LONDON (ShareCast) - The Co-operative is weighing measures designed to bolster the capital levels at its banking subsidiary which may impose losses on the unit’s junior bondholders. The deficit in regulatory capital at its banking division has been estimated by Barclays analysts at between 800m pounds and 1.8bn pounds. That follows on reports, also in the Financial Times, that some councils have begun to cut their exposure to the lender.
The Chancellor’s ‘Help to Buy’ scheme will succeed in raising home prices but it remains to be seen if it increases the supply of new homes. As regards the former, at least, Morgan Stanley has issued a forecast under which house prices will rise by 8% next year - and perhaps by as much as 13%. As well, the investment bank believes that profits at British banks could receive a £1.81bn boost thanks to the measure, most of which will be accounted for by Lloyds, The Sunday Times reports.
Canadian investment fund The Borealis Infrastructure fund, alongside the Kuwait Investment Office (KIO), believes that the increased debt at Severn Trent makes ‘waking away’ from its offer more risky. That is according to a source close to the consortium cited by The Financial Mail on Sunday. To be had in account, Severn’s interest payments are higher than those of other water companies. Outgoing Chief Executive Tony Wray, however, has told customers they can expect the company to remain the cheapest provider of water and sewerage in the UK, the newspaper points out.
BT is raising the cost of its Line Rental Saver scheme by over 9% in what some observers say is a move needed to help pay for its ambitious drive into sports broadcasting. The company, nevertheless, has denied that the increase – the first in 14 months - was linked to its recent investment in television sports rights. BT has paid £736m for the rights to show 38 Premier League matches in the next football season, The Financial Mail on Sunday explains.
The Chinese State Reserves Bureau, the government’s powerful stockpiling agency, has bought about 30,000 tonnes of nickel on the open market. That marks its first foray into the market since prices crashed during the financial crisis. The agency is also said to have been making enquiries about copper, according to the Financial Times.
German Chancellor Angela Merkel has come under fire in her own country for easing off on austerity. According to Sigmar Gabriel, the leader of the centre-left Social Democratic party, Mrs. Merkel has put forward proposals – amounting to up to €28.5bn by calculations in the media – which she will never be able to deliver. The measures include raising child allowances and tax thresholds, the Financial Times writes.
The highest court in Egypt ruled that the nation's Islamist-dominated legislature was illegally elected, and the panel that drafted the country's constitution was illegally selected, The Wall Street Journal Europe reports.
The oligarch founders of ENRC will tomorrow ask for a two-week extension to the deadline set by The Takeover Panel for their £3.3bn buy-out of the troubled mining giant. There is only a faint hope of an increased bid despite the fact that an independent committee of ENRC directors has found that the offer tabled “materially undervalues” ENRC. That committee only represents a minority of shareholders. The central Asia and Africa-focused miner is under investigation by the Serious Fraud Office for several alleged serious infractions of the law, says The Sunday Times.
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