Business Digest - Monday September 27 2010

The Times

TESCO CHIEF ATTACKS SHORT-TERM CITY INVESTORS

Writing in The Times, Sir Terry Leahy, the chief executive of retail giant Tesco , has criticised the City's leading investors for failing to act as responsible owners of publicly listed companies in Britain. Leahy called for shareholders to understand the business and act more like partners than just investors, saying moving away from risk-averse short-termism would see them reaping the benefits. Leahy wrote: "Many investors don't want to get under the skin of business or don't have the patience for long-term value creation."

SEARCH BEGINS FOR A STAR TO SAVE LOCAL TV

Culture Secretary Jeremy Hunt will look for a commercial sponsor to fund plans to create a network of local television stations around the UK. An interim report

to be published on Tuesday by Lazard's head of UK investment banking, Nicholas Shott, will detail the necessary conditions to support the formation of 12 city-based broadcasters, with advertising revenue alone unlikely to be able to sustain the services. Departmental spending cuts mean there will be no public money to support the scheme, but Shott expressed his belief in the possibility of finding a commercial sponsor over the weekend.

The Daily Telegraph

VENEZUELA GIVES BP GO-AHEAD TO SELL

BP is selling of its one billion pounds' worth of oil assets in Venezuela to partially finance the cost of its Deepwater Horizon oil rig disaster. The assets, comprising minority stakes in two joint ventures with the state oil company PDVSA, are likely to be wholly purchased by PDVSA, although TNK-BP is also a possibility. The move is part of the oil giant's programme to raise 19 billion pounds through disposals.

VICTORY FOR 'RED ED' BUT BUSINESS STAYS WARY

Business magnates have reacted with caution to the election of Ed Miliband as leader of the Labour Party. Most City figures were hoping for Miliband's brother David to be elected, as he is seen as a more "centre-ground" politician in the mould of Tony Blair. "It's important that any party which aspires to be in government understands the crucial role that business and enterprise play in delivering economic success'" stated Alistair Tebbit, spokesman for the Institute of Directors. "Any drift away from a pro-enterprise agenda is likely to end in tears for all concerned."

RICH SHUN RETIREMENT TO STAY IN WORK LONGER

Research from Barclays Wealth has revealed 60 percent of rich professionals in the UK plan to work for as long as they are able, rather than retiring at a specific date. The study of 2,000 "high-net worth individuals" in various countries found that Britain had the highest proportion of wealthy workers willing to spend what would be their retirement working or starting a new business.

The Independent

HSBC ATTACKED OVER GEOGHEGAN SEVERANCE DEAL

Disclosure of the severance package awarded to HSBC's outgoing chief executive Michael Geoghegan is likely to be met by a governmental backlash. Geoghegan is to leave in March 2011 after he was not selected for the chairman's position. The bank denied claims that the employee could eventually receive 36 million pounds from long-term incentive plans, and stated that the figure of 36 million pounds assumed a 100 percent payout where much smaller returns are more usual.

TECHNOLOGY AT HEART OF PUBLISHERS' STRATEGY

British publishers are looking to enhance their digital operations with mobile phones and iPad-style devices in 2011. A survey from the Association of Online Publishers showed that 91 percent of the publishers were confident that new technology was to bring a period of "dynamic growth", with 86 percent enthusiastic about the emergent "tablet" devices. "There's a great focus on emerging platforms, on mobiles and tablet computers particularly," remarked Tim Cain, head of research and insight at AOP. "The iPad has caused a stir in the industry."

The Guardian

HOUSE PRICES FALLING AS FEAR OF CUTS COOLS DEMAND

Property information firm Hometrack has revealed weakened demand for property ahead of public spending cuts has resulted in house prices falling by 0.4 percent in September. The report, to be published on Monday, will show prices fell in every region of England and Wales, with the combined figure the third consecutive monthly decline. Hometrack director of research Richard Donnell said the latest trends formed "part of an ongoing re-pricing process which began six months ago in early spring, and which is set to stretch well into 2011".

SAINSBURY'S HAS EYES ON CHINA AS SUPERMARKET RIVALRY DEEPENS

Retailer Sainsbury's is examining plans which will see it pitched head to head with Tesco by opening stores in China. A team of executives visited China to examine the prospects of opening a chain of stores in Beijing and other areas of the country, which is the fastest-growing grocery market in the world. A spokesman for Sainsbury's said no concrete decision had been made about China, but were it to open stores in the country, it would face competition from France's Carrefour, Wal-mart and Tesco - which has drawn up plans to open 80 large Lifestyle malls.

CBI SAYS FINANCIAL SECTOR GROWING AT FASTEST RATE SINCE CRASH

Business group the Confederation of British Industry will report on Monday that the British financial sector is enjoying growth in business at a rate not seen since the onset of the credit crunch in 2007-08. Profits, activity, employment and investment were all rising in the third quarter of 2010, although the CBI noted the pick-up over the period had been less vigorous than the sector had forecast. CBI chief economic adviser Ian McCafferty said: "There is ongoing concern that prospective regulation may hold back business expansion in the coming year, but financial services firms have become more worried that weak levels of demand will dampen growth prospects."