Its Malaysia to the rescue in a last minute LDV buyout

May 6th, 2009 by admin | Filed under Daily News, Recession, Retail, Stocks and shares, UK Bank Accounts, UK Banks, UK employment.

In a move that was as dramatic as it was unexpected, the UK government made a sudden turnaround on their declaration that they will not be sinking any more funds into LDV, the stricken Midlands light van manufacturing plant. In a move that is both controversial and hopefully one that will set a welcome precedent, the UK treasury announced that they will be providing LDV with a £5 million short term loan that will allow Weststar, that Malaysian based car manufacturer to rescue the company and keep their 850 staff in work.
While the Treasury would have us thing differently, LDV may not bet the last company in need of emergency funding according to recent reports. The reports confirm that the majority of small and medium U.K. manufacturing firms continue to experience an ongoing decline in orders and output for the three months of 2009.
The first quarter was also very bad for Easyjet, the “people’s airline.” Easyjet have announced that its losses for the six months up to the end of March 2009 was more than two and half times what it had been in the same period of 2007/2008 (£129.8million compared to £48.4million)
The company remained optimistic for the future, stating that the increases in fuel costs that they had had to absorb as well as the Easter rush falling out of the period, had exaggerated the losses.

Someone who has yet to see the interior of an Easyjet is Guy Whittaker, till very recently finance director at the Royal Bank of Scotland, who will be handing in his keys any time now. Whittaker, one of last remaining executive directors from the good old days when Sir Fred Goodwin was at the helm, has to pay his share of the price for some of the glaring blunders made. Whilst not exactly falling on his sword, Guy will be leaving quietly and without a bonus.

As the FTSE returned from holiday, mining shares were the first to shake of the cobwebs. The world’s largest mining company, BHP Billiton rose by 3.4 percent to close at 1,483 pence with Rio Tinto Group, the world’s third largest also climbing 5.3 percent to 3,002 pence. On a good day for copper, rises were recorded for the fourth consecutive day, on forecasts that global demand and growth look like continuing. Other metal commodities also did well

There seemed to be an aura of confidence around the construction industry in general, as global building giant Wolseley saw their shares rise by 9.8 percent to close at 1,342 pence. Balfour Beatty Plc, still the UK’s Britain’s largest builders increased their share value by 2.3 percent to close at 350 pence as the U.K. construction index jumped to its highest level since Autumn 2008.

The FTSE 100 Index jumped 108.33, to 4,351.55 its highest level since January. The FTSE 250 closed up 55.52 points to close at 7,892.35

Sterling hit a four-month high against the dollar, at one point reaching $1.5161 before closing on $1.5087, as well as climbed strongly against the euro and the Swiss franc.

· Pound/US dollar 1.5087
· Pound/Euro 1.131
· Pound/Japanese Yen 143.84
· Pound/Swiss Franc 1.7049
On Wall Street, share trading was very subdued. . The Dow Jones Average dropped 16 points only to close at 8410.65 while Nasdaq did proportionately less well, closing down 9.44 points to 1754.12
Recent prophecies that consumer demand in the US might be entering a stabilization phase were reiterated by Fed Chairman Ben Bernanke on Tuesday continuing on his assertors that the recession is likely to end toward the end of 2009.
His words were backed up by recent reports that the U.S. service industry turnover will continuing to shrink, did so at a much reduced rate in April.
All eyes in Europe seem to be on Fiat SpA (F.MI) whose shares continue to rise on the back of their ambitious moves to acquire both Chrysler in the Us as well as all of GM’S Europe car manifesting units, including Vauxhall, Opel and Saab. If everything falls into place, Fiat will be looking to turn-over around about EUR80 billion in Europe alone.
On the commodities market, Crude oil was trading for around $54.00 a barrel, while gold reached $900 and Copper $210.50.