PRESS DIGEST - Financial Times - Feb 5

The Financial Times

RISE IN REPOSSESSIONS FORECAST

A new survey by Moore Blatch, a law firm specialising in repossession proceedings, reveals four out of five lenders believe home repossessions will rise this year, as buy-to-let investors and heavily indebted first-time buyers struggle to meet higher costs. A number of lenders, from subprime specialists to high street banks, were approached and asked for their forecasts on bad debt. According to 40 percent of the sample, home repossessions are set to rise between 10 and 15 percent this year, while eight percent of lenders predicted an even sharper rise. First-time buyers and those with 100 percent mortgages were believed to be most vulnerable.

TORY ROW OVER TAX AND SPENDING GROWS

A poll to be published Tuesday by the grassroots Conservativehome Web site is likely to escalate the Tories' internal row over tax and spending policy. David Cameron's strategy of matching Labour's spending plans -- an annual real-terms increase of two percent a year for the next three years -- is opposed by a majority of the rank-and-file who advocate radical tax and spending cuts to differentiate the opposition more strongly from the government. The survey of over 1,600 Conservative members found 77 percent believed spending growth should be cut to 1.5 percent or less. Philip Hammond, shadow chief secretary to the Treasury, said the rank-and-file's argument was "barmy".

FEAR AT HOUSING BILL "ERROR"

The independent status of housing associations appears under threat following a blunder in drafting the housing bill, according to economists and lawyers. The National Housing Federation says poor drafting means the bill effectively "nationalises" housing associations because it gives ministers so many reserve powers to direct them. This risks reclassifying housing associations as public sector bodies, which would bring 35 billion pounds worth of association borrowing -- enough to break the Treasury's sustainable investment rule -- back on to the government's balance sheet. Planning Minister Iain Wright said last week the government is now "considering the entire structure of this part of the bill" and seeking to avoid the "direct micro-management (of associations) by the secretary of state".

RANDGOLD SET FOR EXPANSION IN IVORY COAST

Randgold Resources (RRS.L: Quote, Profile, Research, Stock Buzz), the London and Nasdaq -listed gold miner, is to develop a third mine in Ivory Coast at a cost of 135 million pounds, with initial production scheduled for the fourth quarter of 2010. Graham Shuttleworth, finance director, said subject to agreement with the Ivory Coast's Ministry of Mines and Energy, construction of the mine at Tongon would begin at the end of the year. The company said pre-tax profits fell last year from 74 million U.S. dollars to 66.9 million dollars, due to increased exploration costs. The shares closed in London down 170 pence at 23 pounds.