REASONS TO BE CHEERFUL ABOUT THE WORLD ECONOMY - The global economy is by no means out of the woods, but there are some positive things happening. There is also some welcome good news from the financial markets as the volatile but positive global market recovery remains on track for 2010. This is evident in the profits of big US companies, the rise in the Dow Jones and more recently in European indices. Asian shares also hit a two-year high overnight.
Noel O'Halloran, of Kleinwort Benson Investors, says that though the US economic recovery is evident, it remains fragile. To counteract this, Mr O'Halloran says the US Federal Reserve is expected to announce another programme of quantitive easing at its November meeting. This QE2 move will be worth about $1 trillion. He says the programme will be seen as pro-business and so will give the Democrats a boost in the popularity stakes.
Mr O'Halloran says the corporate sector is in excellent shape as companies have learned lessons from the financial crisis. He says the sector is seeing very strong results and very good margins. Companies have low levels of debt and lots of cash and he predicts that the amount of merger and acquisition activity is set to jump in the coming months. What the authorities hope is that this cash will eventually be spent on capital investment and on increasing jobs.
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MORNING BRIEFS - Independent News and Media's 31.6% shareholding in Australian media group APN is being deconsolidated with the reduction in the amount of directors on APN's board. The move comes after pressure from APN investors to 'evolve and develop' its board to reflect its shareholders more. It sees Brendan Hopkins stand down as chief executive and he will be replaced by Brett Chenoweth. Indo directors Donal Buggy and Cameron O'Reilly will both step down from the APN board. Gavin O'Reilly and Vincent Crowley remain. The move will not change Independent News and Media's 31.6% shareholding, and there is no change in ownership, but it will change the accountancy treatment of APN , meaning it will no longer be consolidated on Indo's balance sheet. Independent News and Media says it remains committed to APN.
*** Two Norwegians have been sentenced for market manipulation. They figured out how the computerised system at a US broker called Timber Hill would react to certain trading patterns, and this allowed them to influence the price of low-volume stocks. They are appealing their suspended prison sentences. The prosecutors in the case said the two day traders gave 'false and misleading signals about supply, demand and prices' by manipulating several Norwegian stocks through Timber Hill's online trading platform. One of the traders' lawyers acknowledged that his client had figured out how the broker's trading algorithm would behave in response to certain trades, but said this did not amount to market manipulation. He said they had no idea of how the computer would change the prices, so that does not make them responsible for what the computer did.
*** A disgraced hedge fund manager's collection of luxury Steiff teddy bears and soft toys has sold for over £1m sterling. Paul Greenwood, who pleaded guilty to fraud charges in the USA last year, is believed to have owned the collection which went under the hammer at the Christie's salesroom in South Kensington, London, yesterday. The top lot out of the collection of 1,300 toys was a Steiff Harlequin teddy bear made in 1925, which sold for £46,850 pounds. Teddy bear specialist Daniel Agnew, the sale presented an incredible opportunity for enthusiasts, with more than 220 clients bidding at auction on the most extensive Steiff collection remaining in private hands. The collection included toys dating back to 1890.
*** On the currency markets the euro is trading at $1.4087 cents and 88.1 pence sterling.
