Sunday newspaper round-up: RBS, HMV, Japan

20th Jan 2013 16:31

Top managers at the RBS investment bank, including its Chief Executive, John Hourican, who it has since emerged was planning to leave after reshaping the business - may quit to take responsibility for the disregard shown for the market even though they are not personally culpable. While the evidence published by the Financial Services Authority (FSA) and US regulators as they announce the fine will not name individuals, it will shine a light on the way traders fixed an interest rate used to determine borrowing costs of 300tn dollars (189tn pounds) of financial contracts - ranging from mortgages to loans for big companies, The Guardian writes.The world's biggest music labels and film studios are assembling a multimillion-pound rescue package to prevent HMV from going out of business. Universal Music, Warner Music and Sony are set to cut the price of CDs and DVDs, and give the retailer generous credit terms. Film giants, including 20th Century Fox, Universal Studios and Warner Bros, are also expected to throw their weight behind the rescue attempt. Industry sources said the entertainment giants were desperate to keep alive a specialist retailer to avoid cut-throat pricing by supermarkets and internet distributors. "They don't want their only choice to be Tesco or Amazon," one source said. Despite its struggles, HMV still accounts for one-fifth of the British music and DVD market, The Sunday Times writes. "Japan matters again, for the first time in more than two decades," The Financial Times' John Authers points out in the paper's latest weekend edition. Thus, in the past two months Japan has suddenly become a consensus trade. Over that period, the Nikkei 225 has rallied 15% while the Yen has weakened by almost the same amount against the dollar. Somewhat intriguingly, the FT Weekend points out how reliably bearish commentators are seeing exciting things in Japan, and money is flowing in. However, Christopher Eoyang, Goldman Sachs' Chief growth markets strategist, recommends shorting Japan, saying the only risk would be that "the Japanese actually follow through on something they've never done before [in apparent reference to the need for more aggressive monetary stimulus and structural reforms]. Another risk, Mr. Authers warns, is that the "gains may already be in place." After bidding up Japanese stocks investors may pause to see if Mr.Abe - the new Primer Ministers - delivers. A strong finish to 2012 and an improved outlook for the global manufacturing sector have given Spectris renewed confidence for the New Year, prompting investors to drive up shares in the maker of precision instruments. Nevertheless, and like the sector as a whole, through its supply of equipment designed to enhance productivity in the manufacturing sector, Spectris is reliant upon the wider macroeconomic environment, and - like the sector as a whole - has endured a tough few years. At one point it was even forced to cut 10% of its workforce and ask remaining staff to forgo bonuses and take unpaid leave. Since then, the group has recovered its footing, and last year broadened its exposure to the recovering US market with the $475m acquisition of Omega Engineering. The result is that the British group's revenues are now roughly equally split between North America, Europe and Asia, the Financial Times' Weekend edition wrote.Two of Britain's biggest car makers, Ford and BMW, have warned that a UK exit from the European Union would be "devastating" for the UK economy, heaping pressure on the Prime Minister ahead of a critical speech due this week. David Cameron was expected to deliver one of the most keenly awaited political speeches in recent years on Friday, but it was cancelled because of the Algerian hostage crisis. However, excerpts show that the Conservative leader is prepared to raise the prospect of Britain leaving the EU without major changes to the relationship. "All countries should have their sovereignty, but don't discuss leaving a trading partner where 50% of your exports go," said Stephen Odell, Chief Executive of Ford in Europe. "That would be devastating for the UK economy," he said, according to The Sunday Telegraph. Disposals by banks and administrators have fuelled a rise in the amount of commercial property being sold at auction, with small investors increasingly among the buyers. Figures from property consultancy CBRE show that the number of lots sold at auction has picked up since a collapse following the financial crisis, when the wider property market dried up. A total of 2,222 lots were sold last year, compared with 2,160 in 2011 and a low of 1,989 in 2010. John Townsend, executive director at CBRE, said auctions were an ideal way of selling assets quickly in situations such as repossession or restructuring, because a fair price was "achieved and seen to be achieved". He said the method was not just used as a last resort, but increasingly out of choice, says Scotland on Sunday. The UK's largest estate agency is being lined up for a stock market flotation by its US private equity owner, indicating a vote of confidence in the recovery of the country's housing market. Oaktree Capital, the buyout group, has started discussions with banks, including Goldman Sachs, about launching an initial public offering for Countrywide, the estate agency that operates 46 high street brands and sells one in 11 of all UK homes. The flotation, which could happen this year, would be one of the most important listings in the UK real estate sector since the collapse of the property market in 2008. The move suggests Oaktree, which is the largest shareholder in Countrywide, is optimistic about the outlook for the country's regional housing market, the FT Weekend says. Rio Tinto should abandon London and move its headquarters to Australia where it logically belongs, mining billionaire Gina Rinehart has urged. Ms Reinhart, the richest woman in the world and Australia's wealthiest person, said that the appointment of Australian Sam Walsh as chief executive last week presented the ideal opportunity to make the move. Mr Walsh's predecessor, Tom Albanese, stepped down after the miner was forced to write down assets worth $14bn (£9bn). "In congratulating Sam on his promotion to such an important position within Rio Tinto, we have urged him to take this opportunity and also move the Rio Tinto headquarters from London to Perth where given most of Rio Tinto's revenue is generated in Australia, it logically belongs," Mrs Rinehart said, The Sunday Telegraph reports. The new Chief Executive of ailing drugs maker AstraZeneca plans to bolster UK research and development in an attempt to build a "dramatically different pipeline" by 2016, according to people close to the business. Pascal Soriot, who joined the business in October last year after the departure of David Brennan, ousted as a result of the Shareholder Spring, is understood to be putting research and development (R&D) at the centre of plans to restore the company to growth. The areas of R&D that attract more investment could lead to more highly skilled jobs, in a boost for the British economy, where other companies, such as Pfizer, have cut back. However, the overall head count at AstraZeneca could still fall. As Mr Soriot unveils his plans for expansion alongside the company's full-year results on January 31st he is also expected to reassure shareholders that the dividend is secure, and that he will pursue a growth strategy aimed at a fundamental revaluation of the share price by analysts, The Sunday Telegraph reports. Santander is examining a £2bn swoop on Clydesdale and Yorkshire banks to accelerate its British expansion. Executives in London and Madrid have been considering the move since the collapse of talks to buy a network of 316 branches from Royal Bank of Scotland last October. Santander UK, the British arm of the Spanish financial giant, is Britain's fifth-biggest bank. It has amassed 25m customers after taking over Abbey, Alliance & Leicester and Bradford & Bingley. The future of Clydesdale and Yorkshire has been thrown into doubt by their owner, National Australia Bank, which is under pressure from shareholders to jettison the loss-making lenders. However, Clydesdale and Yorkshire have a strong position in small business banking and corporate lending across Scotland and northwest England. Furthermore, Santander has the firepower to do the deal. The UK subsidiary received £4.5bn of capital from its Spanish parent group to support the RBS deal. That cash is still sitting in the UK business, The Sunday Times says. AB