ABN Amro was fined £900,000 by the Financial Services Authority for “market misconduct” and “serious compliance failures”.The European Commission slashed its 2003 growth forecast for the eurozone, warning that Germany faced another year of entrenched stagnation.WorldCom changed its name to MCI in an attempt to put its notorious recent history behind it. Corus, the struggling steel maker, revealed plans to shed 1,150 jobs in the UK and warned that 2,200 more were under threat. France Telecom announced an €15bn (£10bn) rights issue to help cut its £46bn debt.APRILThe advertising group Cordiant Communications said it had received a takeover approach 24 hours after being sacked by one of its major clients, Allied Domecq. Wm Morrison’s dreams of buying Safeway suffered a setback after Patricia Hewitt, the Trade Secretary, referred it, along with Asda, Tesco and J Sainsbury, to the Competition Commission. Derek Higgs stirred up controversy in Britain’s boardrooms by recommending that chief executives be barred from going on to chair the same company, and decreed that one full-time FTSE 100 chairmanship was enough to keep anyone busy.Six Continents survived a £4bn hostile bid attempt from Hugh Osmond, the pub entrepreneur, and demerged its pubs arm, Mitchells & Butlers. Oxford Glycosciences’ attempts to merge with Cambridge Antibody Technologies were halted when Celltech launched an offer.Prosecutors in Dusseldorf charged six people over £70m of bonus payments to executives in the Vodafone-Mannesmann takeover.MARCHThe FTSE 100 plunged to 3,287 points, its lowest level in eight years, on the eve of the US-led invasion of Iraq, only to rebound as soon as the first shots were fired.
The founder of PizzaExpress, Luke Johnson, kicked off a bidding battle with a £263m offer for the chain. And Graham Wallace finally bowed to shareholder pressure and quit as boss of Cable & Wireless.Overseas, Ted Turner quit as vice-chairman of AOL Time Warner as the company posted a $100bn (£56m) full-year loss.FEBRUARYThe Dutch retailer Ahold became the latest accounting culprit after admitting that US profits had been overstated for two years. In the UK, Abbey National became the first high street bank since 1992 to announce a loss and halved its dividend, while Reuters posted its first loss since floating 19 years earlier and announced 3,000 job losses.Kohlberg Kravis Roberts, the US private equity group, pulled out of the bidding frenzy for Safeway. Its suitor, Wm Morrison, was perhaps less well anticipated, as was the bidding frenzy that ensued, with Asda, Tesco, J Sainsbury, the retail entrepreneur Philip Green and venture capitalists Kohlberg Kravis Roberts all vying for control of the country’s number four food retailer.Elsewhere, Dixons set the tone for what was to be a difficult year for retailers with a profit warning as it failed to prosper from Britons borrowing £100bn in 2002, twice the amount of the year before.
Premiums may stay high, particularly on personal insurance lines, but the big rises of recent years seem to be over. In life insurance and fund management, better investment performances, recovering confidence from savers, and takeover activity should put these among the better sectors this year.. JANUARY
JANUARY
The story of the month and, indeed, for some, the year, was the much anticipated £3bn takeover bid for Safeway. The sector looks fairly priced, given the still-competitive environment.Insurance has been a disappointing area this year, and the general insurance sector is probably an outright sell.
It should similarly ride out any consumer slowdown, having parcelled out many liabilities and, in many cases, already rolled back on the racier lending. For crystal-ball gazers, this year has proved one of the most predictable in ages for economic and stock market developments Two features dominated the early part of the year. One was the geo-political tensions caused by the build-up to the Iraq war; the other was the fear of deflation. As a consequence, the early months saw economic growth grind to a halt, equities plumbing new depths, and bond yields testing new lows. Equally easy to see was that once the uncertainty of war had been removed, then things would bounce quite substantially. On stock markets, I said that after early weakness, the FTSE 100 would rebound to end the year a bit higher. In the event, the London market looks like finishing some 13 per cent up on the year.