|Citigroup Inc shares slump after attributing profit gain to an accounting adjustment|
|Tuesday, 18 October 2011 08:40|
News round up: Citi, France's AAA rating, inflation, Evraz, gas and electricity providers, BP and EMI.
France's AAA rating
Plans to increase the firepower of Europe's bail-out machinery with extra leverage threaten France's AAA rating and risk setting off a dangerous chain of events, a top German institute has warned. Berlin’s DIW institute, one of Chancellor Angela Merkel’s five official advisers, said attempts to boost the €440bn (£384bn) EFSF bail-out fund – possibly to €2trn – with guarantees to shore up southern Europe would be “poisonous” for France’s credit worthiness, according to the Daily Telegraph.
The official rate of inflation is predicted to rise even higher this week, defying Bank of England assurances that price rises will fall back. City economists say inflation could hit 5% when figures are published tomorrow, putting further pressure on the incomes of cash-squeezed families, savers and pensioners, the Daily Mail reports.
A Russian steel producer part-owned by Roman Abramovich is set to take its place in the FTSE 100 in a move that will compound the dominance of natural resource stocks in London’s leading index. Evraz said yesterday that it was seeking a premium listing on the London Stock Exchange to tap the City’s finances and fund growth, the Times reports.
Big six gas and electricity providers
The Energy Secretary says most of the big six gas and electricity providers have agreed not to put their prices up again this winter. David Cameron and Chris Huhne, the Energy Secretary, yesterday called together the UK’s largest energy suppliers and consumer groups for a summit to discuss how to make it easier for households to switch suppliers and save money, the Daily Telegraph reports.
BP will be able to cease its payments into a $20bn compensation fund to help meet claims from last year’s Gulf of Mexico oil spill one year earlier than expected after striking an out-of-court settlement with Anadarko Petroleum. Anadarko, one of BP’s minority partners in the Macondo well, will pay $4bn to settle claims between the two companies, says the Financial Times.
THE sale of EMI, the music group behind Katy Perry, Robbie Williams and Kylie Minogue, might be scrapped because it has drawn low offers amid the continuing market turmoil. Owners Citigroup, a US bank, is thought to be disappointed with bids that have come in at the lower end of its $3bn (£1.9bn) to $4bn price, forcing the bank to consider whether to sell its music publishing and recorded music divisions separately, or postpone the deal until conditions improve, the Daily Express reports.
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