PRESS DIGEST - Financial Times - Oct 5

Financial Times

DARLING SET TO REVEAL SPENDING CUTS IN AUTUMN

Chancellor of the Exchequer Alistair Darling will reveal public spending priorities and cuts in this autumn's pre-Budget report. Speaking from the International Monetary Fund and World Bank meeting in Istanbul, he also described Conservative plans to reduce spending for 2010 and reform welfare as "downright daft". He also signalled the Treasury's return to its traditional tough scrutiny of departmental budgets after years of splashing public money. "At a time like this we have to ensure we take robust measures to get borrowing down; all my colleagues are fully signed up to that," he said.

GROWTH RETURNS TO FINANCIAL SERVICES

The financial services sector has posted its first increase in business volumes since September 2007, new figures by the CBI and PwC have revealed. In the three months to early September, 32 percent of companies said volumes increased, giving the highest net positive balance for the first time in two years. Securities traders and investment managers saw strong volume growth in the period, while banks and building societies expect business to improve in the final quarter of 2009. However, some sectors, including life assurers and insurance brokers, remain under pressure and business volumes are "well below normal", according to the survey.

PAY INCREASES OF 2.5-3 PERCENT EXPECTED

Most private sector workers are likely to see their salaries increase between 2.5 and three percent in 2010, a new report by a pay research group has forecast. Incomes Data Services expects 60 percent of businesses that froze wages in 2009 to award increases next year. According to the group's analysis, 2009's median pay settlement across the public and private sectors has been a surprisingly high 2.3 percent, even though freezes accounted for a third of pay settlements.

HSBC CHIEF DELAYS GROWTH PLANS OVER FEARS OF A SECOND DOWNTURN

The chief executive of HSBC (HSBA.L) plans to postpone any expansion strategy for the bank over fears of a second downturn. In an interview with the Financial Times, Michael Geoghegan said he was "cautious" about growing the balance sheet too fast before the recovery came "only to write it back into the impairment line later on". He said he expected profits to be quite "reduced", adding he expected the requirement for core tier one capital ratios to be "around the 10 percent mark".

AVIVA TO SELL DELTA LLOYD STAKE

Aviva (AV.L) is hoping to raise about one billion pounds before the end of 2010 through a listing of Delta Lloyd, to be announced on Monday. Chief executive Andrew Moss has said the UK's second second-largest insurer would dispose at least 30 percent of its Dutch subsidiary but that it would maintain majority ownership. The share sale would be the biggest initial public offering in Europe for at least 18 months. It is being led by Morgan Stanley and Goldman Sachs, with a handful of other investment banks in London and the Netherlands.

BSKYB IN REBRAND TO BE "MOST LOVED"

BSkyB (BSY.L) is set to launch a complete rebranding in October as it begins a pre-Christmas marketing drive in a bid to present a friendlier image and "replace the BBC as the country's most loved and respected source of entertainment". The company will unveil a new Sky logo with a more rounded "S", aiming to convey a warmer corporate identity. Marketing experts say the image overhaul could cost the broadcaster between 500,000 pounds and 1.5 million pounds, although other suggestions see the range as conservative. The move comes as the company is getting prepared to launch Sky Songs, a subscription digital music service expected before Christmas.

PORTSMOUTH POISED FOR STAKE SALE

Premier League football club Portsmouth is poised to be taken over after owner Sulaiman al-Fahim said he was nearing a deal with Saudi investor Ali al-Faraj to sell part of his stake in the club. Fahim, who is looking to bolster its troubled finances, would reportedly retain a minority stake in the struggling football team but he said the details were contingent on the offer, expected on Monday. The Abu Dhabi tycoon said his Saudi counterpart has been in negotiations to raise a bridge loan for the club, which revealed last week that payment of player wages has been delayed "for reasons entirely outside the club's control".

LLOYDS RE-EXAMINES TOP-LEVEL PACKAGES

Lloyds Banking Group (LLOY.L) said on Sunday no decisions had been made over executive remuneration, following reports that it was looking to match the bonus of chief executive Eric Daniels to that of Stephen Hester, the head of RBS (RBS.L), whose pay package is potentially worth about 9.6 million pounds. The bank, which is 43.5 percent owned by the government, said any decisions will be made within the context of the announcement about top-level pay packages from the Treasury, the recommendations of the Walker Review and the FSA Code. It said its focus was on a number of other issues, including whether it will enter the government's asset protection scheme that would allow it to ringfence toxic assets.

TESCO'S MEDIA SPREE POINTS TO NEW U.S. PUSH

Tesco (TSCO.L) has launched its first big advertising campaign for Fresh & Easy, in a move that is expected to renew rumours that the UK's biggest retailer is looking to expand the struggling U.S. chain. The supermarket chain, which has continued to invest in stores in northern California, is set to face questions on its progress in the United States when it updates the market on Tuesday. Analysts are expecting losses from Fresh & Easy of about 80 million pounds in the six months to August 22. The company will also face pressure to show that its underlying sales in the UK are catching up with faster-growing rivals, including Asda (WMT.N) , J Sainsbury (SBRY.L) and Wm Morrison (MRW.L).

BLOOMSBURY SEEKS REVENUE FROM ENERGY DATABASE

Bloomsbury (BLPU.L), the publishing company, is looking to bolster its finances with a new business-to-business energy database which will be available online to subscribers and will include contributions from energy experts. The move from the company, which has seen sales from the Harry Potter series subside since the publication of the final episode in 2008, is a follow-up to a similar title, QFinance, which performs the same function for the financial world. Analyst Steve Liechti, of Investec, said the move was a "very, very sensible use of the cash pile Bloomsbury has".

Prepared for Reuters by Durrants