PRESS DIGEST - Financial Times - April 8

Financial Times

LENDERS WITHDRAW NO DEPOSIT MORTGAGES

Abbey (ANL_p.L) became the last mainstream lender to stop offering 100 percent mortgages on Monday, shutting out first-time buyers with no cash savings from the housing market. Borrowers will now need a deposit of at least five percent, a parental guarantee or will have to enter a shared equity scheme. Some lenders, such as Cheltenham & Gloucester (CAGp.L), Britannia and Alliance & Leicester ALLL.L, are asking for a minimum deposit of 10 percent. More than 20 lenders offered 100 percent mortgages at the start of last month but they have pulled out one by one in order to distance themselves from riskier lending. Abbey also announced increases to a large proportion of its fixed-rate and tracker mortgages. Woolwich withdrew its range of two-year and 10-year fixed rate mortgages and some five-year fixed rates.

FSA SETS UP ROCK TEAM AS MORALE FALLS

As it wrestles with a crisis of morale over the collapse of Northern Rock (NRKx.L), the Financial Services Authority has set up a specialist team to supervise the bank. The nine-strong team is tasked with implementing the recommendations of the regulator's own investigation, which revealed a catalogue of errors in supervising the bank. In an unprecedented move, the FSA has relieved all the chosen personnel of their normal duties and the team has a month in which to develop plans and just a year to implement them. Recommendations from the audit include improving information flow within the regulator and boosting staff levels, with the FSA now expected to hire about 100 new supervisors and risk analysts this year.

CEOS ARE WORLD'S GLOOMIEST ABOUT RED TAPE

According to a survey conducted by the professional services firm PwC, chief executives are less impressed by their own government's efforts to cut red tape in Britain than their counterparts elsewhere in the world. More than nine out of 10 UK chief executives disagree that the government has reduced regulatory burdens, a higher proportion than for any other country polled. The findings come as the Federation of Small Businesses says the government's "regulatory splurge" has introduced no fewer than 82 new pieces of business legislation this month. But PwC partner Andrew Ratcliffe said criticism of over-regulation in Britain was not fully justified, and that the media's preoccupation with red tape and the perception that the UK "goldplates" EU regulations might have coloured the findings.

MORE WINNERS THAN LOSERS AS BUDGET CHANGES KICK IN

Prime Minister Gordon Brown's decision to scrap the 10 percent tax band for lower-earning workers means about 20 percent of UK households will be worse off than before the tax change took place this week. But twice as many households are better off due to changes announced at the same time. This group is mainly comprised of families on lower wages with dependent children or pensioners. Stuart Adam, senior research analyst at the Institute for Fiscal Studies, says that for a further 40 percent of households, changes made to the tax regime were neutral.

BT TOPS DISSATISFACTION SURVEY

In a survey of the fiercely contested home phone market published on Tuesday by Uswitch.com, BT (BT.L) came bottom for customer satisfaction. British Sky Broadcasting (BSY.L) came top with 85 percent of people saying they were "satisfied" with the company's home phone service. The survey's findings will add discomfort for BT which, since November has seen its share price fall by nearly 30 percent.

JC FLOWERS TO STEP UP PRESSURE ON FRIENDS

U.S. private equity group JC Flowers is to increase pressure on Friends Provident FP.L by appealing to its shareholders after again requesting talks with the life assurer, and declaring that it has funding in place for a 3.5 billion pound bid. JC Flowers is hoping the shareholders will put pressure on the insurer's board to enter talks. Friends says the purchase proposal does not represent a basis for discussions, though some shareholders do want it to enter talks. JC Flowers is sticking to its 150 pence a share proposal.

PALMER AND HARVEY MANAGEMENT BUY-OUT

Tobacco wholesaler Palmer & Harvey has changed hands in a management buy-out at an enterprise value of 345 million pounds. Palmer & Harvey supplies almost a third of Britain's tobacco and is one of the UK's biggest private companies. The company has a turnover of around four billion pounds and competes with Booker at the top of the wholesale business, supplying independent grocers as well as store chains with alcohol and food. Barclays Commercial Bank and Burdale Financial funded the deal with a debt package comprising a 280 million pound receivables finance facility, 50 million pounds in senior debt and a loan note guarantee facility of 117 million pounds.

THOMAS COOK MAKES ELEGANT STEP UPMARKET

Holiday operator Thomas Cook (TCG.L) has acquired the niche luxury travel company Elegant Resorts at a price understood to be in the region of 30 million pounds. The move comes at a time when competition at the lower end of the domestic market has intensified, with holidaymakers being able to more easily book flights and arrange hotels themselves. Elegant was established 20 years ago and catered for over 20,000 travellers last year who spent on average in excess of 10,000 pounds per booking. Elegant is currently advertising space flights in conjunction with Virgin Galactic and holidays to exotic locations such as the Indian Ocean and the Caribbean, with helicopter transfers and champagne on arrival.

CAMBRIAN SHARES LEAP ON CHANGES

Shares in Cambrian Mining HGV.L leapt 37 percent to 156 pence on Monday as its largest shareholder Audley Capital succeeded after 18 months of trying in its attempt to push for changes for the company to sell assets and become a full-time miner. Cambrian's shares resumed trading last month following action by the Financial Reporting Review Panel. The company had to re-issue its accounts for the year to June 2006. Cambrian says it now plans to either sell its 42 percent in Western Canadian Coal or find a partner to help co-develop the asset.

PHD BRINGS EGYPT TO LONDON

Egyptian real estate developer Palm Hills Development (PHDC.CA) has said it intends to float on the London Stock Exchange. PHD develops high-end residential real estate and resort projects in Egypt and the market value of its properties at March 1 was 3.5 billion dollars. The company generated revenues of 96.7 million dollars in 2007, with a net profit of 32.5 million dollars. The offering is expected to close in May, with PHD also set to trade on the Cairo and Alexandria Stock Exchange.

Prepared for Reuters by Durrants.