US based fund manager BlackRock finally reached agreement late on Thursday to purchase the Global Investors wing of Barclays, pay $13.5 billion for the company. The deal, paid for in cash and shares, will make BlackRock the largest money manager in the world, handling in excess of £2,000 billion in assets.

Barclays as well as receiving around £5 billion in cash will also receive shares in BlackRock equivalent to close to 20 per cent of BlackRock’s current value.

While that particular deal did capture the imagination of the city, it was small potatoes when compared to the excitement created by the deal taking place in the hallowed corridors of Old Trafford in Manchester and the Bernabeu Stadium in Madrid. After almost two seasons of uncertainty, Manchester United eventually accepted a £80 million bid from Real Madrid for their gifted but petulant superstar player, Cristiano Ronaldo. If everything goes according to plan, the deal will be completed by the end of June and will not only break but shatter the World’s largest transfer record, set only a week previously, also by Real Madrid when they purchased the services of Kaka from AC Milan for £56 million. Obviously the global recession is yet to reach Madrid.

In the stock exchange, shares in Thomas Cook Group Plc jumped 10 percent to 235.75 on reports that Germany’s Rewe Group is interested in taking over the travel company.

Shares in the Indian Film Co Ltd jumped by a massive 48.5 percent after company whose core activity is investment in the Indian film industry posted a more than two-fold jump in full-year pretax profit, while announcing their confidence that next year will be just as strong.

Europe’s third-biggest airline British Airways Plc announced that their chief executive, Willie Walsh is to forgo his July salary owing to the “exceptionally challenging circumstances” facing the airline.” Despite Mr. Walsh’s noble gesture shares in BA remained unchanged at 145.6 pence.

Home Retail Group Plc, owners of the Argos and Homebase retail chains saw their shares rise 7.75 pence to 266 pence prior to the release of an interim management statement.

Overall, FTSE 100 rose again yesterday, this time by 25.12 points to finish on 4,461. 87 while the FTSE 250 rose 24.46 points to close on 7,754.44

Sterling has reached its highest level against the euro since the start of the year after data suggested the UK recession may be over.

The pound was worth 1.1758 Euros in early afternoon trading, up from the previous day’s high of 1.1672 Euros.
Pound/US dollar 1.6578
Pound/Euro 1.1758
Pound/Japanese Yen 161.9284
Pound/Swiss Franc 1.7735

US stocks made a recovery on Thursday on the back of some positive economic news from the Federal Reserve.

The Dow Jones rose 31.9 points to 8770.92, while the NASDAQ recovered by 9.29 points to close on 1862.3.
As part of a raft of executive compensation reforms, The salaries of the top 100 employees at seven US companies who have been recipients of government bail-out funds are due to be vetted by a “special master” named by US government officials. The administration is also expected to institute legislation that would force public companies to hold non-binding shareholder votes on executive pay every year. That news should set some corporate knees knocking.

According to reports from the International Energy Agency (IEA), demand for oil in 2009 looks like being higher than previously expected, although it would still be in decline from the previous year. Estimates are that daily global oil consumption will be 83.3 million barrels a day.

The increased demand added to signs that the worst of the global recession is over.

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Tags: BlackRock, British Airways Plc, British Economy, Cristiano Ronaldo, Financial News, Home Retail Group Plc, Stock Exchange, Thomas Cook Group Plc

All that money that went to prop up the UK banking system had to come from somewhere and it looks like public will be paying for it through a severely disabled health service. A recent report from the NHS Confederation predicts that health service will face the most severe and sustained financial shortfall in its history beginning in 2011
The report, to be published today will warn that limited government funding increases are likely be increasingly outstripped by rising costs within the health service, leaving the NHS to cope with budget reductions running between eight to ten billion pounds between 2011 and 2014. Something to look forward to! Confidence is returning to the domestic and commercial property markets, according to recent reports stating that the collapse in commercial property which began in mid 2007 has bottomed out and 2009 has already witnessed an increase in transactions as well as renewed investor interest.

On the domestic front, figures from the Royal Institution of Chartered Surveyors revealed that house prices fell in May at the slowest annual pace since November 2007, adding strength to other indicators that the UK housing market might be stabilising

On the business front, the UK’s second largest travel agency Thomas Cook, looks live they will be themselves seeking a safe haven together with Rewe, its main competitor based in Germany. The move came after the collapse of the Thomas Cook’s largest shareholder on Tuesday. The shareholder, Arcandor, who own 53% of Thomas Cook stock, filed for insolvency, in one of Europe’s largest corporate failures outwith the banking sector.

Lloyds Banking Group announced their plan to close up to 400 bank branches in England. The closures will likely include the 164 Cheltenham & Gloucester outlets which will disappear from the high streets in November. As a result of the closures, designed to improve efficiency and profitability, Lloyds will also cut 1,660 jobs before the end of the year. The FTSE liked the idea and the Lloyds’ shares rose by 3.1 percent to 63 pence.

Also on the up was Barclays Plc whose shares rose by 2.2 percent to 290 pence on speculation that US based investment banker BlackRock Inc. has valued Barclays’ fund business at $13 billion, and are on the verge of making a cash/stock offer.

On the day, FTSE 100 dropped less than a point to close on 4,404.79 while the FTSE 250 rose a conservative four points to close on 7,691.65
The pound advanced yesterday as UK housing data provided a further sign that the worst of the economic slowdown might be over.

Pound/US dollar 1.6344
Pound/Euro 1.1606
Pound/Japanese Yen 159.9017
Pound/Swiss Franc 1.7609

In the US, ten of the largest US banks made a firm declaration that they are ready and willing to repay some $68 billion of the government bail-out money they have received indicating a significant indication of how rapidly the financial crisis is easing.
Whilst welcoming the move, President Barack Obama suggested restraint stating that it shouldn’t be taken for granted that “our financial troubles are over”.

On the news the Dow Jones remained constant falling only 1.43 points to 8763.09, while the NASDAQ climbed 17.73 points to close on 1860.13

The Chrysler saga seems to be finally over after the US Supreme Court rejected a plea to block the sale of assets of the bankrupt company to Italian giant Fiat. The US government strongly in favour of the sale issued a statement applauding the decision.

On a more sinister note, crude oil for July continued their steady increase, rising by 1.9 percent to close on $69.40 on the New York Mercantile Exchange.

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Tags: Barclays Bank, British Economy, Financial News, Lloyds Banking Group, LloydsTSB, NHS, Thomas Cook Group Plc

It might only be the good old co-op, but a touch of humility none the less. The Co-operative Bank announced that they halved home repossessions during the last 16 months. While this sounds very encouraging the actual reduction in repossessions was down from 16 to eight. Nevertheless, a lead for the bigger players in the mortgage market to follow, where it was reported that repossessions for the first quarter of 2009 actually doubled from the corresponding period of 2008.
Recent reports also confirm that property prices rose in May by the highest levels for more than fifteen months as access to mortgages became easier.

UK high street retailer Alliance Boots, taken private almost two years ago in the biggest buy-out in European business history, have announced the acquisition of more £400million of outstanding debt at a steep discount of less than 70p in the pound. The buybacks have been funded by Alliance Boots’ holding company, including £60m from the issue of new shares.

The FTSE had a great day yesterday with Lloyds Banking Group Plc leading the ways. Shares in the bank surged forward by 9.9 percent (10 pence to 98) after they confirmed that they will be offering investors four billion pounds of stock this week. HSBC Holdings Plc, Europe’s largest bank, rose 4.4 percent to (25 pence to 555)

Travel companies were also higher as Europe’s second-largest travel company; Thomas Cook Group Plc announced that they were in the market for further acquisitions. Their shares jumped 6.3 percent (17pence to 237), after seven days of stock declines. TUI Travel Plc, the biggest travel company, also added 2.5 percent (6 pence to 257)

India’s largest copper producer Vedanta Resources Plc climbed 6.8 percent as it was estimated that India’s next government will permit increased foreign investment. Shares climbed 6.8 percent (100 pence to 1,405)
.
Indian based U.K. owned oil and gas explorer Cairn Energy Plc, also saw their shares rise by 5.1 percent (122 pence to 2,454)

The FTSE 100 Index advanced a whopping 98.34 points to 4,446.45, the biggest daily increase since April 29, marking a 27 percent climb from its lowest level this year. The FTSE also climbed to 7,694.38, from 7,472.33 yesterday, a rise of 222 points.

The pound against the dollar by 0.8 percent to $1.5297, making for a 3.5 percent gain during the most month of May, added to the 3.3 percent appreciation in April against the dollar, making for the biggest gain since soaring 5.1 percent in April of 2006.

· Pound/US dollar 1.5297
· Pound/Euro 1.1352
· Pound/Japanese Yen 148.94
· Pound/Swiss Franc 1.719

The benchmark Dow Jones Industrial Average ended up 2.85%, or 235.44 points, at 8,504.08, with the NASDAQ holding up its share, rising 52.22 to 1732.36

Positive news from the housing and banking sectors saw US shares rise sharply on Monday’s trading, indicating continued investor confidence in the economic recovery.

In Germany, car giant Volkswagen (VW) has said it has suspended their merger talks with luxury carmaker Porsche, stating that constructive negotiations were not possible for the time being, whilst urging Porsche to reduce their debt.
However Porsche insisted that negotiations over the merger would continue.

Commodities remain stable, with crude oil up nine cents a barrel to $58.85. Gold ended its rise by dropping $3.20 an ounce to $918.50 and copper reserved its decline up $7.05 to close at $207.55 an ounce.

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Tags: Alliance Boots, British Economy, Financial News, HSBC, Lloyds Banking Group, Lloyds TSB, Thomas Cook Group Plc, UK Banks