PRESS DIGEST - Financial Times - March 23

Financial Times

EUROPE AND U.S. ON "OPEN SKIES" COLLISION COURSE

A deal agreed by the United states and the EU on liberalising global aviation will see Heathrow airport, Europe's primary gateway to America, opened to full competition from March 30, 2008. A number of new routes will also be opened between the United States and Ireland this summer. However, UK transport minister Douglas Alexander warned that unless there was progress towards full liberalisation of the market by the end of 2010, these new privileges would be rescinded. Congress remains opposed to foreign investment in U.S. carriers rising beyond 25 percent of voting shares.

NBC AND NEWS CORP JOIN FORCES TO CHALLENGE YOUTUBE

NBC Universal and News Corp NWSa.N plan to launch a Web site this summer that will compete will YouTube to become the most popular portal for viewing television and cinema online. In addition to their own catalogue of TV shows, NBC and News Corp plan to sign up Time Warner, Sony Corp, CBS and Viacom to provide content. AOL, MSN, MySpace and Yahoo are already engaged to distribute video, which will be free for users and paid for by advertising.

CASINOS WARN OF CLOSURES AFTER INCREASE IN DUTY

Casino operators have warned they will be hurt by the Chancellor's decision to introduce a flat 15 percent levy on such businesses, with duty on the biggest players rising from 40 to 50 percent. Rank (RNK.L) chief executive Ian Burke said reforms would take 25 percent off operating profits. Rank and the British Casino Association have declared that a number of regional casino projects are no longer viable, and both have also been disappointed by the Treasury's failure to lessen duty on bingo.

RETAIL SALES RISING AT FASTEST MONTHLY PACE IN TWO YEARS

Sales of clothing and household goods rose at the fastest rate in two years between January and February. The Office of National Statistics reported an increase in retail sales of 1.4 percent over the period, significantly higher than the 0.8 percent forecast by analysts. Policymakers struggle to determine the real extent of consumer demand from sharp movements in sales figures, and this has led to some observers looking more carefully at underlying trends. The ONS said retail sales in the three months to February were 1.1 percent higher than in the previous quarter, a "robust (increase) and close to the long-run average".

OFT CUTS FINES TO SPEED BID RIGGING PROBE

The Office of Fair Trading has offered construction groups with involvement in cartels reduced fines in a bid to move along its investigation into bid rigging on thousands of tenders with a combined value of some three billion pounds. The OFT has written to a number of groups with its offer, while at the same time indicating it will stop accepting applications from whistleblowers for leniency, which can result in immunity from fines. The regulator has been investigating non-competitive activity in the sector for two years, and has found evidence of winners for tenders being determined before bidding as well as the payment of bungs.

NEW LOOK WARMS TO TWO BILLION POUND SALE

Merrill Lynch has been engaged by clothes retailer New Look to look at sale options for the group, with a price expected to be set around two billion pounds. Owners Apax and Permira are understood to have ruled out a flotation for New Look as a secondary buy-out will allow them to take all of their investment out of the group. The two would prefer any sale to be finalised within weeks, with Kohlberg Kravis Roberts, CVC, Bain Capital, Texas Pacific Group, Cinven and Landmark tipped as possible bidders.

OFCOM DEFIES BRUSSELS ON MOBILE PRICE CONTROLS

Ofcom has indicated it will disregard guidance issued by the European Commission on how much mobile operators will be allowed to charge each other for the termination of calls to their networks. The EC has criticised the way Ofcom has determined its price controls because the value of licences in the calculations has been partly set at 2000 levels, a time of the telecoms bubble and spending on 3G licenses. The EC has called on the regulator to factor in licences at their current value, although only O2 has written down the value of its licences since 2000.

CANARY WHARF HAS HIGH EXPECTATIONS

A six percent increase in occupancy levels to 95.6 percent since the end of 2005 has spurred Canary Wharf to start a number of new developments in east London, and there are rumours the whole of Canary Wharf may be floated, possibly as a real estate investment trust. There were 1.4 million square feet of new lettings, pre-lets and pre-sales at the development, and Canary Wharf is set to apply for a redevelopment of Wood Wharf and has won planning permission for 2.4 million square feet of office and retail space at North Quay.

SONY CONSOLE HITS CRUCIAL EUROPEAN MARKET

Thursday night saw the European release of Sony's (6758.T) Playstation 3 games console, delayed for four months by production problems. While the company's previous effort, the Playstation 2, beat competition from Nintendo and Microsoft to sell 115 million units, its high price and a lack of games this time has pushed it into third place. Data from research group NPD shows Sony sold at least 100,000 fewer units than the Xbox in the U.S. market last month, and an analyst at Ovum said that the Playstation 3's high price would have to come down once Sony's fan base is saturated.

BULLISH MAZDA UNVEILS BOLD FOUR-YEAR PLAN

Mazda (7261.T) plans to increase global retail sales by 23 percent to over 1.6 million units and operating profits by more than 27 percent over the next four years. The group believes operating profits will beat initial targets this year and hit 1.7 billion dollars under the new plan. Mazda intends to boost synergies with 28.9 percent owner Ford (F.N) in the years to come, will raise research and development spending by 30 percent and capital expenditure by 50 percent in the next four years and will increase capacity at its two Japanese plants by 11 percent.

Prepared for Reuters by Durrants