Sunday newspaper round-up: L&G, RBS, FTSE

4th Aug 2013 16:13

Legal & General plans a massive boost to its investment in UK infrastructure over the next 10 years, the Sunday Telegraph reported. The insurer wants to increase its funding of industries such as transport, building and energy from £3bn to £15bn over the period. Chief Executive Nigel Wilson said retrenchment by UK banks left opportunities for insurers like L&G to invest in projects. He was unenthusiastic about the government's proposed High Speed 2 rail link between London and Birmingham. The paper said analysts expect L&G to post a 22% rise in annual revenues to £1.08bn for the first half of this year.Top shareholders in Royal Bank of Scotland have said they will oppose splitting the company into "good" and "bad" banks, the Sunday Telegraph said. Despite Chancellor George Osborne's support for the idea, the Treasury is now looking at a less ambitious plan to split off the disastrous Ulster Bank business. The government owns 81% of the bank but would not get a vote if the matter was put to shareholders, the paper said. The dispute over a break-up is one of the first problems facing incoming chief executive Ross McEwan. Rothschild will present a report on the government's options in September.The FTSE 100 index could break its previous record to reach 7,500 in the next year, the Telegraph reported citing Goldman Sachs analysts. Goldman strategists wrote that they expected the index to surpass its dotcom bubble high of 6,930.20 to hit 7,500 within 12 months. They said the UK economy was improving and that growth in the eurozone should stabilise in the second half of the year. Expected loose monetary policy under new Bank of England Governor Mark Carney will also support equities, Goldman argued.HSBC is in line for a big rise in interim profit as cost cuts pay off, the Sunday Telegraph reported. Basing its story on analysts' estimates, the Telegraph said the bank was set to announce half-year profits of $14.6bn, up $2.1bn, despite revenues falling from by $2bn to just under $35bn.Falls in toxic loan charges, lower provisions for past mis-selling and cost cuts are forecast to have boosted profits, the paper said. The Mail on Sunday reported that HSBC had told more than 40 embassies, consulates and High Commissions in the UK to find a new bank. The paper said HSBC's wariness could be because of its recent fines for allowing money laundering from Mexico to the US.The Sunday Telegraph and the Mail on Sunday looked forward to new Bank of England Governor Mark Carney's first inflation report, due August 7th. Economists predict the Bank will upgrade growth for this year to slightly more than the 1.2% forecast in May and revise down inflation for 2013. In July, the BoE indicated rates would stay at 0.5% for a long time by warning that market expectations of early rises were "not warranted".A government sale of shares in Lloyds Banking Group and a surge in the bank's market value have put Chief Executive Antonio Horta-Osorio in line for a bonus of more than £2m, The Sunday Times reported. The news of the potential payout came amid conflicting reports about the timing of the government's sell-off of its Lloyds stake. The Sunday Times said a partial sale could start as early as August 5th. But the Mail on Sunday reported that Chancellor George Osborne had instead delayed the sale until September. Horta-Osorio's potential payout is much bigger than expected because the bank's shares have risen sharply in recent weeks. It needs the government to get at least 61p a share and to sell at least a third of its 39% stake. Horta-Osorio would not get his hands on the share payment 2018.Tesco is the only supermarket to have increased its share of the online grocery market in the past year, the Sunday Times reported citing industry data. The store's share of internet grocery shopping rose 2.4 percentage points in the first 19 weeks of the year, according to research firm Kantar Worldpanel. Asda and Ocado both lost 0.6 percentage points of market share, but J Sainsbury was the biggest loser with a 1.1 point drop.Tesco is making changes to its big shops, adding a Euphorium Bakery, a standalone F+F clothing department, a Giraffe restaurant and a Harris + Hoole coffee shop at its Watford store. The Financial Times said Tesco would devote the first floor of its upmarket Knightsbridge store to create a standalone London outlet for its F&F clothing range.EasyJet founder Sir Stelios Haji-Ioannou is planning a push into the already crowded food retailing market, the Sunday Telegraph said. Haji-Ioannou is preparing to pilot easyFoodstore to take on budget chains such as Aldi and Lidl. The German budget chains are already a thorn in the side of Tesco, Sainsbury and Morrisons, which are also under pressure from upmarket Waitrose.