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Saturday Papers: Stocks rally after Spain bailout hint

US equities enjoyed their first positive session of the week with the S&P 500 surging 1.9%.

Saturday Papers: Stocks rally after Spain bailout hint

Top stories

  • Financial Times: Stock markets rallied yesterday as Spain responded to a conditional offer of intervention from the European Central Bank by signalling it would consider seeking a sovereign bailout; US equities enjoyed their first positive session of the week with the S&P 500 surging 1.9%.
  • The Daily Telegraph: Spain inched closer to seeking a sovereign bailout as Prime Minister Mariano Rajoy opened the door to a request, but said he would first need to know the attached conditions.
  • Financial Times: Japan Airlines plans to raise $8.5 billion in a listing three years after suffering one of Japan’s largest bankruptcies.
  • Financial Times: Petrobras, the Brazilian state-controlled oil producer, has reported its first quarterly loss in 13 years.

Business and economics

  • The Daily Telegraph: Tesco is set to go head-to-head with Britain's largest banks when it begins offering mortgages on Monday.
  • The Daily Telegraph: Duncan Niederauer, the head of the New York Stock Exchange, has warned that US stock markets have become too concerned with the speed at which trades are executed, as Knight Capital battles to survive a $440 million trading loss.
  • Financial Times: Manchester United’s new sponsorship deal with General Motors’ Chevrolet brand will be worth almost $80 million a year, more than double the £19.6 million insurer Aon is now paying to have its brand on the team’s shirts.
  • The Daily Telegraph: National Express is boosting the pay of its chief executive Dean Finch, including handing him an extra performance-based share bonus currently worth £550,000, after deciding it hired him "on the cheap".
  • Financial Times: Berkshire Hathaway said its cash pile had grown 9% to $40.7 billion since the start of the year.
  • The Guardian: International Airlines Group, the merged British Airways and Iberian airlines, revealed it is preparing for a Spanish exit from the eurozone as it announced that huge and "unsustainable" losses from Iberia have dragged the parent company into the red.
  • The Daily Telegraph: BHP Billiton has written down the value of its US shale gas assets by £1.8 billion, prompting Marius Kloppers, head of the world's biggest natural resources group, to waive annual bonus.
  • The Daily Telegraph: Standard & Poor's took ratings action on a range of Italian banks yesterday, including downgrading 15 financial institutions, citing increased credit risk for the country's economy and banks.
  • The Daily Telegraph: Royal Bank of Scotland chief executive Stephen Hester has warned that lenders face "wrenching times" in the next few years after a spate of scandals.
  • The Daily Telegraph: Knight Capital, which has been fighting for survival after a $440 million trading loss caused by a software glitch wiped out much of its capital, has obtained a credit line that will allow it to operate for the day.
  • The Guardian: Lloyds TSB has revealed that a "small" number of those packaged bank account holders, who have enjoyed the "fee waiver", will have to pay from 2 October.
  • The Daily Telegraph: Britain's services sector grew at the slowest rate since December 2010; the headline index slipped to 51 from 51.3 in June, according to the Markit/CIPS services PMI.
  • The Daily Telegraph: Soaring fuel costs and rising taxes have taken their toll on Virgin Atlantic as the airline slumped to an underlying loss of £80.2 million.
  • Financial Times: Electronic Arts has filed suit against Zynga for allegedly copying its game The Sims Social.
  • The Guardian: George Osborne has asked technology businesses to invest in the UK, insisting that the government has "the right vision and the right policies" to help companies succeed.
  • The Independent: Shares in global satellite phones firm Inmarsat jumped nearly 11% after better-than-expected half-year sales under its new chief executive Rupert Pearce.
  • The Independent: Royal Bank of Scotland is bracing itself for hefty fines for its role in the Libor fixing scandal.
  • Financial Times: Germany’s Continental received one of the biggest boosts from the earnings season this week as rising demand for cars globally lifted profit beyond market expectations.
  • Financial Times: Oil prices rallied more than $3 a barrel to their highest level in 10 weeks, leading a surge in commodity markets.

Share tips, comment and bids

  • The Guardian: The Belfry, the Warwickshire golf course and resort that was formerly part of the business empire of one of Ireland's richest families, has been sold to a US private equity firm for an undisclosed sum.
  • The Independent: Global Radio, the owner of Capital Radio and Classic FM, received a blow yesterday when its £70 million purchase of Smooth Radio from Guardian Media Group was referred to the media regulator, Ofcom.
  • The Daily Telegraph: Rentokil Initial, the pest control and hygiene group, is to open talks about refinancing its £960 million of net debt.
  • Financial Times: AIG is buying $3 billion of the $4.5 billion included in the government’s public offering, with underwriters having an option on another $675 million of shares.
  • The Guardian: Universal Music's £1.2 billion acquisition of EMI could be heading into regulatory trouble in the US, after the head of the Senate's anti-trust panel warned the Federal Trade Commission that the deal posed significant competition issues.
  • Financial Times: An Australian infrastructure group has positioned itself as a bidder for London’s third-biggest airport, Stansted, after winning the contest to buy a £1 billion stake in Manchester Airports Group.
  • The Independent: The Chancellor's Budget stamp duty raid on homes worth more than £2 million has triggered a 23% fall in sales of properties valued between £2 million and £10 million in the capital, the estate agency Knight Frank said yesterday.
  • Financial Times: Heineken won its first victory in a two-week battle for control of Asia Pacific Breweries after the board of Singapore’s Fraser and Neave agreed to put to shareholders the Dutch brewer’s S$5.28 billion ($4.2bn) offer for F&N’s share in a joint venture that controls the maker of Tiger beer.
  • The Daily Telegraph (Comment): The most important number in the IAG results is not British Airways' €13 million operating profit, the 25% increase in fuel costs or even Iberia's €263 million operating loss.
  • The Independent (Comment): No relief for the sluggish US economy this week, not from the Obama administration, not from Congress, not from the Federal Reserve.
  • The Independent (Comment): Plenty of businesses speak well of UK Trade & Investment, the Government's export arm that tries to help firms carve out revenues from new overseas markets.
  • Financial Times (Lex): The government has been discussing the nationalisation of RBS as a way to boost lending. Buy it would make little difference if customers do not want to borrow.
  • Financial Times (Lex): JAL: the indicative price of Y3,790 per share goes to show just how determined the government is to get the listing away smoothly.
  • Financial Times (Lex): Knight Capital – the kids and the nerds have too much sway on Wall Street and in the City of London.

1 comment so far. Why not have your say?

Graham D-C

Aug 04, 2012 at 16:35

The markets have long stated that Spain would be too big to bail out, whilst in recent weeks its finance minister has categorically denied it would need a sovereign bail out Yet here we are with the FT reporting that Spain was signalling it would consider exactly that, subject to conditions, (where have we heard that before? At the same time the parent company of BA is making a plan of actions in the event of Spain leaving the eurozone. This sounds like another nail in the EU coffin. Is it possible that Greece will be kept in the EU, even if Spain has to leave?

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