Financial Data Giant Poised To Snub London

By Mark Kleinman, City Editor

A financial data provider that has gone from start-up to multibillion pound enterprise within a decade is poised to snub London in favour of a stock market listing in New York.

I have learnt that Markit Group, which is estimated to be worth in the region of $5.5bn, told prospective advisers this week that it is targeting a flotation in the US - probably on Nasdaq - as soon as the end of this year.

The company has asked investment banks to prepare for a pitch in the near future to win roles on a possible initial public offering (IPO).

"They've clearly signalled that New York is the preferred option," said one insider.

People close to Markit insisted it had not yet made a firm decision to pursue a listing, and that other options, such as an outright sale to a trade buyer or group of private equity investors, were still under consideration.

Sky News reported on the embryonic listing plans last month.

Markit, which provides information across financial asset classes such as credit default swaps, was founded by Lance Uggla, a Canadian former bond trader, in a barn at the bottom of his garden not much more than a decade ago.

It is now regarded as a key component in the financial infrastructure relied upon by investment banks and traders around the world. It now employs more than 2,500 people and has offices around the world.

Mr Uggla has described his vision for Markit as "the iTunes of the financial world".

His company is majority-owned by large Wall Street and European investment banks, such as Bank of America Merrill Lynch, Goldman Sachs and JP Morgan. Each of their stakes would be worth tens - if not hundreds - of millions of dollars as part of a flotation.

Insiders said that those, and other, banks were being lined up to pitch for a role on a possible listing.

The private equity firm General Atlantic paid a reported £155m for a 7.5pc stake in Markit in 2010. The most recent valuation exercise had put a price-tag on Markit of approximately $6bn, since when profits had continued to rise, insiders said.

Sky News revealed recently that Markit was in talks to sell a stake in itself to Temasek Holdings, the Singaporean state-backed investment company. Those discussions are understood to be continuing and are likely to be concluded before a formal decision about a flotation had been taken.

A decision to list in New York would be a blow to London, which has seen the beginnings of a resurgence in the market for initial public offerings.

One of Mr Uggla's few setbacks since founding Markit in 2001 came exactly a decade later, when the company lost out in a bidding war for control of LCH.Clearnet, the clearing house, which is now in the process of being bought by the London Stock Exchange.

Markit has also been the subject of a long-running investigation by Brussels into the pricing of credit information.

A Markit spokesman declined to comment.

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Food Prices Set To Soar After Big Freeze

By Emma Birchley, East of England Correspondent

Months of heavy rain followed by extreme cold are set to hit harvests and push the price of the weekly shop up ever higher.

More than a quarter of winter wheat could not be planted last autumn because of waterlogged fields and attempts to catch up this spring have been hampered by frost.

But poor grain yields do not just affect the price of bread and biscuits.

Animal feed is 50% more expensive than 15 months ago, in turn increasing the cost of producing meat, milk and eggs.

Snow covers a field in North Yorkshire, with many crops affected

Mother-of-three Sarah Tait is concerned. She has already seen her weekly bill rise from £80 to around £100 in the past 18 months or so.

She said: "It is a worry. It just means there will be other things we don't buy because we have to buy food and retailers have got you really because you have got to pay what the prices say."

Other crops including potatoes, tomatoes and sugar beet have also been delayed.

In the 12 months to February fruit has risen in price by almost 12%, vegetables are up 7%, meat costs 4% more and bread and cereals are 3% more expensive - all above general inflation, which stands at 2.8%.

On the Euston Estate in Suffolk crops like winter barley have struggled from the start after being sown in November rather than the end of September due to the weather.

Estate manager Andrew Blenkiron expects the late planting to have a 20% impact on yield.

He said: "There are areas of the field that we couldn't plant because it was so wet and usually we would try to work through the winter and try to patch it up, but there's still water lying in it in early April."

UK growers should also have planted 50% of their spring cereals by now but have in fact only managed to sow 15% due to the weather.

Shoppers are being advised by Richard Dodd from the British Retail Consortium not to be too worried.

He said: "Customers shouldn't panic about the impact on food prices of this weather, of course it's adding an extra pressure, but at the same time the cost of lots of key world commodities, things like wheat are actually coming  down, and that's certainly balancing out any upward influences from weather.

"And of course retailing remains incredibly competitive so as the retailers battle it out for every bit of spending that is to be had from customers, they are doing all they can to protect customers from any effects."

But at the beginning of the year, Waitrose's managing director Mark Price warned the price increases in some commodities will be "massive".

And it will be some months before the full impact of the bad weather on crops becomes clear.

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Smartphone Sales Boost Samsung's Profit

Samsung has said it expects to report strong results for the first three months of the year - usually a slow time for consumer electronics sales.

The South Korean company estimated that its operating profit rose to 8.7trn won (£5.06bn) in the quarter - an increase of 53%.

It follows a year of soaring profits, as the popularity of Samsung's smartphones increased. In the last three months of 2012, its operating profit hit 8.8trn won.

The results mark the end of five consecutive quarters of record profits at the world's biggest technology company by revenue, which was giving guidance ahead of its quarterly results later this month.

Sales of Samsung's Galaxy S and Note models especially helped boost profit at the company - which had the largest market share of smartphones in 2012.

Samsung's launched its Galaxy S IV in New York last month

It makes more than 30 models to cover most price ranges, and sells cheaper models including the Rex and Galaxy Pop to less affluent customers in emerging markets.

The company, which is valued at around $220bn, said sales in the first-quarter would be around 52 trillion won (£30.3bn) - a rise of 14.9% on the year, but down 7.2% from the previous quarter.

Analysts estimated that Samsung sold between 68 and 70 million mobiles in the first quarter - up from 63 million at the end of last year.

In comparison, Apple's iPhone shipments are expected to have slumped by around 30% to 30 million - from 47.8 million in the previous quarter.

Samsung's sales are likely to be boosted further by the launch of its latest Galaxy smartphone - the S IV - which will be rolled out this month after a high-profile launch in New York.

The Android-based handset has a five-inch (12.7cm) screen, a faster chip and is thinner and lighter than the Galaxy S III.

As well as smartphones, Samsung makes tablets, televisions, cameras and home appliances.

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Immigrant Numbers 'Impossible To Predict'

The potential number of migrant workers from Romania and Bulgaria who will come to live in the UK when restrictions are relaxed remains unpredictable, according to a new report.

But the National Institute of Economic and Social Research (NIESR) says it expects the impact on public services will initially be modest - only potentially increasing if Romanian and Bulgarian migrants choose to settle in the country long term.

This will have an effect on schools, putting pressure on primary school places and the need to provide language assistance.

But there will be a lesser impact on the NHS, the housing sector and the welfare system, the study says.

It suggests that future migrants are likely to be young, mainly under 35, healthy, without families - and low-skilled workers, employed in construction, catering, hospitality, and as carers or cleaners.

Evidence from local surveys showed while Romanians and Bulgarians are interested in coming to the UK, it is not a favoured destination and many are interested in temporary stays rather than long-term moves.

Currently, the main destinations for Romanian and Bulgarian migrants are Spain and Italy, and Germany to a smaller degree, the report says.

"It is not possible to predict the scale of migration from Bulgaria and Romania to the UK with any degree of certainty," it goes on.

The extent to which a fresh influx of migrants from both countries will settle permanently in the UK in the future "is impossible to predict".

Bucharest, the capital of Romania

Pressure group Migration Watch UK called the report a whitewash.

It has forecast that 250,000 people from Romania and Bulgaria will arrive in Britain by 2019 after restrictions on workers from the countries are removed at the end of this year.

European Union rules allow citizens to stay in the UK for up to three months. To stay longer they must be able to prove they are working, studying or are self-sufficient.

Communities Secretary Eric Pickles last month admitted the Government had "no idea" about the size of the possible influx.

According to a British Labour Force sample survey, there are currently 26,000 Bulgarians and 80,000 Romanians living in the UK, but the actual numbers could be larger, the NIESR study found.

Minister for Europe, David Lidington, welcomed the report as a contribution to the debate on migration.

"The report will help to shape this Government's work to build an immigration system which works in the national interest - supporting the UK economy by continuing to attract the brightest and the best global talent, at the same time as protecting our public services and ensuring our welfare system is not open to abuse," he said.

"Our tough new rules are already taking effect with overall net migration falling by almost one third since 2010."

The independent report, published by the Foreign Office, was commissioned and funded by the British Embassy in the Romanian capital Bucharest and included a review of data and of research literature produced in the UK, Romania and Bulgaria.

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Petrol Sales Crash As Consumers Choose Diesel

Petrol sales have plummeted in the last five years, according to official figures, with retailers dispensing 5.4 billion fewer litres than five years ago.

In 2007, filling stations sold a total of 22.87 billion litres of petrol, the AA motoring group said.

But the latest Government figures revealed that last year, retailers dispensed 17.43 billion litres of petrol - a fall of almost 24%.

The combined sales of both petrol and diesel also fell over the period - by 9.3% to 34.16 billion litres in 2012.

The AA said that the total decrease was equivalent to 35 days of fuel sales being lost since the start of the credit crunch.

But diesel sales increased slightly over the last five years, in part due to companies buying the fuel directly from forecourts instead of storing it in depots, the AA said.

Sales of diesel rose from 14.8 billion litres in 2007 to 16.73 billion litres last year.

The organisation's president Edmund King said the increasing popularity of diesel cars and smaller vehicles had contributed to the overall decline in fuel sales.

Car registrations rise by 5.9%, with Vauxhall's Astra among the top sellers

"However, soaring pump prices have taken a huge toll on petrol sales more recently - during the 10p-a-litre price surges last March and October, pump sales of petrol fell by up to 5%," he added.

"The trouble is that, with global economic recovery, the stock market will predict greater oil and fuel demand and push up commodity values accordingly."

The AA said non-supermarket fuel retailers had been hardest hit by the sales slip, with petrol sales down 7.7% last year compared with 2011. Supermarkets saw a 0.6% decrease over the same period.

The RAC Foundation's director Professor Stephen Glaister warned that the UK's infrastructure could not cope with an increase in diesel's popularity.

"Our ageing refineries are not geared up to cope with growing demand for diesel and you can't just flick a switch to produce more," he said.

"Already we are a net importer of diesel and, if sales of diesel-powered cars continue to surge, our reliance on foreign imports will grow, especially if the economy recovers and mileage increases."

It comes as industry statistics revealed that new car registrations rose by 5.9% in March - the thirteenth consecutive month of growth.

Volumes were their highest since 2010 when the vehicle scrappage scheme was in place, the Society of Motor Manufacturers and Traders (SMMT) said.

Over 394,806 cars were registered in March, with sales of the mini and SUV vehicle types growing especially strongly.

The figures take registrations over the first quarter of the year to 605,198 units - an increase of 7.4%.

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HP Chairman Raymond Lane Resigns Amid Woes

The chairman of Hewlett-Packard is to resign amid a shakeup of the board of directors at the struggling US computer giant.

Non-executive chairman Raymond Lane was re-elected to the board last month with less than 60% of shareholder votes.

He will be replaced on an interim basis by Ralph Whitworth during the search for a permanent replacement. Mr Whitworth received 96% of the vote during the annual general meeting.

Mr Lane remains a director on the board.

HP, which is still the world's biggest PC maker, has seen its market value half in less than three years, wiping out $45bn (£29.5bn) in shareholder wealth.

The damage would be even worse, if HP's stock had not rebounded during the past two months on hopes that the company is now headed in the right direction.

Meg Whitman has attempted to turn the firm's performance around

In addition to Mr Lane's resignation as chairman two other top executives, John Hammergren and G. Kennedy Thompson, will be stepping down.

The resignations are said to be linked to the £7.2bn purchase of UK software company Autonomy, which was allegedly sold at an over-inflated price.

The news comes with HP in the middle of a massive shift in strategy as consumers gravitate from traditional PCs to mobile devices, including tablets.

HP chief executive and president Meg Whitman said: "Ray, John and Ken have invested a part of themselves in HP.

"Their leadership is reflected in the early success we've had turning the company around. I'm grateful that Ray will continue to serve, and I wish John and Ken the very best.

"I also appreciate Ralph's willingness to increase his responsibilities during this transition."

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Ex-HBOS Head Quits After Bank Report Criticism

Former HBOS chief executive Sir James Crosby has resigned from his new job as an adviser to a private equity firm following criticism of his role in the collapse of the bank.

He has left European investment firm Bridgepoint after a report by the Parliamentary Commission on Banking Standards criticised the role played by top HBOS executives before the bank's bailout.

Sir James was the "architect of the strategy that set the course for disaster" and held primary responsibility for the collapse along with former chairman Lord Stevenson and fellow chief executive Andy Hornby, the report said.

It blamed their "toxic" misjudgements for the bank's downfall and £20.5bn taxpayer bailout at the height of the financial crisis, and said they should not be allowed to work in the financial sector again.

The former HBOS bosses also failed to admit their mistakes, the report said, and should apologise for their "incompetent and reckless board strategy".

Peter Cummings is the only former HBOS director to have been penalised by City regulators after being fined £500,000 and banned for life from working in the City last September.

Lord Stevenson, Sir James Crosby and Andy Hornby were slammed in the report

But the commission said it was wrong that he should shoulder the blame alone and called on the new City regulator, the Prudential Regulation Authority, to consider stripping Sir James, Mr Hornby and Lord Stevenson of their Approved Person-status - which permits individuals to carry out particular financial functions.

Sir James was chief executive of HBOS from 2001 to 2006 and also former deputy chairman of the Financial Services Authority.

He was a member of the European Advisory Board at Bridgepoint and is also a senior independent director of catering firm Compass.

Mr Hornby's current employer - bookmaker Gala Coral - has defended his position of the company's boss.

"Coral as a business is performing extremely well and that coincides with Andy's tenure as chief executive," spokesman Simon Clare said.

"He's doing a great job and we're delighted with the job he is doing. He has the complete backing of the business."

Lord Stevenson was singled out for special criticism in the report for claiming reckless lending at HBOS was not his fault because he was "only there part-time".

It said he had shown himself "incapable of facing the realities of what placed the bank in jeopardy from that time until now".

While Royal Bank of Scotland's disgraced former boss Fred Goodwin has been stripped of his knighthood, Sir James and Lord Stevenson have retained their titles.

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US New Jobs At Lowest Level For Nine Months

US Jobs Figures Are Deeply Worrying

Updated: 4:04pm UK, Friday 05 April 2013

By Ed Conway, Economics Editor

Americans are dropping out of the jobs market, and fast. That's the depressing takeaway from today's non-farm payroll report.

The overall participation rate – a measure, essentially, of the proportion of people of working age either in a job or looking for one – has fallen to the lowest level since 1978.

It is, as far as employment experts are concerned, a deeply worrying signal: increasingly, potential workers are giving up on getting work, dropping out of the jobs market instead of attempting to find a new position.

In fact, as you can see from the chart, participation has been falling since the turn of the millennium, though it's only in the wake of the financial crisis that the drop has become more vertiginous.

Why be concerned about this? Well, a high participation rate has typically been seen as evidence of the American economy's strength – a complement to its high productivity rate and consistently-strong GDP growth rate.

A low participation rate, on the other hand, is often evident in economies which are more sclerotic and less efficient – particularly ones with over-generous welfare states which some think discourage people from working.

So, for instance, Japan and Spain both have participation rates below 60%: Germany's has only just tipped fractionally above it.

The reality is that now, for the first time since 1977, America's participation rate, at 63.3%, is lower than Britain's, which is 63.6%, or was in the three months to the end of January.

It would be nice to claim that this was because Britain was in some way becoming leaner and meaner, but the statistics suggest otherwise: Britain's participation rate has remained steady since 2005 while America's has fallen sharply as people leave the workforce.

It might be odd, having said all of the above to say that today's nasty US jobs report (the headline, by the way, was that a mere 88,000 net jobs were added in March – well below the rise in the population) also technically make it more likely that the Federal Reserve will scale back its stimulus.

But in one sense they do. The Fed has committed to more quantitative easing, buying up $85bn (£55.8bn) of debt each month until the unemployment rate drops below 6.5%.

But because unemployment measures the number of working people as a percentage of the total workforce, it can fall as a direct result of the workforce falling – and that's what happened this time, with the rate dropping from 7.7% to 7.6%.

Now, pragmatically speaking the Fed will try to "look through" this optical illusion. But it's an important reminder that when you tie your monetary policy to a very specific number, it doesn't always make it easy to predict future moves from the central bank.

Mark Carney, who is coming in as Bank of England Governor this summer and has nodded approvingly over at what the Fed has been doing, should take note.

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HMV Rescue Saves 141 Stores And 2,500 Jobs

By Mark Kleinman, City Editor

HMV's future as a high street retailer has been salvaged in a £50m deal that secures 2,500 jobs on Britain's beleaguered high streets.

Hilco, a restructuring firm, confirmed on Friday morning that it had struck an agreement with Deloitte, the administrator to HMV, to rescue the retailer.

The deal, which was revealed exclusively by Sky News on Thursday night, will keep 141 shops open, including 25 which had already been earmarked for closure by Deloitte. All nine of the Fopp-branded shops are included in the transaction.

While that represents little more than half of HMV's UK stores that were open before it called in administrators in January, it represents a more optimistic outcome for the chain than many analysts had predicted.

Hilco acquired HMV's Canadian operations two years ago, since when the performance of the business has surpassed expectations.

Paul McGowan, Hilco chief executive, said the deal had the backing of key HMV suppliers and landlords.

He said: "We hope to replicate some of the success we have had in the Canadian market with the HMV Canada business which we acquired almost two years ago and which is now trading strongly.

"The structural differences in the markets and the higher level of competition in the UK will prove additional challenges for the UK business but we believe it has a successful future ahead of it."

Mr McGowan will become chairman of HMV, with two other Hilco executives taking key roles with the retailer.

HMV had been weighed down by a mountain of debt, allied to a combination of waning consumer confidence and intense pressure from supermarkets encroaching on its entertainment retailing turf, as well as the rapid rise of low-cost digital rivals.

Hilco said it would abandon a recently-introduced practice of selling tablets and other digital devices, using the space instead for an expanded music and visual entertainment range.

Ian Topping, one of the Hilco executives who will be involved in running HMV, said: "The reaction of the British public to the administration of HMV shows a strong desire for the business to continue to trade and we hope to play a constructive part in delivering that."

Hilco also confirmed that it would seek to re-establish a presence for HMV in Ireland.

Nick Edwards, joint administrator at Deloitte, said the deal "provides a solid financial footing on which the business can be taken forward".

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Axminster Rescue To Save 100 Devon Jobs

By Mark Kleinman, City Editor

One of Britain's oldest carpet-makers is to be rescued today in a deal that will preserve about 100 jobs in the south-west of England.

I understand that Axminster Carpets, which traces its roots back to 1755, will be bought out of administration by a local consortium. An announcement about the deal is expected to be made on Saturday afternoon.

The consortium is being led by Stephen Boyd, a businessman who chairs Pittards, a major leather supplier, and includes backing from Centric Commercial Finance, an invoice discounting and asset-based lending group.

Axminster fell into administration last month, citing difficult trading conditions, with the loss of about three-quarters of the company's 400-strong workforce.

A supplier to Clarence House, 10 Downing Street and the Royal Albert Hall, the carpet-maker was founded by the Whitty family in the 1750s, and gave rise to what became known as the Axminster method of weaving.

After going out of business in the 1830s, it was subsequently revived a century later.

Joshua Dutfield, grandson of the founder of the current incarnation of Axminster, is expected to remain involved with the company following the rescue deal.

Axminster's collapse sparked an emotional response in Devon, with thousands of people signing a petition aimed at saving the company.

A spokeswoman for Axminster declined to comment ahead of the announcement. Duff & Phelps, which has been handling the administration, could not be reached for comment.

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