(RIO.L) Rio Tinto PLC Buy/Sell

YAOUNDE, Nov 21 (Reuters) - Rio Tinto's aluminium operation in Cameroon has secured a 30-year power supply contract with the government but electricity costs have doubled and output from a smelter will fall due to cuts in power consumption, Rio said.
Rio Tinto Alcan is a partner with Cameroon's government in Alucam, a bauxite mining and aluminium smelting operation that had already slashed output by nearly 40 percent from its 90,000 tonne capacity in 2009 due to power shortages.
"The new contract will last 30 years and Alucam will now pay 12.94 CFA francs ($0.029) per kilowatt of electricity, up from about 6 CFA francs for the previous one," Cameroon's Finance Minister Lazarre Essimi Meny said late on Friday.
"On paper, the price increase seems to be too much, but in reality it is just within international norms," he added.
Menye said state power firm AES-SONEL will raise power supply to Alucam to 250 MW in 2012 when the Kribi gas-fired power plant goes operational and to 490 MW in 2013, when other power plants come on line.
However, in the meantime, Alucam has agreed to slash its electricity consumption from current levels around 140-120 MW so Cameroon can avoid power cuts and satisfy electricity demand, which is growing at eight percent per annum.
"Going by the present arrangement, we'll further reduce our electricity consumption to about 100 MW in 2010 and 2011," Alucam spokesman Arnold Mouangue said.
"(This) means our output, which already dropped to 63 percent in 2009 will fall again to around 50 percent during the two years," he added.
Alucam and the government agreed in 2005 to increase capacity at Alucam's Edea smelter to 300,000 tonnes from current levels around 90,000 tonnes but the project has been delayed due to the global crisis and chronic power problems in Cameroon.
Alucam had a turn-over of 149 billion CFA francs in 2008. It contributes 7 percent of Cameroon's industrial output, 5 percent of export revenues, and generates 3 percent of the gross domestic product.

($1=441.5 Cfa Franc)

(Reporting by Tansa Musa; Editing by David Lewis) Keywords: CAMEROON RIO/ (Dakar Newsroom +221 33 8645076)

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Financial Times

BANK URGES RESTRAINT IN BOOM TIMES

The Bank of England's consultation paper into the financial crisis will conclude that new discretionary tools should be considered to help smooth the peaks and troughs of the economic cycle, even if they were only introduced in Britain. The bank's report will call for stronger measures than those in the Treasury's Financial Services Bill including the creation of "macroprudential" powers to be used as an effective way of dampening future credit booms. The main tool would be raising the capital required to be held by banks in good times, with less tight capital requirements during downturns.

ASB CALLS FOR GOVERNMENT BOND PENSIONS BENCHMARK

Britain's leading accountancy group, the Accounting Standards Board, has called for company pension liabilities to be discounted by an interest rate equal to that on risk-free government bonds. UK and international accounting standards currently call for pension liabilities to be discounted at a rate consistent with either high-quality or AA-rated corporate bonds. National Association of Pension Funds chief executive Joanne Segars described the ASB proposals as"extremely disappointing". The International Accounting Standards Board is thought unlikely to consider the proposals for several years.

PRIVATE BANKS SEEK HOME LOAN CASH DEPOSITS

Leading UK private banks are demanding upfront cash deposits from buyers seeking mortgages in excess of one million pounds as extra security against uncertain bonus income. Brokers say some private banks now require a year's worth of mortgage interest payments in advance and that this money is ring-fenced with clients unable to draw on this money until the end of the lending facility or until conditions improve. Nigel Bedford of largemortgageloans.com said: "Banks are using this to give them a little more comfort that there is money there just in case bonuses dramatically reduce."

OPPOSITION THREATENS TO BLOCK DIGITAL REFORM BILL

The Conservative and Liberal Democrat parties have threatened to block the digital economy bill unless the government makes concessions. Both opposition parties suggested on Friday that they would demand changes to legislation entered into the bill by Lord Mandelson which would affect copyright law. The Conservative party also warned that that they would oppose the reform if the government kept powers to allow the industry regulator OFCOM to use part of the licence fee to pay for regional news provided by commercial broadcasters.

FULLERS HIGHLIGHTS SECTOR SPLIT

Fullers Smith & Turner reported an 18 percent increase in pre-tax profit to 14.1 million pounds for the six months to September 26, on revenue that increased from 106 million pounds to 117 million pounds. The pub group's figures highlighted a growing divide in the sector between successfully managed operators and struggling leased and tenanted ones. Mark Brumby, analyst at Astaire Securities, said Fullers fared better than many of its rivals as most of the group's pubs are in London and the southeast. Brumby said: "Food-led managed houses have generally outperformed wet-led tenanted houses and southeast England has been outperforming the north."

L&G SEARCH FOR CHAIRMAN ENDS

Legal & General, the UK's third-largest life and pensions company, hopes to name former National Australia Bank head John Stewart as its new chairman by the end of next week. A source close to the situation said the appointment of Stewart is subject to the approval of the Financial Services Authority and the finalisation of some contractual terms. L&G is thought to be one of the primary targets of Clive Cowdery's Resolution vehicle as it looks to consolidate the insurance sector.

GARTMORE TO CUT DEBT WITH 250 MILLION POUND IPO

Asset manager Gartmore is looking to raise 250 million pounds as it makes its debut on the London Stock Exchange. The group said the proceeds of the capital-raising would be used to reduce its 400 million pound debt. Gartmore is also expected to release another tranche of shares, enabling U.S. private equity group Hellman & Friedman to sell most of its 58 percent stake. The issue is expected to be priced within the next fortnight with the listing to occur in the second or third week of December.

MORTGAGES BEFORE CURRENT ACCOUNTS AT TESCO

Tesco could introduce mortgages by the end of next year as it looks to stake a claim in the UK financial services sector. However, the supermarket group told analysts Friday that current accounts may not be offered until 2011. Tesco said: "We have said that we plan over time to extend the financial services business from a collection of successful financial products to that of a full-service retail bank. We need to build the systems and infrastructure platforms to enable us to provide these services."

RIO TINTO BOLSTERED BY U.S. COAL SALE

Miner Rio Tinto has continued its recapitalisation drive with the 741 million dollar sale of Cloud Peak Energy, a unit that comprises most of Rio's former U.S. coal business. The deal follows the 764 million dollar sale of the Jacobs Ranch mine to Arch Coal in October. Both disposals are part of an attempt to halve net debt by the end of the year from its peak of 39.1 billion dollars on June 30. The initial public offering of Cloud Peak raised 434 million dollars; a further 307 million dollars was raised through its share of a simultaneously placed offering of debt.

NATIONWIDE LASHES OUT AT RESCUED BANKS

Graham Beale, chief executive of Nationwide Building Society , has criticised the aggressive strategies of government-backed banks such as Northern Rock and Lloyds Banking Group as "seriously distorting" the savings market with "uneconomic pricing". Beale singled out National Savings & Investment's current market leading one-year bond which pays 3.95 percent interest saying: "NS&I is way outside the competitive spectrum, way, way off the scale." Nationwide revealed a 64 percent fall in underlying pre-tax profits in the six months to September, citing lower interest rates and tough competition.

Prepared for Reuters by Durrants
Keywords: PRESS DIGEST Financial Times Nov 21

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By Clare Baldwin and Phil Wahba

NEW YORK, Nov 20 (Reuters) - Investors bet on growth in the IPOs of a Chinese hotel chain and an online education company on Friday, but were less enthusiastic about a spin-off of mining giant Rio Tinto.
Rio Tinto's U.S. coal-mining spin-off, Cloud Peak Energy Inc edged down in its debut on the New York Stock Exchange after its initial public offering fell short of expectations on concerns the money raised was going to the Anglo-Australian parent company rather than for its own growth.
By contrast, the shares of both Chinese economy hotel chain 7 Days Group Holdings Ltd and online education company Archipelago Learning rose as much as 15 percent.
The shares in Global Defense Technology & Systems Inc , which drew 74 percent of its 2008 revenue from contracts with the U.S. government, were nearly flat on Nasdaq.
Analysts said the company could suffer if the government cuts defense budgets.
Cloud Peak stock closed down 1.1 percent on Friday, but investors lapped up the shares of 7 Days and Archipelago Learning, with 7 Days closing up 13.6 percent and Archipelago Learning ending the day 13.8 percent higher.
Historically, IPOs have risen about 10 percent to 12 percent in their debuts, according to Thomson Reuters data.

"IPO investors are used to having growth," said Matt Therian, an analyst with Connecticut-based investment firm Renaissance Capital.
"Cloud Peak is really tied up in coal prices. It's kind of a murkier growth outlook for this company."
Gillette, Wyoming-based Cloud Peak raised about $459 million in its IPO on Thursday, but it priced at $15, below its expected range of $16 to $18.
Cloud Peak shares opened at $14.50 on the NYSE, more than 3 percent below the IPO price and fell as much as 6.7 percent before recovering to close down 1.1 percent on Friday.
"The Cloud Peak deal was really a divestiture by Rio Tinto. The cash streams in coal are predictable ... It's not a real sexy industry and it depends very much on energy prices," said Morningnotes.com founder Ben Holmes.
Analysts said 7 Days and Archipelago benefited from strong growth potential.
On 7 Days, Therian said: "They've gone from five hotels in 2005 to almost 300 now."
Therian said private equity-backed on-line education company Archipelago Learning has a significant backlog of business.
Archipelago raised about $103.1 million in its IPO.
Earlier this week, fast-growing network security provider Fortinet Inc, whose sales rose 18.8 percent in the first part of the year, had one of the best debuts of the year, with a 33 percent rise.
Cloud Peak is the third-largest U.S. producer of coal and owns surface mines in Wyoming and Montana. Almost all the proceeds from its IPO will go to Rio Tinto, which will retain a 48.3 percent stake, leading to investor push-back, analysts said.
Cloud Peak was the seventh spin-off this year in a total of 46 IPOs. Typically, IPOs by spin-offs are well received as the companies are better known to investors, who believe the new company can tap into the parent's resources, but Cloud Peak is the fifth carve-out in a row to fall below its IPO price.
This week was one of the busiest for U.S.-listed IPOs this year, as companies rushed to get deals over before the Thanksgiving break. There are currently no IPOs scheduled for pricing.

(Reporting by Clare Baldwin and Phil Wahba; editing by Andre Grenon) Keywords: IPO/DEBUTS (phil.wahba@thomsonreuters.com +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net)

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Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

By Clare Baldwin and Phil Wahba

NEW YORK, Nov 20 (Reuters) - Investors bet on growth opportunity in the IPOs of a Chinese hotel chain and an online education company on Friday, but saw murkier prospects for a spin-off of mining giant Rio Tinto, sending its shares lower.
Rio Tinto's U.S. coal-mining spin-off Cloud Peak Energy Inc edged down in its debut on the New York Stock Exchange after its initial public offering fell short of expectations on concerns the money raised was going to the Anglo-Australian parent company rather than its own growth.
By contrast, shares in both Chinese economy hotel chain 7 Days Group Holdings Ltd and online education company Archipelago Learning rose 15 percent.
Shares in Global Defense Technology & Systems Inc which drew 74 percent of its 2008 revenue from contracts with the U.S. government, were flat on Nasdaq.
Analysts said the company could suffer if the government cuts defense budgets.
Cloud Peak stock was off 2.7 percent late on Friday afternoon, but investors lapped up shares in 7 Days and Archipelago Learning. 7 Days was up 15 percent while Archipelago Learning was up 15.8 percent.
Historically, IPOs have risen about 10 to 12 percent in their debuts, according to Thomson Reuters data.

"IPO investors are used to having growth," said Matt Therian, an analyst with Connecticut-based investment firm Renaissance Capital.
"Cloud Peak is really tied up in coal prices. It's kind of a murkier growth outlook for this company."
Gillette, Wyoming-based Cloud Peak raised about $459 million in its IPO on Thursday, but it priced at $15, below its expected range of $16 to $18.
Cloud Peak shares opened at $14.50 on the NYSE, more than 3 percent below the IPO price, and fell as much as 6.7 percent before recovering to trade at $14.60 late Friday afternoon.
"The Cloud Peak deal was really a divestiture by Rio Tinto. The cash streams in coal are predictable ... It's not a real sexy industry and it depends very much on energy prices," said Morningnotes.com founder Ben Holmes.
Analysts said 7 Days and Archipelago benefited from strong growth potential.
On 7 Days, Therian said: "They've gone from five hotels in 2005 to almost 300 now."
Therian said private equity-backed on-line education firm Archipelago Learning has a significant backlog of business.
Archipelago raised about $103.1 million in its IPO.
Earlier this week, fast-growing network security provider Fortinet Inc, whose sales rose 18.8 percent in the first part of the year, put in one of the best debuts of the year with a 33 percent rise.
Cloud Peak is the third-largest U.S. producer of coal and owns surface mines in Wyoming and Montana. Almost all the proceeds from its IPO will go to Rio Tinto, which will retain a 48.3 percent stake in Cloud Peak, leading to investor pushback, analysts said.
Cloud Peak was the seventh spin-off this year in a total of 46 IPOs. Typically, IPOs by spin-offs are well received as the companies are better known to investors, who believe the new company can tap into the parent's resources, but Cloud Peak is the fifth carve-out in a row to fall below its IPO price.
This week was one of the busiest weeks for U.S.-listed IPOs this year, as companies rushed to get their deals done before the Thanksgiving break. Currently there are no IPOs scheduled for pricing.
(Reporting by Clare Baldwin and Phil Wahba) Keywords: IPO/DEBUTS Keywords: IPO/DEBUTS

(phil.wahba@thomsonreuters.com; +1 646 223 6128; Reuters Messaging: phil.wahba.reuters.com@reuters.net)

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Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.