Thursday Papers: HSBC braced for huge US penalty

Top stories

• Financial Times: HSBC is to apologise to US lawmakers for failing to have appropriate controls in place to ensure it did not facilitate the financing of terrorism and other criminal activities, transgressions that analysts estimate may cost it up to $1 billion in fines.
• Financial Times: John Cridland, director-general of the CBI, Britain’s biggest employers’ group, has strongly criticised the government for the “really disappointing” implementation of its growth plan, asking: “Where are the diggers on the ground?”
• The Guardian: US politicians are considering summoning Barclays' former boss Bob Diamond to Washington to answer questions about the Libor-fixing scandal, in a sign that the controversy is becoming an ever hotter issue in the US.
• The Daily Telegraph: Lloyds Banking Group could have to pay out more than £1 billion over claims it was involved in the manipulation of Libor.
• Financial Times: ICAP, the world’s largest inter-dealer broker by revenues, on Wednesday played down its role in the Libor interest rate rigging scandal as it suffered a further slowdown in its trading business.
• Financial Times: JP Morgan is aiming to take the number one slot in the lucrative prime brokerage market in Europe by the end of next year.
• Financial Times: The investment managers, including Allianz, Axa, BlackRock and Fidelity, join a swelling chorus of critics of the technical standards that the EU has proposed as part of reforms of hedge fund regulation.
• The Guardian: A shareholder vote on Glencore and Xstrata's plan for a £50 billion merger has been set for 7 September.
• Financial Times: Just 8.7% of funds raised in equity capital markets this year were through convertible bonds, an all-time low, according to Dealogic.
• The Daily Telegraph: Sir Mike Rake has sounded out investors about becoming chairman of Barclays and has told them he will quit the boards of easyJet and BT to do it.
• Financial Times: European regulators have hailed their exercise to force the continent’s banks to buttress themselves with fresh capital as a resounding success, revealing 27 banks deemed to have a capital shortfall of €76 billion last autumn raised a combined €94.4 billion by the end of June deadline.

Business and economics

• Financial Times: Investors bypassed Wall Street dealers and were record-sized buyers of 10-year Treasury debt on Wednesday at the lowest recorded regular auction yield of 1.459%, just above June’s all time low of 1.44% for the benchmark issue.
• Financial Times: Global mining groups, such as BHP Billiton, Vale and Anglo American, are pruning their expansive portfolios, as calls from shareholders for greater focus and spending discipline prompt them to shed non-core assets.
• Financial Times: Sir Michael Rake, chairman of BT, has admitted that the UK telecoms group had attempted an audacious raid for Sky’s rights to Premiership football in the face of criticism from shareholders about the cost of the matches that it had acquired.
• The Daily Telegraph: The US trade deficit shrank 3.8% to $49 billion, the US Commerce Department said.
• Financial Times: The Spanish government has unveiled €65 billion worth of tax increases and public spending cuts as part of a deal to secure European aid.
• The Guardian: The British government has committed $1 billion of taxpayer's funds to support deep-sea drilling in the south Atlantic.
• Financial Times: The worst drought in the US in 25 years has wrought havoc on the country’s most important crops, putting the global economy at risk of its third food inflation shock in five years.
• The Daily Telegraph: The Government is failing on its pledge to stimulate the economy through infrastructure projects and could lose Britain’s key investments by delaying vital decisions, according to more than 20 leading figures in the construction industry.
• Financial Times: Burberry on Wednesday reported an 11% year-on-year increase in first-quarter sales to £408 million, undershooting analysts’ forecasts of £418 million.
• Financial Times: The London Stock Exchange will launch an “international board” as part of a preliminary agreement with the Singapore Exchange to offer trading in each other’s blue-chip stocks.
• The Guardian: Poundland has delivered a major coup by appointing former Tesco finance director Andrew Higginson as its non-executive chairman.
• The Independent: Total revenues at Thorntons rose by 7.8% to £24.7 million, while its like-for-like revenues grew by 0.7% over the nine weeks to 30 June.
• Financial Times: Silicon Valley investor Michael Moritz has announced a £75 million donation to Oxford university on Wednesday.
• The Daily Telegraph: Barratt Developments, Britain’s biggest housebuilder, expects to report a near 160% rise in full-year profits to £110 million in a relatively stable housing market.
• Financial Times: Facebook on Wednesday announced a partnership with Comcast’s NBCUniversal, under which the US broadcaster will post Olympics-related news, interactive polls, photos and other exclusive content to Facebook.
• The Guardian: Britvic has admitted that the company would miss City profit forecasts for this year owing to the botched introduction of the new bottle caps, which will cost it up to £25 million.
• Financial Times: After more than three years of delays, the Securities and Exchange Commission voted on Wednesday 3-2 in favour of a system that will require exchanges to establish a tracking database for single orders.
• The Independent: House prices will take nearly two decades to fully recover the damage wrought by the recession and financial crisis, accountants PriceWaterhouseCoopers have said.
• Financial Times: US insurer WR Berkley, which has a market value of $5.4 billion, is understood to have agreed terms with the City’s planning authorities to construct a 40-storey tower next door to the offices of Lloyd’s of London.
• Daily Mail: JD Wetherspoon bucked the economic gloom, posting like-for-like sales up 6.1% in the 11 weeks to 8 July, on the back of Royal celebrations and the football finals.

Share tips, comment and bids

• Financial Times: Telefónica is seeking to sell its Atento call-centre unit for the second time in just over a year as the Spanish telecoms group presses ahead with accelerated plans to cut its debt pile.
• The Guardian (Comment): The House repeal of Obamacare is mere GOP grandstanding. Americans deserve instead a reasoned Republican alternative.
• The Guardian (Comment): Tenants are wising up and spreading the word: they won't put up with lax rights and worsening housing conditions.
• The Daily Telegraph (Comment): Proud Spain has once again humbled itself to the euro’s demands.
• The Daily Telegraph (Comment): You can have all the cheap money in the world but if there’s no demand for it if the exercise is academic.
• Daily Mail (Comment – Alex Brummer): The work needed to make public finances more robust will be seen in the Office for Budget Responsibility's 'sustainability' report. It is a chance for the Chancellor to put some thrust behind a growth agenda.
• Financial Times (Lex): Burberry: whatever the jitters about the global economy and after reporting strong results the UK luxury goods company’s continued focus on growth still looks justifiable.
• Financial Times (Lex): Deutsche Post: the German mail and parcel company is a group of two halves with the express division growing rapidly while the domestic unit holds steady.
• Financial Times (Lex): Hybrid capital: Spain’s bank bailout calls for burden sharing by holders of hybrid capital such as preference shares. Just what is the role of this funny money?
• Financial Times (Lex): Chinese earnings: with the economy slowing and corporate earnings suffering, the onus is on managers to show they can show their mettle when times are tough.