PRESS DIGEST - Financial Times - June 21

The Financial Times

PUBLIC PURSE 'FACES FIVE BILLION POUND SHORTFALL'...

The Liberal Democrats have estimated that the deteriorating housing market will deprive the Exchequer of five billion pounds in tax revenue this year. The opposition party claims that the sharp fall in housing transactions means that stamp duty receipts in 2008 will be less than half that originally projected by the Treasury. Stuart Adam, of the Institute for Fiscal Studies, said that the figures are plausible and that the Treasury had been too optimistic at the time of the last budget.

INSURANCE TRIM OF 1.5 BILLION POUNDS FORECAST

A new survey by Deloitte suggests that the insurance industry should prepare itself for a 1.5 billion pound fall in revenue, as an estimated 25 percent of consumers trim back their policies because of the credit crunch. The survey said that 26 percent of respondents are planning to reduce spending on insurance policies in the next 12 months, while another 18 percent said that they will downgrade to third-party car insurance, with many of them hoping to offset this year's eight percent increase in average premiums.

INTEREST-FOR-LIFE OFFER FROM B&B

Bradford & Bingley BB.L have launched a new set of savings accounts which offer consumers a guaranteed interest rate for life. The Rate for Life accounts will pay returns of around 0.25 percent above the Bank of England base rate, for as long as the account is kept open. The bank says that it is the first savings provider to offer a guaranteed rate for the life of the account or its holder. Branch, online and postal versions of the accounts are being launched. Customers need to pay 1,000 pounds to open an account and they can pay in up to 500,000 pounds. They may also withdraw their money without notice.

PRIVATE INVESTORS TRICKED BT INTO HANDING OVER DATA

Christopher Hackett and Darren Whalley, two private investigators, have pleaded guilty to illegally procuring telephone customer data as part of an investigation carried out by a personal finance subsidiary of Lloyds TSB (LLOY.L). Black Horse has said that it was unaware of the couple's criminal activities and had also cut ties with a third private investigator who subcontracted the work to the two men. Mr Hackett has been fined 400 pounds with 400 pounds in costs, while Mr Whalley was charged 500 pounds with 400 pounds costs. The Information Commissioner's office has said that Mr Hackett had pretended to be a BT (BT.L) employee in an attempt to persuade actual workers to give him personal information.

SMFG EYES 470M POUND STAKE IN BARCLAYS

Sumitomo Mitsui Financial Group (8316.T), one of Japan's largest banks, has reported that it is considering taking a stake in Barclays (BARC.L) as part of a quartet of large investors leading the group's four billion pound capital increase. If the 471 million pound deal goes ahead, then SMFG will join Temasek [TEM.UL], the Qatar Investment Authority and China Development Bank [CHDB.UL] in underwriting the capital increase. Barclays is now negotiating the final details and could make an announcement next week. Investors have yet to give their final approval to the deal.

HALFORDS LURES WAL-MART EXECUTIVE FOR ITS TOP JOB

Bike and car maintenance chain Halfords (HFD.L) has poached top Wal-Mart (WMT.N) executive David Wild as part of a strategy of furthering its international reach. Halfords has been looking for a new chief executive since the departure of Ian McLeod in February. It is understood that Mr Wild's experience will be of great benefit to the group as it plans to expand further into eastern Europe, having recently opened four stores in Poland and the Czech Republic in order to cash in on the region's high levels of bike and car ownership. Mr Wild is due to start work as the firm's new chief executive in early August.

HBOS TUMBLES AMID BROKER DOWNGRADES

Amidst a slew of broker downgrades, shares in HBOS HBOS.L have fallen below their rights issue price of 275 pence. Analysts at Citibank (CIT.LM) have halved their expectations for the bank's profits and dropped their target share price from 425 pence to 275 pence, while their counterparts at Credit Suisse have cut their target to 370 pence. Shares in the bank fell to 273.75 pence on the news, ending trading at 282.25 pence. Meanwhile, new Financial Services Authority rules on short selling - which were introduced following suspicious trading ahead of HBOS' rights issue - have come into effect.

BARRATT SOARS ON REPORTS OF COVENANT DEAL

Barratt Developments (BDEV.L) has failed to confirm media reports that it has reached an agreement with its banks to waive a key banking covenant. Shares in the organisation jumped 25 percent in early trading after a trade magazine reported that banks were taking an understanding view of Barratt's debt burden, currently standing at 1.8 billion pounds. Other shares in the sector went up by 10 percent before doubts started to emerge. People close to the situation have suggested that if the news is true then it would constitute a material fact that Barratt would be obliged to communicate to the stock markets.

CARPHONE CO-FOUNDER CUTS HIS STAKE AND RAISES 33 MILLION POUNDS

The co-founder of Carphone Warehouse (CPW.L), David Ross, has sold 15 million shares in the company at 218 pence each, raising 32.7 million pounds. Mr Ross' stake has been reduced from 21.2 percent to 19.6 percent, but he still remains the second-largest shareholder in the mobile phone retailer. Shares in Carphone peaked at 374.75 pence in August 2007, but have since fallen sharply due to the economic downturn.

JOHN LEWIS SEES 'BIG TICKET' SALES FALL

John Lewis [JLP.UL] has reported a significant decline in sales for the fifth week running, adding to existing market concerns over the strength of the retailing sector. The store reported a sales decline of 4.4 percent in the week to June 14, with such items as televisions and furniture bearing the brunt of the consumer slowdown. Figures from John Lewis are said to be a barometer for the sector as a whole and the firm's gloomy report resembles the experience of many other retailers.

Prepared for Reuters by Durrants.