PRESS DIGEST - Financial Times - July 3

Financial Times

ROGUE OIL BROKER TRIGGERED PRICE SPIKE

It has emerged that a rogue broker was the cause of the startling increase in oil prices to their highest level this year on Tuesday. The broker had placed a massive bet in the Brent oil market and triggered nearly 6 million pounds ($9.87 million) of losses. London-based PVM Oil Associates admitted on Thursday that it had been the "victim of unauthorised trading" and had been forced into the loss. The biggest over-the-counter oil brokerage in the world said: "As a result of a series of unauthorised trades, substantial volumes of futures contracts were held by PVM. When this was discovered, the positions were closed."

PROFITS CHASM IN 'MAGIC CIRCLE' OF LAW FIRMS

Freshfields Bruckhaus Deringer unveiled record partner profits on Thursday, just a day after rival Clifford Chance announced that earnings had plummeted by more than a third. Last year, Freshfields received nearly twice as much as their counterparts at Clifford Chance, by receiving 1.444 million pounds. The difference between the two figures serves as a striking illustration of the financial hit of firms, like Clifford Chance, that have suffered from both expensive job cuts and close ties with the banking industry.

DOUBTS CAST ON MPC NEWCOMER

On Wednesday, MPs questioned the independence of the newest member of the Bank of England's monetary policy committee, David Miles. Ministers want an urgent report into potential conflicts of interest surrounding Miles' continued role as non-executive director of the Financial Services Authority. "David is an outstanding addition to the MPC and one of the best applied economists in Britain today, but there is a clear potential for conflict and I am concerned that a precedent would be set," said Conservative MP Andrew Tyrie.

PRICES FOR FARMLAND GROW AS CONFIDENCE RETURNS

For the first time in nearly a year, English farmland values have soared on the back of renewed confidence in the sector as an investment asset class. In the second quarter, values increased by 3.1 per cent as they were boosted by sales to working farmers, as well as some signs of stability in pricing for weekend farmhouse homes with land attached. Values have also been helped by the low level of availability. According to agents at Knight Frank, this follows three consecutive quarters of falling prices.

LONDON MAYOR HITS AT LDA CUTS

The Mayor of London, Boris Johnson, has attacked proposals from the government to slash millions from the London Development Agency's budget to help fund housing programmes. Johnson warned business secretary Lord Mandelson that the switching of money to fund the "Building Britain's Future" programme would leave the agency's ability to fund Johnson's priorities for the capital's economic development in jeopardy. The LDA faces cuts of up to five million pounds this year and 17 million pounds in 2010-11.

TESCO TO FACE INVESTOR NO VOTE

At Tesco's (TSCO.L) annual meeting on Friday, the largest retailer in Britain is set to face strong opposition to its planned share option scheme changes. Investor advisory service Riskmetrics is calling on shareholders to vote against changes to the share option scheme, which would extend the one-year period in which leaving or retiring executives can exercise options by three years. Defending its intention, the supermarket said: "In Tesco, many of our managers own and hold Tesco shares over a long period. This is about fair treatment to loyal staff members who leave us on good terms because of ill health, redundancy or retirement."

M&B SEEKS TO FEND OFF INVESTOR REBELLION

Mitchells & Butlers (MAB.L) will offer its two biggest shareholders board representation in an attempt to head off a potential rebellion. It is understood that chairman Drummond Hall is in negotiations with billionaire Joe Lewis and Elpida, the investment vehicle for tycoons JP McManus and John Magnier. However, it was not clear on Thursday night if either party would take up the offer to join as a non-executive director of M&B. The company is currently seeking a new chief executive after Tim Clarke resigned last month following a hedging arrangement that cost the group 500 million pounds.

FSA TO BRING BANKS UNDER THE ONE ROOF

Global investment banks and British retail banks are set to be supervised by the same Financial Services Authority team as part of a significant reorganisation of the City regulator. The FSA will also bring all of its risk specialists and its crimefighters together in dedicated teams. "This will ensure that supervisors have a consistent approach and more effectively share information," said Hector Sants, chief executive. He also revealed the creation of an international division in an effort to "maximise our influence on the international agenda" for regulating financial services.

ICG LOOKS TO RAISE 351 MILLION POUNDS FOR DEBT PURCHASES

Mezzanine debt provider Intermediate Capital Group (ICP.L) will raise 351 million pounds in a fully underwritten rights issue. The move is being made in an attempt to increase its firepower for buying debt in private equity-owned groups at big discounts. Managing director Tom Attwood believes there is "an enormous refinancing opportunity for anyone with capital to invest". Attwood pointed to 257 billion pounds of buy-out debt that needs repaying over the next three to eight years. He also underlined an opportunity to make 25-35 per cent returns on buying leveraged loans at a discount.

GREENE KING PLAYS IT COOL ON RECOVERY

According to the chief executive of Greene King (GNK.L), Rooney Anand, pub companies should expect a further 18 months of tough trading before signs of a full-scale recovery. Anand said that he was looking ahead with "cautious optimism" after recent improved trading. Greene King has benefited from the current warm weather, with life-for-like sales at its managed pubs arm up 5.2 per cent in the eight weeks to June 28. However, on Thursday the group cautioned against assuming that the strong trading would continue, because of concerns that unemployment would continue to increase.

Prepared for Reuters by Durrants ($1=.6082 Pound)