PRESS DIGEST - Financial Times - June 13

The Financial Times

SHARP RISE IN PUBLIC'S INFLATION EXPECTATIONS

The Bank of England's quarterly survey of inflation expectations published on Thursday showed a sharp rise in public expectations of inflation in the past few months. The survey found people on average thought prices had risen 4.9 percent in the past year, compared with the latest reading of three percent on the consumer price index that the Bank targets. The findings increase the likelihood the Bank will countenance a prolonged period of sluggish growth. "To contain inflation, inflation expectations must be anchored," said George Johns, economist at Barclays Capital.

RETAIL MARKET "WORST SINCE EARLY 1990s"

Rents on high streets and in shopping centres are falling at their fastest rate for 15 years as the retail sector feels the effect of the economic slowdown. According to the annual mid-summer retail report by consultancy Colliers CRE, "real term" rents fell by 3.1 percent in the 12 months to May. The report, published on Friday, said: "This is the worst retail market since the early 1990s." Greg Styles, head of retail at Colliers, said: "Rents are likely to fall further and voids rise as more space comes available."

MPS HIT AT "FAILURE" OVER ROAD PRICING

A report published on Friday by the Commons transport select committee argues that national policy on road pricing needs to be re-examined after progress on developing a UK-wide scheme -- under which drivers would be charged according to how far they drove, at what times and how busy the roads were - slowed to a near halt. The Department of Transport has sounded more cautious recently over the scheme, which it first proposed in 2004 as a fairer, more efficient system than fuel tax.

FSA FINES WOOLWORTHS OVER TIMING OF DISCLOSURE

The Financial Services Authority has fined Woolworths WLW.L 350,000 pounds for failing to disclose vital information to the market quickly enough about a significant "variation" in a key contract. The contract adjustment occurred on December 20, 2005 but Woolworths only informed the market on January 18, 2006, leading to a false market in its shares for 29 days. "This sort of failure is unacceptable," said Margaret Cole, director of enforcement at the FSA. "Investors deserve, and the FSA expects, higher standards than Woolworths showed."

EXPANSION COSTS HURT CHARLES STANLEY

Charles Stanley (CAY.L), the stockbroker, announced an eight percent rise in revenues for the year to March 31 to 105.6 million pounds, but pre-tax profit fell 30 percent to 12.4 million pounds, largely due to expansion costs. The broker spent 4.4 million pounds in one-off costs of buying and opening new offices in Bristol, Exeter and Guildford, while total headcount jumped nearly 10 percent to over 840. "We're romping ahead in terms of revenue growth and it's taken profits a while to catch up," said Sir David Howard, chairman and managing director. "We've always been a very acquisitive company, but the scale is much higher than in the past."

TRILLIUM SALE OPENED UP TO UNDER BIDDERS

Under bidders have been invited back into the auction for Trillium amid talk that first-round bids for the outsourcing and infrastructure arm of Land Securities (LAND.L) fell short of its 1.4 billion pound valuation. Land Securities will proceed with a straight flotation if the auction does not meet expectations. "We are currently running a dual track process of preparing Trillium to demerge while testing the benefits of a sale to shareholders," said Land Securities. "Both processes are moving along very well."

AFREN EYES WEST AFRICA EXPANSION

Shares in Afren (AFRE.L), the Africa-focused oil and gas company, edged up 1.75 pence to 179.5 pence following an update to investors at the annual meeting just days after it announced the first flow of oil from its Okuru Setu field in Nigeria. This marked the company's first oil revenue. "The key thing is that they demonstrated they can carry off these projects, which bodes well for its other projects in the region," said Richard Griffith of Evolution Securities. Afren's chief executive Osman Shahenshah said he was "delighted that Afren has achieved its first organic production, a key milestone in the company's history".

3I INFRASTRUCTURE INVESTS 86 MILLION POUNDS IN UTILITIES DEBT

3i Infrastructure (3IN.L) has joined the rush of private equity groups taking advantage of credit market dislocation to invest in debt at a time when corporate loans are trading at large discounts to face value. The firm's chief executive Michael Queen said 3i had spent 86 million pounds on buying debt in utilities, including Viridian, Thames Water and National Grid Wireless. "There was a window of opportunity because the dislocation of credit markets meant debt was trading at 80 to 82 percent of par value," said Queen. "What this means is we have de-risked the investment portfolios."

MONEYSUPERMARKET TO ADVERTISE IN NEWSPAPERS

Moneysupermarket.com (MONY.L), the price comparison Web site, is looking to newspaper advertising to drive more traffic to the site. The company spent 35 million pounds last year on advertising in search engine results, accounting for 3.6 percent of Google's total UK revenues, and plans to spend 50 million pounds in the coming year on that sector. But newspaper ads were an area "under explored" by online businesses, according to chief executive Simon Nixon. "We're looking to invest more in newspaper advertising," he said. "Most Internet businesses don't, they just use TV and online."

GUOCO GROUP LIFTS STAKE IN RANK

Guoco Group (0053.HK) has once again increased its stake in Rank Group (RNK.L), lifting its holding from 12.02 percent to 12.67 percent. This is likely to fuel speculation the Asian-based investment group, run by the Malaysian billionaire Quek Leng Chan, may consider making a bid for the UK casino, bingo and online betting company. Rank's shares, which have fallen by more than 56 percent over the past year, rose 1.25 pence to 78.25 pence.

Prepared for Reuters by Durrants