PRESS DIGEST - Financial Times - Dec 29

HOUSE PRICES FALL FOR SECOND MONTH

Nationwide reported on Friday that house prices fell 0.5 percent on the month, taking the annual growth rate to its lowest level since May 2006. Fionnuala Earley, chief economist at Nationwide, believes that "lower interest rates are more likely to stabilise market activity rather than reignite it" because "housing affordability is starting from a much worse position than in 2005, while interest rate cuts have started from a higher and more restrictive level."

EQUITY CHIEF SAYS CGT IS TOO LOW

Jon Moulton, founder of Alchemy, has broken ranks from the private equity industry by saying that it does not pay enough tax and that the government's capital gains tax reforms would not be sufficient to silence critics. On Friday Moulton told the BBC "in reality, I don't think we do pay quite enough tax," but reiterated that high taxes could provoke an exodus to other countries.

CAPITAL INCREASES SET FOR BOOST

Bankers have forecast a wave of capital increases by financial institutions looking to repair their stretched balance sheets in 2008, but this is more likely to be in the form of convertible bonds which can be changed into equity at a later date, allowing existing shareholders to cash in on any upside and giving the issuer the benefit of a tax deduction on the coupon. Initial public offerings could be increasingly driven by private equity firms in the coming year as they seek the swiftest exit route from investments made over the last three or four years.

M&S SUCCESS EARNS ROSE KNIGHTHOOD

The chief executive of Marks & Spencer(MKS.L), Stuart Rose, will receive a knighthood in Saturday's New Year honours list. Stuart will now be on equal footing with his friend and rival retailer Sir Philip Green, and is being recognised for his "great success" in turning around the fortunes on the high street chain.

NEW PROFITS WARNING AT JOHNSON AS SKINNER QUITS

Troubled workwear and linen rental company Johnson Service Group is in need of a new chief executive after Charles Skinner resigned "following agreement with the board that a different set of skills are required in the company's current situation." Johnson shares lost 90 percent of their value in 2007 as the company put out three profit warnings, withheld a planned dividend payment and failed to offload three non-core businesses last month. On Friday the company announced that it had secured a waiver to its year-end banking covenants.

BOOST FOR WATERFORD WEDGWOOD

Lazard Alternative Investments has announced that it will invest 37 million pounds in Irish crystal and china maker Waterford Wedgwood, which experienced a slump in 2007 due to product shortages and a weak dollar. The crystal maker said on Friday that the funds would be used partly to fund cost rationalisation measures, such as reducing the size of the workforce at the Irish crystal operations from 1,000 to 510, and outsourcing lower-value items to Slovenia and other cheaper central European suppliers.

KESA IN TALKS TO SELL BUT FOR 550 MILLION EUROS

Kesa Electricals (KESA.L) has begun exclusive talks with a consortium made up of Colony Capital, Goldman Sachs and Merchant Equity Partners to sell its French furniture business BUT for 550 million euros. The consortium, which last year purchased the British furniture and home improvements retailer MFI, has raised debt financing from banks to complete the acquisition by convincing them that it is closely focused on improving BUT's operations.

TRINITY'S APPETITE FOR IPT FADES IN WAKE OF WARNING

A pre-Christmas profit warning from Interactive Prospect Targeting has threatened to scupper its sale to Trinity Mirror (TNI.L). Shares in the Aim-listed group dropped from above 160 pence to 113 pence on Friday on the back of news that UK revenues would be about ten percent below expectations. This values IPT at 50 million pounds and dents investors' hopes of a bid achieving a price of 80 million pounds.

3I SETS ITS FOCUS ON ULTRALASE EYE SURGERY SPECIALIST

UK private equity group 3i QPE.L is to purchase laser eye surgery specialist Ultralase from Spanish plastic surgery provider Corporacion Dermoestetica for 174.5 million pounds. The deal is subject to the completion of legal, tax and other due diligence processes but if concluded will generate a large return for Dermoestetica, which bought Ultralase for around 30 million pounds in 2005, and will strengthen 3i's portfolio of healthcare investments across Europe and North America.

MARBLES RAISING CHARGES AS SQUEEZE STARTS TO BITE

In a further sign of a squeeze on consumer credit Marbles, the credit card owned by SAV Credit, is raising its charges by an average of about four percentage points for purchases and six percentage points for cash advances. Financial comparison website Moneyfacts.co.uk said the increase in Marbles' charges was in line with subprime credit cards and that the credit crunch is hitting those who are most vulnerable, as only those in real need withdraw cash from a credit card.

Prepared for Reuters by Durrants