Members of the G8, representing the World’s leading nations met over the weekend. They had a nice lunch and gave themselves a major pat on the back, by announcing that the largest economies are beginning to stabilise. However they hastened to add that there are significant risks around that could put a halt to recovery from the still global recession.

All the signs are in place that the recession has begin to unwind, with stock markets were rising, interest rates remaining stable, and consumer confidence begin to pick up.
However, US Treasury chief Tim Geithner put a damper on any premature celebrations by pointing out that it was still premature to crack out the champagne.

Reports from the National Institute of Economic and Social Research suggested that the U.K. economy had shrunk by a mere 0.9 percent in the quarter up to the end of May, encouraging news when compared with the 1.5 percent pace in the three months through April. Manufacturers in May were reported to be at their most optimistic for almost a year, a further sign that the industrial slump on record may be easing, according to a survey issued by the Confederation of British Industry.

Estate agents handling the prime housing market that was hardest hit by the downturn are reporting that of all the sectors the” top end” appears to be undergoing the fastest rates of recovery, with buyers returning to desirable parts of London and popular country markets. Mortgage brokers are reporting a considerable increase in inquiries from buyers seeking financing, for central London properties. According to unconfirmed reports a number of buyers have closed deals paying up to 3,000 pounds per square foot for properties in Chelsea and Knightsbridge, prices that bear a strong resemblance to those being paid during the peak of property prices in 2007.

News is that a number of Britain’s building societies are taking a close look at the example set by West Bromwich Building Society to extricate themselves from the jaws of extinction. The society, in an effort to strengthen their capital reserves, succeeded in converting outstanding debt into new subordinated debt, doing away with any need for a Government financed bailout.

A spokesman for the Financial Services Authority (FSA) confirmed that the new structure would be open to other societies, stating that “We believe this is a strategically important step for the sector as a whole to have access to good quality capital.”

FTSE Friday U.K. stocks fell, led by mining company led by Vedanta Resources Plc who announced a $1.25 billion convertible bond issue.

British residential services provider LSL Property Services enjoyed share gains of 8.3 percent after news of a management share-buy-out headed by group chief executive officer Simon Embley. Embley personally acquired 250,000 ordinary shares at 135 pence per shares.

Despite the high pollen count, shares in hay fever vaccine specialist Allergy Therapeutics took a tumble of almost 14 percent to 15.3 pence per share on the announcement that the company is looking to raise more than 22 million pounds through placing at 12 pence per share, making for a significant discount on Thursday’s closing of price of 17.25 pence. A representative of the company said the offer presents a 28 percent premium to the average share price for the last 90 days.

Another example that good (or profit) can come from bad is the news that shares in GlaxoSmithKline Plc jumped by 5.4 percent, to 1,115.5 with the World Health Organization official announcement that the Swine Flu outbreak has been classified as the first pandemic since 1968. As if by coincidence, Glaxo announced the advanced development of a vaccine against the pandemic flu strain to be go under the exciting and imaginative title of A (H1N1). I feel better already.

As the weekend drew nearer, the, FTSE 100 fell back just a little, down by 19.92 points to finish on 4,441. 95 while the FTSE 250 fared a lot worse, down 63.08 close on 7,691.36

Sterling took a drop against the dollar and Euro after reaching some new heights on Thursday.

Pound/US dollar 1.6377
Pound/Euro 1.1732
Pound/Japanese Yen 161.0319
Pound/Swiss Franc 1.7731

On Wall Street, shares in Columbia Banking System fell after the bank-holding company said it expects a second-quarter loss per share that is larger than analysts expected. The company said it expects to increase its loan-loss provision for the quarter.

The Dow Jones rose a further 28.34 to 8799.26, while the NASDAQ surprisingly dropped but by just 3.57 points to close on 1858.8
Shares of U.S. financial stocks lost ground on Friday as markets digested BlackRock’s huge acquisition in the asset management industry, and investors awaited the latest reading of consumer sentiment.

Asian stocks mostly declined on Monday’s trading, led by commodity companies, after metals and oil prices fell. Shares in Japanese automakers climbed as the weakening yen boosted earnings prospects.

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Tags: Bank, BlackRock, British Economy, Financial News, Financial Services Authority, FSA, G8, GlaxoSmithKline Plc, LSL Property Services, UK Banks, UK Recession, Vedanta Resources Plc