PRESS DIGEST - Financial Times - March 17

Financial Times

BUSINESS MISSING 2012 BONANZA

According to research from Lloyds TSB, businesses have yet to wake up to the commercial opportunities offered by the London 2012 Olympics. It said almost three-quarters of UK companies say they have not yet looked at possibilities surrounding the Games. Even though the Games are over four years away, experts at Lloyds TSB say companies should already be acting to secure a slice of the economic windfall. Economic modelling by the bank estimates the entire commercial benefits of the Olympics at 21 billion pounds with the Southeast being the biggest beneficiary with a boost of 8.6 billion pounds.

HIGHER BOND SPREADS PUT PRESSURE ON COMPANIES SEEKING CAPITAL

A report from the Bank of England has confirmed the turmoil in financial markets is already sharply raising funding costs for British companies that need to tap the bond markets and could constrain them further in coming months. In its quarterly update, the Bank noted that spread on sterling-denominated corporate bonds has risen well above their 10-year average and that spreads on investment-grade bonds were well above the peaks of 1998 to 2002. Higher funding costs are likely to remain, as the Bank said most of the recent widening in spreads seems to reflect perceptions that credit risk has increased and that corporate defaults will rise sharply in 2008.

NYMEX IN CARBON TRADING CHALLENGE TO CITY EXPERTISE

The New York Mercantile Exchange will today start trading carbon dioxide and other greenhouse gases. The move is the first serious challenge to London's pre-eminence in the carbon markets. Nymex's Green Exchange is to trade in a variety of "carbon financial instruments", including futures on U.N.-issued carbon credits and EU-issued emissions allowances. London has been the centre of carbon trading since the market took off on January 1 2005 when the EU's emissions trading scheme was introduced.

CAA CALLS FOR AIRPORT PRICING SYSTEM TO PUT PASSENGERS FIRST

The Civil Aviation Authority is urging reform of the system for setting price controls at Stansted, Gatwick and Heathrow to put the interests of passengers first. The CAA's director of economic regulation, Harry Bush, said: "The regulatory regime could be improved by placing the interests of consumer unambiguously at the heart of the CAA's duties and by encouraging competition between airports and between airlines for their business." The call for reform comes as the CAA has fallen under heavy attack from airlines for what they claim is its failure to regulate effectively the monopoly that BAA (FER.MC: Quote, Profile, Research, Stock Buzz) has over London's airports. Leaders from the four largest airlines operating from the UK are to meet the transport secretary today to press for reform.