UK insolvencies up by more than half in the first quarter of 2009

May 4th, 2009 by admin | Filed under Daily News, Employment, Recession, UK Small Business.

A recent report issued by Insolvency Service revealed that company insolvencies have risen by more than 50 percent in the first quarter of the year

Business insolvencies in the first three months of 2009 were reported to have reached 4,941– an increase of seven per cent on the last quarter of 2008

The report also points out that the number of individuals who declared themselves personally bankrupt in 2008, jumped up by close to 25%, and those who signed individual voluntary arrangements (IVA’s) were also up close to 12 percent on the previous 12 months.

Within the business corporate sector, understandably hardest hit were companies involved in building and construction percentage wise, while those companies involved in manufacturing, made up the largest number of all insolvencies.

The media sector is also finding that surviving the credit crunch is no cake walk. Channel 4 the up-market television look likely to announce another fall in advertising revenue, which could bring with it further cuts in their programming budget. The channel announced that the income from advertising fell £25 million last year from £825 million, leaving their cupboard a lot barer than they would like, and making them less attractive to potential advertisers. This Catch 22 situation if not arrested could see a further and sharper decline in advertising revenue for 2009, which could cost them around £100 million in income, the channel’s management fears.

National Express seems on the course for a rights issue. According to recent reports, the rail group is very close to reaching an agreement with the government in which they will relinquish their east coast franchise UK transport officials envision replacing National Express’s current franchise arrangement with a fixed fee management. A meeting between officials of the Ministry of Transport and National Express supposedly resulted in the signing of an outline agreement in which the franchise agreement will be suspended and replaced with a contract which National Express will be invited to bid for.

Tobacco shares continue to take a tumble as the recession’s positive side is causing more and more people to cut back on the weed.

Europe’s largest publicly traded cigarette makers British American Tobacco Plc and Imperial Tobacco Group Plc have slumped steadily amid speculations of profit cuts that could reach as high as twenty percent in 2009.

Rentokil have realized that the best profits are in pest control, and consequently are overhauling their till now loss making parcel delivery business. The market seemed reassured by the news and their shares rose on the day by 14 percent (10.5 pence to 75.25)

On Friday the FTSE 100 fell 0.1 percent on Friday’s trading to 4,238.96 with the FTSE 250 closing down for the holiday weekend at 7571

May the 1st marked a special day for the FTSE 100 as it closed with week with its third straight week of advances and its largest monthly jump for six years

The pound recovered for the third consecutive day, advancing against the dollar, the euro and the yen, bringing with it tentative signs that the current recession may be beginning to bottom out.

Pound/US dollar 1.4949

Pound/Euro 1.1225

Pound/Japanese Yen 147.73

Pound/Swiss Franc 1.6967

Wall Street shares had a fair day on trading on Friday

The Dow Jones Average rose 44.29 to close at 8212.41. NASDAQ raised a smidgeon to close at 1719.2

The eagerly awaited of annual general meeting of Berkshire Hathaway company seemed to go off without any heads being broken. Legendary chairman Warren Buffett, speaking to the company’s 35,000 shareholders, announced that in his opinion “the US government is generally taking the right steps to aid economic recovery.”

He spiked his words by adding that he expected the company to make further losses in 2009, adding to the 10% losses in 2008. At least, Mr. Buffett can take some comfort that the stock fall saw his personal wealth shrink by £17billion.

It is difficult not to become entranced on what is happening in the car industry with Italian carmaker Fiat apparently looking to become a major player in the regrouping of the industry worldwide. In addition to their intention to take a major share in Chrysler, Fiat have also confirmed for the first time that it is interested in a takeover of German car maker, Opel, currently part of the cash strapped General Motors group.

GM faces potential bankruptcy in the US and has until 1 June to restructure.

In Asia, governments have been warned to reduce their reliance on growth driven solely by exports and to focus more on rebuilding their internal finance and growth. The warning came from officials of the Asian Development Bank (ADB) during the banks’ annual meeting, held in Indonesia.

Asian economies continue to decline dramatically during the worst global slump since World War II.

Demands for their products have fallen accordingly and the downturn is set to keep tens of millions of people below the poverty line.