A round-up of other business news in brief
August data spurs German recovery hopes
German analyst and investor morale hit its highest level in more than three years in August, spurring hopes for a recovery in Europe’s largest economy despite government warnings about a looming credit crunch.
The ZEW institute said rising industrial orders and stronger exports had brightened the outlook for Germany, which data last week showed emerged from recession in the second quarter.
The think tank’s economic expectations index for Germany rose to 56.1 in August from 39.5 in July, taking the indicator to its highest level since April 2006.
Germany has spent most of the past 18 months mired in its sharpest postwar recession. – (Reuters)
The risk of troubled commercial real estate loans to European banks is to be reviewed by Fitch Ratings following a sharp drop in property values. “Fitch is concerned about the degree of deterioration in certain commercial real estate markets, and the effect this could have on those banks most exposed,” said MD Gordon Scott.
The ability of lenders to “absorb additional problems may be constrained by a weak earnings outlook”, he said. The review will focus on Britain, Ireland and Spain where property values have fallen the most. A similar study is taking place in the US and it may be expanded to the Middle East and Asia.
– (Bloomberg)
Inquiry into iPhone explosion report
Apple is investigating media reports that one or more of the company’s iPhones have exploded in Europe, a European Commission spokeswoman said yesterday.
The spokeswoman for the EU executive, which oversees the safety of consumer products sold in the region, said Apple had described the reported incidents as isolated.
Apple said it was aware of the media reports, which include a case in which a teenager in France said he was slightly injured when his iPhone made a hissing noise and shattered, but did not comment on any contacts with the Commission.
– (Reuters)
$77.9m operating loss for Hardie
Australian building products group James Hardie, which is planning to move its domicile from the Netherlands to Ireland in early 2010, yesterday reported a net operating loss of US$77.9 million for the three months to the end of June, the first quarter of its financial year.
This compared with a profit of $1.4 million for the same period of 2008. Its sales during the quarter declined by 22 per cent to $284.5 million.
The loss was the result of an “unfavourable asbestos adjustments” of $119.8 million in the period, said Hardie, which is listed in both the United States and Australia. – (Reuters)
State-owned British bank Northern Rock said yesterday it would defer paying interest on a range of subordinated bonds, propping up its capital position and pre-empting an anticipated European Commission requirement.
The lender, nationalised in early 2008 after it became the first major British victim of the credit crisis, said it had decided to defer payment of coupons until further notice on almost all of its subordinated debt.
Anglo Irish Bank and others in Europe have said they would not pay interest on certain debt due to regulatory decisions, though Anglo subsequently offered to buy back the bonds at a substantial discount.
– (Reuters)
