PRESS DIGEST - Financial Times - May 2

SUSPEND BIOFUELS RULES, SAY MPS

MPs warned the government on Thursday that regulations mandating the use of biofuels must be suspended. Growing concern about their effect on the environment and food prices has led ministers to concede that they may have to rethink biofuels policy from the bottom up. Alarm bells were sounded by the Commons environmental audit committee as the industry warned that Britain only has enough surplus wheat to support three large ethanol plants, even though plans for several more already exist. High costs mean the future of biofuels production in Europe looks bleak, according to Richard Lucas, an analyst at Ambrian Partners.

BANK OPTIMISM MEETS WITH SCEPTICISM

Economists reacted with a degree of scepticism on Thursday to the Bank of England's claim that the worst of the global credit crisis is behind us. The road to stability outlined in the Bank's twice-yearly financial stability review, published on Thursday, was likely to be more bumpy than was implied, according to economists. Birgit Specht, managing director in Citi's securitised products division, said the Bank was spot on in its analysis of the market for residential mortgage-backed securities. But according to Michael Saunders, an economist at Citi, the narrow focus on housing missed the bigger picture. "At its heart, the financial crisis has been triggered by the mix of surging private debts, booming asset prices, strong private spending and plunging private savings," he said.

CALL FOR CREDIT CONTROLS TO STOP EXCESSIVE RISK-TAKING

The National Institute of Economic and Social Research argues in a report published Friday for tougher controls to stop lenders and people taking excessive risks. According to the think-tank, credit needs to be more expensive and harder for risky borrowers to obtain to lessen the chance of a new bubble emerging. "I'd like to fly the flag for regulating what banks can do with their money," said Martin Weale, the institute's director. "The reality is that entrepreneurs and speculators often have poor judgement of risk, and regard the result of excessive risk-taking as honest failure," he added. "If the UK has a problem, it's much more acute in the US."

HORNBY SNAPS UP CORGI

Hornby, best known for its model trains and Scalextric slot car racers, has acquired Corgi, the maker of die-cast model cars, for a total of 8.3 million pounds. Frank Martin, chief executive, revealed that he had considered moving for Corgi several times over the past few years, but held back on grounds of cost. "But it's a perfect fit and at this price it's a cracking deal," he said. Shares in Hornby rose 6.5 pence, closing at 170.5 pence.

HENDERSON CONSIDERS 75 MILLION POUNDS OF BOLT-ON ACQUISITIONS

Henderson, the UK fund manager, is looking to capitalise on investment opportunities thrown up by the market turmoil of recent months and may spend up to 75 million pounds on bolt-on acquisitions. The company said it was "actively looking" for acquisition opportunities as part of a strategy to build up its higher margin businesses, in areas such as property and hedge funds. In a statement released on Thursday, the chief executive Roger Yates said: "Our primary focus will continue to be on profitable organic growth, but we also believe that, in more difficult markets, we are in a good position to capitalise on other opportunities."

BHP INVESTS TWO BILLION DOLLARS IN ALUMINA

BHP Billiton(BLT.L), the Anglo-Australian mining group, unveiled plans on Thursday for an almost two billion dollar (1.02 billion pound) expansion of its alumina refinery in Australia. The group owns 86 percent of the Worsley refinery, which processes bauxite into alumina, the raw material required for aluminium production. BHP said it would spend 1.9 billion dollars expanding the refinery, an investment that should boost its output of alumina from 3.5 million tonnes a year to 4.6 million tonnes a year by 2011.

GALIFORM BANKS ON RESILIENT TRADE SALES

Galiform (GFRM.L), the kitchen supplier that changed its name from MFI Furniture Group in 2006, posted sales figures that outstripped its discretionary consumer spending peers to shrug off the nascent housing market slowdown. Growth slowed for the 16 weeks to April 19, but like-for-like sales advanced 5.9 percent. Matthew Ingle, chief executive, was bullish when asked if the company could maintain pace, saying: "I don't see any reason why we shouldn't . Looking at the front door here [at Galiform's depot in Halifax]; trucks and vans keep pulling in." The shares gained 6.96 percent, closing up 4.75 pence at 73 pence.

BAUGUR OFFLOADS MK ONE TO HILCO

Baugur, the Icelandic investment group, has offloaded its loss-making fashion chain MK One to Hilco UK, a retail restructuring specialist. Suppliers fear the deal will lead to the business being split up. Departing from its usual practice, Baugur declined to comment on the financial terms of the transaction, saying only that it was "being sold as a going concern". Industry observers believe the equity will have been valued at little or nothing. "MK One no longer fitted in the portfolio and we're pleased to announce a sale," said Gunnar Sigurdsson, the chief executive.

CSR SAYS REVENUE WILL UNDERSHOOT

CSR, the chipmaker whose components are used in the Sony Playstation 3, warned that revenues for the second quarter will fall below expectations as the normal pick-up in sales failed to materialise for its Bluetooth-enabled headsets. Previous guidance had suggested that revenues would be flat, but CSR's revised guidance pointed to second quarter revenues in the range of 89 million to 101 million pounds - meaning turnover would be down between seven percent and 19 percent year-on-year. The shares fell 71 pence to close at 324 pence.

MICRO FOCUS SNAPS UP US RIVAL FOR 73 MILLION DOLLARS

Micro Focus International (MCRO.L), whose software enables corporations to update legacy IT systems, raised its revenue guidance for the year to April 30 to between 226 million and 228 million dollars. The company also snapped up Nasdaq-listed rival Netmange for 73.3 million dollars in a 720 cents-a-share cash deal, its second foray into the US market after the 40 million dollar acquisition of AcuCorp in May last year. Shares in Micro Focus closed up 18.25 pence at 252 pence.

Prepared for Reuters by Durrants