Sunday newspaper round-up: Lloyds, Government spending, Google

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LONDON (ShareCast) - Lloyds is plotting to raise 1bn pounds through a sale of its 60 per cent stake in Britain's biggest chain of financial advisers. The bank's majority holding in St James's Place Wealth Management could be placed with investors in the market before the year-end. Antonio Lorenzo, the bank's strategy director, is leading the disposal plan, which comes as Lloyds faces renewed scrutiny from the Financial Services Authority (FSA) over its capital position. Lloyds is at loggerheads with the regulator over plans to start paying dividends to shareholders for the first time since the financial crisis. Raising cash from a sale of the St James's Place (Xetra: 888460 - news) holding could ease the FSA's concerns. The adviser's shares have soared more than 30 per cent over the summer and closed on Friday at 398p, which values the firm at 2bn pounds, The Sunday Times reports.

The Chancellor will be under pressure on December 5 -when he delivers his autumn statement- to boost government spending to accelerate growth, even after the welcome 1% third-quarter bounce. Osborne has been criticised for cutting spending too much. A more telling criticism is that he has not controlled it properly or sensibly. Lying behind such calls are two pieces of conventional wisdom, says the Sunday Times´s David Smith. The first is that public sector workers are being squeezed as never before, their pay frozen indefinitely even as inflation has stayed stubbornly above the official 2% target. The second is that the economy's struggle has been made much more difficult by cuts in government spending. "Today I can tell you that neither of those things is true," Smith adds. As regards public sector pay, for example, in a report published a few weeks ago, Brian Reading, of Lombard Street Research, suggested that public sector pay had risen by 9% over the past three years, a claim which turned out to be true, Smith goes on to explain.

Senior (Xetra: 852271 - news) government sources have told The Sunday Telegraph that technology giants Google (NasdaqGS: GOOG - news) and Microsoft (NasdaqGS: MSFT - news) have expressed "extreme interest" in unused sections of airwaves known as white spaces. These spaces are effectively gaps between those airwaves used for television, radio and mobile services, and are used as buffers to prevent the broadcasting and mobile signals from interfering with each other. In the past, white spaces have been put to little or no use, but telecoms regulator Ofcom wants to develop them for broadband services. Google and Microsoft are expected to launch a major charm offensive to win control of the valuable airwaves. They could also use the white spaces to provide widespread broadband access, potentially giving them an important calling card with which to win over customers.

The Chairman of Centamin has slammed a court ruling that sent the share price of the FTSE 250 (FTSE: ^FTMC - news) goldminer crashing by two-thirds. The company's stock collapsed last week after a court appeared to question the validity of the licence of its giant Sukari goldmine in Egypt — its only operating asset and one of the largest deposits in Africa. Josef El-Raghy, chairman and largest shareholder with 6.5%, expects to receive a copy of the ruling this week, but said the administrative court had gone beyond its powers. "The licence can be repealed only by an act of parliament, and at the moment, there is no parliament," he said. "We are operating today and expect to continue to do so, " he added. The court appears to have questioned the validity of the tax and royalties the government receives, according to The Sunday Times.

Beny Steinmetz, the Israeli billionaire, plans to boycott a committee backed by George Soros set up to investigate allegations of corruption at a $5bn (£3bn) mine in Africa. Steinmetz co-owns Simandou, a huge iron ore deposit in Guinea, with Vale, the Brazilian mining giant. On Friday his company, BSG Resources, received a letter from the Guinean government demanding evidence of how he came to own the world's largest undeveloped deposit. BSGR said: "This is the fifth and most clumsy attempt by an already discredited government to illegally seize BSGR's assets. The government has been in possession of the information it is demanding for over 12 months." Soros is advising Guinea's government on an overhaul of the mining industry. Steinmetz acquired Simandou in the dying days of President Lansana Conté's regime. It had been expropriated shortly before from Rio Tinto (Berlin: CRA1.BE - news) , The Sunday Times says.

The changing shape of Oxford Street in 2012 is a microcosm of the ferociously competitive fashion market and the challenges facing Marks&Spencer. At one end of the clothing sector, it is being squeezed by the seemingly unstoppable Primark, whose sales are up 17% year-on-year and whose low prices have resonated with consumers during the recession. At the higher end of the sector, Zara has established a significant and broad fan base in UK cities. Its (Euronext: ALITS.NX - news) flagship store in Park House on Oxford Street - where rents are soaring to around £700 per sq ft - underlines its ambitions. In contrast, the M&S flagship store at Marble Arch appears drab and uninspiring. The consequences of the Oxford Street battle is that Primark and Zara are grabbing M&S customers, The Sunday Telegraph explains.

Morrisons is expected to confirm this week alongside a third quarter trading update that it will launch a family clothing brand called Nutmeg next Easter. Morrisons is the last of the major supermarket groups to launch its own clothing brand, a part of the industry that has thrived following George Davies' launch of George at Asda in the 1990s. The supermarket group has hired former Peacocks managing director Tim Bettley to become its director of clothing and is building an internal buying, merchandising, and design team of about 50 staff. The Nutmeg staff will this week move into a new headquarters in Coalville, Leicestershire. Nutmeg will go on sale in about 100 Morrisons' stores next March. Initially, Morrisons plans to focus on children's clothing and adult essentials, The Sunday Telegraph reports.

Engineer WS Atkins (Other OTC: WATKF.PK - news) is struggling to fill 1,200 British vacancies in the face of stiff competition for talent and concerns that the country is failing to produce enough science graduates. The company, which designs and plans major projects such as the construction of the Olympic Stadium and the renovation of the Statue of Liberty (Berlin: RS3.BE - news) , is recruiting as Chief Executive Uwe Krueger eyes new opportunities in energy, defence and aerospace markets. "It is an important sign that makes me optimistic about our UK business, which, please keep in mind, is also serving international clients," Mr Krueger said. Atkins is battling for workers in the oil-and-gas world, where demand in locations such as Houston, Texas, and Perth in Western Australia remains hot. Mr Krueger, who took the top job last year, added: "The other uncomfortable truth is that we are just not churning out enough talented young engineers at the moment, The Independent on Sunday writes.

Although Europe was on the right path to overcome the crisis: "Whoever thinks this can be fixed in one or two years is wrong. We need a long breath of five years and more," Mrs. Merkel told a conference in Sternberg, Germany. "We need rigor to convince the world it's worth investing in Europe (Chicago Options: ^REURUSD - news) ," she added. Thus, two years ago some heavily indebted European countries were dragged into the turmoil that first gripped global financial markets in 2007. Greece in particular has been struggling with the austerity conditions imposed on it by countries such as Germany. But Mrs Merkel told a regional meeting of her Christian Democratic Party on Saturday that the time had come for "a bit of strictness," The Sunday Telegraph says.

Fears have been raised of a plunge in commercial property values as banks embark on a fire sale of distressed loans. They are expected to dispose of £16bn worth of poor-quality debt in the coming months in a bid to clean up their balance sheets. These property loans are being snapped up at rock-bottom prices, mainly by US "vulture funds" who are expected to force owners to sell the assets. Property experts predict values will fall by up to 20% in what has been dubbed a "Darwinian" boost for the sector, according to property agent Chris Dougray at Lambert Smith Hampton, Scotland on Sunday reports.


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