BUDAPEST (AFX) – Minister of Economics and Transportation Janos Koka ordered the release of Hungary’s strategic crude oil reserves late yesterday after deliveries from Russia via the Druzhba pipeline, which were halted on Monday, did not restart, said MTI-ECONEWS.
The order is for the release of 15,000 tonnes of crude oil per day for the next seven days.
Hungarian oil and gas company Mol can use this oil from the reserves, which must be replenished within six months after deliveries on the pipeline restart.
Mol said Hungary has 90 days of reserves it can draw on.
Both Mr Koka and a spokesman for the Hungarian Foreign Ministry said that they hoped an agreement could be reached on the restart of deliveries from Russia within the next few days.
The Ministry started diplomatic efforts to end the disruption of deliveries — which was sparked by a row over export duties between Belarus and Russia — late on Monday.
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Hungarian govt releases strategic oil reserves after Russian supply cut-off
New car registrations in Britain drop in December
LONDON: New car registrations in the U.K. slumped 14.7 per cent in December compared with December of 2005, according to the Society of Motor Manufacturers and Traders.
The trade body said the registrations during the month stood at 133,810 units. For the whole year, the figure was 2.34 million units, which again is a slump of 3.9 per cent, it added.
The registrations fell 19.3 per cent and 17.9 per cent in fleet and business sectors respectively during the month, mainly on account of changes in company car tax rules at the end of 2005 which encouraged diesel cars.
Registrations of diesel vehicles were up 0.1 per cent to a record 898,521 vehicles, accounting for more than 38 per cent of the British new car market.
The society said private car registrations fell 6.5 per cent and all the months except March had seen falls in this sector. On a yearly basis, the fall had been 4 per cent.
The society’s chief executive Christopher Macgowan said uncertainty caused by factors like interest rate rises, political instability and fuel price variations fluctuations created a difficult market place.
The society expects a further weakening of the car market in 2007 because of the curbs on consumer and government spending. Registrations may come down 1.3 per cent to around 2,315,000 vehicles, it said.
Macgowan, however, sounded optimistic when he said a host of new models are due in 2007 and there could be attractive offers to tempt buyers during the year.
During 2006, Ford Focus was the top selling model for the eighth year in a row.
First Choice Holidays profit up 2.7 per cent
LONDON: The U.K. travel company First Choice Holidays Plc. posted a 2.7 per cent increase in its net income to 72 million pounds, compared with 70.1 million pounds in 2005. Sales rose 11 per cent to 2.7 billion pounds.
The company, headquartered in Crawley, is in talks with a number of parties including rival MyTravel to sell its package holiday business. Chairman Michael Hodgkinson said a transaction may not happen but the company is sure that its strategy and flexible business model will ensure that it is well placed to continue to outperform the market and deliver sustainable growth in 2007 and beyond.
The company said its mainstream holiday revenue rose 15 per cent in the current trading for winter 2006-2007, against the market’s 9 per cent fall. This has been possible because long-haul revenues and bookings rose 40 per cent and 26 per cent respectively. However, for the summer 2007, the company’s mainstream revenue fell 5 per cent, compared to an 11 per cent drop in the market.
The company’s package holiday business is estimated to be worth 500 million pounds. Besides MyTravel, Germany’s TUI and Thomas Cook and Switzerland’s Kuoni are also understood to have made offers for the unit.
First Choice plans to develop its adventure and short-breaks businesses. It has already changed its focus to profitable adventure holidays than on flight sales and cheaper no-frills holidays and this actually helped the company to improve its financial performance. It has package holidays as well as independent accommodation and flights. It also undertakes yacht charters in the Caribbean and organizes vacation trips for adventure tourists to climb Mount Kilimanjaro in Tanzania.
The company revealed it has ordered two more Boeing 787 aircraft to meet long-haul demand.
The company’s shares rose 3.8 per cent to 274 pence, valuing it at around 1.45 billion pounds. The company is paying a final dividend of 5.4 pence a share, an increase of 16 per cent.
Debt Free Direct wants misleading ads withdrawn
LONDON – Debt Free Direct Group PLC yesterday reported a 128 percent increase in half-yearly pre-tax profits to £4.26 million. Its turnover for the six months ending October 32 was up 91 percent to £12.2 million.
The company also revealed that it had arranged for 536 IVAs per month over the last six months. This figure was up from 266 IVAs per month at the same time a year ago.
Meanwhile Debt Free said that it was preparing a list of misleading advertisements by its rivals and will be submitting the same to the Advertising Standards Authority (ASA). Derek Oakley, insolvency director at Debt Free Direct (DFD), said that competitors were exaggerating the level of debts that could be written off.
Accuma, Spectrum and W3 Debt Solutions are some of the companies named in the dossier. ASA said that it would be looking into the report before deciding whether a full inquiry was needed. Mr Oakley said that the ASA must take swift action and force the firms to withdraw the misleading ads.
“Regulation hasn’t caught up with the reality of the growth in IVAs,” Mr Oakley said. The shadow chancellor, George Osborne has accused the debt industry of leading the consumers to believe that some debts can be easily dodged.
“I am concerned that people may be being encouraged by unscrupulous IVA companies to commit to IVAs, even where this may not be the right course of action … Firm action must be taken against any IVA company found to be issuing false or misleading advice,” Osborne added.
Friends Provident reports robust Q3 sales
LONDON – UK life insurer Friends Provident today announced a 40 percent increase in third-quarter life insurance and pensions sales in the UK spurred on the April reforms in the country.
Friends Provident, which is the UK’s fifth-biggest insurer, said that the income from new business was 1.60 billion pounds in the third quarter, beating expectations of 1.46 billion pounds forecast by analysts. A year ago sales figures totaled 1.14 billion pounds.
Friends Provident also said that UK new business increased 34 percent to £3.04 billion compared with £2.27 billion reported at the same time last year. Total International new business increased by 51 percent to £1.59 billion, the group added.
“In the UK our leading group pensions franchise has continued to support profitable growth, with a useful contribution from individual pensions business in the third quarter,” said Ben Gunn, chief executive of Life and Pensions at Friends Provident. “We now intend to become a major player in the investment market, whilst still further building profitability and presence in our two other core product segments.”
The group also said that the life business market continued to be competitive. Hence it has taken measures like repositioning the pricing on its products and renegotiating reinsurance arrangements very early this year in order to minimize the impact on its bottom line.
“International growth has been excellent in the year so far, with good prospects for a healthy contribution in the fourth quarter. These results clearly demonstrate our ability to drive growth in both the UK and International businesses,” said a statement issued by the group.
Demand and supply imbalance fuelling house price growth: Hometrack
LONDON – House prices rose at their fastest rate in two years despite the increase in interest rates by the Bank of England in August, the latest survey by property consultant Hometrack said.
The annual house price inflation was 4.3 percent in September as compared to the previous year. This is the fastest growth in the last two years, Hometrack said. In September the actual rise in house prices was 0.4 percent, while the cost of an average UK home was 167,900.
“Despite the rate increase in August, house prices continue to rise as we start the autumn selling season,” said Richard Donnell, director of research at Hometrack. “Prices have risen in nine out of 10 regions over September, largely on the back of a 0.4 percent decline in the volume of homes available for sale over the month.”
Hometrack said the main reason for the rise in house prices was a lack of good properties coming onto the market. The disparity between demand and supply was most visible in London and the South East. Hometrack said prices here grew rose above the national average. Hometrack also said that the proportion of asking prices being achieved by sellers fell for the third month running in September.
Hometrack predicted that house price growth would slow down in the coming months, “Whilst the supply constraints are unlikely to disappear in the very short term, we expect the extent of price increases to continue to slow over the rest of the autumn,” Mr Donnell said.
Case for speed cameras weakens
LONDON – Campaigners continued their protests against the installation of speed cameras amid government reports that most number of road casualties took place due to the drivers’ failure to pay attention on road rather than for speeding.
The campaigners argued that if that was the case, then there was no need of the speed cameras as they cannot do anything to stop a driver from speeding. Paul Smith, associated with Safe Speed, which has led the campaign, said, “In that case, why are there so many cameras? Even those statistics are flawed, because they could include a joy-rider who is going at 100mph and no camera will ever stop him. They are spinning like tops to justify the camera programme.”
According to government reports, accident casualties in UK dropped to 3,201 deaths in 2005, a decline of 0.6 percent while the rate of serious injuries fell to 7 percent. The figures shown by Department for Transport added that of the total number of accidents taking place, 26 percent of them were fatal crashes. Even there the DfT said that only 15 percent of the accidents were caused due to speeding. Meanwhile over 35 percent of fatal accidents took place due to loss of control.
The DfT used only police reports and were aware that the numbers recorded could be less than the actual number. A spokesman for DfT said, “We have always used police figures and they do provide a straight year-on-year comparison.”
Britons have highest debts in western Europe, says study
LONDON: Britons account for a third of all unsecured debt in western Europe, according to a new study.
Analysts at business research firm Datamonitor, who carried out the study, found that the U.K. consumer credit market reached 214 billion pounds in 2005, making the country the most indebted in western Europe. In comparison, the combined total debts for continental Europe was 600 billion. While Europeans average 1,558 pounds in unsecured debt, the British owe 3,175 pounds.
The country’s people have an “insatiable appetite for credit”, which has led to this situation, the analysts said.
Other European countries have developed a culture of savings and frugality, the analysts felt, while the people in France and Germany are averse to debt.
However, the study finds consumer credit growth in Europe is now outstripping the U.K. and the lenders in this country, who are facing a saturation problem, can hope to have an opportunity in Europe. This may also change the picture for Britain.
The study’s author and financial services analyst at Datamonitor Paul Marsh said U.K. lenders should now look for business opportunities overseas. The U.K. is a difficult place to do business, he said, due to the highly indebted nature of the population.
According to estimates, the total personal debt in the U.K., including mortgage debt, is around 1.2 trillion pounds.
The “buy now pay later” culture has helped the credit card industry in the country to such an extent that there are more than 50 million cards in the U.K. Almost a third of Britain’s unsecured debt is on credit cards compared with 1.6 per cent in France.
In another study, carried out by Sainsbury’s Bank, it has been found that the demand for funds is likely to continue as family costs are mounting in view of higher utility bills, increases in university tuition fees, etc. The bank estimated that the increase in tuition fees from 1,175 pounds to 3,000 pounds could lead to a rise of 21 per cent in the cost of living for an average student. This may lead to around 54 million pounds worth of personal loans being taken out to help cover the cost.
The Datamonitor study found that Germans tried to restrict their use of credit to buying cars. In France, which has 96 billion pound of unsecured debt in contrast to Germany’s 60 billion pounds, there is greater use of loans to buy household appliances and furniture as well as cars and home improvements.
Standard Life to part ways with Alison Reed
LONDON – Alison Reed, the finance director of Standard Life looks all set to leave the company less than two years after joining it, according to a report in The Guardian newspaper. Reed’s move is being seen as a part of a major boardroom reshuffle at the life and pensions group, which floated recently on the stock exchange.
It appears a sensitive period for Standard Life, which is set to announce its first interim figures next week. The Edinburgh-based company may announce the departure of Reed as early as December, although she could stay on till a successor is found. Standard Life declined to comment on these speculations.
Analysts are yet to make up their minds on whether Standard Life will in fact be able to match rivals Prudential or Legal & General on an even keel. “It’s a long haul. They got themselves into a pothole a few years ago and it’s going to take a long time to get out of it,” said Roman Cizdyn at brokers Oriel. “It will take some years.”
Reed stands to make £900,000 when she does pack up and Sir Brian Stewart, the group chairman is also expected to step down soon. Also Sandy Crombie, Standard Life’s chief executive has retirement plans on the anvil in two years’ time. All in all analysts say the group is facing “challenging succession issues.”
Reed was a former finance director of Marks & Spencer and joined Standard Life in April 2005 when the group was looking for a finance director for nine months. Retail analysts were surprised by her choice since they felt she would not fit in with the floatation plans.
Prudential’s head of risk, Andy Crossley, is thought to be the perfect successor to Reed.
Norwich Union hikes car insurance premiums by 16 percent over 12 months
LONDON – Norwich Union, Aviva’s UK insurance division, became the first big name to hike the premiums in response to spiraling costs. On Thursday Norwich Union announced that it would hike car insurance premiums by 16 percent over the net year in the country.
“We’ve stuck our head above the parapet, but you can expect to see the market following our lead,” a company spokesman said. “We may lose some market share, but the key is profitability.” Tough competition has managed to keep insurance premiums under tight control even though the costs of repairs as well as injury claims have gotten out of control.
Norwich Union said that the premium hikes would come into effect from this month. For drivers with good records, their policy premiums will be raised by 6 percent, while high-risk policyholders may find themselves paying 40 percent more. On an average premiums are set to rise by 5 percent in the first six months.
Norwich Union spokeswoman explained that the profitability in the motor insurance market was very less. “Intense competition driven by technology has forced premiums down to an unrealistic level,” she said. “We would expect to see a number of other companies following.” Analysts say Norwich Union’s action may well act as a catalyst for other companies to follow suit.
The Association of British Insurers said the move was understandable since there have been no significant hikes in premiums since 2003. “A rise in the number of staged accidents and subsequent false claims has pushed up costs by an average of 5 per cent and a rise in the number of uninsured drivers has further forced up cost by a similar amount,” a spokeswoman said. “The increased accessibility of fast cars has helped to fuel the number of personal injury claims – you only have to look at how the price of used cars has gone down.”
In mid-afternoon trading yesterday, Aviva shares were off 5-1/2 pence at 739.
