Arcus takes over Forth Ports with a massive offer of £760 million

 

Forth Ports (FPT .L) owns and operates 7 commercial ports throughout UK that are good profit generators. The company announced a significant 10% increase in annual profit in the year 2010 where its pretax profit was £36.6 million on revenues 5% higher at 181.9 million in 2010. According to experts the optimistic prediction for the annual profit of Forth Ports for the previous year was £35.6 million, where practically it crossed the limit and performed exceptionally well.

Arcus European Infrastructure fund posses 23.5% shares in the company. Forth Ports’ Chairman Mr. David Richardson said that till offer from Arcus will give a new opportunity for Forth Ports; shareholders to realize that this investment is at a fair price.

Previously an offer of £745 million was proposed to Forth Ports by Arcus but this was not convincing enough for the company as its shares have also risen up by 12% during the February where the business valued at a worth of around £735 million. After the acceptance of the proposal the company said that although the economic conditions of UK especially in trading is challenging at present, but since the ports have been enjoying good profits and conditions are predicted to become better soon as well, this will surely an encouraging decision for the management.

Inflation impacts the highest UK Household income fall since 1970s

 

A report generated by Institute of Fiscal Studies (IFS) claims that the people of UK have faced a drastic decrease in living standards for the last 30 years, because of the rapidly increasing inflation and unemployment throughout the region. The average household’s real income has decreased by 1.6% over the three years which contrastingly increased significantly even during the recession.

IFS report emphasized that the reasons for the fall in living standards were not only due to increase in unemployment in various sectors, but the decrease in interest rates from the saving also lead to this decrease. Moreover the tax and benefits that were changed and stagnating the real earnings pay after the eroding effects of inflation are also considered to be prominent factor for the cause.

Unfortunately according to experts the situation is not expected to resolve soon and even after the Government announcement of £111 billion austerity program to over the issue there would be further innovative steps required from the government to completely eliminate all the issues.

According to one of the experts from IFS, the household incomes are probably to level in 2013, where things are expected to become after and government program are most likely to take effect.

The problem of stagnant condition to pertain for sometime is the sluggish economic recovery and weak jobs in the market, where the workers are in no position to demand a pay increase due to the fear of over-target inflation and higher inflation rate. January’s VAT rise was one of the highest rise in Consumer Price Index (CPI) where it hit the margin of 4% pushing the cost of living still further.

Swiss based pharmaceutical company Novartis decreased that UK is implementing jobs cuts plan

 

Novartis is a pharmaceutical giant operating in many countries around the world. The company spokesperson said that particularly in UK the company is planning to cut jobs after which the jobs throughout UK would be reduced to 500 which were 950 in the previous year. This plan is a result of cut down of research and development plan of UK pharmaceutical research and development (R&D) industry.

The Novartis and Pfizer have been working on this plan and will continue to implement for the next two years as well. In February next year Pfizer is planning to completely close down its research and development facility in Kent that has about 2,400 employees working.

There have been significant changes in healthcare systems and the organizations are focusing on different cost effective and cost cutting strategy. UK investments have also shown a decline and innovative drugs are not emerging in the market even after the little investment in research and development sector of UK pharmaceutical industry.

Royal Bank of Scotland Paying high to its important staff

The Royal Bank of Scotland (RBS) has a total of £375m to 323 people who are renowned as their key staff. Although RBS declared £3.6bn loss in 2009 and declared £1.67bn loss in 2010 has come up with a different strategy to back their key employees and ensure success even though the company is incurring losses.

Although  most of the private companies in UK have been focusing on cost cutting strategy because of recession and low profits but RBS has brought an innovative strategy to cater the problems in a proactive manner that can improve the organization’s overall performance and productivity and to improve the profitability of the company.

Inflation expected to further increase

Inflation rate rose to 4% in the month of January from 3.7% in the month of December. However, the target inflation was 2%. Retail price index (RPI) also showed an increase in inflation of 5.1% from 4.8%. According to a survey conducted by Bank of England, almost 66% of the people believe that the inflation would further increase. This would be a threat for all those people who have been saving money and earning small interest rate of their savings as inflation would reduce the value of their savings.

Competition in the credit card becomes more intense

More and more banks have come up with different offers for customers to increase their use of credit cards and other services. Now because of intense competition, time length of 0% interest on the loan which customers switch from other cards has been extended to 20 months. This change has been in the spotlight and many financial groups and analysts have warned customers to remain cautious over such deals.

However, lenders are giving these special offers to only those customers having above average credit histories. According to Kevin Mountford from Moneysupermarket, “"If you fall outside of this category then you may find your options are more limited. Before applying for a credit card, consumers need to check their credit profile and make sure there is no adverse information that would jeopardize their chances of being accepted."

 

UK is experiencing an alarming situation in the unemployment sector, where the unemployment figure has raise to 27, 0000

UK is experiencing an alarming situation in the unemployment sector, where the unemployment figure has raise to 27, 0000 in only three months making a total to 2.53 million employed people. This unemployment figure is the highest since last 17 years where in 1996 the difference was not big as well. Another record of age demographics in unemployment was broken during this period as the unemployment among 16 to 24 years old people raised to 20.6% which was only 0.8% in the previous years. The 20.6% also includes the students who are now willing to job because of the high inflation and change in lifestyle and trends to earn money.Globally, the fresh graduate or new entrant age sector that is employed is considered to be 18 to 24 years bracket. In UK, this age bracket of 18 to 24 years has also unfortunately showed a rise in unemployment rate, where the percentage has reached to 18.3% which is again very high considering the average similar age demographic segment of 10%. These figures and facts were disclosed by ONS, where the research report also communicated that the average earning in January were 2.3% higher than what it was during January 2010. This is mainly because companies throughout UK have declared good bonus and profits and have showed some good progress in business, which are good signs and a sigh of relief for the unemployed people.The Wage growth in UK is higher than what is expected and according to the experts’ prediction, the Bank of England will not put pressure on the banks to raise their interest rates.

Job Cuts in UK Public Sector

Contradicting to the scenario of unemployment, the employment sector has experienced significant changes as well. The age demographics in the employment sector have changed, where companies have focused more on experienced professional rather than fresh market employees. A record employment of age bracket between 50 to 64 years has increased to 7.3 million, which includes 25,000 employment increases during the last three months. The Public sector in UK is more affected than government sector, there the employment of average age from 18 to 30 years feel by 45,000 as compared to government sector there it fell by 24,000. Although there have been about half a million job vacancies opened during the last three months but since the unemployment rate is very high and companies are more concerned about experienced professionals about one third of these vacancies are yet to be filled. UK’s Prime Minister, David Cameron admitted that the youth unemployment numbers are disappointing, however they have a mixed picture of employment and unemployment, however the government is making efforts to overcome the problem and come up with policies that can provide employment to the UK people.UK, Employment Minister, Chris Grayling has developed hopes that the situation will become better in the second half of 2011. He emphasized that the business are making progress and growing that will result in employment and the private sector will have substantial growth in the coming time.

Reports suggest that China has over taken the global art market of UK for the first time.

 

 

Reports suggest that China has over taken the global art market of UK for the first time. As stated by European Fine Art Foundation UK has recently slipped down to third position in the global market for antiques and arts. However US still continues the domination of this market with the shares of 37% and it remained the leader in 2010

According to British Art Market Federation which generally represents many leaders of UK says that current market share of UK are 22% in contrast to that of China which is 23% and the figures seems quite alarming. However UK stills leads to be the Europe’s biggest market leader as followed by France

The report further says that although the period from 2008 to 2010 remained to be crisis period for the UK arts industry, but still the industry seems to have recovered from this crisis period. it further says that art tax due to be extended in UK, Ireland, Netherlands and Austria further an attempt to damage the market and encouraging the vendors to sell their art elsewhere.

Pay plan for public sector senior revealed by Will Hutton

An independent review recently indicated that the pays for senior public servants should be based on their performance rather than subject to the cap imposed on them. The review by Government commissioned fair pay stated that at least 10% of the pay must be awarded to the public servants if the objectives were met

The review as conducted by Will Hutton also compared the link between the executive pay and the pay given to lowest paid staff. However he further said that pay level comparison should also be conducted by the public sector bodies and public limited companies. George Osborne the Chancellor then said that he will give the review careful consideration, however there was no pledge for implementing the proposed solution.

Benetton to increase the costs because of its profit reduction

Italian Fashion retailer Benetton operating worldwide has announced a low profit margin on the products throughout Europe during the year 2010. The increased costs of raw materials were mainly the factors that resulted in reduced profits. The outlet across Europe announced a net profit of 102m euros equal to £89m which is very less as compared to 2.1bn euros in the previous years.

Even through Benetton managed to grow good profits in other regions but particularly in Europe the revenue fell by 2.8%. The company is trying to plan some new strategies to cater the raw material costs problem and to increase the profits. The shares in Benetton have also fell by 3.4% in Milan and a strong growth of the brand is expected in near future. Currently the net debt of the company is 556m euros which were 486m euros in the previous year; this might be a good sign and opportunity for the coming years.

The UK market is experiencing a tough competition in fashion and clothing which is predicted to further increase as many global designers are entering into the UK market due to large amount of potential customers.

 

Earthquake in Japan: Fear of British casualties to rise

 

Concerns are being raised by number of Britishers for their fellows who might have been caught in the recent earthquake and Tsunami in Japan. The Foreign office had received around 800 calls from the worried people which take the total to around four thousand of missing people. Jeremy Browne stated that he is not sure whether UK victims are involved in this catastrophe, but there is certainty that there are number of foreign victims.

The rescue team from UK has also been sent and has started their operations in Ofunato in the eastern coast. Ofunato is located about 100 miles from the northern Sendai, one of the worst hit areas from Tsunami.

Although up till now there are no confirmed deaths of the British Nationals in Japan, but the number of people concerned about their loved ones raised the bar on Sunday to 4000 people. Many of the worried people contacted the Foreign office in Japan for enquiring about their fellows; however the death toll is still not confirmed by the officials.

Mr Browne the Foreign Office minister spoke to Sky news saying that he is not in a position to confirm the definite umber of British Nationals dead in this catastrophe. However he still claimed that since this disaster is a huge one there will be number of foreign nationals as victims. David Warren British ambassador to Japan also stated that there are number of British nationals unaccounted.

However when Mr Warren travelled to Sendai visited six hospitals and reported that there were no casualties of British nationals being reported up till now. He further added that situation might be going to evolve as this a report only two days after the Tsunami.

Majority of the British nationals living in Japan are in Tokyo or Osaka and according to officials there are about 17000 Britons in Japan. An additional staff of 45 British consulars is now on duty in Japan and there are teams working at Tokyo’s Haneda and Narita airports to help British nationals in Japan

 

BDO UK predicts that the rise in interest rate would affect UK exporters

The BDO of UK predicts that the rise in UK interest rates in the coming months would derail the economic recovery and the growth would remain sluggish during the next quarter throughout. The Bank of England has announced an inflation of 2% that will most likely affect in the interest rate and the rise in the rate would strengthen the pound and would reduce export competitiveness significantly.

The manufacturing sector of UK, had risen during February with the index reaching 95.5, but experts predict that the rise will mostly hit large UK manufacturers.

Peter Hemington, who is one of the of the representative at BDO predicts that the growth will remain fragile for the next two quarters and this attempt to raise the interest rate would push up sterling but will badly affect the manufacturing sector. He further emphasized that manufacturing sector should hold nerves and risk scuppering recovery prospects.

 

 

Housing prices down by 0.9% in February

In the current economic trends it is seen that housing market has been flat in the recent months owing. In February as compared to the previous month the UK house prices were down by 0.9% that cancelled out the rise in the month of January as said by Halifax.

According to Lender part of Lloyds Group of Banking, the year on year prices had dropped by 2.8% in February. Thus the cost of typical home in UK is £162,657. Due to this uncertainty in economic climate the housing market was most likely to weigh down and as said by Lender it is likely to have modest fall in prices in 2011

As reported by Lender the month on month fall counteracts the rise of 0.9% in the property values. However the less stable quarter on quarter trend showed 0.4% decline in the prices.

The housing economist at Halifax Martin Ellis also predicted a decline of 2% in housing prices in 2011, leading to an uncertainty for the sellers. This current trend in the dropping of prices has resulted in emerging of fewer properties in the market in previous months. This is also predicted if the current trend continues it will create a balance between demand and supply and will prevent considerable fall in housing prices

John Lewis to offer first retail saving bonds

UK’s largest chain of departmental stores John Lewis is planning to raise £50m from their customers and staff in order to offer first retail savings bond. The departmental store chain is already offering various financial services to its customers including home insurance and credit card services, however retail savings bond will be first of its kind in the departmental store business.

The company will offer a minimum bond investment of £1,000 that will be offered to more than 1.5 million customers and about 0.7 million employees and staff members. A fixed interested rate will be paid @ 4.5% plus 2% in vouchers. The savings bond will be offered under the same financial services with the name “partnership” bond. 

Currently there are no shareholders of the company, as it is owned by its employees. The chairman of John Lewis Partnership, Charlie Mayfield has high expectations from the idea and he aims to reduce its reliance on bank loans through this venture.

The fixed interest rate of 4.5% will be paid in cash for five years with the maximum investment of £10,000. However the additional 2% will be paid through gift vouchers and promotions to increase the business revenue of the departmental stores. The company has already made strong grounds with an exceptional growth of 28% in the retail stores and online shopping.

Bob Diamond gets £6.5m as Bonus

Barclays’ CEO, Bob Diamond receives diamond valued bonus of £6.5m for his exceptional performance in 2010. He led Barclay’s investment banking and wealth management operations that showed remarkable growth and performance. Annual salary of Mr. Diamond is £2.5m and with the banking sector running in saturated condition the bonus is sure to set new standards in the UK banking industry. Barclays is one of the four biggest banks in UK and it reported pre-tax profits of £6.07bn for the year 2010. Mr. Diamond has also been blessed with long term incentive award of £2.25m contingent on the future performance and his total pay package for the year 2010 sums up to £9m.

Nationwide lucrative offer for the tax-free Isa account

 

Here is the good news for all the savers who has opt for tax-free interest rate Individual saving accounts-Isa. Nationwide has decided to increase the Isa rate to 3.1% and ranks high among top-paying easy access account. Savers to get benefited from 3.1% rate needs to open either current account with Nationwide, a CashBuilder savings account, a Smart card or InvestDirect savings account. This offer by Nationwide is a creative innovation in the easy access account competitive market of big three giants namely Nationwide, Santander and Halifax. However, Santander is offering 3.15% marginal high rate than Nationwide yet Nationwide is leading against Halifax who is offering 3%.

Manchester daily evening news publisher -Trinity Mirror, shows weak performance

Trinity Mirror has a fall is its share prices after they have reported 6.9% fall in their revenues. Trinity Mirror has reported a sluggish and unstable recovery position in the share market. As the major step to counterbalance the effect of inflation and vulnerable economic position, cost cutting at Mirror is reported to be the consequences. Trinity has cut down cost on personnel by lying-off jobs and head counts while changing editorial patterns and outsourcing various tasks. Trinity has reported a full year revenue decline in 2010 and is reported the same situation with decline of 6% in sales of January and February. 

FTSE regains from the barrier

FTSE is seen to regain its position as it breaks the barrier of 6000 to an increase at 6005.1 when FTSE 100 index closes at 90.2 points. This improvement was result of the releasing tension of Libya and high performance by the blue-chip companies. Oil prices flying for the couple of weeks now showing a relaxing position depicted by the London Brent crude taking back approx 1% to 114USD per barrel. This impact of lowering oil prices was well observed in the improved performance by the airline industry. Sky, Travel firms and Aviva-insurance firm were among the most prominent ones who have reported a reasonable increase in their operating profits.

Post office sees to remove the facility of benefit cheque payments

The government decision of favoring benefits cheques from post office was highly criticized on the grounds that it could lead to the business closure of new branch setups. As a result government has decided to remove this attractive and creative feature.  From 2012 Citibank has announced to set for a new service by opining Paypoint outlets with the estimated cost of £20 million serving more than 250,000 people.  Government has highlighted that payment through cheque is costly mode as it cost about £30 million to the tax payers and it is also vulnerable as its open to fraud. Therefore, these public services can’t be trusted for processing such payments. On the other hand National federation of SubPostmasters is now in a threat that they might be confronted with the closure of Post Office Card Account which is currently used by approx 4 million customers per week.

Plastic money aggravating superfluous buying

 

Studies have shown that shopping on credit cards doesn’t count as buying with money. Young people at the age of 16-24 are most like to be seen making superfluous buying and being out of money who were actually reported to be savers previously.  Young population falling at the age bracket of 22-24 are still relaying on their parents money and 13% of unemployed population falling on this age bracket is frequently running out of cash.

Money management programs to be adopted

The vulnerability of young people to disturbed financial position due to lack of budgeted living has influenced financial managers to adopt programs that will educate them on money management skills. It is vital to the prosperity and raising standards of living for the youth. Research has found that only 4% of the young population gets guidance on money management from their schools and colleges and rest of them is dependent on parents and friends advices. This money management programs will help in educating the unreached youth sector on budgeting, spending patterns and saving behavior to enhance their quality of life.

Britain Stocks seen to be dropping

Heavy sell-off on the Wall Street and Asian markets has dropped the Britain 100 index.  This disturbed market liquidity was due to the increased oil prices as a result of swelling tensions in Libya which is expected to spread in the whole Middle East. The UK’s blue chip companies were found to be closed 1% lower than the preceding day. Share investors are eagerly waiting February payroll reports expected to be announced on Friday will show the complete picture of employment position and increased hiring by private sector can improve the economic position boosting the share market.

Glencore profits cushioned by commodity prices

World’s largest commodity trader Glencore GLEN.UL is expected to report biggest hit in their annual profit as it arrange for massive stock market listing. Glencore has reported an increase of 42% in the net income approx £955.3 million with the considerable increase in the metal prices. Executives were conducting training session in London to educate equity analyst on UK’s upcoming biggest initial public offering (IPO). It is expected that Glencore would be floating approx 20% or even more of its stock in the London and Hong Kong markets. According to an analyst, when the performance of these expanded miners specifically copper stocks have been analyzed it was found that with the increase in metal prices these miners have reported substantial amount of profits during the year.

Stocks likely to increase with job market surge

As the private companies announces hiring giving its positive impacts on not only the employment structure of the economy but also on the improved position of share prices in the Britain stock market. Investors were despair and were at vulnerable position after the increase in oil prices due to Libya turmoil. It was estimated that 217,000 jobs were added by the private companies against the projected figure of 180,000. It is expected that it will improve the unemployment rate of 9% and will improve the stock market position.

Pound hit high with improved retail sales

 

Pound sterling strike high against euro after the retail sales has picked up its pace in the economy. It created positive hopes after the sluggish performance of economy in winter. The rise in the Pound Sterling against euro from € 1.188 to € 1.195 was also due to prediction of Market forces that bank of England was prone to increase the interest rates in upcoming days.  The retail sales volume was improved by 1.4% after a week performance reported in the preceding months. The rise in the Pound Sterling was also due to the speculative activities in the market. 

Pound strikes a year high record against dollar

 

Pound sterling was closed above $1.63 mark on 1^st March 2011 which is seen to be a record broken in 13 months. Economist has given their views that UK has the tendency to raise rates faster than US. Increase in the rates were also influenced by the high rise in inflation rates which has caused the retail sales volume to decline in December which was also reported to decline due to climatic conditions.

Surprise hike in property market

 

Recent data revealed an unexpected increase in UK house prices, which has perhaps contributed to rise the pound at $1.633 earlier today being the strongest since January 2010. Traders in the currency market were expectant to buy pound from property markets.

Weak stock performance with increase in oil prices

 

Stock prices have suffered a decline as the oil prices in international market rises. The decline of stock performance and increase in the oil prices can totter the economic position which was picking up pace. Since last week reported figures oil prices has hikes to about 13% due to uproar across North Africa and Middle East. This hike has caused per gallon price of oil to be increased to 20 cents.

Overseas aid to be targeted healthier

 

International Development Secretary Andrew Mitchell has announced that overseas aid will be targeted to more deserved areas after it has been cut off from 16 countries which have been receiving UK funds. The countries which will be experiencing a cut off in the aid budget are Russia, China, Angola and Vietnam. These aid funds will be targeted more to the war affecting countries like Afghanistan and Somalia. British taxpayers were not willing to fund for agencies like United Nations Industrial Development Organization, UN-Habitat, the UN agency the international Labor Organization and the UN International strategy for Disaster Reduction as they were reported of poor performance. Aid funds will be more targeted towards the weak sectors of the economy like for ‘Save the children’ campaign where taxpayers are relieved that their funds have been utilized in the sectors for productive outcomes.

Retail bond market was praised by state minister

 

The London Stock Exchange’s Order book for Retail Bonds (ORB) was appreciated for making the bond market reachable for the retail investors and making it as simple as trading in the stock market. It has widened the horizon of investment by giving investors opportunity to invest in the UK firms in varying ways.

Aids would be more focused & BMA warns health reform plans as unethical

Government has proposed a new plan to provide aids to 5 countries. This would help to improve the poverty level in these 5 countries. Summary of the important events are as follows:

Aid Budget would be more focused to reduce poverty

A plan has been proposed by the government to discontinue the direct development aid to 16 countries however, some countries like Pakistan, Nigeria and Bangladesh would be given more aids and these aids will be more focused to improve the livings of the poor. One reason for this change in approach is that large portion of UK’s aid budget is not spent in the right way. 

The British Government would stop giving aids to 16 countries which includes countries like China, Vietnam, Iraq, Kosovo, Lesotho, Moldova, Angola, Bosnia, Cameroon, Cambodia, Burundi, Indonesia, Serbia and Russia. However, budget of 5 countries has been proposed to substantially increase. These 5 countries are Ethiopia, Bangladesh, Nigeria, the Democratic Republic of Congo and Pakistan.

As the government wants more transparency and accountability so that the purpose of these aids would be achieved and these funds would provide better results. According to this new plan, 30% of the UK aid would be given to war-torn and unstable countries by 2014. According to government this new approach would reduce the poverty level in these nations and it would also help in reaching the Millennium Development Goals by 2015.

Insurers set for sex discrimination ruling

The cost of car insurance for young women could be increased. It will be decided by the European Court of Justice that whether this act is a kind of sex discrimination or not and if it is then it should be prohibited.

The Association of British Insurers (ABI) has proposed that the average increase in cost of young women could be in the range of 25% to 50%. However, according to the estimation of a research published previous year men under the age of 25 were expected a 10% reduction in premiums on average.

Mile Williams, a renowned insurance broker said, “It's entirely certain that women's premiums will go up. I don't think there's any chance whatsoever that men's premiums will come down, And the reason for that is that men have more accidents and when they have accidents they're more expensive."

BMA has claimed Government Health reform plans as unethical

British Medical Association (BMA) has warned the government about the NHS reform programme that it is highly unethical. According to the Health Minister, Paul Burstow this criticism was a gross distortion of government proposals.  

Dr. Laurence  Buckman has claimed that this bonus system could distort the trust between the doctors and patients.

According to him, "We don't understand what the Quality Premium means. We don't understand where it will come from. We rather fear it will come out of our pay and be paid back to us if we do certain things. It appears that what we might actually be asked to do is to save money and if we save a certain amount of money we will receive some of our pay given back to us. That is something that is appallingly unethical. I don't believe that I should be saying to a patient 'you can't have treatment because that way I'll get paid'. I don't think any patient would sit down with me and have in their head the thought that I would only be being paid by withdrawing treatment from them. I'm not prepared to do that".