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View the article online at http://citywire.co.uk/wealth-manager/article/a645014

Wednesday Papers: Carney hints at dumping inflation target

by Himanshu Singh on Dec 12, 2012 at 07:59

Wednesday Papers: Carney hints at dumping inflation target

Top stories

  • Financial Times: A trader who worked for UBS and Citigroup, along with two inter-dealer brokers were questioned by police in London on Tuesday after being targeted in the first arrests in the widening global probe into the manipulation of Libor.
  • Financial Times: Mark Carney, the next governor of the Bank of England, has suggested that he will act much more aggressively to revive the UK economy when he takes charge next summer, including dumping the BoE’s much-vaunted inflation target if growth fails to pick up.
  • Daily Mail: Giving workers shares in their companies in return for losing some employee rights could cost British taxpayers £1 billion, it emerged on Tuesday.
  • The Independent: Senior executives at HSBC are to reportedly defer a portion of any bonuses they are awarded for the next five years under the terms of a record €1.9 billion settlement with the US Department of Justice.
  • Financial Times: UBS has become the second Swiss banking giant to announce it will be imposing negative interest rates on institutional clients, as it battles with haven flows into the Swiss franc from overseas banks.
  • Financial Times: More than 150,000 Northern Rock customers will receive an early Christmas present – in the form of an average £1,800 state handout – following an expensive administrative error made by the nationalised lender’s staff in 2008.
  • Financial Times: HSBC will spend $700 million on a global “know your customer” programme, as part of a 26-point plan agreed with US regulators to settle money laundering and sanctions breaches.
  • Financial Times: British Airways faces stronger competition on its core transatlantic routes after Delta Air Lines on Tuesday unveiled plans to form a joint venture with Sir Richard Branson’s Virgin Atlantic for flights between the US and UK.
  • Financial Times: WPP shareholders have voted overwhelmingly in favour of moving the marketing services group’s headquarters back to the UK from Ireland, following recent changes to UK laws on how overseas profits are taxed.
  • The Daily Telegraph: Channel 4 is locked in a stand-off with WPP, the world’s biggest advertising group, which could end up pulling all of its ads from the broadcaster.
  • Financial Times: Slowing subscriptions threaten Bloomberg’s goal of raising revenues to $10 billion between July 2013 and June 2014, which would have triggered large bonus payments.

Business and economics

  • Financial Times: Greece on Tuesday night received offers from private investors to sell €32 billion in bonds back to Athens for an average of 33.5 cents on the euro, in essence agreeing to a 66.5% voluntary loss on their holdings.
  • Financial Times: Members of the Business Roundtable, one of corporate America’s main lobbying groups, have said lawmakers should consider backing higher tax rates along with spending reforms in a compromise to avert the fiscal cliff.
  • The Independent: British PM David Cameron and George Osborne will on Wednesday begin a rearguard action to stop the City of London's status as the world's leading financial centre being threatened by plans for banking union inside the eurozone.
  • Financial Times: Britain is set to be joined by Sweden outside Europe’s banking union, a move signalled on the eve of crunch talks that will strengthen the hand of countries demanding safeguards against a powerful eurozone bank supervisor.
  • The Independent: Britain has no reason to fear a spike in borrowing costs if stripped of its AAA credit rating, the chairman of the Office for Budget Responsibility, Robert Chote, told the Treasury Select Committee.
  • The Daily Telegraph: New European pension rules would lead to 180,000 UK jobs being lost and would hit businesses with £350 billion of added costs, the CBI has warned, as it called for the "crazy" and "wrong-headed" proposals to be ditched.
  • Financial Times: Enrique Peña Nieto is pushing for constitutional reform as the new president attempts to open up Mexico’s state-run energy sector to private investment.
  • The Daily Telegraph: The long-awaited auction of Britain's 4G mobile airwaves finally rolled into action on Tuesday, as would-be bidders lodged their applications to participate in the multi-billion pound race.
  • Financial Times: Saudi Arabia has cut oil output to its lowest level for a year as a combination of surging US crude production and weakening economic growth sapped demand.
  • Financial Times: Total, the French oil group, is to concentrate on “aggressive” management of its existing assets to invest and grow and is not seeking new acquisitions, according to its chief executive.
  • The Daily Telegraph: Carpetright, the flooring retailer and economic bellwether, has slipped further into the red after closing stores and writing down the value of other sites in the face of challenging trading conditions.
  • The Daily Telegraph: Entertainment retailer HMV is being backed over the vital Christmas trading period with funding of around £40 million from its suppliers.
  • Financial Times: Jaguar Land Rover could set up its first plant in the Middle East after an agreement with the Saudi Arabian government to study the possibilities of car production in the region.
  • The Independent: Nick Robertson, the chief executive of online fashion retailer Asos, has boasted that its US sales will outstrip the UK over the next three years after sales there rose by 57% to £19.1 million over the three months to 30 November; UK sales rose by 24% to £62.1 million in the quarter.
  • The Daily Telegraph: Cathay Pacific flight crews may stop serving alcohol and smiling at passengers after voting in favour of industrial action during the Christmas holidays over a salary dispute, union bosses said on Tuesday.
  • Financial Times: HSBC Global Asset Management has altered the business model of its exchange traded funds operations by adding a second official market maker who will help to improve the trading liquidity of its ETF range.
  • The Independent: Revenues at IG Group fell 14% to £169 million in the six months to 30 November, with the UK, accounting for half of the business, down 15%.
  • Financial Times: Paul Walsh, Diageo chief executive, said Diageo and Jose Cuervo, the world’s top-selling tequila, have agreed to call time after failure to clinch terms on acquisition.
  • The Independent: Dilip Patel, the UK managing director of the Spanish group behind Zara, is to take the helm of the company's fledgling United States business.
  • The Guardian: Costa Coffee sales rose by 7.1% in the last three months against the backdrop of protests and boycotts against its closest rival Starbucks because of the US chain's controversial tax arrangements.

Share tips, comment and bids

  • Financial Times: Tullow Oil is to pay up to $672 million to acquire Norwegian explorer Spring Energy as part of a change in strategy for its business that will also see the sale of interests in the UK and Dutch sectors of the North Sea.
  • Financial Times: Rio Tinto said it had reached a binding agreement to sell its 57.7% share in Palabora Mining for $373 million, while Anglo American said it had agreed to sell its 16.8% holding in the copper company for $103 million.
  • Financial Times: Sprint is in talks to buy the 49% of Clearwire it does not already own, according to people familiar with the matter, a move that would give the US wireless carrier additional spectrum.
  • The Daily Telegraph: Delta Air Lines has confirmed it is to take a 49% stake in Sir Richard Branson's Virgin Atlantic in a $360 million deal that will see the US carrier buy out Singapore Airlines' stake.
  • Financial Times: Abu Dhabi’s Etihad Airways has identified two Indian airlines – Kingfisher and Jet Airways - as potential targets for investment.
  • The Independent: Aquiline Capital Partners, a private-equity firm led by the son of former AIG boss Hank Greenberg, is in the driving seat to buy Lloyd's of London insurer Equity Red Star.
  • Financial Times: John Malone’s Liberty Interactive has taken voting control of TripAdvisor, the online travel group, from fellow media mogul Barry Diller in a $300 million deal that marks the latest chapter in their long-running and sometimes difficult relationship.
  • The Daily Telegraph: Yorkshire-based technology group Pace has made an offer to buy part of Motorola Mobility, in a deal that would more than quadruple the size of the UK company and make it the biggest set-top box maker in the world.
  • The Guardian (Comment): Unions will survive – but they'd do well to learn from another embattled industry that has faced many of the same problems.
  • The Daily Telegraph (Comment): British Chancellor George Osborne is between a Rock and a hard place.
  • The Daily Telegraph (Comment): Britain is becoming a nation of renters as overseas investors gobble up the housing stock.
  • Financial Times (Lex): HSBC and Standard Chartered are about to pay record fines in the US but the sums pale in comparison with recent earnings.
  • Financial Times (Lex): AIG: four years after its $180 billion rescue, the US Treasury has sold the last of its stake, but investors should be focusing on the core insurance business.
  • Financial Times (Lex): Diageo: as talks to buy Jose Cuervo stall, rumours swirl that Beam is the next target, even though it is a much bigger slug than the Mexican liquor producer.
  • Financial Times (Lex): Tullow Oil: the oil explorer’s purchase of Norway’s Spring Energy gives it significant virgin exploration territory.
  • Financial Times (Lex): European patents: after four decades, the EU has finally agreed a single intellectual property right. This may boost Europe’s dismal research record.

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