PRESS DIGEST - Financial Times - Oct 1

The Financial Times

MPS' FUND BENEFITS FROM FALLING PRICES

MPs and ministers pouring scorn on hedge fund "spivs" in the City for reckless short-selling are likely to be embarrassed by the revelation that the 367 million pound parliamentary pension fund has itself invested in hedge funds that cash in on falling shares. For example, public accounts show the fund has placed seven million pounds with Quellos, a fund for hedge funds. John Ralfe, a pensions consultant, said: "It seems inconsistent for MPs whose own pension fund invests in hedge funds and short selling to criticise other people for doing the same."

EMPLOYERS FACE HIGHER BILLS FOR HEALTH BENEFITS

A new independent study by Mercer indicates that the cost to UK companies of providing employee healthcare benefits is one of the highest in Europe. UK firms spend an average of seven percent of payroll costs on healthcare provision, compared with a Europe-wide average of 5.3 percent. According to a separate survey published earlier this summer, the overall cost to UK employers of providing medical cover for employees and their dependents has risen 67 percent since 1999.

BANKS FACE CRACKDOWN ON LOAN INSURANCE SALES

The Financial Services Authority has launched a crackdown on alleged mis-selling of lucrative insurance products and has urged companies to reform their sales practices ahead of "escalating" intervention it was planning. In the interim, banks might "wish to consider" stopping selling lump sum insurance policies on unsecured personal loans, according to John Pain, managing director of the FSA's retail markets division.

BAD NEWS FOR 1,000 AS ITV CUTS JOBS

ITV (ITV.L) has unveiled a cost-cutting programme that will mean the loss of up to 1,000 jobs in the next six months. The broadcaster said the headcount reductions, which include 430 jobs being cut from regional news, are expected to save 40 million pounds a year. John Cresswell, chief operating officer, described the move as a "self-funding" solution to the broadcaster's difficulties, saying: "In order to sustain our investment in UK content we have to keep on top of our cost base."

MOSAIC PAYS DOWN DEBT TO WEATHER STORM

Mosaic, the group of fashion brands including Karen Millen and Coast, has paid down debt as it attempts to weather the storm hitting retailers on the high street. The Baugur-controlled group announced a loss of 12.9 million pounds for the six months to July 26, up from 4.7 million pounds in the previous half, on sales that increased five percent to 410 million pounds. Derek Lovelock, chief executive, said: "We are pleased with those first-half results because it has been a difficult climate".

GAME BUCKS TREND WITH LEAP TO 33 MILLION POUNDS

Game Group (GMG.L) has raised its expectations for the full year and defied the high-street slump to report a 26-fold jump in interim profits. Pre-tax profits in the first half rose to 33.4 million pounds, up from 1.3 million pounds, after revenues across the group rose 54 percent to 743.4 million pounds. Like-for-like sales for this year were now expected to grow between eight and 12 percent, compared to previous guidance of five to ten percent. The shares gained 10 pence to close at 205 pence.

CAUTIOUS OUTLOOK AT HARVEY NASH

Harvey Nash (HARV.L), the IT- and executive-focused recruitment and outsourcing group, reported a 25 percent increase in pre-tax profit to 3.9 million pounds, but admitted that the present turmoil in the financial markets left serious questions hanging over the recruitment sector as a whole. Albert Ellis, the chairman, insisted he was confident the business could weather the storm, saying: "We have proven over the past five or six years now that we can grow the business organically."

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