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: Quote, Profile, Research, Stock Buzz) 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: Quote, Profile, Research, Stock Buzz), the package delivery company, has entered preliminary discussions to acquire Dutch rival TNT (TNT.AS: Quote, Profile, Research, Stock Buzz), 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."