PRESS DIGEST - Financial Times - April 12

Financial Times

ALARM RAISED ON MORTGAGES

A warning from the Council of Mortgage Lenders that mortgage lending may halve this year has prompted Alistair Darling to say he will do "everything I possibly can" to restore normality to the housing market. The Chancellor of the Exchequer's comments point to an increased likelihood that the Bank of England and the government may take over risky mortgage assets that banks cannot sell, in an attempt to unblock the lending markets. Darling said Britain could act without waiting for other countries as it became clearer the G7 will not propose any globally coordinated moves to ease strains in financial markets.

THE RICH SWITCH TO CASH AND BLUE CHIPS

A report from Tulip Financial Research reveals Britain's richest people are moving their wealth from riskier investments into blue-chip industrial stocks and cash. Since November, about 70 billion pounds has been switched into the shares of leading UK companies. The richest one percent of investors reduced their holdings in unit and investment trusts by almost 50 billion pounds, and property-related investments by 21 billion pounds. John Clemens, managing partner at Tulip said: "The inflow of cash has helped maintain the share prices of FTSE 100 companies." The report is based on a regular survey of the wealthiest individuals in the UK, 470,000 adults living in 335,000 households.

SLOW HOUSE PRICE GROWTH CONTINUES

The FT House Price Index reveals UK house prices were flat in March, making it the fourth month out of five where almost no growth was seen in the market. On an annual basis, house price inflation was at 5.5 percent in March, down from an annualised 6.1 percent in February. The latest data paint a slightly less gloomy picture than that presented by figures on housing from Halifax and Nationwide. The data show London continues to be out of step with the rest of the UK in terms of housing demand, with prices rising at 12.3 percent, five percentage points higher than the region which shows the next highest growth.

HOLIDAYMAKERS PAY FOR POUND'S DOWNWARD PATH

Sterling's latest slide against the euro has made shopping in Paris, going to EuroDisney and owning a home on the Mediterranean distinctly less affordable. Confidence in the British economy has dwindled since the onset of the credit crisis, knocking the pound down 13 percent since last summer's peak. The surge in the euro, almost 20 percent in the last year, means Britons' spending power in Europe has been hit even harder. Not all holidaymakers will feel the full effects this summer, however, as almost half of holidays are booked as packages or through tour operators who fix prices well in advance and use hedges to protect themselves from currency fluctuations.

OPEC REDUCES OIL PRODUCTION DESPITE PLEAS FROM THE WEST

Despite calls from the United States and Europe for an increase in oil production so prices can fall, Opec has actually started to reduce its level of production. Output from Opec's core countries fell last month to 27.3 million barrels a day, down from 27.6 million b/d produced in February and 27.8 million b/d in January. Production from Opec's largest member, Saudi Arabia, dropped slightly from January and was the same as February at 9.2 million b/d. Some of the drop in supply has been linked to field maintenance and pipeline outages in Nigeria and Iraq. The International Energy Authority has warned the world will need Opec's oil, as strong demand from Asia is likely to counterbalance any drop in U.S. demand that occurs due to the economic slowdown and higher pump prices.

PRU GIVES BUMPER HELLO TO THIAM

Prudential's (PRU.L) new finance director, Tidjane Thiam, is to receive a 650,000 pounds golden hello and will be guaranteed a bonus of at least the same amount in his first year with the life assurer. Prudential's annual report reveals its chief executive, Mark Tucker, was paid 3.92 million pounds in 2007, boosted by a 1.13 million pound bonus and a 1.59 million pound payment under a long-term incentive plan. Prudential has defended the payment to Tucker, saying the award was due to the fact that the company had "outperformed the market in terms of our performance".

LANGHOLM SWALLOWS PREMIUM CRISPMAKER

Hertfordshire potato farmer Will Chase has made around 30 million pounds from the sale of Tyrrells, the premium crispmaker he founded six years ago, to Langholm Capital. The deal, signed on Friday, values Tyrrells at about 40 million pounds. Langholm Capital aims to repeat the success it achieved with Dorset Cereals, which it sold for 50 million pounds last month, a four-fold return on its equity investment. The market for premium crisps is growing at double-digit rates and now accounts for about 15 percent of the entire 1.3 billion pound crisps market.

MWB DELAYS PROPERTY SELL-OFFS

Property company MWB Group (MWB.L) has postponed the sale of its retail, offices and hotels divisions because of difficult conditions in the market for such assets. The owner of hotel group Malmaison and retailer Liberty said the sales process will be extended until the end of 2010. MWB has been trying to dispose of the three business units since 2002 but has failed to achieve a satisfactory price through sale, or get plans for a real estate investment trust off the ground.

NCIPHER BACK IN THE BID FRAME

Ncipher NCH.L saw its shares rise seven percent to 135 pence on Friday after it said it is again being circled by potential acquirers. The data encryption company said it had received "a number of preliminary approaches" which could lead to a bid. KBC Peel Hunt analyst Simon Strong said likely bidders might include IBM and EMC, as they may be interested in adding more encryption expertise to their security portfolios.

CANCER DRUG TRIAL BOOSTS ANTISOMA

Antisoma (ASM.L) saw its shares rise 12 percent to 28 pence on Friday after it received a 25 million dollar milestone payment from its Swiss partner Novartis (NOVN.VX), triggered by the start of a final-stage trial of its lung cancer drug. Antisoma may receive as much as 865 million dollars in further payments if its experimental drug ASA404 is successfully marketed and developed in multiple indications. ASA404 could, if successful, be among the first class of anti-cancer drugs to disrupt blood flow to tumours.

Prepared for Reuters by Durrants.