PRESS DIGEST - Financial Times - Sept 19

Financial Times

SURGE IN TRADING BY SMALL INVESTORS

The rise of the FTSE 100 to its highest level of the year has been driven by small investors trading in shares at levels not seen since the "dotcom" boom. Figures show the number of deals placed through retail stockbrokers climbed to more than four million in the three months to June, a figure beaten only in the spring of 2000. Brokers said low interest rates on savings accounts and scepticism about the property market have forced investors to look to equities in the hope of riding a six-month rally. Trading in bank shares has dominated.

CONSTRUCTION WORKERS NEAR DEAL ON PAY

The GMB and Unite unions will instruct their members to accept a two-year pay and conditions deal in a move that could signal the end of unofficial walkouts by staff at power station and petrochemical sites. The disputes centred on suggestions that local workers were being passed over for jobs in favour of foreign labour in a bid to undercut terms and conditions. The threat of a national strike saw employers agree to a deal of a two percent pay rise from January and further increases linked to the retail price index in 2011. However, unions failed to secure a demand for a register of unemployed workers that employers would have to use amid suggestions it would discriminate against non-UK workers.

ACOUNTANTS WARN OF 50 PERCENT TAX EXODUS

Accountants say the planned rise in the top rate of income tax to 50 percent will drive many financiers and entrepreneurs to follow the lead taken by Sir Philip Green and Guy Hands and relocate to Monaco, Guernsey or Switzerland. Leonie Kerswill at PricewaterhouseCoopers said a number of her clients feel the rate is temporary and will be lowered. However, Mike Warburton at Grant Thornton said the increase in the level of interest in leaving the UK is a growing concern and the government should "wake up and get real" and stop pretending it is not happening.

CINEWORLD STAKE CUT SIGNALS BLACKSTONE SENTIMENT

Blackstone (BX.N) has sold half of its 57 percent stake in UK cinema chain Cineworld (CINE.L). It is the private equity group's first realisation since April and gives an indication it believes the stock market rally could soon end. Blackstone said it had sold 38.1 million shares in a secondary placing at 165 pence per share. As a result of the sale, Cineworld's shares dropped 13 pence to 166 pence, giving the company an equity of 235 million pounds. Last month, Cineworld reported a 24.3 percent increase in box office sales for the first six months of 2009.

PRESSURE MOUNTS ON GUARDIAN STRATEGY

News that the Observer newspaper was saved this week has now shifted attention to how Guardian Media Group [GRMDG.UL] will make money from its online content. Parent body of the newspaper and website, Guardian News and Media, reported an operating loss for 2008-09 of 36.8 million pounds, with seven million pounds of that attributed to the Observer. A person with knowledge of the business said the digital side of the business had made losses since 2002 of 20 million pounds. However, there is now growing pressure on the company to reconsider its pricing policy and charge for its online content as advertising revenue alone is not enough to cover costs.

SIGNS OF RECOVERY AT DOMINO PRINTING

Rising demand for consumer goods has led to increased sales at Domino Printing Sciences (DOPR.L). The maker of coding and labelling equipment used to print bar codes and sell-by dates noted that while industrial markets remain depressed, consumer product markets are now approaching levels experienced during the first half of 2008. Steve Medlicott at Altium points out that Domino was among the first to see the downturn and is now managing the growth phase after implementing cost-cutting and doing "all the right things". The firm expects full-year profits to be in line with previous expectations.

CALLS FOR PROBE OF TELECOMS TIE-UP

Lawyers and consumer groups have questioned the proposed tie-up between Orange UK and T-Mobile UK, citing competition concerns. Which?, the consumer group, has cautioned that the proposed deal could result in a poorer quality phone service, while lawyers have said the attempt at consolidation will face major regulatory scrutiny. Echoing the concerns of Which?, Consumer Focus has said consolidation threatens to slow the fall in the price of mobile tariffs.

IMAGINATION TO DIVERSIFY FROM RADIO

Imagination Technologies (IMG.L) is to diversify from its core DAB digital radio market despite data for the first four months of the year showing that demand is returning for its Pure-branded products. The group also licenses design technology for graphics chips -- leading to investors questioning the synergy of the two disparate activities. Imagination will resist calls from investors to divest the Pure subsidiary and a new product launched on Thursday, a touch-screen radio incorporating Facebook and Twitter applications, is seen one of the earliest manifestations of the mesh between the two businesses.

BLUEBAY PROFITS SLIDE AS HEDGE FUNDS SUFFER

Europe's largest specialist debt asset management company BlueBay (BBAY.L) reported a 60 percent fall in pre-tax profits for the year to June, despite assets under management rising to 27.8 billion dollars from 2008's figure of 21 billion dollars. The growth in assets under management was undermined by poor performance of the previously lucrative hedge fund operations. BlueBay's pre-tax profit was 17.5 million pounds -- well down on last year's high of 50.1 million pounds.

SONGBIRD LIFTS STAKE IN CANARY WHARF

Songbird Estates SBDb.L has increased its majority stake in Canary Wharf Group, after agreeing to buy an additional 54 million shares from Commerzbank for 112.5 million pounds. Songbird has secured its finances after raising over 800 million pounds via a share placing with existing share holders and securing additional investment from China Investment Corporation, a Chinese sovereign wealth fund. The acquisition of Commerzbank's 8.45 percent stake takes Songbird's holding in Canary Wharf to 69.3 percent.

Prepared for Reuters by Durrants