Elderly seek end to injustice of social care (Financial Times)

Representing around 35 per cent of the population, Christchurch in Dorset has the highest proportion of elderly individuals of any local authority in England. The picture of tranquillity, this strong Conservative seat seems the ideal retirement spot. Ahead of the release of the social care green paper on Tuesday, the Financial Times spoke to Christchurch residents, who voiced their disapproval of government policy.

“I don’t think the government does enough”, Joan, 70, a former post office clerk said, addressing the government’s financing of social care. She disapproves of the ‘compulsory insurance for all’ scheme where individuals will pay around £20,000 ($33,000) either upon retirement or through their estate after death. “I don’t think anything should be taken from the estate”, she said. “I think it’s unfair that for some, the state will take the whole lot.”

Len, 80, also a former post office employee, was highly critical of the means-tested system. “I think its wrong – I’ve worked all my life, never cost anything to anybody and then they take it away from you”. The “cruel lottery”, as described by health secretary Andy Burnham, results in some elderly people selling their homes and using up their entire savings to afford care, while others pay nothing. “You just feel like you’re hard done by”, Len said.

It seems many pensioners feel they are being punished for being sensible by saving. “It’s better to be lazy and go on the dole,” Len said “We’ve saved all our lives for our retirement and want to be comfortable with it”. This point was echoed by Joe, 85, a former engineer. “If we’ve saved to buy a house why should we have to pay for care because of that?” Joe proposed a solution to the issue. “Spend it now” he said to his surrounding peers, “if you’ve got nothing they can’t take it away.”

By Abadesi Osunsade

Copyright The Financial Times Limited 2009

G20 Summit Pittsburgh: Objectives and actions

Click here to view the G20 interactive graphic:

In Pittsburgh on Sept 24-25, the G20 group of nations are meeting for the third time since the financial crisis began, to discuss regulation, stimulus plans and trade. We examine how G20 thinking has changed on the major topics, and how far the individual countries have followed their own prescriptions for reform.

China deal boosts Renesola (Financial Times)

Renesola surged 19.2 per per cent to 177p on the back of a significant contract win and an upgrade from Goldman Sachs.

The silicon wafer maker said it had won exclusive rights to develop a $706m solar power plant in northern China.

Meanwhile, Goldman Sachs added the stock to its “conviction buy” list in a sector note favouring Chinese producers.

The broker said they have a 30 per cent cost advantage over European companies and look set to make strong market share gains while the market is oversupplied.

Gulf Keystone Petroleum , which has regularly been mooted as a takeover target, surged 31.8 per cent to 50¾p amid hopes of a positive update from its Shaikan-1 field in Kurdistan.

The group has previously said the well has 400m barrels of oil in place, with potential for a further 1.5bn barrels. The test results are not thought to be imminent but are expected within the next few weeks.

TT Electronics rose 20.4 per cent to 48p after the components supplier said trading remained on track to meet full-year estimates.

Football club Birmingham City rose 33 per cent to 62p after its potential acquirer and biggest shareholder, the Hong Kong businessman Carson Yeung, put down a deposit that valued the stock at 100p apiece.

Property group Capital & Regional dropped 55.9 per cent to 43¼p after confirming that it would raise cash with a placing and open offer to current holders at 24p a share. South African peer Parkdev will take a 25.4 per cent stake as part of the £69m fundraising.

Landmine detector maker Pipehawk gained 86.7 per cent to 7p on news of a contract win with Delphi Automotive.

Morse , the IT group, bounced back by 11.5 per cent to 29p after saying on Wednesday its bid talks had collapsed.

Investec reinstated “buy” advice on the stock with a raised 36p target price.

Copyright The Financial Times Limited 2009.

Appetite for European construction grows (Financial Times)

Demand for equities returned this week, leaving Europe’s bourses higher for a fifth week out of the past six.

Sentiment was tinged with caution, causing some hefty losses on Monday, but the recovery over the remaining four sessions took the FTSE Eurofirst 300 back to a 10-month high.

The index gained 2.6 per cent over the week to close on Friday at 966.87.

The shares of German carmakers Porsche and Volkswagen took diverging paths, topping and tailing the Eurofirst 300 leaderboard, as the complicated saga was clouded further by Thursday’s news that the Stuttgart headquarters of Porsche had been raided by state prosecutors investigating alleged market manipulation.

Volkswagen shares fell 21 per cent over the week to €151.15 after it was revealed that Porsche sold VW shares to Qatar for just over half of the market price in a multi-billion euro deal.

Porsche gained 9 per cent to €52.79, in spite of the manipulation allegations.

The construction and building materials sector made a recovery after Switzerland’s Holcim said it expected stimulus measures across Europe and the US to drive growth in the coming quarters.

The cement maker also announced better-than-expected second-quarter profit, pushing its shares up 11 per cent over the week to SFr72.70. Its positive outlook was in contrast to the mood set in a Nomura report, stating there was an “absence of macro data suggesting a sustained recovery in end markets”.

Germany’s Heidelberg-Cement fell 1 per cent over the week to €34.50, while German builder Hochtief rose 14 per cent to €52.60 and Irish building materials group CRH climbed 5 per cent to €18.92.

Austrian brickmaker Wienerberger, which reported forecast-beating results on Tuesday, gained 23 per cent to €15.33 after a couple of broker upgrades.

Bank shares were buoyant with Switzerland’s UBS leading gains after settling its long-running tax dispute with the US government.

UBS shares also jumped after the Swiss government sold its 9 per cent stake in the bank for a profit of SFr1.2bn.

Nordic banks advanced after Sweden’s Swedbank, the biggest lender in the Baltic states, reported signs of stabilisation and announced a SKr15bn rights issue with an aim to making itself more competitive and less dependant on state guarantees. Its shares gained 14 per cent to SKr75.50. Swedish rival SEB, which also has a big Baltic exposure, rose 11 per cent to SKr50.75.

German tyremaker Continental soared 19 per cent to €27.71 after Schaeffler, the privately-owned ball bearings specialist, announced a €12bn refinancing that would pave the way for a merger between the two companies.

By Abadesi Osunsade and Neil Dennis

Copyright The Financial Times Limited 2009.

Outlook brightens for Europe’s builders (Financial Times)

European equity markets were supported on Thursday by an overnight surge on commodity markets and hopes that global stimulus packages would drive infrastructure and construction spending.

Recovery in the construction and building materials sector was high on the agenda after Switzerland’s Holcim, the world’s second-largest cement maker, said it expected stimulus measures across Europe and the US to drive growth in the coming quarters.

This brighter outlook combined with the company’s announcement of better-than-expected second-quarter profit and success in cutting costs, pushed shares 6.1 per cent higher to SFr69.45.

It also had a strong impact on the sector. Germany’s HeidelbergCement rose 2.3 per cent to €34.98, while Irish building materials group CRH climbed 3.3 per cent to €18.49.

This was in contrast to the mood in the sector on Wednesday after Nomura downgraded its outlook. The broker said there was an “absence of macro data suggesting a sustained recovery in end markets”.

Austrian brick maker Wienerberger, which reported forecast-beating results on Tuesday, climbed 0.5 per cent to €13.93 after price target upgrades from both Deutsche Bank and Citigroup.

Hochtief, the German builder, rose 6.1 per cent to €52 after Deutsche Bank upgraded the stock to “buy” from “hold” and lifted its target price to €67 from €41.

Deutsche Bank analyst Michael Kuhn said: “Hochtief provides an attractive investment case – from the second quarter, it should benefit significantly from construction orders from worldwide stimulus packages.”

Dutch company Koninklijke Boskalis also advanced, jumping 13.4 per cent to €21.30. The world’s largest dredger group announced better-than-expected interim results in spite of falling demand, causing its shares to touch a nine-month high.

With strong support also from resource-related stocks, the FTSE Eurofirst 300 ended the session 1.4 per cent higher at 944.94.

Leading the banks, UBS was up 4.5 per cent at SFr17.50 after the Swiss government sold its stake in the bank for SFr16.50 per share, making a profit of SFr1.2bn. The government bought SFr6bn in convertible securities in October to help the bank weather turbulent conditions – the amount converted to about a 9 per cent stake.

Spain’s BBVA meanwhile edged up by 2.2 per cent to €11.59 in anticipation of its purchase of Guaranty Financial Group, the troubled Texas lender . Its national rival Banco Santander gained 2 per cent to €10.19.

Rising prices on commodity exchanges on Wednesday kept metal groups mostly buoyant. Germany’s ThyssenKrupp added 2 per cent to €24, while Paris-listed ArcelorMittal rose 1.2 per cent to €24.85.

Austrian steelmaker Voestalpine’s shares rose 1.2 per cent to €20.88 as the company declared it would stick to its full-year outlook on signs that demand and prices were stabilising.

Oil prices raced more than 4 per cent higher on Wednesday, rising above $72 a barrel, after US data showed a fall in crude imports and stockpiles. Although the two benchmark contracts, ICE Brent and Nymex West Texas Intermediate, were lower on Thursday, the big oil producers helped drive gains in Europe. France’s Total gained 2.5 per cent to €38.75, while Norway’s StatoilHydro added 1.4 per cent to NKr132.32 and Spain’s Repsol rose 1.9 per cent to €16.57.

By Abadesi Osunsade and Neil Dennis

Copyright The Financial Times Limited 2009

SMALL CAPS: China deal boosts Renesola (Financial Times)

Renesola surged 19.2 per per cent to 177p on the back of a significant contract win and an upgrade from Goldman Sachs, write Bryce Elder and Abadesi Osunsade.

The silicon wafer maker said it had won exclusive rights to develop a $706m solar power plant in northern China.

Meanwhile, Goldman Sachs added the stock to its “conviction buy” list in a sector note favouring Chinese producers.

The broker said they have a 30 per cent cost advantage over European companies and look set to make strong market share gains while the market is oversupplied.

Gulf Keystone Petroleum, which has regularly been mooted as a takeover target, surged 31.8 per cent to 50¾p amid hopes of a positive update from its Shaikan-1 field in Kurdistan.

The group has previously said the well has 400m barrels of oil in place, with potential for a further 1.5bn barrels. The test results are not thought to be imminent but are expected within the next few weeks.

TT Electronics rose 20.4 per cent to 48p after the components supplier said trading remained on track to meet full-year estimates.

Football club Birmingham City rose 33 per cent to 62p after its potential acquirer and biggest shareholder, the Hong Kong businessman Carson Yeung, put down a deposit that valued the stock at 100p apiece.

Property group Capital & Regional dropped 55.9 per cent to 43¼p after confirming that it would raise cash with a placing and open offer to current holders at 24p a share. South African peer Parkdev will take a 25.4 per cent stake as part of the £69m fundraising.

Landmine detector maker Pipehawk gained 86.7 per cent to 7p on news of a contract win with Delphi Automotive.

Morse, the IT group, bounced back by 11.5 per cent to 29p after saying on Wednesday its bid talks had collapsed.

Investec reinstated “buy” advice on the stock with a raised 36p target price.

Copyright The Financial Times Limited 2009.

Volkswagen plunges after Qatar deal (Financial Times)

European equities slipped on Wednesday as investors withdrew in the wake of a sharp sell-off of Chinese shares which forced the Shanghai index into bear market territory.

Stocks retreated following a strong run on Tuesday, when Europe’s main indices clawed back some of the ground shed during Monday’s torrid session.

Volkswagen came under heavy pressure after news reports emerged that Qatar paid Porsche just over half the current market price for shares in VW in a multi-billion euro deal announced last week.

Porsche last week said it was planning to sell assets worth billions of euros to Qatar in an effort to bolster its stretched finances, in a move that paved the way for a merger between the two companies.

VW shares, which last year briefly passed the €1,000 mark – making it the world’s most valuable company – slumped 13.6 per cent to €146.52, while its preference shares rose 13.4 per cent to €67.50

Porsche, meanwhile, soared on the news and continued a run of strong sessions by adding 3.7 per cent to €54.20.

Other car stocks also slipped, with France’s Peugeot losing 2.1 per cent to €19.75, local rival Renault falling 1.2 per cent to €31.47, and Italy’s Fiat flat at €8.15.

Banks performed badly, with UBS edging slightly lower after the Swiss government said it would release details of about 4,450 of the group’s bank accounts to US authorities, settling the long-running tax dispute that has threatened Swiss banking secrecy

France’s Societe Generale dropped 1 per cent to €51.74, Spain’s Santander lost 0.3 per cent to €9.98 and Swiss lender Credit Suisse slipped 1.3 per cent to SFr52.30.

The main indices, which fell sharply during the morning, regained some poise later in the day. The pan-European benchmark FTSE Eurofirst 300 fell 0.3 per cent to 931.98, the French CAC 40 was fractionally lower at 3,450.34 and Germany’s Xetra Dax lost 0.3 per cent to 5,231.98.

Telekom Austria made healthy gains after the Vienna listed group surprised the market by maintaining its outlook for the year.

It was feared the company, which has suffered as the economic crisis in emerging Europe has hurt its business and exchange rates, would be forced to lower its guidance.

Telekom Austria added 4.9 per cent to €11.23.

Stora Enso, Europe’s largest paper manufacturer, announced that it would close mills in Finland because of continuing weak demand and booked a €592m hit to earnings in the current quarter.

The paper industry has been struggling to emerge from a six-year slump caused by soft demand and overcapacity.

“The operating environment has deteriorated faster than ever: long-term structural cost inflation in fibre and energy costs has recently been followed by dramatic weakening in demand,” Jouko Karvinen, chief executive, said. Stora’s shares were 0.8 per cent higher at €4.66.

Faes, the Spanish pharmaceutical company, edged 0.2 per cent higher to €3.92 after it announced that it had agreed with Jazz Pharmaceuticals to take back the licence for Flufenoxina, an anti-depressant drug.

Oil and gas companies got off to a poor start but later rallied to finish slightly higher as oil prices rose. Spain’s Repsol was up 0.2 per cent at €16.26, StatoilHydro, Norway’s national oil company was also marginally higher, adding 0.2 per cent to NKr130.48.

By Ed Hammond and Abadesi Osunsade

Copyright The Financial Times Limited 2009.

SMALL CAPS: Fewer referrals hit Care UK (Financial Times)

Independent healthcare group Care UK was under pressure on Wednesday on concerns about local authority budget cuts and signs of resistance from doctors, write Bryce Elder and Abadesi Osunsade.

The stock lost 5.7 per cent to 287½p, even after saying its trading was in line with expectations.

Analysts focused on weakness at its community care and treatment divisions, which saw lower- than-expected referrals from the NHS.

“We are concerned that this suggests that GPs are still reluctant to refer patients to independent sector treatment centres on principle, which is not an encouraging sign,” said UBS. The broker took Care UK off its “buy” list.

Quintain Estates, the London property developer, climbed 19 per cent to 185p after the head of its fund management business bought stock. Tonianne Dwyer paid 134¾p each for 12,000 shares.

Capital & Regional was squeezed higher by 12 per cent to 98p as investors looked to get onto its shareholder register in advance of a potential fundraising.

The shopping centre manager, which announces results next week, has been looking to relax banking covenants and recently completed a £50m equity issue for its cinema investment fund.

Newspaper distributor John Menzies was up 24.2 per cent to 252½p after cost-cutting lifted its interim profit above market expectations.

Talk among customers of potentially weak trading led Earthport, the payment transfer group, to ease 4.8 per cent to 65p.

Morse fell 17.1 per cent to 25p after saying takeover talks with all parties had been terminated. The IT consultancy had said last month it had received and rejected approaches at 25p per share.

Lidco, the maker of heart monitors, rose 6.1 per cent to 17½p after saying interim sales will improve, with the group expecting to show a maiden profit in its financial year ending 2011.

Copyright The Financial Times Limited 2009.

SMALL CAPS: Funding boost for Dominion (Financial Times)

Dominion Petroleum was 17.7 per cent higher at 7½p after returning from suspension due to the late publication of its accounts, write Bryce Elder and Abadesi Osunsade.

The Ugandan explorer agreed a $10m funding package from BlueGold Capital Management, an energy hedge fund that tripled its clients’ money last year.

Indus Gas, the India-focused explorer, jumped 21.6 per cent to 310p on news of a find in Rajastan about 10 miles away from its core SGL development.

Arden Partners, house broker to Indus, said a similar find to the SGL field would have the potential to double its net asset value estimate of 195p a share.

Sonar maker Raymarine was up a further 7.6 per cent to 17¾p following Monday’s news of a bid approach from US rival Garmin and in spite of concerns that any offer would be below yesterday’s share price.

Speculative gossip about possible deals lifted Provexis, the developer of a tomato extract reported to help prevent heart attacks. It rose 25.5 per cent to 6p.

Luminar added 3.6 per cent to 150p after the nightclub owner completed a placing and open offer priced at 95p per share, which received a take-up of 95.5 per cent.

Cash transfer specialist Earthport slipped 2.2 per cent to 68½p after saying it remained in talks with a number of parties as part of a strategic review.

The group was responding to continued speculation that its bid talks had stalled.

Software maker Innovation Group lost 8.4 per cent to 10½p after a cautious first-quarter update, with the group reporting tough trading in the insurance sector.

“Confidence in full-year outlook seems misplaced,” said broker Piper Jaffray.

A profit warning sent Relax Group, the debt management company, sliding 16.7 per cent to 22½p.

The group said it was monitoring its capital position and bank facilities closely.

Copyright The Financial Times Limited 2009.

Algerian hopes boost Gulf (Financial Times)

Gulf Keystone inched higher amid hopes that it was nearing an agreement to sell its Algerian assets to GDF Suez.

Gulf Keystone, which has regularly been the subject of bid speculation, faces a potential dispute with partner BG Group for suspending investment in Algeria to focus on its prospects in Kurdistan. Its shares rose 0.8 per cent to 31½p.

Servicepower Technologies , which rejected a bid approach last week, drifted 5.7 per cent to 6¼p. Dealers believe there are two companies interested in paying about 7p per share for the maker of software for site workers but management is holding out for 10p.

Fellow software group Intec Telecom rose 2.6 per cent after Investec started coverage with “buy” advice.

Oil explorer Ascent Resources gained 2.4 per cent to 5.375p on talk of a positive update in the pipeline. Traders also noted renewed speculative interest in Victoria Oil & Gas , up 8.5 per cent to 4.1p.

Encore Oil gained 1.7 per cent at 14¾p after its full-year results showed narrowed losses while Indus Gas rose 9.3 per cent to 222½p on upbeat shareholder meetings following its maiden results on Wednesday.

Petards , the surveillance specialist, gained 17.4 per cent to 0.675p on news of two new orders with the Ministry of Defence.

Green fuel developer ITM Power was up 27.2 per cent to 35¾p. The stock price has nearly tripled in 10 sessions on turnround hopes and broker comment.

Quintain Estates gained 0.2 per cent to 125½p after the head of its fund management business added to his stake.

Max Property , the investment group floated last month by Nick Leslau, edged higher by 0.8 per cent to 119p in spite of news that its first deal had stalled.

Ernst & Young, receivers to collapsed peer Industrious, said it had not been able to satisfy the conditions required to complete a £232m sale of assets to Max.

By Abadesi Osunsade and Bryce Elder

Copyright The Financial Times Limited 2009.

Europe retreats from 10-month high (Financial Times)

European shares hit a 10-month high this week but fell back on Friday, tracking losses on Wall Street.

Talk that LVMH could sell its coveted Moët Hennessy division to long-time suitor Diageo sent the luxury brand group’s shares higher. LVMH has repeatedly denied it is planning to sell, in spite of rumours that Diageo is a willing buyer. It ended the week up 3.2 per cent at €65.62.

Nestlé shares fell 4.3 per cent at SFr42.20 after the Swiss food group reported a slide in profits and sales in its interim results.

UBS shares rose 4.7 per cent to SFr17.12 over the week following the Swiss bank’s provisional settlement of a long-running tax dispute with the US government. But Credit Suisse gave back gains from earlier in the week to close down 0.1 per cent at SFr53.20, while Germany’s Commerzbank fell 0.3 per cent to €5.95. France’s Natixis had a turbulent week, rising sharply before ending 8 per cent lower at €2.23. Banco Santander, Spain’s largest bank by market value, was flat for the week at €10.16. ING, the Dutch banking and insurance group, announced it had returned to profit in the second quarter following three successive periods of losses. However, results fell short of analysts’ expectations. Its shares rose 4 per cent to €9.56. Peer Aegon fell 11.8 per cent to €5.20 after launching a €1bn share placing.

Germany’s Eon followed the trend of its competitors in posting better-than-expected earnings. The world’s largest utility company reported earnings before tax down 1 per cent in the first six months. Its shares rose 2.9 per cent to €27.55.

Results earlier in the week from France’s EDF and Italy’s Enel also beat analysts’ expectations. EDF’s shares gained 1.9 per cent to €34.76 and Enel rose 1.8 per cent to €3.97.

The FTSE Eurofirst 300 index fell 1 per cent over the week to 940.94, but on Thursday hit its highest level since November 5. However, in Germany the Xetra Dax was dragged down by the heavily weighted Volkswagen’s sharp decline on Friday. The car manufacturer dropped 21.7 per cent to €190.70 as more details of its costly integration with Porsche were released. In sharp contrast, Porsche shares rose 7.9 per cent on Friday to €48.50. The Dax closed 2.7 per cent lower at 5,309.11.

Among the individual performers, Swatch Group, the world’s largest watchmaker, climbed 16.2 per cent to SFr237 over the week after reporting that first-half profits had beaten forecasts and that it expected demand to increase in the second half.

Anheuser-Busch InBev, maker of Stella Artois and Beck’s beers, announced second-quarter profits that beat forecasts, but analysts stressed they expect a weaker second half of the year. The company’s shares fell 1.8 per cent to €27.17.

Copyright The Financial Times Limited 2009.