Questor share tips: Antofagasta’s cash makes it a copper-bottomed play

Garry White

Published: 6:00PM GMT 09 Mar 2010

There are continuing concerns about a correction in the copper price, but
Questor feels these worries are overdone. The dollar has been strengthening,
buoyed by concerns over the eurozone, and this is negative for commodity
prices.

However, the fundamentals of the copper market remain tight. It is expected to
be in deficit in 2011 as the global economic recovery gathers pace. Copper
faces supply side pressures because the recession has caused a lack of
investment in new mines. When demand rises a supply crunch is almost certain.

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Questor share tips: Hill & Smith weathers the downturn

By Garry White

Published: 5:40PM GMT 09 Mar 2010

Midlands-based industrial group Hill & Smith has weathered the downturn
pretty well – and its focus on cash management has put it in a strong
position.

Last’s year’s results, released yesterday, came in ahead of expectations.
Revenues fell by 7pc to £389m, but pre-tax profits rose to £39.7m from
£35.1m in 2008 - hitting a record high in one of the toughest years the
industry has seen for sometime. This is a credit to the group’s cost cutting
and cash management drive.

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London to become most highly-taxed finance centre in world as business is driven overseas

By
Lucy Farndon
Last updated at 10:23 PM on 08th March 2010

London will become the most highly taxed financial centre in the world when the new 50 per cent income tax rate for those earning £150,000 or more comes into force next month.The findings will raise fears that Labour’s levies are driving businesses and bankers overseas and threatening our competitiveness.From next month onwards, financial workers will pay more in personal tax and social security than they would if they were located in any other major financial centre.
Exodus: There are fears that Labour’s new 50 per cent income tax rate for those earning £150,000 or more, will drive businesses and bankers overseas
Taxes will be higher than for workers living in New York, Paris, Frankfurt, Geneva, Zurich, Dubai and Hong Kong, KPMG calculated.It gives further ammunition to City firms, who have been moaning for months about the rising tax burden.Today, Terry Smith chief executive of broker Tullett Prebon, warned that slapping further taxes on workers and companies will only hinder the economic recovery.He accused Labour of ‘criminal negligence‘ by racking up a budget deficit in the boom times rather than saving money for a rainy day.
Warning: Tullett Prebon chief executive Terry Smith says slapping further taxes on workers will only hinder the economy
And he said he fears that there is a ‘reasonable chance of a further financial crisis’, pointing to concerns about the level of debt among some European nations and the UK.’The UK economy is a disaster, an utter disaster on any number of fronts,’ Mr Smith said. ‘The government went into a downturn with a big deficit - that is criminal negligence.’Mr Smith added: ‘Additional taxes won’t work - you have got to cut the spending.’ Tullett announced last December that it will help employees move abroad if they want to avoid the top rate of tax. Mr Smith, who employs 700 brokers in London and has offices Hong Kong, Singapore and other centres said workers are already looking at relocating.’Certainly two or three of our significant desks expressed a lot of interest in relocating and have done quite a lot of work on” the practicalities of a move, he said.KPMG’s analysis shows that the 50 per cent income tax rate will sharply tilt the balance between living in London and other financial centres.London today ranks sixth out of the eight key financial centres, in terms of the tax burden for high earners.Professionals based in Geneva with a total salary and bonus package of around £1 million would pay about £60,000 more in tax than those in London. High earners in Frankfurt would pay around £80,000 more in tax on a £1 million package.But when the new rate comes into force the UK jumps to the top of the list of eight financial centres with the most onerous tax burden for any worker earning £500,000 or more in pay and bonus. Ian Hopkinson, of KPMG, said: ‘You can see from the calculations that for those earning significant bonuses, London has moved from being highly competitive to being the most expensive location.’

Graeme Leach, chief economist and director of policy at the Institute of Directors said: ‘The 50 per cent rate is a policy that should never have been announced. The indirect impact on entrepreneurial aspiration, business confidence and foreign direct investment is likely to be significant.’We suspect that little or no money will be raised and we urge the next government to reverse the increase as soon as possible.’The government’s windfall tax on city bonuses has also led to anger in the City. That imposes a 50 per cent one-off charge on the banks themselves for any bonus that they pay out in excess of £25,000. But it has not changed behaviour in the banks, who are still handing out multi-million pound packages to thousands of workers.Banks have been stomaching the cost themselves and forcing shareholders to pay for the levy, rather than risk annoying their top traders by taking it out of the bonus pool.The Treasury points out that people take many factors into account, not just tax, when deciding where to live or base their businesses.Tax minister Stephen Timms last week denied that the higher rate would harm the UK. He said: ‘Don’t agree that the new 50p rate of income tax will harm UK competitiveness, particularly if you look at what others will have to do. ‘It effects one per cent of the population. It is right that those with the broadest shoulders bear their share of responsibility during the consolidation. In these circumstances, and for the time being, it is fair and justified.’

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ITV returns to profit and forecasts advertising revival

By
Daily Mail Reporter
Last updated at 9:07 AM on 03rd March 2010

ITV - home to Dancing on Ice and The X-Factor - today announced that it had returned to profit during 2009 and forecast that the worst of the advertising downturn was over. The broadcaster’s full-year figures show that it made a pre-tax profit of £25m during 2009 - reversing the £2.7bn loss it suffered in 2008. The figures also show the broadcaster stem its decline in advertising - although it saw a 9% drop in ad revenues across the year, the wider market fell by 11%. ITV also forecast a 7% rise in advertising revenues for the first quarter of 2010.

Revival: Shows such as Dancing on Ice helped ITV stem declines in ad revenue

The impressive figures are the first major announcement under new chairman Archie Norman, who joined the business in January. Last year saw a round of deep cost-cuts which saw ITV achieve cost savings of £169m and Norman signalled that the efficiency drive would continue.

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House price slide could be start of longer downturn

The UK’s largest building society said a second downturn in house prices may
be on its way, after it recorded the first fall in average values for 10
months.

The average house price fell 1% to £161,320 in January, according to the
Nationwide building society house prices index published last week. This is
13% lower than the peak of £186,044 in October 2007, although values have
recovered 9% from the trough of £147,746 in February 2009.

Nationwide said it was “too early to say” if the fall was the start of a
trend, triggering yet more uncertainty for borrowers. Martin Gahbauer,
Nationwide’s chief economist, said: “There is evidence from a range of
indicators that the market may have lost momentum in early 2010 as the stamp
duty holiday ended and house hunters were obstructed by the icy weather.”

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Ben Bernanke expects rates to stay low for a long time

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Reuters

Published: 5:00PM GMT 24 Feb 2010

In his first appearance before Congress following a testy confirmation vote
in the Senate last month, Mr Bernanke offered a relatively sombre assessment
of the US economy despite recent signs of strong growth.

The country has lost 8.4 million jobs since the economy in December 2007
dropped into its deepest downturn since the Great Depression. The Fed chief
said job losses were abating, but also acknowledged the recession’s toll on
American workers.

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Unemployment figures mask UK labour market’s grim reality

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By Amanda Monaghan, Economics Reporter


Published: 6:45AM GMT 18 Feb 2010

There are still 2.46m people unemployed, and a further 2.8m who are not
working as much as they would like to. On top of that, the number of people
claiming jobless benefits has actually started to rise again, and thousands
have simply given up looking for a job and are turning to education to fill
the void.

Unemployment fell by 3,000 in the third quarter, to 2.46m, the
Office for National Statistics (ONS) told us yesterday , leaving the
unemployment rate unchanged at 7.8pc. The news was broadly welcomed and
underlined the expectation that unemployment is unlikely to peak at above
3m, which was the widely-held view in the early stages of the downturn.

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Qantas axes first class seats as profits dive

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AFP

Published: 6:43AM GMT 18 Feb 2010

Alan Joyce, the chief executive, said passengers would only be able to fly
first class between Australia and London, via Singapore, and between
Australia and Los Angeles after demand dropped dramatically in the wake of
the downturn.

“Our first class product will remain on key routes,” he said. “It’s a
re-balance - there are more business class seats and less first class seats.”

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One in ten of workforce are ‘underemployed’ as those forced to work fewer hours rises by a third

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By
Sean Poulter
Last updated at 6:07 PM on 16th February 2010

A record 2.8million desperate workers find themselves locked in part-time ‘underemployment’.
The jobs may be in retail, fast food chains or security and often don’t match the skills of those involved, who will include thousands of graduates with good degrees. As many as one in ten of the workforce are living in a state of such limbo, unable to fulfill their career and family ambitions, according to the Office of National Statistics.
Frustration: The total number of people with part-time jobs in the UK is 7.7million - some would like to work more
The Economic & Labour Market Review, which is published by the
ONS, calculates that 9.9 per cent of the UK workforce - 2.8million
people -  say they want to work longer hours but are unable to do so.
This total number is a mix of people currently in part-time jobs and
others who were previously employed full-time but have had their hours
cut because of the recession.

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Reckitt shareholders need to be patient

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By Damian Reece, Head of Business


Published: 12:30AM GMT 11 Feb 2010





Reckitt Benckiser Group

With dividends from many companies constrained, cash machines like Reckitt are
a rarity. But shareholders should resist the urge to raid the business. The
Finish to Harpic household goods maker is not only throwing off cash, but
growing its top line too.

Stripping out currency fluctuations, sales are up 8pc. It’s been investing
through the downturn in better products. It proves there’s no substitute for
constant innovation in markets as competitive as household, health and
personal care.

But focus is important too and, like all successful consumer goods companies,
it has built a business around a limited number of international power
brands that still have growth potential, jettisoning large but ex-growth
brands when necessary.

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