Sunday newspaper round-up: Aon, Volcker, BoE, Rockhopper

15th Jan 2012 17:03

Aon is to become the first US S&P 500 company to become domiciled in the UK after the insurance broker unveiled plans to shift its headquarters from Chicago to London. The move by Aon, which employs 59,000 people globally and has a market capitalization of $15bn gives a boost to London´s status as a global financial centre. Aon, which is the world´s biggest insurance broker by sales, said the shift to the UK would provide greater access to emerging markets and place it closer to the Lloyds of London insurance market, The Financial Times´ Weekend edition reports. The Treasury has raised concerns with American regulators over the controversial Volcker rule banning proprietary trading for banks after warnings it could lead to a government funding drought. In a move that will increase pressure on the US government to relax the rule, Treasury officials have said that an unintended consequence of the ban would be less liquidity in the international bond markets, essential for the government to fund its ongoing public spending commitments. It is understood that a report by Barclays Capital on the functioning of the rule has revealed the threat of US banks pulling out of the European bond market or at least reducing their activity. One bank, State Street Corporation, has already withdrawn from the UK bond market because of the new regulation which is due to come into force in a few weeks, The Sunday Telegraph reports. Scepticism is mounting over WM Morrisons' attempts to buy frozen supermarket chain Iceland Foods after rival Asda pulled out of the auction last week. The increased pressure has led to Landsbanki and Glitnir - the banks which own 77% of the retailer - to offer to inject up to £200m of junior debt into any bid above £1.4bn. Sources close to Iceland say Asda's withdrawal has confirmed internal suspicions that a deal with another retailer is not workable for the whole group due to competition concerns. This sentiment comes despite private assurances from Morrisons that the company has finalised details of its £1.44bn consortium bid. The quoted supermarket retailer has lined up Waitrose, FarmFoods, and the Co-op to buy just over 200 of Iceland's 730 stores for £250m, and is understood to believe that Asda's desire to bid for a limited number of shops could add strength to its own moves, according to the Sunday The Telegraph.Cairn Energy is considering a controversial move into the Falkland Islands, where a recent big oil find has heightened tensions between Britain and Argentina. The FTSE 100 firm is in talks with Rockhopper Exploration, a £780m quoted company that has discovered a field 80 miles north of the Falklands. Rockhopper is the only one to have made a commercial discovery. Developing its Sea Lion reservoir will cost at least $2bn (£1.3bn). The company, which has just 15 employees, has neither the finance nor technical expertise to bring it to fruition. It has appointed Bank of America Merrill Lynch, the investment bank, to find a partner to shoulder some of the development costs. Bankers think, however, that the auction could lead to a takeover. Rockhopper's Falklands find is its only asset. "This is the end game," said a source close to the situation. Premier Oil, the North Sea producer, and America's Noble Energy, are also thought to be considering a deal with Rockhopper. The list of bidders is limited by the potential political fallout. Buenos Aires has threatened to blackball any company that takes part in the fledgling Falklands oil industry, The Sunday Times says.Interest rates could remain frozen well into the next parliament, with homeowners benefiting from rock-bottom mortgage repayments for at least four more years, a leading think tank has predicted. The Centre for Economics and Business Research (CEBR) now expects the Bank of England to keep rates at their historic low of 0.5% until January 2016 at the earliest, when they will have been on hold for 81 months. It previously predicted Bank rate would rise in 2013. It would be the longest period of static rates since the economic austerity of the 1940s. The Bank of England held rates for 12 years between 1939 and 1951, although the rate was higher than it is now at 2%. The current rate of 0.5% is the lowest since the Bank was founded in 1694, according to The Sunday Times. Defence giant BAE Systems has drafted in management consultants to examine the future of its historic shipyards in Glasgow and Portsmouth, creating fears that thousands of jobs could be at risk. LEK Consulting is understood to be reviewing all potential options for the BAE Systems Surface Ships division, including shutting one of the three shipyards - there are two 19th-century sites very close to each other on the River Clyde in Scotland. The company has been forced to look at the future of the shipyards as the £5bn contract for two 65,000-tonne super-carrier warships draws to a close. The ships are due to launch in 2018 - most work would be completed sooner - and there are fears that subsequent Ministry of Defence programmes will not be enough to keep the yards' 7,000 employees busy, The Independent on Sunday reports. The UK's biggest investors will lead a crackdown on excessive boardroom pay, according to an exclusive poll of 200 leading City fund managers for The Independent on Sunday. The survey, carried out by Capital Spreads, found 58% of fund managers agreed that major institutional investors are "set to become more interventionist" on salaries for top executive pay. The signs of the shift in attitude come after a week when David Cameron lambasted "rewards for failure" among leading businesses, with the threat of new legislation to bring in binding shareholder votes on pay packages later this year. On Friday, Lloyds Banking Group chief executive Antonio Horta-Osorio decided against accepting his annual bonus, having taken two months off on medical leave at the end of 2011.The rise of the "travelling luxury consumer" has helped Burberry to solid third-quarter sales figures, the fashion brand will tell the market in a trading update on Tuesday. Analysts have predicted total sales growth up 18-20% with sales for the quarter forecast to be close to £569m. But like-for-like retail sales growth could be slightly down on last year at around 15%. The company's 10 million Facebook friends are testament to its growing social media presence - it released images from the catwalk yesterday on a Twitter "tweetwalk", The Independent holds.Secure Trust Bank, which recently floated on the London Stock Exchange, has reported a strong rise in lending volumes during 2011. The company, based in the Midlands, said it was working on "significant organic and external business opportunities". Following the figures, non-executive director Paul Marrow bought his first holding in the group last week with the purchase of 5,440 shares at 910p each, Scotland on Sunday says. Gulf Keystone Petroleum has invited bidders to build a pipeline that would allow the much-watched oil & gas company to export vast supplies of black gold from its key Kurdistan field.This pipeline would have the capacity to handle 500,000 barrels a day. There is also an option to build a second pipeline, of similar capacity, which would ramp up production to a million barrels a day. That would be more than 1% of the world's oil needs and explains why super-majors are running the slide rule over the company, The Independent on Sunday writes.AB