Our view on this is that while the appointment smacks of unreconstructed nepotism, the best outcome for BSkyB shareholders would be if Mr Murdoch did as little as possible. The hard work has been done and the awesome risks taken. The company now has a still-growing and increasingly profitable digital subscriber base, it has trounced the cable companies, and it will soon start paying dividends. All Mr Murdoch has to do is sit back and watch while the money rolls in.
A bidder has finally emerged for Canary Wharf, the property company that owns much of Docklands including the eponymous tower. It is a consortium of investors headed by US investment bank Morgan Stanley, whose pin-striped bankers ironically toil away in one of Canary Wharf’s buildings. However, the price – equivalent to 255p a share – is a disappointment. All eyes are now on Canary Wharf’s founder Paul Reichman, who is understood to feel the company is worth over 300p. The question is whether he can raise the finance to buy it.
A further piece of the rail jigsaw dropped into place this week with the award of the Thames Trains franchise to Firstgroup. The decision means Firstgroup now controls two out of the three companies operating out of Paddington station, and puts it in pole position to win the unified franchise, which will be let in 2006.
Marks & Spencer reported interim results this week, and confounded those who predicted its recovery had run out of steam. Sales performance was acceptable and the company continues to reduce its costs. The shares, which have slumped on fears of a slowdown, now look temptingly cheap.
Interest rates went up this week, although most Britons – mortgaged to the hilt and busy ‘maxing out’ their credit cards – will probably not notice a quarter-point increase. They should soon start to sit up, however. Economists are predicting that rates may rise quite sharply, with the futures market pricing in three-month rates of 5.3% by the end of December. One of the main reasons for raising rates is to cool the ludicrously over-valued housing market; the other way to do this, without harming a fragile manufacturing sector, would be via fiscal means. Watch out for extra taxes on homeowners in the mini-budget.