This article titled “Go-Ahead drops 5% on worries about future bus and rail prospects” was written by Nick Fletcher, for guardian.co.uk on Thursday 1st September 2011 09.58 UTC

Go-Ahead shares have hit the buffers despite an 11% rise in full year profits, boosted by good performances at both its bus and rail businesses.

It expects to benefit as car owners increasingly turn to public transport thanks to high petrol prices- although commuters on already crowded trains across the whole rail network may not relish the prospect.

And despite a dip of 1.3% in London bus revenues during the year, it expects a pick up from now on, helped by the addition of a number of new routes. As for rail, it said it was hopeful of winning the Greater Anglia franchise when the Department of Transport makes its decision next month.

But its shares have slumped 84p to £14.99, a 5% decline which makes it one of the biggest fallers in the FTSE 250.

Analyst Paul Hickman at Peel Hunt said the results were just about in line with expectations, with profits of £97.6m and earnings per share of 135.2p, but the company’s outlook was more uncertain, with the Southeastern rail franchise due to expire in 2014 and London Midland in 2015. Hickman said:

The main reason for holding the stock is the 5% yield, backed by a strong balance sheet. But prospects are dependent either on long-promised bus acquisitions or on replacing expiring rail franchises, without which we now forecast a 4% earnings decline in 2012. Given those uncertainties, the stock is not cheap.

Go-Ahead needs success in either its bid for Greater Anglia or bus company acquisitions to sustain scale.

Meanwhile Shore Capital cut its recommendation from buy to hold, with analyst Karl Burns saying:

Go-Ahead has outperformed with FTSE All Share by 20% over the last 3 months and 44% over 12 months, and whilst we believe its UK bus operations are in a strong position for 2012, we believe UK rail may see a more difficult 2012, with volumes likely to come under pressure from higher fares and unemployment on all franchises and furthermore, a reduced level of cost savings. In particular, the Southern franchise remains ‘at risk’ from a slowdown given it retains no revenue protection on the downside until 2015, albeit the franchise remains slightly ahead of bid assumptions.

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This article titled “Investors switch out of ITV on economic concerns, but US data sees FTSE edge higher” was written by Nick Fletcher, for guardian.co.uk on Thursday 1st September 2011 15.58 UTC

ITV‘s recent share price recovery came to a halt on renewed fears about the outlook for advertising spending in the current economic climate.

In a report on the European media sector, Nomura moved its recommendation on ITV from buy to neutral and reduced its price target from 105p to 75p. Analyst Colin Tennant said he was cutting earnings forecasts for all stocks in the sector based on the assumption of no real GDP growth in the US or Europe in 2012. On top of that, Nomura suggested the global economy would see very limited growth for the next three to five years. Tennant said:

Free-to-air broadcasters are by far the most highly exposed to the economy, have little or no pricing power or scope to gain exposure to emerging markets, or benefit from cross-border consolidation.

So ITV – which earlier in the week played down a report it would join forces with Silvio Berlusconi’s Mediaset to buy debt-laden Big Brother producer Endemol – fell 1.55p to 59.7p, the third biggest loser in the leading index.

Overall the mood was cautious after recent rises, with manufacturing surveys in the UK and Europe confirming the idea of an economic slowdown. A brief respite after a better than expected US manufacturing report soon fizzled out, leaving the FTSE 100 up 24.12 points at 5418.65. Giles Watts, head of equities at City Index, said:

The fact that the stock market rally, triggered from the better than expected [US manufacturing] data, was short lived is absolutely no surprise at all. We have the UK index close to strong resistance levels, whilst many of the buys we have seen this week have been on the back of weaker data, with poor data being cited as applying more pressure on the Fed to begin a third phase of quantitative easing. Sure enough the stock market rally from today’s better than expected ISM manufacturing data was short lived as with investors quickly digesting the fact that whilst stronger data helps to calm fears of a double dip, it also calms pressure on the Fed to act.

Friday’s US non-farm payroll numbers are likely to be the key to the next major move in the markets. Watts said:

We may get a somewhat indifferent reaction depending on which way the payroll data comes in. A worse than expected reading, whilst posing yet more woes for the US economy could apply pressure on the Fed to act with more [QE] and this could temper any instant bearish market reaction. Yet a stronger reading paints a brighter picture of the US economy than some of the recent data has suggested but at the same time eases Fed pressure to announce QE3. Either way, there is likely to be huge interest surrounding the number and we could see a somewhat volatile market reaction as a result.

Tullow Oil rose 34p to £11.09 on late speculation of a possible bid. Traders heard talk that China National Offshore Oil Corporation could be interested, with a price of £16 to £17 a share mentioned.

Top of the heap however was Hargreaves Lansdown, up 76.5p to 508.5p after the investment firm reported a 31% rise in full year revenues to £207.9m, underlying pretax profits of £129m and a 41% rise in assets under management. It said it had seen a surge of new business in July and August, up more than 30% year on year. Numis raised its forecasts for the current year’s earnings by 3%, saying:

With forecasts up our target price increases from 463p to 483p [and] this combined with a weak share price moves our recommendation to add from hold.

Banks were boosted by reports that any plan to ringfence their retail and investment arms could be delayed until at least 2015. Royal Bank of Scotland rose 1.98p to 26.25p, Lloyds Banking Group added 2.07p to 35.665p and Barclays was 9.6p better at 180.35p.

But miners were among the leading fallers on worries about demand for commodities if the global economy does continue to struggle, with Fresnillo falling 78p to £20.22 and Xstrata down 27p at £10.52.

Among the mid-caps Cable & Wireless Communications climbed another 2.21p to 37.6p on hopes of an improved outlook for its Jamaican business, while Hays was 5.05p higher at 80.55p following a 50% rise in full year profits, helped by the recruitment group’s push into overseas markets.

Elsewhere Hamworthy added 5p to 550p as the marine engineering group was tipped as a possible takeover target for US oilfield equipment supplier National Oilwell Varco. Evolution said:

[Varco's] chief financial officer said he expects the company to make more than bn of acquisitions this year as it seeks to take advantage of lower valuations. The company is looking mainly at companies outside the US. Focus seems to be on offshore production equipment – the acquisition of Norwegian business APL in Dec 2010 for 0m has whetted their appetite to expand in the Floating Production Storage and Offloading vessels market (APL designs and manufactures turret mooring systems). We note that they could easily buy Hamworthy (around £250m market capitalisation) – the global leader in offshore fluid handling systems.

Finally Namakwa Diamonds dropped 61% to 10.5p after the mining group said a m credit facility announced in July was no longer available on the original terms, and it was seeking alternative funding. It also announced the surprise news it was in advanced talks to sell the whole of its operations in the Democratic Republic of Congo, which had been expected to help the company into profit this year. It will also take a m charge as it winds up its diamond trading joint ventures as part of its restructuring. There has also been a boardroom upheaval, with chief executive Nico Kruger stepping down a day after the company announced the resignation of chairman Hans Smith. Numis said:

This all appears to have been driven by the removal of the m debt facility, with the company pointing to on-going negotiations and alternative funding sources. [This is] a negative update, coming on the back of news in June over a legal claim against Namakwa over its in Storm Mountain Diamonds.

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This article titled “FTSE falls ahead of US jobs data, as AstraZeneca slumps 3.5% after Crestor trial news” was written by Nick Fletcher, for guardian.co.uk on Friday 2nd September 2011 08.35 UTC

As leading shares in London follow Wall Street and Asia lower ahead of the US non-farm payroll figures later, investors are bailing out of the riskier sectors such as mining and banks.

But another big faller is AstraZeneca after a disappointing trial result for its cholesterol drug Crestor, its biggest selling product. Crestor failed to beat rival Lipitor, produced by Pfizer, in a head to head trial known as Saturn, with the results in the primary trial failing to reach “statistical significance.”

Further data and analyses will be presented in mid-November, but the market’s initial reaction has been to knock Astra’s shares 103p lower to £28.13, a decline of more than 3.5%. Analyst Dr Mike Mitchell at Seymour Pierce said:

While detailed data and analysis is due in mid-November at the American Heart Association meeting, top-line results this morning are not the slam-dunk AstraZeneca might have been hoping for.

In terms of the primary efficacy measure, a numerically greater reduction was found for Crestor but, crucially, this lacked statistical significance. Only in the secondary measure was a statistically significant reduction for Crestor over [Lipitor] actually seen.

The wider commercial environment is seeing increasing pressure coming from payers to demonstrate clear benefits of therapies in order to justify high price tags. As Lipitor (atorvastatin) comes off patent towards the end of November, and the prospect of cheap generics beckons, the burden is on Crestor to demonstrate an unequivocal benefit over atorvastatin: on first view, this appears to be absent in terms of the primary measure within the Saturn study. We stay with reduce.

Navid Malik at Matrix also repeated a reduce recommendation:

The Saturn study was intended to allow Crestor to be differentiated against Lipitor, as it entered a generic market. The failure of the study to reach statistical significance calls into question the rationale for use of the 40mg dose altogether and in our view potentially muddies the water on the data previously seen in the Jupiter study, which resulted in a label change for Crestor.

We expect to see downgrades to Crestor sales in the market and are reviewing our sales estimates in light of this update.

Ahead of the non-farm payrolls, where a gain of 75,000 is expected, the FTSE 100 has fallen 104.62 points to 5314.03 as nervous investors cashed in after three days of rises. Whatever the jobs figure, continued volatility is expected. A strong result might not necessarily provoke a positive market reaction, while the opposite may also be true. Kathleen Brooks at Forex.com said:

If the jobs number is weak risk could rally as it would boost the chances of more policy support from the Fed. But any risk rally may be half-hearted. If QE1 and 2 didn’t work then eventually people will start to question the rationale for using something that has failed to change the economy’s fortunes in the past.

Among the fallers, Barclays is 5.8p lower at 174.55p and Kazakhmys is down 40p at £10.36. But not all miners are lower. Randgold Resources has risen 60p to £64.55 as the price of gold continues to rise, thanks to its safe haven status, even at these elevated levels.

Elsewhere Kesa Electricals is down 4.4p at 104p following reports a pensions deficit might hinder the proposed sale of its UK chain Comet.

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This article titled “FTSE falls nearly 2.5% on US jobs and Greek worries, while AstraZeneca slides after Crestor trial” was written by Nick Fletcher, for guardian.co.uk on Friday 2nd September 2011 16.17 UTC

Leading shares fell nearly 2.5%, after poor US jobs figures and renewed worries about Greece prompted investors to bail out of riskier sectors such as mining and banks.

But another major faller was in the normally defensive sector of pharmaceuticals. AstraZeneca dropped 106.5p to 2809.5p, a 3.65% decline after a disappointing trial result for cholesterol drug Crestor, its biggest selling product. Crestor failed to beat rival Lipitor, produced by Pfizer, in a head to head trial known as Saturn, with results in the primary trial failing to reach “statistical significance.”

Further data and analyses will be presented in mid-November, but analyst Dr Mike Mitchell at Seymour Pierce said:

The wider commercial environment is seeing increasing pressure coming from payers to demonstrate clear benefits of therapies in order to justify high price tags. As Lipitor (atorvastatin) comes off patent towards the end of November, and the prospect of cheap generics beckons, the burden is on Crestor to demonstrate an unequivocal benefit over atorvastatin: on first view, this appears to be absent in terms of the primary measure within the Saturn study. We stay with reduce.

Navid Malik at Matrix also repeated a reduce recommendation:

We expect to see downgrades to Crestor sales in the market and are reviewing our sales estimates in light of this update.

News that no jobs had been created in the US in August, compared to expectations of a 75,000 rise, helped send the FTSE 100 tumbling 126.62 points to 5292.03 and souring a week which had started brightly. Wall Street was around 160 points lower by the time London closed, as investors moved to close positions ahead of Monday’s – ironically named – Labor Day holiday. Angus Campbell, head of sales at Capital Spreads, said:

Even though earlier in the week we’ve seen poor economic data being followed by a rally in equity markets as investors believe the likelihood of further quantitative easing from the US’s Federal Reserve is greater, today the number was so bad that it really added to the concerns that already haunt the market.

Barclays led the index lower, down 15.15p at 165.2p on a cocktail of concerns. Apart from the continuing uncertainty over whether UK banks’ investment and retail arms will be split, other negative news included reports the US planned to sue banks over their role in the sub-prime mortgage fiasco. On top of that, Eurozone worries resurfaced as an EU review of Greece was halted to allow the country more time to work on measures to boost growth.

Among the miners Anglo American lost 121.5p to £24.58 as its proposed joint venture with Lafarge’s construction materials business was referred to the Competition Commission.

But with gold moving sharply higher thanks to its status as a safe haven, Randgold Resources rose 275p to £66.70 and Fresnillo added 11p to £20.33.

Tullow Oil continued its recent gains following vague speculation of takeover interest from China National Offshore Oil Corporation, adding another 3p to £11.12.

Software group Sage edged up 0.1p to 255.5p on hopes that the cash investors receive from Hewlett Packard’s proposed £7bn purchase of Autonomy could find its way back into the sector. George O’Connor at Panmure Gordon said:

The Autonomy payback will need a home. Whilst the investors in Sage and Autonomy had traditionally come from different ‘camps’, this gap is being eroded by Sage’s new growth initiatives.

Supermarkets came under pressure following a negative note from Citigroup, which told clients it saw no reason to own the UK food retail sector over the coming months. The bank argued that leading supermarkets had opened too many stores during the boom times, and could suffer as the economy turns weaker. Analyst Alastair Johnston said:

Between 2007 and 2010 grocery spending in the UK grew close to 20% in real terms, on the back of surging commodity prices and sterling devaluation. For an industry accustomed to zero real demand growth, this was extraordinary. The Big 4 responded to the profit binge by ramping up space opening plans. As demand normalises (and looks set to deteriorate) this excess capacity is beginning to weigh on returns.

The cosy, consolidated UK food retail market is destined to turn ugly if the economy shuffles sideways Japan-style and capacity growth plans roll on as planned.

Citi cut its estimate for next year’s earnings at J Sainsbury by a hefty 9% and downgraded its shares, down 4.8p to 297.4p, from hold to sell. It kept its sell rating on Tesco, 5.85p lower at 375.05p, and moved from buy to hold on Morrisons, off 1.9p at 292p.

Morrisons, which reports half year results next week, also suffered from a sell note from Goldman Sachs. The bank said:

Morrisons’ share price has outperformed its food retail peers so far this year supported, in our view, by strong prints in the monthly Kantar grocery data and an expectation of continued margin progression from cost and productivity initiatives.

However we believe the market may have to wait for the full benefits of margin improvement as high petrol prices and continued gross margin pressure from food supplier inflation weigh on profitability in the first half. The risk of potential participation in the Iceland auction could also weigh on share price performance.

Home Retail ended 8.8p lower at 124.3p after UBS cut its price target from 140p to 130p, saying:

Argos’ profit in the first half could fall close to break even. Group interim profit could fall by around two thirds to £34m. With a potentially weaker than expected end to the second quarter we reduce our full year profit estimate by £10m to £140m.

The Christmas quarter at Argos (twice the size of the second quarter) remains key.

But ITE topped the mid-cap risers, up 14.7p to 184.8p. as Investec raised its recommendation on the exhibitions group from hold to buy.

Enquest fell 3.5p to 107.7p but could come under further pressure next week. After the market closed the oil company issued a disappointing update due to lower than expected production at the Conrie and Don Southwest fields in the north sea.

On Aim Cyril Sweett, a construction and property consultancy, lost 5.5p to 28.5p after it issued a full year profit warning, partly due to projects in the Middle East being cancelled due to the Arab spring uprisings.

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This article titled “Markets slide as US jobs stagnate” was written by Phillip Inman, for The Guardian on Friday 2nd September 2011 21.42 UTC

Stock markets dived on Friday after weak US jobs figures, news of a slump in UK construction orders and further wrangling over the eurozone’s Greek bailout unnerved investors.

The FTSE was down 137 points at 5280 while the US Dow Jones industrial average closed down 253 points, or 2.2%, at 11,240. Frankfurt and Paris followed the downward trend, with both losing more than 3% of their value.

Politicians on both sides of the Atlantic are expected to come under pressure to reverse the decline in growth rates that is pushing western economies to the edge of a second recession in three years. Declines in business and consumer confidence have hit manufacturing and other key sectors, with knock-on effects for jobs and consumer demand.

Barack Obama, who is due to deliver a speech on employment next Thursday, is expected to face calls to stimulate the economy from his Democrat supporters despite intense lobbying by opposition Tea Party representatives on Capitol Hill.

The chancellor, George Osborne, has refused to waver in his plans for widespread spending cuts, insisting that his deficit reduction programme has prevented a Greek-style panic.

Economist David Blanchflower, a former member of the Bank of England’s monetary policy committee, accused Osborne of sitting on his hands at an important time for the economy and warned that action was needed to create jobs or Britain could suffer a double-dip recession.

His concerns echoed those of shadow chancellor Ed Balls, who said Osborne should use a G7 meeting in Marseille next weekend to agree a growth strategy to stop Britain and other leading economies from falling back into recession.

Figures from the US labour department showed America failed to create any new jobs in August. Analysts expected at least 75,000 jobs to have been created last month, but the figure came in at zero.

A strike by 45,000 Verizon telecoms workers distorted the August figures – which showed a 48,000 decline in the number of workers in the information services sector – but that was offset by a revision to the July numbers, which showed 58,000 fewer jobs had been created than thought. The US economy needs to add 150,000-200,000 new jobs each month to bring the jobless rate down. It remained at 9.1% last month.

The US labour department said it was the weakest reading since last September, with firms holding off hiring after declines in consumer and business confidence. Few firms made redundancies, but the data showed a freeze on new hirings.

The poor snapshot of the labour market led Goldman Sachs and several other big Wall Street firms to forecast that the US could back further rounds of quantitative easing. Goldman said that the federal open market committee, which determines the policy followed by the US central bank, might extend maturity on the Fed’s .65 trillion (£1trn) of government bond holdings after its policy meeting this month.

“This report will certainly strengthen the case for the doves on the committee going into the next meeting this month,’ said Millan Mulraine, a senior strategist with TD Securities in New York.

Rob Carnell, chief international economist at ING, said the figures would provide further ammunition for those arguing for policy easing. He said it would be difficult to boost consumer demand while the figures showed real wage growth stalling.

“If there are any glimmers of hope, and basically there aren’t, you could point to the smaller decline in the government sector as a potential slowing of public sector job-shedding,” he added. “You could also assume this has bolstered the chances of a new round of quantitative easing from the Fed before the year end.”

Britain’s MPC is also expected to discuss further quantitative easing at its next meeting after one of its chief hawks, Martin Weale, argued that the deteriorating situation in the UK might warrant further support from the central bank.

More problems also emerged in Athens following negotiations between the International Monetary Fund, the EU and the Greek government. Talks were suspended after disagreement on the success of Greek austerity measures, which have already failed to generate the expected savings. The situation worsened after the Finnish government warned that it would only agree to lending Greece further funds if it was given a cash security.

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This article titled “Euro crisis: how long can Germany remain the saviour?” was written by Helen Pidd in Frankfurt, for The Observer on Saturday 3rd September 2011 23.07 UTC

“Das Titanic Szenario” was the headline on Friday on the front page of Handelsblatt, one of Germany’s most-respected business newspapers. Inside, Angela Merkel was pictured, arms outstretched, on the bow of the sinking ship, with Nicolas Sarkozy in the Leonardo DiCaprio role embracing her from behind. Days earlier Jacques Delors, a former president of the European Commission, had said the eurozone was “on the brink of the abyss”.

There was similar doom-mongering in Der Spiegel. “The euro can’t survive in its current form,” proclaimed Hans-Joachim Voth, an eminent economic history professor from the Universitat Pompeu Fabra in Barcelona. Some countries were going to have to leave “if [the EU] wants to become anything more than just a transfer union”, he said, adding that “it would be simpler to have the stronger countries veer off”. And which of the 17 eurozone nations did he have in mind? Deutschland.

But could Germany seriously leave the euro? Is the common currency on the verge of collapse? “It’s not looking good,” said Jane Dill, a 20-year-old logistics student on a college outing to the Money Museum of the Bundesbank, Germany’s National Bank, in Frankfurt. “How much longer can things go on like this? First Greece asks for help, then Portugal, Ireland, maybe Spain and Italy. What are we going to do when the next countries fail? You can’t just keep chucking money at them. And what if Germany needs help? Who will come to our aid?”

“Even the rouble’s more reliable,” said her classmate, Edward Krieger, a 24-year-old with an even gloomier Weltanschauung. “I honestly believe the euro has no future. It’s going to crash and a whole new currency is going to have to be brought in. Maybe money as we know it will be abolished. I think in 20 years’ time there will be one currency used by everyone in the world.”

In the gift shop at the foot of the European Central Bank (ECB) tower, Gebhard Klotz was more optimistic. “Will the euro collapse? No!” scoffed the 64-year-old shop assistant as he tidied the display of chocolate money. “The euro will survive. Of course it will. Unity costs money, that’s all. It’s just the way it is.”

In his office 34 floors up, Jean-Claude Trichet, president of the ECB, would share this optimism. “Weaknesses need to be corrected,” he conceded in an interview with Il Sole 24 Ore last week. But the single currency was “credible” and “over the past 12 years has kept its value in terms of price stability in a remarkable way in comparison with the previous national currencies in the past 50 years”.

Much has been written about German nostalgia for the deutschmark; last December some stalls at the Christmas market in Berlin’s Gendarmenmarkt let punters pay with the old currency in what proved to be a very popular marketing gimmick. Around the same time, a survey by Cologne’s YouGov-Institute found that 49% of Germans want the “D-mark” back.

However, if Klotz’s customers are anything to go by, the longing is not widespread in Frankfurt. His shop sells two ranges of mugs, one plastered with euro notes, another, also priced at €6.90, depicting the deutschmark.

“The euro is much more popular,” said Klotz’s colleague, a 23-year-old coin enthusiast called Florian Koch. “We sell 30 or 40 of them every day.”

Both men were adamant they would not soon be made redundant or the shop reborn as a shrine to what once was. “Yes, the euro is sick,” said Koch, a business student at Frankfurt University, “but it’s healthier than many other currencies. It’s limping at the moment, but it’s not going to go kaput.”

This week is a big one for the euro in Germany. On Wednesday, the constitutional court in Karlsruhe will deliver its eagerly awaited verdict in three cases brought by five eurosceptic academics and a renegade MP from the Christian Socialist Union, the Bavarian sister party to Merkel’s Christian Democratic Union. The plaintiffs argue that last year’s bailout of Greece, Ireland and Portugal was illegal because it was not debated in the Bundestag, Germany’s parliament.

Merkel spent yesterday mourning the death of her father on Friday. This Thursday she must quell a threatened revolt in her own parliamentary bloc when the Bundestag begins debating the controversial expansion of the rescue fund, which increases Germany’s share of guarantees to up to €211bn (£184bn) from a previous €123bn – about two-thirds of the annual federal budget. MPs will vote on the changes on 29 September. And Friday is the deadline for private-sector participation in a second Greek rescue package, Merkel having asked the commercial world to voluntarily chip in after resolutely failing in a bid to force them to do so. News that Greece is set to miss its latest financial targets will not have bolstered confidence.

As Europe’s largest economy, Germany foots more than a quarter of the bill for eurozone bailouts. Much of that money stems from Frankfurt am Main, the birthplace of Goethe, a surprisingly small city affectionately referred to as a “village of skyscrapers”. Despite only being Germany’s fifth-largest metropolis, with a population of just over 688,000, it is the financial capital of not just Germany but also the eurozone.

Frankfurt’s stock exchange, the Deutsche Börse, is more of a tourist attraction than a trading hall in these unromantic days when all you need to trade is a powerful computer and a strong disposition. But the neo-Renaissance sandstone building remains at the heart of the financial district.

Every Friday lunchtime, suited and booted bankers ring in the weekend with a glass of local wine or beer at the weekly farmers’ market, which sets up outside the exchange by the famous Bear and Bull sculpture, which is a metaphor for the rise and fall of the Dax, Germany’s equivalent of the FTSE.

It did not feel pessimistic last week. Harald Feick had lined up three glasses of wine. “Two friends are coming! They are not all for me!” he insisted, and explained why he has no fear for Europe’s common currency. Describing himself as “ein bankmensch“, he said the crisis was “not about the euro; it’s about financial mismanagement in certain European governments. The Greeks would be in the same trouble if they still had the drachma.”

The German media was too pessimistic, he reckoned. “You hear all the gloom, but a lot less about the fact that, despite the crisis, we have decreasing unemployment and an economy that is growing, albeit slowly.” Quarterly economic growth slowed to 0.1% in April-June.

Robert Hung, a blond banking lawyer in a crisp white shirt and dark suit, said the tabloid media – in particular the three million-selling Bild – was partly to blame for a feeling of discontent among the general population, spreading the overly simplistic idea that money earned by hard-working, prudent Germans was being frittered away by profligate Mediterraneans.

Hung, 36, and his heavily pregnant wife, Fabienne, said they had been on holiday to Greece this summer and were “embarrassed” at the reputation Germans had on Crete. “When the receptionist saw our passports, he said, ‘Please, when you go home, tell everyone that not all Greeks are lazy. Tell them that many of us work very hard’,” said Fabienne. “It was embarrassing.”

Hung admits he is having a good crisis – he has been inundated with cases from banks defending themselves from crash-related lawsuits – but not everyone is a winner.

“We can’t rescue everyone,” said Barbara Schiml, enjoying a wine in the sunshine with her husband, Udo. “The government needs to set boundaries. We can’t keep bailing out other countries for ever.” The couple agreed it should be harder for other countries to join the common currency in future.

Antonia Gugel and her friend Elisabeth Brändl, both in their 80s, are typical of a generation which grew up treasuring the deutschmark. They are, to put it mildly, disapproving of the current mess. “When we started work after the war, there was nothing. Germany was in ruins. We had to build up everything ourselves,” said Gugel.

“We worked Monday to Saturday, had 12 days’ holiday a year and didn’t spend what we didn’t have. Young people today have grown up in prosperity. If they want something, they put it on their credit cards. They have never had to learn the value of money. That’s at the root of all these problems.”

• This article was amended on 5 September 2011. The original referred to Frankfurt am Rhein. This has been corrected.

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This article titled “Severe economic shock ‘would break one in 10 European insurers’” was written by Phillip Inman and agencies, for The Guardian on Monday 4th July 2011 17.05 UTC

Almost one in 10 European insurers would need to raise fresh capital in the event of a severe economic shock, according to Europe’s insurance watchdog.

The Frankfurt-based regulator, set up in the aftermath of the last financial crisis, warned that 13 insurers across the 27 member states would go bust under new solvency rules if a crash were to occur.

A plunge in share prices, tumbling interest rates, and a property market crash would lead to a €4.4bn (£4bn) shortfall based on the capital required under the EU’s proposed Solvency II rules, the European Insurance and Occupational Pensions Authority (EIOPA) said.

EIOPA refused to name the companies, but said the small size of the estimated capital shortfall compared with the sector’s €425bn surplus before the stress tests were applied demonstrated that the industry was financially robust overall.

The EIOPA chairman, Gabriel Bernardino, said: “This shows that overall the European insurance industry has a good shock absorber in its capital position. Now each company will have an analysis of the areas where they are more exposed, and they can take action.”

Bernardino said it was “not appropriate” to identify the firms facing a potential shortfall, as the Solvency II regime could change before it is introduced in 2013.

Insurers emerged from the financial crisis in better shape than banks, but a small number of high-profile failures and government bailouts in the sector have spurred regulators to scrutinise the industry more closely.

Analysts said the UK industry is likely to be well placed to survive another financial crash after showing its resilience in the wake of the Lehman Brothers collapse.

The European Banking Authority is due to publish the results of a stress test of EU lenders this month.

EIOPA also said six European insurers would face a capital shortfall of €2.5bn in a second shock scenario involving a surge in sovereign bond yields.

However, the industry’s exposure to bonds issued by critically indebted peripheral eurozone nations is “manageable”, Bernardino said.

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This article titled “Reckitt rises on Unilever bid talk, as FTSE shakes off Greek woes” was written by Nick Fletcher, for guardian.co.uk on Monday 4th July 2011 15.58 UTC

Leading shares rose for the seventh day running , with the FTSE 100 ending well above the 6000 level and climbing to its highest level since early May, albeit in very thin trading volumes.

Reckitt Benckiser, the maker of Cillit Bang and Dettol, was the day’s speculative tale, up 35p to £34.88 on renewed talk of a possible offer for the company at around £50 a share. The supposed predator was Unilever, 25p higher at £20.37, with traders suggesting the Anglo-Dutch group could sell on any unwanted Reckitt brands to US rival Colgate-Palmolive. The timing would be interesting – Reckitt’s long standing chief executive Bart Becht is due to step down in September.

Despite negative comments on the Greek bailout from ratings agency Standard & Poor’s, the FTSE 100 added 27.78 points to 6017.54. But with Wall Street shut for the Independence day holiday, investors were still nervous about how long the current market rally would last. Giles Watts, Head of Equities, City Index commented:

It’s been yet another positive session for the FTSE 100, though we must recognise the fact that much of today’s advance was certainty exacerbated by low volumes. That said, the terrific run of gains seen in the FTSE of late is certainly giving those who want to take profits at current levels a bit of a problem in fearing missing out on any continued moves higher. If the FTSE 100 can come through near term resistance of 6050, then the UK index could be primed for another attack on the year’s high of 6105.

Among the big gainers was British Land, up 14p to 629.5p after an enthusiastic note from Deutsche Bank. Analyst Martin Allen put a buy recommendation on the group, saying it was well placed to boost its growth by buying up to £10bn of property loans from the banks:

We believe that the chief executive’s background as an investment banker could stand the group in good stead should it decide to acquire [such] a portfolio from the banks.

He said that contrary to the belief of many investors, the company had a better property portfolio that rival Land Securities:

Not only is the group’s exposure to central London offices similar to that of Land Securities, both currently and prospectively on completion of their respective development programmes, but also that British Land has a much higher exposure to out-of-town retail, which we believe has better growth prospects than most other retail formats.

We expect the group’s share price to appreciate considerably over the next 12 months owing to anticipated strong net asset value growth and an expected upward re-rating in the valuation of the shares.

Miners were once more a dominant feature, as metal prices benefited from last week’s stronger than expected US manufacturing figures. Anglo American added 13p to £31.15, Xstrata rose 5p to £13.94 and BHP Billiton was 13.5p better at £24.73 after it completed a bn share buyback last week, sooner than the City had expected. Analysts at UBS said the mining group could announce a similar programme along with its results on 24 August.

But banks suffered a bout of profit taking, prompted by lingering concerns about Greece’s financial woes. Lloyds Banking Group lost 0.935p to 49.875p and Royal Bank of Scotland dropped 0.58p to 39.11p.

Cairn Energy closed 13.8p lower at 404.7p after JP Morgan Cazenove cut its target price from 500p to 480p following the renegotation of the terms of its sale of part of its Indian business to Vedanta Resources, down 7p at £20.88.

Lower down the market Greggs slipped 1.5p to 546p despite a positive note on the bakery group from Shore Capital. Following a meeting with the company, analyst Clive Black said:

Shore Capital has few positive recommendations in the UK mid-cap consumer space. Greggs is one of the few as it is a medium to long-term growth company with a strong balance sheet and cash flows.

Greggs is now 18 months into a five-year transformation project under chief executive Ken McMeikan. The plan is straightforward: accelerate store openings, grow sales and deliver scale-driven manufacturing efficiencies, so building the earnings line, dividend stream and cash flows. Against the backdrop of demonstrably tough consumer trading conditions in Britain, we have been encouraged by the progress to date, especially on the margin front. Despite investing around £300m over five years in its stores and manufacturing base, we expect Greggs to retain cash balances throughout the investment phase.

He also pointed to a couple of recent initiatives, including the roll-out of card payment capability on purchases over £3, and development of its own label products, such as Greggs potato crisps, at a higher gross margin and lower unit price.

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This article titled “FTSE 100 pushes through 6000 level despite continuing Greek worries” was written by Nick Fletcher, for guardian.co.uk on Monday 4th July 2011 09.01 UTC

Leading shares have pushed through the 6000 level for the first time since the end of May, despite a negative report on Greece from ratings agency Standard & Poor’s.

The FTSE 100 is now up 15.06 points at 6004.82, following positive moves on Wall Street on Friday and in Asia overnight in reaction to an agreement on the latest stage of the Greek bailout. But investors are still nervous, with no guidance later from the US markets which are closed for Independence Day, the widely watched US non-farm payroll numbers due on Friday, and S&P saying the French rescue plan for Greece was effectively a default. A UK construction survey just released has come in pretty much in line with expectations.

Banks are among the leading fallers after a downbeat survey of the financial sector by the CBI. Lloyds Banking Group is 0.83p lower at 49.98p, Barclays is off 4.35p at 261.2p and Royal Bank of Scotland has lost 0.57p to 39.12p.

But British Land is 9.5p better at 625p after Deutsche Bank put a 820p price target on the shares, albeit down from 840p.

Among the mid-caps Premier Foods, the owner of Hovis and Branston Pickle, recovered 0.73p to 17.81p following its recent profit warning and subsequent share price slump. Investec analyst Martin Deboo cut his price target from 35p to 20p, saying:

Premier’s first half warning has put the shares into free-fall. We assume further pressure in the second half and reduce our forecasts accordingly. The option value on the equity at 17p is clearly interesting, as ever. However the [valuation] isn’t that compelling to us and the presence of uncapped downsides in the form of a fresh flirtation with banking covenants and a less than 100% probability of [a] canning disposal keeps us cautious. We think we can afford to wait on this one and remain holders.

Despite our caution today and the renewed risks, Premier remains a company which we would like to see succeed. But urgent and decisive action is now required to unlock value. Premier clearly has the potential to rally on positive events and surprises, this is unlikely to happen quite over night.

Elsewhere the London Stock Exchange has added 13p to £10.46 on hopes of a possible bid from Nasdaq OMX following the failure of the UK business’s proposed merger with Canada’s TMX.

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This article titled “London Stock Exchange jumps 11% on bid hopes, while FTSE climbs for fifth day” was written by Nick Fletcher, for guardian.co.uk on Thursday 30th June 2011 16.05 UTC

A day after its proposed merger with Canada’s TMX fell apart, the London Stock Exchange has jumped nearly 11% on suggestions it was now vulnerable to a predator.

The failure of the TMX deal – the latest collapsed merger between global exchanges – is another embarrassment for LSE bosses, including chief executive Xavier Rolet. And it may prompt the likes of Nasdaq OMX, the Hong Kong, Singapore or Australian exchanges, to make an approach. Analysts at UBS said:

We believe that there is a good chance of a Nasdaq approach. Hostile deals have a high failure rate in exchanges. We believe there is sufficient scope for cost synergies for Nasdaq to offer up to 1150p, a 22% premium on current share price while maintaining sufficient earnings accretion for their shareholders to support the deal.

Two of the LSE’s shareholders would be key to any deal. Borse Dubai holds nearly 21% of the LSE, while the Qatar Investment Authority has 15.1%, although both are sitting on hefty losses on their stakes which could make them reluctant to back any bid they perceive as too low. LSE shares ended 105p higher at £10.61.

Overall leading shares moved sharply higher for the fifth day running, the market’s best run since the end of May, as the Greek parliament successfully passed a second vote on the government’s crucial austerity measures.

With a better than expected Chicago purchasing managers’ survey lifting Wall Street, the FTSE 100 finished 89.76 points higher at 5945.71. The leading index has added almost 250 points since Monday. Joshua Raymond, chief market strategist, City Index commented:

This week has seen a return of risk appetite amongst investors, with confidence gained by the positive steps made by Greece’s lawmakers to cut debt, and the unity seen in the eurozone, particularly that of French and German banks to help the troubled country. [But tomorrow] there is a chance that investors could use the final session of the week as an excuse to cash in some gains ahead of the weekend.

Banks were boosted by the Greek news, and by the strategy update from Lloyds Banking Group, up 4.345p to 49p, which included confirmation of 15,000 job cuts. Royal Bank of Scotland rose 1.7p to 38.46p amid talk of an Australian disposal.

Insulation specialist SIG added 3.5p to 136.5p on talk of a possible bid from French cement and aggregates business Lafarge.

Vedanta Resources rose 62p to £20.94 after it appeared the Indian government had finally approved its acquisition of a majority stake in Cairn Energy‘s business in the country. Cairn climbed 8.5p to 414.8p.

Elsewhere Glencore closed 4.45p higher at 491p after Credit Suisse said the company planned to move from quarterly to half yearly reporting. Traders said this would avoid problems with reporting the figures of its associate Xstrata before the mining group issued the figures itself, as effectively happened recently.

Credit Suisse also said, after a meeting with Glencore, that acquisitions were likely using the commodity trader’s shares following its recent float. It said;

The company is always assessing a number of options and will continue to avoid competitive sales processes. On Xstrata management believe there are value benefits (mainly through marketing synergies) to putting the two companies together but it would not comment on potential likelihood or timing of a combination.

In our view potential targets include privately held agriculture player Louis Dreyfus and ENRC. Both companies would fit Glencore’s strategy to expand in the agriculture sector and increase its industrial asset base.

An IPO of the Kazzinc precious metals assets remains a potential plan for 2012.

Among a number of companies reporting results, textiles services group Berendsen added 39.5p to 545p after it said first half profits would be higher than the same time last year.

But Greene King fell 30.6p to 487.4p as investors took profits. The pub and restaurant group’s results were in line with expectations but it warned of a tough outlook, given the current UK consumer climate.

Halfords lost 6.3p to 371.2p as Barclays Capital began coverage of the retailer with an underweight rating and 340p target price.

Game Group added 3p to 36.25p after Credit Suisse increased its stake from 5.6% to 8.2%. Traders suggested this stake-building could be the forerunner of a possible bid. US rival Gamestop has been linked with the UK retailer in the past.

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