PRESS DIGEST - British business press - July 14

The Daily Telegraph

EU VICTORY FOR OSBORNE

European finance ministers have agreed to base the European Banking Authority, the new super-regulator, in London rather than Frankfurt, providing a major boost for the City. It had been proposed by members in the European Parliament to position the new watchdog next to the European Central Bank. However, the Ecofin council, which comprises George Osborne, the chancellor, and his counterparts from each EU member state, decided that London was its natural place.

2.5 BILLION POUND UK BANKS LEVY DRAWS NEARER

The government has launched a consultation on proposals for a bank levy that could raise 2.5 billion pounds a year in additional revenues. The Treasury intends to introduce the levy on UK bank balance sheets in stages from 2011, and the industry has been asked to give feedback by October 5. A 0.04 percent levy on balance sheets is set to be introduced in 2011, increasing to 0.07 percent in 2012.

DIXIT JOSHI, HEAD OF EUROPEAN EQUITIES AT BARCAP, DEPARTS

Dixit Joshi has stepped down as head of European equities at Barclays Capital (BARC.L), the investment bank. Joshi's departure came amid speculation that he has left to join rival JP Morgan, which has declined to comment. His exit is seen as significant for BarCap, the investment arm of Barclays bank, where he was viewed as its rising star. It was also speculated on Tuesday night that a former Lehman equities banker could be brought in to replace him.

DTZ COST-CUTTING HELPS SLASH LOSSES

DTZ DTZ.L, the property agent, has seen a sharp fall in annual losses thanks to recovering commercial property markets in the UK and Asia. However, chief executive Paul Idzik warned of "considerable economic uncertainty and geopolitical risk around the world". Idzik also declined to reinstate the company's dividend. Its pre-tax losses were slashed from 79.7 million pounds to 22.9 million pounds. DTZ's shares dropped 0.25 pence to reach 61.75 pence.

BAE NOT BETTING ON RAF TYPHOON ORDER TO SAVE JOBS

Ian King, chief executive of defence group BAE Systems (BAES.L), has said he is not expecting the Ministry of Defence to order the final set of Typhoon fighter jets for the RAF. However, King added that manufacturing jobs will be protected by export orders. The group expects an export agreement between the UK and Oman to be signed within a year. Under the original terms of Britain's agreement, there are 48 jets outstanding in the final set of Typhoons.

CRANSWICK BRINGS HOME THE BACON

Pork, bacon and sausage group Cranswick (CWK.L) has announced an increase in first-quarter sales of 19 percent to 198 million pounds for the three months to June 30. The company also announced its net debt had been reduced by 10 million pounds over the last year to 54 million pounds. The company's trading update said: "The board is confident in the continued successful long term development of the business". The company plans to continue upgrading its operations and has recently acquired new abattoirs and is expanding its sausage and bacon capacity. Its share price closed up 11 pence at 871 pence.

QUESTOR

Northern Foods NFDS.L (Hold)

Burberry (BRBY.L) (Hold)

The Independent

KAZAKHMYS ACCUSED OVER ASTANA GOVERNMENT LINKS

The non-governmental organisation Global Witness has claimed that investors in mining company Kazakhmys (KAZ.L) were not aware of the relationship between the company's management and the president of Kazakhstan, Nursultan Nazarbayev. Nazarbayev has been accused of accepting bribes from western companies in exchange for the rights to Kazakh oilfields in the 1990s. Global Witness said that UK regulator the Financial Services Authority was at fault for not properly investigating the biographies of Kazakhmys's senior managers when the company floated in London in 2005. Kazakhmys said the NGO's report contained many errors but acknowledged the relationship between Nazarbayev and some senior managers.

TIMIS'S AFRICAN MINERALS AGRESS 1.5 BILLION DOLLAR CHINESE DEAL

African Minerals AMI.L has agreed a 1.5 billion dollar investment deal with Chinese steel-manufacturer Shandong Iron & Steel. The money will be used by the mining group to develop its Tonkolili mine in Sierra Leone, a project that chairman Frank Timis has said could become the largest iron ore mine in the world. African Minerals has previously talked up the possibility of investment from several large mining groups. Eurasian Natural Resources Corporation (ENRC.L) was mooted as one possible investor, but a spokesperson for African Minerals yesterday refused to comment and talks with ENRC are said to have ended.

NEW BANKS WILL STRUGGLE TO COMPETE, SAYS RBS CHIEF

The chief executive of British banking group Royal Bank of Scotland (RBS.L) has said that he expects new entrants to the UK high street banking market to perform poorly. Stephen Hester said that the existence of larger banks was a result of customer demand for services such as online banking. "Our customers want to keep up with these changes, not look backwards", said Hester. RBS is being forced to sell over 300 of its branches as a penalty for receiving state aid during the recession. Spanish bank Santander BNC.L is said to be the most likely candidate to acquire these branches.

INVESTMENT COLUMN

Cranswick (CWK.L) (Buy)

Indian Energy IEL.L (Avoid)

DTZ Holdings DTZ.L (Avoid)

The Guardian

OECD DEMANDS RADICAL STEPS TO CURB INCAPACITY BENEFIT CLAIMS

Thinktank the OECD will on Wednesday call for the British chancellor George Osborne to take further steps to reduce government spending, such as making changes to the welfare benefits. The OECD is also expected to urge the chancellor to remove the Value Added Tax exemption currently afforded to items such as food and children's clothes. The OECD believes that Britain is still capable of achieving a strong economic recovery, but that more must be done to reduce the inequality created by the recession.

BIGGEST DROP IN FOREIGN TRIPS SINCE 1970S

Figures from the Office of National Statistics have recorded a 15 percent fall in the number of foreign visits by British nationals to 58.6 million in 2009, largely due to a steep decline in business trips as companies tighten their belts. The travel industry has been hit by the fall in demand, but the domestic tourism industry has felt the benefit of people remaining in the UK for their holidays, as well as an increase of 500,000 in overseas visitors to Britain.

BRITISH AIRWAYS BOSS TRADES INSULTS AT AGM

An acrimonious British Airways BAY.L AGM saw the chief executive Willie Walsh spar verbally with share-owning cabin crew members. Flight attendants accused the airline's management of "gagging" employees, not imposing sufficient discipline on auxiliary crew, and discriminating against those staff who participated in the 22 days of strikes this year. Walsh, supported by the chairman Martin Broughton, responded by claiming that the BASSA and Unite unions had "misrepresented management to their members".

The Times

BP PLAN TO TURN GULF OF MEXICO CRISIS INTO TAX LOSS PROVOKES FURY

Popular anger against BP (BP.L) on both sides of the Atlantic has been reignited by the news that the company plans to use tax relief received from the governments of the UK and US to offset the cost of the Deepwater Horizon oil disaster. BP is legally entitled under the law of both countries to claim relief on nearly all the costs of the disaster, except fines levied by U.S. courts.

VIRGIN WANTS FORMAL RULING ON INTERNET TV

Virgin Media (VMED.L) could be just "days away" from demanding a full market impact assessment from Ofcom on Project Canvas, a joint venture by a number of broadcasters that plans to offer video-on-demand via a broadband connection. Virgin claims that the project, which is led by the BBC in partnership with ITV (ITV.L), Channel 4, Five and BT (BT.L), would discourage competition in the broadcasting sector. Canvas, however, has already gained the approval of regulators from the BBC Trust and Office of Fair Trading.

LIGHTNING MOVE PAYS AS BURBERRY CUSTOMERS SPLASH OUT

The fashion retailer Burberry's (BRBY.L) speedy launch of a spring range entitled "April Showers" helped the company to a 10 percent increase in like-for-like sales during the three months to 30th June, ahead of City expectations. Burberry's strategy of refusing to reduce the cost of most of its items also proved to be beneficial. Total first-quarter sales, including products sold to other retailers and franchises, rose 27 percent to 291 million pounds.

TEMPUS

Northern Foods NFDS.L (Cheap shares, but uncertainty about the dividend)

Cranswick (CWK.L) (Not cheap, but worth picking up on weakness)

DTZ DTZ.L (A brave recovery play)