*** A very smelly rat for EMI
*** BAT vs Bush: Strike one to the fag-makers
*** Glazer back for more...what will the Irishdo...Vodafone's Japanese woes...and more.. ------------------- Who did music group EMI blame for its dismal fullyear sales result on Monday? Well, that would be ChrisMartin and the Gorillaz...obviously.
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EMI yesterday said sales for its music division fellaround 9% in comparison to last year's results. Andblamed Coldplay and Gorillaz for the delay in releasingtheir new albums. Both albums were due to be releasedthis financial year although they will now hit themusic stands after 1 April in the new financial year.
Yet analysts smelled a rat much larger than the tworock groups, and suggested the sales plummet could notjust be attributed to the delay in the albums. 'The 8%to 10% numbers suggest something big went quite wrong,'one analyst said yesterday. Shareholders agreed, as theshare price plunged over 16%. EMI closed at 235p.
Despite mid-cap stock EMI's fall, the FTSE250continued its record-breaking surge. It closed 0.3% upat 7,320. The FTSE100 shot up a further 38 points or0.8% to close at 4,979. That means the index is now amere 21 points off the 5,000-mark a high not seensince May 2002. But it's still around 2,000 pointsshort of its all-time high of 6,930 reached in the endof 1999.
And with indices across the board up, the All Shareindex also reached two and a half year highs on Monday.It gained 0.7%, to close at 2,503.
Sugar group Tate & Lyle closed as the top blue chipgainer on Monday. It closed 7% up, after news thatCoca-Cola North America will use its Splenda artificialsweetener for new brand, Diet Coke Sweetened. Moreover,the FT reports that Tate & Lyle's dominance in the UKmarket is becoming an increasing concern for theCompetition Commission. Not for investors, however, asthe sugar group traded 33p up at 501p.
Meantime, British American Tobacco won their courtruling in the US against the government. The Bushadministration had tried to force the fag-makers to paynearly $300bn in past profits, as a part of itsracketeering case versus the industry. Not so, the UScourt said, pushing the tobacco sector up 2% and toan all-time high on Monday. Imperial Tobacco andGallaher both climbed 0.6% in sympathy.
And retailer Allders could be sold by the end of thisweek, administrator Kroll said yesterday. Kroll is saidto be looking for bids of between £120m and £130m although Allders has a bank debt of nearly £200m.
'Survival of the company is no longer achievable,'Kroll's Alastair Beveridge said yesterday. 'Our firstpriority at the moment is achieving a better outcomefor creditors ------------------ Manchester United closed 5% up at 281p followingreports that Malcolm Glazer is about to relaunch hisbid attempts. The American known as the Leprechaun has given the Man U board a detailed proposal thatcould lead to a £800m bid for the club. The mainproblem for the wealthy American?
Well, Glazer can't have too many friends left on theRed Devil's board. Last year he voted against theappointment of three United directors to the board allegedly out of anger at having his initial bidrebuffed.
In fact, then-financier JP Morgan quit as Glazer'sadviser last year following the incident. But they'requick to forgive, it seems, as the group are said to beplaying a part in financing the latest bid attempt.
So how can Glazer secure a winning bid for United?Well, the American will have to butter-up Irish racingmagnates JP McManus and John Magnier. Together the twoown 29% of the Devils in comparison to the 28.1% heldby Glazer himself. Unfortunately for Mr Glazer, the twohave given no indication that they wish to cash theirinvestment. We'll have more on that story in MoneyMorning as the news breaks.
Meantime, mobile group Vodafone has resorted todesperate measures in order to boost its flaggingJapanese sales. The phone company yesterday said it'sto reshuffle its top management in the country. Thisfollows reports that Vodafone lost 60,000 customers inJanuary alone much more than any of its rivals inJapan in a single month. And analysts are nowquestioning the group's decision to stay put in thecountry.
'Vodafone is going to need to put a lot of money intoJapan if it wants to rebuild the business,' DeutscheBank's Tetsuro Tsusaka said yesterday. ' I don't knowif it will be worth it for them to spend that kind ofmoney just for Japan.' Perhaps Vodafone is focussing onthe wrong country...
Mobile phone users in China number around 320m andthat looks set to grow to over 400m by the end of thisyear. The company to beat in China? That would be ChinaMobile (CM) the country's top mobile operator, oftencalled 'the wireless dynasty'. At the end of last year,CM had snagged over 200m subscribers, a figure thataccounts for 65% of the market. And looks a lot morepromising than Vodafone does in Japan.
The problem is of course that while investors caneasily trade in Vodafone shares, it's not so easy tobenefit from China Mobile's success. Until now, thatis. Remember, CM is one of the top 25 companies foundon the FTSE/Xinhua China 25 Exchange Traded Fund mentioned here in Money Morning in the past.
In fact, this is the first ETF to track the Chineseindex and a good way for investors to benefit fromthe country's surging economy Until tomorrow, Heather D'AltoMoney Mornin
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