen 1.5% in Britain in the year to June – the worst annual fall in nearly three years, according to Nationwide.
  • The Guardian: Data from the Office for National Statistics showed that the British economy shrank faster than previously estimated between October and December last year, with a decline of 0.4%.
  • Financial Times: The financial services industry cut 11,000 jobs in the three months to June – all in banking – as concern about economic prospects grew despite strong business performance.
  • The Guardian: European leaders were deadlocked early on Friday over ambitions to embark on a "big leap forward" towards political union and rescuing the euro, with Italy and Spain engaging in a risky gamble to hold an EU summit hostage unless measures were agreed to lower the soaring costs of their borrowing.
  • Financial Times: South Korea plans to boost public spending by more than $7 billion this year to support the flagging economy as it faces strong headwinds from Europe’s debt crisis and China’s economic slowdown.
  • The Independent: The British arm of Spanish banking giant Santander has suffered a blow as it faced a downgrade by Moody’s.
  • Financial Times: Nike has reported an 8% decline in net income for the three months ended 31 May from a year earlier to $549 million or $1.17 cents a share.
  • Financial Times: Jean-Bernard Lévy was ousted as chief executive of Vivendi on Thursday, opening the door to a potential break-up of the French media and telecoms group.
  • The Independent: Shares in Pathfinder Minerals, the Mozambique-focused miner which suspended trading in November, will relist in London Friday after an intervention by the UK Government.
  • Financial Times: Brazilian billionaire Eike Batista was set to lose his title as Brazil’s richest man after shares in his flagship oil company OGX plummeted 40% in just two days.
  • The Independent: The Office of Fair Trading has issued a provisional finding alleging that the Mercedes-Benz unit of German automotive group Daimler and five UK auto dealers were involved in price fixing and the sharing of commercially sensitive information between 2007 and 2010.
  • Financial Times: RIM has reported a net loss of $518 million, or 99 cents a share, in the first quarter and a steep decline in revenues, down to $2.8 billion, 43% below a year earlier.

Share tips, comment and bids

  • Financial Times: Malaysia’s Petronas on Thursday took a big step towards securing supplies of liquefied natural gas from North America for the Asian market by agreeing to buy Canada’s Progress Energy Resources for $5.3 billion including debt.
  • The Daily Telegraph: An infrastructure fund owned by Prudential and US bank Morgan Stanley has bought a 90% stake in Veolia’s regulated water businesses for £1.2 billion.
  • Financial Times: Shares in Felda Global Ventures, the world’s third-largest palm oil estates operator, jumped as much as 20% on their debut, defying global market uncertainty for big-ticket listings.
  • The Guardian (Editorial): Loophole Islands: we should tighten up the UK's own regulations – and increase demands for financial transparency.
  • The Guardian (Comment): Heads will probably roll for the Libor scandal, but this crisis won't end until the profession's link with politicians is severed.
  • The Daily Telegraph (Comment): The performance of the US stock market has been a rare bright spot for America over the past three years.
  • The Daily Telegraph (Comment): After Barclays, the golden age of finance is dead
  • Financial Times (Lex): US healthcare: the court thwarted the predictions of market pundits by affirming the legislation’s mandate and virtually all the law’s other provisions.
  • Financial Times (Lex): Petronas is well-placed to help after a year-long joint venture with Progress.
  • Financial Times (Lex): Opel: the lack of specifics in GM’s business plan for its struggling European unit suggests that self-help will not rescue the sector.
  • Financial Times (Lex): News Corp: in a break-up of world’s last true media conglomerate, sharing cash and debt between its two arms makes the split a more delicate exercise than it looks.

1 comment so far. Why not have your say?

alan franklin

Jun 29, 2012 at 07:29

There is not really any such thing as "The British housing market." It's entirely regional, just like America. Prices have been rising a lot in our area, which is blessed/cursed by its proximity to London and fast rail and road links.

If you look up Fleet, Hampshire, on Rightmove, where you get accurate figures for house prices and sold prices over recent years, you can chart the rises. Furthermore, if you ask to see all properties, including those under offer, you will see that the vast majority are sold.

The tight market, which is bad news for young people, is entirely caused by constant government/local council interference in the free market, putting virtually all the country off limits to house building.

In the highly unlikely event that you could find a plot to build on, which we would like to do, you would be bogged down for years battling with ludicrous reams of regulation and planning officers with too much time on their hands. We know about this, once making the mistake of taking on a Grade Two listed building.

For new build, once you had proved that no rare birds ever fly overhead or live within a few miles, that no bats ever lived in your belfry (!) that no unusual snails ever ate a lettuce leaf in the garden and so on (I jest not) you would probably die of old age before a brick was laid.

That's why houses cost too much and the London/South East market is still active. The actual cost of materials is quite low and there are plenty of builders with time on their hands who would do a deal. It's land and planning that are the bottlenecks.

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