PRESS DIGEST - Financial Times - July 12

Financial Times

DIFFERING HOUSE PRICE DATA CONCERN ECONOMISTS

New figures by the FT house price index for June have shown that valuations in the housing sector remained 1.8 percent higher compared to the year before, contradicting the recent data from mortgage lenders. The difference in findings has left economists speculating on possible reasons for the gap amid concerns that false figures could affect the market. Peter Williams, chairman of Acadametrics, the group that produces the FT index, said: "There can be no doubt that the (media) coverage the lenders' measures attract adds to negativity, which in turn undermines consumer confidence and ultimately sales transactions." According to the survey, house prices have dropped for the past four months, with Nationwide building society and Halifax saying the falls were 6.3 percent and 6.1 percent respectively over the same period.

BROKERS TURN TO THE HARD SELL TO SURVIVE

Beleaguered mortgage brokers are cutting jobs, cold-calling former customers and turning to aggressive sales practices on insurance products, in a bid to escape from the economic slowdown that has hit the housing sector. The difficulty to find lenders keen to provide services to clients has led to the plunge of business volumes in recent months. Chris Fleming-Brown, of Egerton Partners, said: "I think we are bound to see more redundancies as business volumes are sharply lower. There is not enough cake to go round and most brokers are having to diversify." The credit crunch has also hit the sub-prime mortgage market, as a number of brokers have collapsed, while others tend to avoid the riskiest areas.

POOR CIDER SALES HIT PROFITS AT C&C

A trading update for C&C (GCC.I) for the four months to June has revealed sales are down eight percent compared to the year before, mainly affected by the poor cider consumption in Ireland and the UK. Sales in the cider division have posted a 10 percent drop, while the spirits and liqueurs branch grew by three percent. The company behind the Bulmers and Magners brands said: "A weak trading performance in June, together with continued unsettled weather and a deteriorating economic backdrop in our principles markets makes the outlook uncertain." Shares in the group fell 12.89 percent to 2.42 euros.

FEDEX IN EARLY TALKS TO BUY RIVAL TNT

FedEx (FDX.N), the package delivery company, has entered preliminary discussions to acquire Dutch rival TNT (TNT.AS), in a move expected to strengthen the group's European parcel network. On Friday, FedEx's market capitalisation was 22.8 billion dollars while the Dutch group's was 11.3 billion dollars. The severe economic slowdown and the soaring fuel costs have hit the package delivery groups, prompting merger talks. A company spokeman said: "As a matter of policy, FedEx does not comment on rumours or speculation about corporate development activities."

CANCER STUDY HITS OXFORD BIO

Shares in Oxford BioMedica (OXB.L) plunged following a note by the Data Safety Monitoring Board which said TroVax, the group's leading drug, had failed to meet the goals of a renal cancer study after the death of many patients in the trial group. The news sent the shares down 11 pence to 7.5 pence. Mike McDonald, the group's chief executive, said there is good reason to carry on with the trial and that a late survival benefit for the drug might still be shown. Sanofi-Aventis (SASY.PA), Oxford Bio's partner in developing TroVax, has not yet decided if it will continue the trial.

BUPA JOINS WITH MAX IN INDIA

Bupa is set to enter the Indian market with the launching of a joint venture with local conglomerate Max. The health insurer and care home group will only be permitted to hold a 26 percent stake in the new group, called Max Bupa. Chief executive Ray King acknowledged there are great opportunities for the group in the country: "India has a population of 1.1 billion, by 2025 it's going to have a middle class of about 600 millions. Some 70 percent of the healthcare spend is private and 90 percent of that spend is not insured, it's paid for out of pocket. The latent demand there is huge." Bupa operates in 200 countries, including Spain, Denmark and the United States.

GMG ACQUIRES PAIDCONTENT BLOG

Guardian Media Group has spent 15 million pounds in acquiring Paidcontent, a well-known media blog, and its parent company ContentNext. Tim Brooks, managing director of GMG, said the group wants to use the deal to help its expansion in the United States. He added that business-to-business advertising was "holding up better" than consumer, and that GMG was interested in further similar acquisitions. ContentNext is now based in California, with four sites looking into digital media and mobile content in India and the UK.

XAAR FALLS ON CHINA SLOWDOWN WARNING