LONDON-Tuesday newspaper round-up: Prudential, Apple, Deflation

Date: Tuesday 25 May 2010

Prudential’s market debut in Hong Kong fizzled this morning as the stock dived by more than 2.5% in the first half hour of trading over fresh concerns for the prospects of its planned $35bn takeover of AIA.

The plunge, if sustained over coming days, could cast a dark cloud over Prudential’s impending cash-call on its shareholders – an ambitious $21bn capital-raising exercise which may depend heavily on the appetite and confidence of Asian investors, the Times reports.

AIA’s chief executive has told friends and industry executives that he would quit if the UK’s Prudential succeeded in its $35.5bn (£24.6bn) takeover of the Asian businesses of AIG. Mark Wilson has said he would step down once the deal closed because the proposed combination of the two Asian businesses was “unworkable”. Wilson, 43, joined AIA from Axa in 2006 and boasts more than a decade of senior management experience in the Asian insurance industry, the FT reports.

Apple is planning a high street blitz to sell the iPad when it is launched in Britain on Friday — but people ordering online could have to wait more than two weeks for delivery. Apple has signed a deal with DSGi to stock the tablet computer at 139 PC World and Currys stores from launch, more than trebling the number of shops at which it will be available. DSGi has agreed a 60-day window with Apple to sell the iPad ahead of rivals such as Comet, Tesco, John Lewis and the Carphone Warehouse, the Times reports.

Britain is at risk of sliding into a Japan-style episode of deflation, and may be even worse-equipped than the Asian country to escape, a Bank of England policymaker has warned.Adam Posen, a member of the Bank's Monetary Policy Committee, said that although Britain and the US were unlikely to face repeated recessions, in many senses their plight was "scarier" than Japan's, the Telegraph reports.

BP admitted it is capturing less oil than initially estimated from the broken well in the Gulf of Mexico yesterday, and the group is ramping up efforts to try yet another scheme to plug the leak. The mile-long pipe siphoning oil and gas from the broken well for the past eight days is the first successful effort to contain the leak conservatively estimated to be pumping out 5,000 barrels of oil per day. But since the so-called "riser insertion tube tool" (RITT) went into operation it has collected an average of just 1,885 barrels per day, according to the latest statistics – far from the 3,000 barrels estimated last week, the Independent reports.

Australia is now Rio Tinto's number one sovereign risk country following the proposed introduction of a mining super tax, according to Tom Albanese, its chief executive.Mr Albanese, whose company also invests in countries such as Mongolia and West African nation Guinea, said: "This is my number one sovereign risk issue on a global basis, and we need to express that as such." He added that Rio was now reviewing all its capital spending plans in Australia in light of the potential new tax, the Telegrpah reports.

European Union countries will be required to impose an upfront levy on banks, with the proceeds to be paid into national funds to insure against future financial failures, under proposals to be unveiled on Wednesday. The scheme, which could raise billions once implemented, is designed to prevent future bank failures from destabilising the broader financial system, the FT reports.

Speculators raised their bets against sterling to record levels even after the formation of the new coalition government, as worries escalated over the health of the country’s finances. Data from the Chicago Mercantile Exchange showed that speculators had extended bets against sterling to 76,745 contracts from 72,188, equivalent to $6.9bn (£4.7bn), in the week ending on May 18, the FT reports.

The euro slid 1.5% yesterday as the collapse of a Spanish bank and a stark warning from the International Monetray Fund, which has 486 branches and €1.5bn (£1.3bn) of problem loans, the Times reports.

Pace has unseated Motorola to become the world’s biggest maker of set-top boxes. The company, based in Saltaire, near Leeds, recorded a 31 per cent increase in shipments last year to leapfrog Motorola and Technicolor, formerly Thomson, to take the No 1 spot. Moreover, IMS Research, the consumer electronics analysis provider, said that it expected Pace to cement its position at the top of the market this year after it signed deals with pay-TV operators to supply high-definition receivers in the Benelux region and in Malaysia, the Times reports.