PRESS DIGEST - Financial Times - May 3

FALL IN NEW BANKRUPTCY FIGURES

New figures from the Insolvency Service show that the number of new bankruptcies in the first quarter fell compared with the same period last year. There were just over 25,000 individual insolvencies in England and Wales in the first three months of the year, a fall of 13 percent compared with the first quarter of 2007. However, 858 companies were placed into administration, up from 557 in the last quarter of 2007, and there was an 85 percent jump in companies going into receivership, up from 147 to 273 in the same period.

HOUSE PRICES DOWN ON YEAR

A survey by the UK's biggest mortgage lender suggests the downturn in the property market is gathering pace as house prices continued to fall in April, registering the first year-on-year decline in more than a decade. Halifax said prices in the three months to April were 0.9 percent lower than for the same period in 2007, the first time its index of house prices had shown an annual fall since 1996. The index fell by 1.3 percent in April, a bigger drop than analysts expected. Malcolm Barr, economist at JPMorgan, said: "At this stage ... the fall in house prices is gaining momentum".

BUYERS WITH SMALL DEPOSITS BEING FROZEN OUT OF MARKET

Borrowers who are unable to come up with a large deposit for a mortgage are being priced out of the housing market as lenders remove 100 percent and above loan-to-value (LTV) deals, with many now cutting LTV requirements further. "The longer the liquidity squeeze continues, the more lenders are likely to reduce the number of products available at high LTVs, or pull them altogether," said Melanie Bien, director of Savills Private Finance mortgage broker. The difference between interest rates available for borrowers with limited down payments and those with large deposits has widened to one percent in recent months from around 0.4 percent last year, according to brokers.

MERLIN ADDS AQUARIUM TO EYE

Merlin Entertainments, owner of the London Eye, added to its marine leisure activities on Friday with the acquisition of the London Aquarium, a venue in the same South Bank neighbourhood as its big wheel. The owner and operator of Sea Life, whose 28 European attractions pull in six million visitors, bought the aquarium for an undisclosed sum from County Hall Entertainment, an offshoot of Japanese company Shirayama Shokusan. Merlin has signed a 35-year lease and will invest five million pounds in the aquarium. Glenn Earlam of Merlin said: "There are quite a lot of things we need to add".

C&R NEARS BREACH OF SHOPPING MALL DEBT

Shares in Capital & Regional(CAL.L) plunged 18 percent on Friday - compounding a double-digit percentage fall the day before - as the property asset manager admitted it is close to breaching an important covenant on the debt facilities for its 2.9 billion pound shopping centre fund. It said it was barely one percent away from breaking the 60 percent limit on the loan to value on a 300 million pound acquisition and capital expenditure debt facility with Royal Bank of Scotland(RBS.L). The shares, which hit a 17 pound peak in February last year, closed down 67 pence at 309.75 pence.

LLOYDS TSB UNLIKELY TO NEED RIGHTS ISSUE SOON

Lloyds TSB(LLOY.L) is expected to signal in a trading statement on Tuesday that it has no need to launch a rights issue in the near future, but is set to outline further writedowns on its complex trading securities. The bank could write down between 500 million and 900 million pounds, analysts at Collins Stewart believe, although only part of this would need to go through the profit and loss account, hitting earnings. However, according to Alex Potter, an analyst at Collins Stewart, the bank is likely to keep open the option of a rights issue. "[A] capital raising, whilst not explicitly necessary, cannot be ruled out," he said in a note.

ISLAMIC INSURER MAKES DEBUT

Principle Insurance, the UK's first Islamic insurance company and the first in western Europe to comply with the tenets of Islam, was launched this week. Practising Muslims avoid regular insurance because it clashes with two principles of Sharia law - gharer, or uncertainty, and maysir, or gambling. Islamic insurance, or takaful, is structured differently to comply with religious law. Bradley Brandon-Cross, chief executive, said: "This company will give Muslims in this country the opportunity to choose Sharia-compliant insurance products." The company forecasts 200,000 policyholders within five years.

3I PAYS 32.5 MILLION POUNDS FOR 34 PERCENT OF SLR

3i (III.L) has paid 32.5 million pounds for a 34 percent stake in SLR Holdings, one of a small number of environmental consultancies, in a deal valuing the company at nearly 100 million pounds. The private equity group increased its holding by buying the 25 percent stake held by Isis Equity Partners since 2004. David Richards, chief executive of SLR, said that taking on another private equity partner was "an intermediate step" on the way to a flotation, which had been explored but ruled out in the current market conditions.

XG SEVERS CONTRACT WITH FIRST CUSTOMER

The Aim-listed XG Technology, a wireless technology developer, has ended its contract with Far Reach Technologies, its first and only named customer. The Florida-based Far Reach had been rolling out the first commercial network to use xMax, XG's proprietary wireless technology. However, its contract was terminated due to non-payment of bills. XG said on Friday that the contract severance was not expected to have a material impact on revenues in 2008.

JOHN LEWIS HIT BY FALLING HOUSE PRICES

John Lewis revealed a modest rise in recent trade boosted by electronics and home technology but reported lower demand for large home products and outdoor furniture. Hindered by good weather and sporting events, sales had been erratic, the department store chain said, although they rose 1.1 percent to 46.7 million pounds in the week to April 26. Pointing to a link with falling house prices, Patrick Lewis, director of retail operations, said: "In terms of the big ticket items such as fridges and sofas, it is difficult to judge if we're at the bottom and whether we may be here for a little while or whether it's going to get worse."

Prepared for Reuters by Durrants