Thursday Papers: ECB resists capping bond yields in debt plan

Citywire for Financial Professionals

View the article online at http://citywire.co.uk/money/article/a616041

And analysts' thumbs down for smartphones sees shares tumble at Nokia.

Top stories

• Financial Times: The European Central Bank will refrain from publishing any formal cap on bond yields when it announces a new plan to buy distressed eurozone sovereign debt at its governing council meeting on Thursday, sources said.
• The Independent: Shares at the troubled Finnish mobile giant Nokia tumbled by 13% on Wednesday as analysts gave a thumbs down to its new range of Windows 8 smartphones.
• The Guardian: Four of News Corporation's top executives have had their bonuses cut as a result of the phone-hacking scandal, although its chairman and chief executive, Rupert Murdoch, still pocketed more than $30 million for the year to the end of June.
• Financial Times: The private bank of Goldman Sachs is quietly beefing up its lending to wealthy individuals with a host of new loan products and credit offerings to boost revenues as new rules are expected to clamp down on their old profitmaking activities.
• The Daily Telegraph: Lloyds Banking Group is being investigated by the regulator for mis-selling financial products to retail customers in the latest scandal to hit Britain?s high street banks.
• Financial Times: Citigroup is launching a commodity trade finance business to capitalise on the pullback from the market by European lenders such as BNP Paribas.
• The Daily Telegraph: Two senior Barclays staff ? Ritankar ?Ronti? Pal, head of US interest rates trading in New York, and Dong Kun Lee, a derivatives trader who reported to Pal ? have left the bank?s US offices in the wake of the Libor scandal that has shaken the bank to its foundations.
• Financial Times: Shell is to build one of the world?s largest carbon capture and storage facilities in Alberta, Canada, in an effort to cut the greenhouse gas emissions from its business mining the country?s oil sands.
• The Guardian: More than 3,000 striking South African miners marched through the streets of Marikana on Wednesday, threatening to kill colleagues who continued working and to burn down a Lonnmin mine shaft.
• Financial Times: Paul Walsh, chief executive of Diageo, pocketed ?11.2 million in pay in the year to 30 June ? more than double the amount he took home last year.
• Daily Mail: Billionaire Mike Ashley became the latest casualty in the City?s shareholder spring after Sports Direct investors voted against an incentive scheme that would have netted him ?26 million.
• The Independent: The TUC condemned Britain's "two-tier" pension system on Wednesday as its research showed the pension pot of the average FTSE 100 director swelling more than 10% to ?4.3 million last year.
• Financial Times: Royal Bank of Scotland?s insurance arm Direct Line has warned it plans to make about 900 employees redundant as part of a cost-cutting drive ahead of an expected flotation.
• The Daily Telegraph: Royal Bank of Scotland shareholders who are threatening a ?3.3 billion lawsuit against the lender and its former directors have been dealt a blow after a US court dismissed similar allegations that the bank misled investors.
• Financial Times: Honda is to invest ?267 million in its plant in Swindon, marking its biggest expansion in the UK in more than a decade and a further sign of the auto industry?s resilience despite the recession.
• The Guardian: Shares in BP fell nearly 3% to 423.85 pence on Wednesday following the US government's determination to prove BP responsible for 'corporate recklessness' over the Deepwater Horizon disaster.
• Financial Times: The ?Apple effect? is weighing heavily against the Dow Jones Industrial Average this year with the venerable benchmark lagging behind the S&P 500 by the widest margin since 2004.
• Financial Times: Samsung Electronics has been accused of breaching labour law at six factories in China by China Labor Watch, a US-based non-profit organisation.

Business and economics

• Financial Times: In the latest break with their traditions of secrecy the Security Service, MI5, and GCHQ, the secret communications agency, called on SMEs to develop ?groundbreaking, cutting edge innovations? to help with following and identifying potential terrorists.
• The Guardian: Preparatory work for the ?8 billion Battersea power station project to build 3,500 homes, 160,000 square metres of office space, shops and a park on the 16-hectare site will begin this year.
• Financial Times: GM Financial has taken advantage of investor clamour for higher-yielding securities by selling $1.3-billion package of debt backed by subprime auto loans so far this year.
• The Independent: Hargreaves Lansdown, the financial advisory giant, has reported record profits of ?153 million ? up 21% - and unveiled a 20% rise in its dividend, leaving its co-founders, Peter Hargreaves and Stephen Lansdown, to share a ?56 million payout.
• The Daily Telegraph: Bumi Resources lost a further 19.3 pence to 268.7 pence on Wednesday, becoming the worst-performer on the FTSE 250 index.
• Financial Times: China Development Bank will sell $1.6 billion in asset-backed securities this week, the country?s biggest securitisation deal, and its first in three years.
• Financial Times: Holger H?rter, Porsche?s former chief financial officer, has denied committing credit fraud during the sports car maker?s failed attempt to take over Volkswagen.
• The Guardian: Britain's economic performance has received a rare accolade from the Switzerland-based World Economic Forum, which says the UK is now the eighth most competitive country in the world.
• The Guardian: The euro gained 0.3% to close just above $1.26 on Wednesday after the Bloomberg financial news service reported that the European Central Bank was preparing to announce plans to buy unlimited quantities of government debt from troubled members of the single currency.
• Financial Times: Italy?s worsening economic crisis and high debt costs have led senior officials in Rome to warn that the country may be forced by the end of the year to apply for an EU bond-buying programme in exchange for implementing further tough economic reforms.
• The Guardian: Financial Services Authority has ordered banks to put an end to their bonus culture, in a report that blames staff incentives for corrupting the services they provide and leading to millions of consumers being missold investments and insurance policies.
• Financial Times: Turkey is moving ahead with its first ever Islamic bond, or sukuk, after almost a decade of preparation in a country with a fiercely secular tradition but an Islamist-rooted government.
• Financial Times: Emirates Airline is set to announce plans on Thursday for a far-reaching partnership with Qantas in a move that would prompt the Australian flag carrier to seek the dissolution of its 16-year joint venture with British Airways.
• Financial Times: Turnover at Advanced Medical Solutions increased in the six months to 30 June from ?16.3 million to ?24.8 million; pre-tax profit was up from ?2.6 million to ?4.5 million.
• The Daily Telegraph: Soaring salaries and transfer deals could eat into Manchester United's growing revenues, analysts have warned, weeks after the football club floated in New York.
• Financial Times: The private equity owner of Powerleague, the five-a-side football pitch operator, has raised ?880 million for a European acquisition spree.
• Financial Times: The Hong Kong share price of PetroChina opened down 2.5 per cent on Wednesday after rumours about the whereabouts of its chairman, Jiang Jiemin, spread online on Tuesday.
• Financial Times: Malaysia has given the go-ahead for the country?s first plant to process rare earths, granting a licence to Lynas Corporation, an Australian company, to start processing the materials.
• Financial Times: MasterCard Worldwide has become the first international payments network to grant a licence to a Myanmar bank, paving the way for issuance and acceptance of branded credit and debit cards in the country.

Share tips, comment and bids

• Financial Times: ING will sell its stake in Capital One, the US bank, for about $3 billion as it continues to shed international assets and retrench in the wake of a ?10 billion bailout from the Dutch government during the financial crisis.
• Financial Times: AG Barr, maker of Scotland?s ?other national drink?, Irn-Bru, has launched an audacious bid for Britvic, its bigger UK peer; the deal may be worth as much as ?1.42 billion.
• The Daily Telegraph: Luxury jewellery designer Theo Fennell, whose customers include Victoria Beckham and Helen Mirren, is in takeover talks with EME Capital.
• Financial Times: Lenovo has continued its aggressive expansion with the acquisition of CCE, a Brazilian consumer electronics company, for $150 million.
• Financial Times: NEC, the loss-making Japanese computer company, has sold its 2.7% stake in Lenovo of China for $230 million as it seeks to streamline its portfolio of businesses and return to profitability.
• The Guardian (Comment): After the reshuffle, Ed Miliband should realise that voters are focused on jobs, benefits and rents, not on pensions, shares and house prices.
• The Guardian (Comment): Funding guarantees worth ?60 billion may kickstart housebuilding. Capping the cost of infrastructure projects would be better.
• The Daily Telegraph (Comment): Barclays and its former chief executive, Bob Diamond, can be blamed for many things. But Parliament resorting to the unacceptable practice of retrospective legislation is not one of them.
• The Daily Telegraph (Comment): Boo the Tories all you like, but they?re right about saving the economy.
• Daily Mail (Comment ? Alex Brummer): Reckless charge for oil giant BP over Gulf of Mexico spill.
• Financial Times (Lex): Facebook buyback: the social networking group is not trading cleverly to make a fast profit on its own shares ? it is simply doing what it must.
• Financial Times (Lex): Nokia: cash buffer should help negotiate a difficult transition period, but investors should await evidence of a product-led revival.
• Financial Times (Lex): BP: the latest salvo from the Department of Justice does not imply that an out-of-court settlement is less likely, but a gross negligence finding is still a serious threat.
• Financial Times (Lex): Bank mis-selling: regulators need to ask themselves whether there is a risk of killing the sort of innovation from which customers would benefit.

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Source: http://www.citywire.co.uk/money/thursday-papers-ecb-resists-capping-bond-yields-in-debt-plan/a616041

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