Airports profits slump as Brits (and everyone else)
stays home

The British Airports Authority (BAA) announced yesterday that their profits had taken a major slump, due to a combination of reduced passenger traffic and a dramatic increase in running costs. BAA, acquired by Ferrovial, the infrastructure management giant in 2006, posted profits of £528 million for 2008, down 18 per cent from the previous year. The number of people who passed through the seven airports fell by almost three percent to 145.8 million.

BAA have been ordered to sell of three of their airports, two in the south of England and one in Scotland. Early expectations are that the airports to be put up for sale in England will be Stanstead and Gatwick, with a final decision to be made within the coming weeks.

Aricom Plc (ORE LN): The developer of iron-ore projects in Russia that is in takeover talks with Peter Hambro Mining Plc is scheduled to report earnings. The shares slipped 0.25 pence, or 0.9 percent, to 28.25 pence.

Bank of Ireland Plc (BKIR ID): The country’s largest lender by assets said Richie Boucher will succeed Brian Goggin as Chief Executive Officer. The shares were little changed at 28 cents.

BlueBay Asset Management Plc (BBAY LN): The London-based money manager of fixed-income funds is scheduled to report earnings. The shares advanced 9 pence, or 11 percent, to 92 pence.

British American Tobacco Plc (BATS LN): Europe’s largest cigarette maker is scheduled to report earnings. The shares rose 17 pence, or 1 percent, to 1,716 pence.

Centrica Plc (CNA LN): Britain’s biggest energy supplier is scheduled to report earnings. The shares slipped 1.5 pence, or 0.6 percent, to 258.25 pence.

Capita Group Plc (CPI LN): The U.K.’s biggest supplier of administrative services is scheduled to report earnings. The shares gained 2.5 pence, or 0.4 percent, to 673.5 pence.

Dunelm Group Plc (DNLM LN): The U.K. operator of Dunelm Mill homeware stores is scheduled to report earnings. The shares rose 7.5 pence, or 4.8 percent, to 163.5 pence.

Genus Plc (GNS LN): The U.K.’s biggest cattle breeder is scheduled to report earnings. The shares rose 31.5 pence, or 4.3 percent, to 768.5 pence.

GKN Plc (GKN LN): The U.K.’s biggest maker of components for airliners is scheduled to report earnings. The shares rose 8 pence, or 11 percent, to 77.75 pence.

Hays Plc (HAS LN): Britain’s largest recruitment company is scheduled to report earnings. The shares advanced 3.75 pence, or 5 percent, to 79 pence.

Henderson Group Plc (HGG LN): The U.K. money manager is scheduled to report earnings. The shares rose 5.5 pence, or 7.2 percent, to 82.25 pence.

Hunting Plc (HTG LN): The U.K.-based oil-services provider is scheduled to report earnings. The shares gained 25 pence, or 6.4 percent, to 415 pence.

Liberty International Plc (LII LN): The U.K.’s largest owner of shopping malls is scheduled to report earnings. The shares rose 12 pence, or 3.8 percent, to 328.5 pence.

Mondi Group (MNDI LN): The paper and packaging company spun off by Anglo American Plc is scheduled to report earnings. The shares advanced 3 pence, or 2.4 percent, to 128.75 pence.

National Express Group Plc (NEX LN): The U.K. long-distance coach and rail operator is scheduled to report earnings. The shares dropped 10.5 pence, or 4.5 percent, to 225 pence.

Rank Group Plc (RNK LN): The second-largest U.K. casino owner is scheduled to report earnings. The shares rose 1 penny,, or 1.7 percent, to 60 pence.

RSA Insurance Group Plc (RSA LN): The U.K.’s second-largest non-life insurer is scheduled to report earnings. The shares advanced 1.6 pence, or 1.3 percent, to 126 pence.

London equities rose on Wednesday, with financial stocks in demand on hopes that the worst extent of the toll taken by the financial crisis was becoming clearer.

The FTSE 100 closed 32 points higher at 3,848.98, a recovery of 0.9 per cent, making up most of the 34.2-point loss over the previous session that took the benchmark index 14 per cent lower for 2010. The mid-cap FTSE 250, seen as more representative of the domestic UK economy, was 136 points higher at 6,042.15, a rise of 2.3 per cent.

Sterling fell slightly against the dollar and the Euro and rose slightly against the Japanese Yen and the Swiss Franc:

S&P cut the Baltic republic of Latvia to a junk credit rating – rare for a sovereign state – and said it may reduce its creditworthiness ranking for sister republics Lithuania and Estonia. It also said it may further cut Latvia's credit rating later this year or in 2010.

Economies in eastern Europe have suffered badly from the credit crunch as their high debt, built up as they borrowed in recent years for rapid expansion and more recently to try to fight the economic downturn, has become costly. Their currencies have tumbled too, making leverage more of a burden. Investment from Western countries, which was one of the factors fuelling the huge growth in the region until the credit crunch, has also dried up as investors redeem cash and try to reduce exposure to smaller, riskier economies.

As City traders speculated that the Baltic states could default on their debt, the cost of insuring Latvian and Estonia sovereign debt for five years through credit default swaps (CDS) rose, while five-year CDS for Lithuania hit a record high. Serbia, meanwhile, said yesterday it will seek an additional $2bn loan from the International Monetary Fund to weather the increasingly severe effects of the global financial crisis.

Its Prime Minister, Mirko Cvetkovic, said Serbia will seek to change its current "precautionary" deal with the IMF to a "classic standby arrangement" – meaning it plans immediately to withdraw the $2bn once it is granted, instead of simply having access in case of need. Late last year, the Balkan country reached a 15-month deal with the IMF that gave it access to $520m only in case of a sudden halt in foreign investments.

Wall Street shares had a bad day on trading

The Dow Jones Average dropped 226. to close at 8149.03. Nasdaq fell 50.5 points to 1507.84

American International Group Inc. received bids from MetLife Inc. and Axa SA for a life-insurance unit spanning more than 50 countries, a sale that may mark the biggest step yet in the company’s dismantling, said three people familiar with the situation.

MetLife made a preliminary offer of $11.2 billion for American Life Insurance Co., a price that may drop to about $8 billion because of deterioration in the unit’s financial condition, said the people, who declined to be identified because negotiations are private. A rival bid from Axa excludes operations in Japan, Alico’s biggest market, the people said.

Forced to auction dozens of units to repay part of a $150 billion government bailout, AIG may shelve the Alico sale or issue shares to the public if it doesn’t find a buyer at the right price, one of the people said. AIG is selling subsidiaries amid a global stock-market rout that pushed the Standard & Poor’s 500 Life & Health Insurance Index down 73 percent in the past year.

“All the life insurers are pretty much suffering right now,” said Alan Rambaldini, an analyst at Morningstar Inc. “Before this whole financial crisis happened, that unit of AIG was considered one of their best ones. Under normal circumstances there would probably be a lot more interest than just two companies.”

Five Continents

AIG is continuing to solicit bids for its businesses even as it seeks this week to restructure its rescue package for a second time in four months, one of the people said. Instead of depending on the asset sales to repay its loans, under the plan Chief Executive Officer Edward Liddy announced in October, AIG may instead hand off some of the units directly to the government, two of the people said.

Christina Pretto, a spokeswoman for New York-based AIG, declined to comment, as did Peter Stack, a spokesman for New York-based MetLife, and Emmanuel Touzeau of Paris-based Axa. AIG slipped 12 cents to 41 cents at 4:15 p.m. in New York Stock Exchange composite trading. MetLife gained $2.96, or 15 percent, to $23.30 and has a market value of about $18.5 billion. Axa fell 5.6 percent to 7.65 euros in Paris trading, valuing the company at 16 billion euros ($20.5 billion). It’s possible that other firms or groups of companies may emerge as rival bidders, one of the people said.

For MetLife, already the largest U.S. life insurer, adding Alico would bring customers on five continents, from the U.K. to Japan. Robert Henrikson, MetLife’s chief executive officer, said in December his firm was in an “amazing position” to pursue takeovers because it weathered the financial crisis better than rivals. Life insurers are facing losses and credit-rating cuts because of the declining value of investments.

Annuity Business

At $8 billion, the purchase would be the biggest since Henrikson took charge in 2006 and the second-largest since MetLife sold shares to the public in 2000. The only bigger deal was MetLife’s purchase of Citigroup Inc.’s life and annuity business in 2005 for about $12 billion.

The global financial crisis may produce “attractive” takeover opportunities as rivals lose the appetite for making purchases, Axa CEO Henri de Castries said in November. Axa has transformed itself into a global business spanning Europe, the U.S. and Asia through takeovers including Equitable Life Assurance Society in the U.S., Germany’s Colonia AG and Japan’s Nippon Dantai Life Insurance Co.

“Major deals have defined Axa in its present state,” said Tony Silverman, a London-based analyst at Standard & Poor’s Equity Research Ltd. with a “sell” rating on the stock. “They are one of the leading international players in the Far East and in general terms Axa would want to be No. 1 anywhere in the world,” he said.

Philippines, China

Liddy on Oct. 3 announced plans to sell as much as two- thirds of itself after a government bailout. In addition to Alico, the company said it is selling separate life units in the Philippines and the U.S., and a 49 percent stake in an insurer that operates in Asian nations including China.

AIG has secured agreements to raise about $2.4 billion in sales of assets and units including a stake in a Brazilian joint venture for $820 million to Uniao de Bancos Brasileiros SA and equipment insurer Hartford Steam Boiler for about $742 million to Munich Re.

Japanese exports fell at their fastest rate in more than 40 years last month, as a rapid deterioration in global demand pushed the country’s trade balance to a record deficit.

The gloomy economic data on Wednesday fuelled fears that the recession in the world’s second largest economy would be longer and deeper than expected.

This is article was sourced from www.bank--accounts.co.uk

< back