Date: Tuesday 29 Jun 2010
Fresh tensions erupted between BP and the Kremlin last night after the British oil giant was forced to deny reports that Russia’s Deputy Prime Minister had suggested its chief executive was on the verge of resignation.Just hours before Tony Hayward was due to meet Igor Sechin in Moscow for talks aimed at restoring confidence that BP remains financially viable despite its Gulf of Mexico spill, three news agencies reported that Mr Sechin had told reporters that Mr Hayward “is leaving his position and he will introduce his successor”, the Times reports.
Meanwhile, the FT reports BP has the most shorted bond among US investment grade corporate issuers, and, unusually, more of its bonds are being borrowed for shorting than its shares.
Drugs maker AstraZeneca, defence company BAE Systems and infrastructure group Balfour Beatty have been named by Standard & Poor's as potential takeover targets for cash-rich US companies. Analysts at the credit rating agency listed the three UK-listed companies among nine in Europe that most closely matched the characteristics of groups acquired by US corporates in the past 12 months. "Large US corporate cash balances, combined with currently low European and UK equity forward price-to-earnings ratios and the euro's 16% year-to-date fall against the US dollar, leave US corporations well positioned to pursue European target company acquisitions," S&P said, the Telegraph reports.
Tesla Motors has raised the number of shares it will sell in its initial public offering by 20%, an early sign that investor interest in the electric carmaker is strong. Tesla, the first American car company to go public since Ford in 1956, maintained the price range of the shares between $14 and $16. Based on the midpoint of $15 a share, the IPO could raise more than $200m (£132m). The final pricing of the shares is expected today and the stock is set to trade on the Nasdaq exchange on Tuesday under the symbol TSLA, the Times reports.
The Bank for International Settlements has warned authorities across the developed world that they cannot rely on ultra-low interest rates to cushion the blow of austerity measures. Both fiscal and monetary policy may have to be tightened at the same time and before recovery is entrenched, a chilling possibility for asset markets. "Macroeconomic support has its limits," said the bank's annual report. The Swiss-based "bank for central bankers" said ultra-low rates and massive fiscal stimulus saved the world from an economic meltdown during the credit crisis, but the balance of advantage has since shifted, the Telegraph reports.
Britain's mountain of debt could leave the country powerless to launch another rescue bid in the wake of a fresh financial crisis, the world's central bankers warned yesterday. Their "club" - the Bank of International Settlements - presented in its annual report a frightening picture of the impact of a second banking emergency on heavily indebted nations such as Britain, the Independent adds.
Spanish banks have been lobbying the European Central Bank to act to ease the systemic fallout from the expiry of a €442bn ($543bn) funding programme this week, accusing the ECB of "absurd" behaviour in not renewing the scheme. On Thursday, the clock runs out on the ECB financing programme - the largest amount ever lent in a single liquidity operation by the central bank - under the terms of the one-year special liquidity facility launched last summer, the FT reports.
Details of a new “green investment bank”, replacing several government quangos and with powers to raise billions from green Individual Saving Accounts and other financial instruments, will be unveiled on Tuesday. Putting the UK’s economy on a low-carbon footing will cost about £550bn by 2020, according to a commission set up to examine how a green investment bank could work, the FT reports.
Leaders of some of Britain’s biggest businesses last night gave their emphatic endorsement of the coalition Government’s decision to cut spending immediately in order to pay down the deficit. Senior business executives voiced their support for the approach at a summit organised by The Times and attended by the Prime Minister, the Chancellor and the Business Secretary.
Richard Lambert is to step down as Director-General of the CBI in the new year after five years as the voice of British business. Mr Lambert has chosen to leave because “we’ve got the election out of the way and we have now entered a new phase in the economy. It’s a fantastic job, but it is a six-days-a-week job. I haven’t read a novel for four years. I don’t know what I’m going to do next, but it felt like the right sort of time to step down.” Mr Lambert, 65, told The Times that he wanted to avoid a clash of departures given that Helen Alexander, the CBI’s president, reaches the end of her two-year tenure next summer.
The car industry in the UK can no longer rely on direct state support, the Business Secretary warned yesterday, adding that the sector was no longer facing the crisis that threatened to cripple it a year ago. Vince Cable used a visit to Burnaston, Derbyshire, where Toyota was launching its new hybrid car, the Auris, to warn that the Government would no longer provide blank cheques for the car industry, the Independent reports.The new private equity owner of Liberty yesterday vowed to return the 135-year old London department store to profitability, as its chief executive quit. Marco Capello, the head of BlueGem Capital Partners, which has acquired Liberty's shares for £32m, said: "I would be very disappointed if Liberty was not profitable in the second half of this year, but definitely in 2011." Liberty made a reduced loss of £5.2m for the year to 31 December 2009, the Independent reports.
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