A Brief Look At The Week Ahead

After last year's reserves scandal, Shell shareholders will get the chance on Tuesday to approve a sweeping change to the company's structure. They will vote on a proposal to merge the Dutch and British holding companies to form a single entity, to be called Royal Dutch Shell. If the AGM vote is successful, the single entity will have one board, one chairman and one CEO, replacing the existing structure of two boards and a committee of managing directors. Its main listing will be in London and should start trading on 20th July. A string of trading updates and results will guide the direction of the market. This week, it is the turn of music and books giant HMV to release full-year results and the market will be looking for signals on how current trading is holding up. In early May, the City was warned that underlying sales had fallen at both HMV and its books chain, Waterstone's. This was particularly disappointing after a strong Christmas, fuelled by sales of albums by giant bands such as U2 and the DVD of the hit series Little Britain. Still in the music business, Sanctuary will release interim results on Tuesday. A trading update two weeks ago saw its shares plummet after the company behind Morrissey and Iron Maiden warned that profits would be "substantially lower". The City will want more details about trading as well as reassurance that the long-term outlook is more positive. Trinity Mirror, will provide an update on trading, which in turn will be a pointer to the strength of the advertising market. Investors will be hoping that conditions have improved since the last update, for March and April, when advertising revenue fell 1.4%. Analysts fear conditions may have worsened since then. br> Sir Martin Sorrell's WPP, the world's second-largest advertising firm, will update the market at its annual general meeting. Investors will be hoping that the owner of advertising agencies including JWT, Ogilvy & Mather and Young & Rubicam continues its recent strong performance. In April the group reported a near 6% rise in quarterly like-for-like revenues. It also said profitability and operating margins "were ahead of budget" during the first quarter. The smaller end of the market will hear from Dobbies Garden Centres and Heavitree Brewery, both of which are releasing interim results. The updates on current trading will be of most interest, as will the outlook for the rest of the summer, a key period for both businesses. If last week's break in the hot weather continues, it will not bode well. It may also be a good idea to keep an eye on any companies involved in online gambling as PartyGaming comes to the market with every indication that the flotation will be a big success. Hilton Group, William Hill and others could benefit from riding the wave. It should be another very interesting week. Greystone (Greystone is Alan English, City Editor at MoneyAM.)

AFX UK at a glance share guide

MARKETS
FTSE 100 5,079.0 down 35.40
FTSE 250 7,329 down 52.90
DJIA 10,297.84 down 123.60
Nasdaq Comp 2,053.27 down 17.39
S&P 500 1,191.57 down 9.16
Gold 438.85 usd (441.85)
Oil - Brent August 58.36 usd (57.96)

BREAKING NEWS - WEEKEND
* British shareholders in ROYAL DUTCH PETROLEUM will have to pay nearly 80 mln stg in capital gains tax as a result of next week's restructuring of SHELL into one company - The Daily Telegraph
* Tim Parker, the former chief executive of Kwik-Fit, stands to make more than 20 mln stg after private equity group CVC has agreed to sell the tyre and exhaust business to rival PAI for 800 mln stg - The Telegraph
* PUNCH TAVERNS, Britain's second-biggest pubs group, has made an unsolicited approach for Spirit in a deal that could value the rival operator at up to 3 bln stg - The Weekend FT
* Legg Mason, the Baltimore-based asset manager, has agreed to pay up to 1.39 bln usd for Permal, a French-owned fund of hedge funds manager, in the biggest move yet by a traditional investment manager into the hedge fund market - The Weekend FT
* Demand for shares in PARTYGAMING's controversial IPO was triple the amount of equity available when the books closed last night - The Weekend FT
* John Mayo, the former finance director of MARCONI, is spearheading the takeover of XENOVA, the biotechnology company - The Weekend FT
* A plan to impose a 1 stg levy on all 50 million passengers travelling by air every year from Britain has sparked a massive row within the Government - The Independent
* SENDO, Britain's only mobile phone handset manufacturer, is holding talks with potential investors to secure an urgent injection of cash into the business - The Independent
* One of the worlds largest gym chains, FITNESS FIRST, is warming up for a possible 800 mln sale. The leisure group has appointed UBS to conduct a strategic review, with a sale seen as the most likely outcome - The Sunday Times
* A leading economic think tank says public money is needed to build a new generation of nuclear power stations - The Sunday Times
* President Putin has sought to reassure the leaders of some of the world's biggest companies that investments they make in Russia will be safe in spite of international concern at the dismantling of Yukos, the oil giant - The Sunday Telegraph
* Sheikh Ahmad al-Fahd al-Sabah, the president of Opec, is holding discussions with Saudi and Qatari oil ministers in a bid to cool soaring oil prices - The Sunday Telegraph
* The Jersey government is cracking down on a VAT loophole which is being exploited by TESCO, AMAZON, ASDA and WOOLWORTHS to sell tax-free music and DVDs - The Sunday Telegraph
* SENDO, the UK's only mobile handset manufacturer, is in last gasp talks with Motorola to stave off the total collapse of the company - The Sunday Telegraph
* ARSENAL is aiming to overtake MANCHESTER UNITED as the UK's highest earning club on match days when it moves to its new 60,000-seat stadium in July next year - The Sunday Telegraph
* An Italian judge has ordered executives from Bank of America and Deloitte & Touche to stand trial alongside Calisto Tanzi, the founder of PARMALAT, the Italian dairy giant that collapsed owing around 14 bln eur (9.3 bln stg) amid allegations of fraud in 2003 - The Sunday Telegraph
* The Government wants to privatise URENCO, the uranium enrichment group, in a 2.5 bln eur (1.7 bln stg) flotation but is being blocked by the Dutch and German governments, the two other shareholders in the company - The Sunday Telegraph
* An American looks set to become the new chief executive of ASTRAZENECA - The Sunday Telegraph
* Stephen Byers, the former transport secretary, will be accused of dishonesty in the High Court for his role in forcing RAILTRACK into administration in October 2001 - The Sunday Telegraph
* IMPERIAL INNOVATIONS, the commercial arm of Imperial College London, is to seek a listing on the stock market which could value the company at up to 200 mln stg - The Sunday Telegraph
* Gustav Humbert has been named as the new chief executive of AIRBUS, ending months of wrangling between the French and German shareholders of its parent company, EADS - The Sunday Telegraph
* A small company in India, ENCORE, has teamed up with the Indian government to develop what is likely to be the world's cheapest computer, costing just 200 usd (110 stg) - The Sunday Telegraph
* Paul Mason, the president of Levi Strauss's European arm and former chief executive of ASDA, has emerged as a possible candidate for the role of chief executive of WM MORRISON - The Sunday Telegraph
* Archie Norman, the former boss of ASDA, has denied receiving an approach from MORRISONS, the supermarket chain beset by a boardroom feud - The Observer
* A number of high-street fashion chains have opted to go on seasonal sale early this year in a bid to shake shoppers out of their torpor and shift summer stock - The Observer
* AMEC and Fluor of the US have approached the government about buying the Sellafield-based British Nuclear Group. This would complete the break-up of fuel and reprocessing operator BNFL - The Observer
* Leading food groups are setting up a food safety watchdog in an industry-funded effort to keep contaminated and potentially harmful products off supermarket shelves - The Observer
* PARTYGAMING is expected to be valued at 4.7 bln stg when it floats on the London stock market tomorrow. Institutions are tipped to 'stag' the shares - City jargon for holding equity for no more than two or three days before selling it on - The Observer
* Russia's biggest companies are pressing ahead with plans for international flotations, ignoring warning shots from their home regulators, which have vowed to stop the migration of capital abroad - The Sunday Times
* MITCHELLS & BUTLERS is considering gatecrashing a possible 3 bln stg takeover of Spirit Group by PUNCH TAVERNS, according to banking sources - The Sunday Times
* INTERPUBLIC GROUP, the world's third largest marketing services group, will this week hold crunch talks with its creditors in an attempt to secure a financial reprieve - The Sunday Times
* Sly Bailey, chief executive of TRINITY MIRROR is trying to acquire the quoted recruitment firm HOT GROUP - The Sunday Times
* SANCTUARY GROUP will this week mount a fight to restore its financial health - The Sunday Times
* The battle to buy Priory Healthcare, owner of the celebrity rehabilitation clinic of the same name, has attracted a bid from Fortress Investment Group - The Sunday Times
* David Jones, the non executive chairman of WM MORRISON, will try to lure Archie Norman to run the troubled group with a renumeration package that could top 50 mln stg over five year - The Sunday Times
* The US Department of Justice will consider arresting executives of PARTYGAMING - The Sunday Times
* ELECTRONIC DATA SYSTEMS, the American computer giant behind the British government's tax credits fiasco that is costing the taxpayer millions of pounds, is a frontrunner for the huge contract to operate the government's identity cards system - The Business
* GLAXOSMITHKLINE is falling behind in the race to bring a ground-breaking vaccine against cervical cancer to market, the pharmaceutical giant will reveal to the City this Thursday. At stake is dominance of a market worth up to 4 bln usd a year - The Business
* NM ROTHSCHILED, the London merchant bank, is leading an initiative to finance, build and manage Britain's next generation of nuclear power stations. It plans to create a jointly-owned nuclear power company, provisionally named New Nuclear, that could raise funds and manage the nuclear-build programme - The Business
* BAE SYSTEMS, VT GROUP, AMEC and KBR are among more than a dozen companies which have formally expressed interest in being the project manager for Mars, the UK's latest multi-billion pound shipbuilding programme - The Business
* Wall Street is bracing itself for another quarter point rise in US interest rates on Thursday, despite the price of oil hitting 60 usd a barrel and fears about the health of the global economy - The Business
* The Bank of England's monetary policy committee will cut interest rates in August, according to a poll of top City of London economists released this weekend - The Business
* The boardroom rift at WM MORRISON deepened this weekend after it emerged that reports claiming Archie Norman is in discussions to join the board of the crisis hit supermarket chain were untrue - The Business
* DEUTSCHE TELEKOM is mulling a takeover of UK based operator O2, which has extensive German operations - The Business
* Private Equity Group TERRA FIRMA's 435 mln stg acquisition of EAST SURREY HOLDINGS has been thrust into crisis - The Business
* The advertising boss who has been offered the role of chief executive at HAVAS after the departure of Alain de Pouzilhac last week, is having second thoughts about accepting the job. He has asked the Havas board for seven days to ponder his decision - The Business
* There are signs that merger and acquisition activity in the European financial services sector is picking up again as companies focus on growth in 2005-06 - The Business
* Japan, considering construction of a defence shield to protect against missiles fired from North Korea, is looking at the anti-ballistic missile laser being developed by BOEING for America - The Business
* Roman Abramovich's Russian oil company faces an inquiry being launched into how its UK partner's stake in a massive Russian oilfield has disappeared - The Independent
* A 1 bln stg Private Finance Initiative project to redevelop the famous Royal London Hospital in the East End is being threatened by a legal dispute - The Independent
* RAB CAPITAL has seen the performance of its funds plummet in recent months - The Independent
* Unions from the US, South Africa and Indonesia will converge on GROUP 4 SECURICOR's AGM in London this week to protest against the alleged use of workers' rights at the security giant
* TESCO is facing a 9 mln stg hike in the cost of carrier bags this year as oil prices rocket to new highs - The Independent
* The cigarette industry is calling for stricter limits to be reimposed on the amount of tobacco that smokers are legally allowed to bring into the UK - The Independent
* Industry faces the threat of shutdowns as wholesale gas prices soar - The Mail on Sunday
* PREMIER FOODS, whose brands range from Branston Pickle to Ambrosia rice pudding, has put its Typhoo tea business up for sale at up to 100 mln stg - The Mail on Sunday
* ITV's annual licence payments could fall by more than 100 mln stg this week, possibly triggering a takeover bid for the broadcaster - The Mail on Sunday
* The alarming spectre of a worldwide crash in house prices will be on the agenda at a top level meeting of regulators and central bankers in London - The Mail on Sunday
* SEVERN TRENT has launched an investigation into the departure of one of its top executives from his former job at CABLE & WIRELESS - The Mail on Sunday
* Another senior executive is leaving stockbroker CANACORD CAPITAL. Bob Cathery, head of European operations, will be the eight key staff member to quit in a row sparked by bonuses for London bosses Tim Hoare and Paul Reynolds - The Mail on Sunday
* Sir Martin Sorrell will tomorrow fly in the face of industry forecasts and paint an optimistic picture for the sector - The Sunday Express
* Former Asda chairman and chief executive Archie Norman has quashed shareholders' hopes that he might be the saviour to turn around Morrisons - The Sunday Express
* Homeowners are set for further gloom as house prices continue to fall, according to various sources - The Sunday Express
* DIXONS boss John Clare has admitted the future of the electrical chain will depend on how it performes over the crucial Christmas period - The Sunday Express
* TELEWEST is smoothing the route to a 5.9 bln stg merger with NTL by hiring a chief executive to oversee the flotation of its content business - The Sunday Express
*

SATURDAY PRESS COMMENT
The Weekend FT
THE LEX COLUMN comments on CENTRICA (Sir Roy Gardner may have left Manchester United football club, but he still faces a game of two halves as chief executive of Centrica); Baltic Freight Index (China is a black box. The true state of its economy is difficult to discern from official data, leaving forecasters to look for clues in related indicators. One of these is the Baltic Dry Index, a basket of prices paid for chartering dry cargo on the worlds most important trading routes) MORGAN STANLEY (You can imagine the Harvard Business Review case study in years to come: Morgan Stanley - how not to conduct a CEO search - While it is dangerous to prejudge an outcome and this one may yet turn round the very least one can say is that the process has had its flaws) - Spirit Makers (The sale of ALLIED DOMECQ has had its dramatic moments, although it was an anti-climax when CONSTELLATION BRANDS finally staggered off stage last week, leaving PERNOD RICARD to face the curtain. Competition authorities could provide a little more excitement, although the European Commission let it off rather lightly on Friday)
- Weekend share watch: ROLLS-ROYCE (concerns over the opacity of its accounts may limit how far its rating matches rivals), FIRST TECHNOLOGY (Only the bravest investors would dare take a punt), DELTA (the shares are trading on a PE for 2006 of about 12.7, lower than average for the chemicals sector)

The Daily Mail
Market Report; SHELL (growing speculation that Total of France is lining up a cash offer) - HHG (growing bid gossip) - INVESTMENT EXTRA: ANGLE (looks full
of long-term promise)

The Independent
Market Report; REGUS (talk that the office group could soon receive a 130 pence a share offer from a US private equity house, possible Blackstone), JAMES BEATTIE (talk that takeover offer from House of Fraser could value the group at up to 168 pence a share)

The Telegraph
Market Report; VOSS NET (speculation that the shell company could be close to revealing a new deal after recent talks over a possible acquisition were terminated) - QUESTOR COLUMN: DIXONS (Those looking for capital growth should wait for the share price to fall before putting any in their shopping bag), ALKANE ENERGY (Highly speculative, but worth a punt at 35-1/4 pence, CONNAUGHT (There is momentum behind the shares and they should have further to go), MAYBORN (It is even started to pay a dividend and an estimated full-year multiple of 13 is not expensive),

The Times
TEMPUS: Comments on the UK independent oil and gas sector

The Express
Market Report; O2 (talk of bid from Deutsche Telekom), OLD MUTUAL (talk that its proposed 3.2 bln stg takeover of Skandia could be overtaken by a possible break-up of the Swedish Group), WM MORRISON (speculation that former Asda boss Archie Norman was being lined up to revive its fortunes), SR PHARMA (hopes that the group could attract stakebuilding by major drugs company), CONNAUGHT (talk of bumper orders)

The Guardian
Market Report; WILink (speculation of private equity buyout of group)

SUNDAY PRESS COMMENT
The Business
THE ALCHEMIST: (some people find it natural to buy a stock that is rising. The "trend is your friend" so the saying goes, but I am by nature a contrarian and like to try to pick the exact moment a share has hit the bottom rather than join up to a bandwagon) - SMALL-CAP INVESTOR: (private investors have few opportunities to take advantage of the profits made through private equity investments in unquoted companies. One way is through DUNEDIN ENTERPRISE INVESTMENT TRUST, which specialises in backing buyouts of companies worth up to 50 mln stg. It has an excellent track record and has outperformed the FTSE Small Cap Index), WIN (News that the Crazy Frog has conquered the singles chart shows the huge influence of mobile phones and the growing demand for text, chat and ringtone services, which makes it an excellent time to invest in WIN (Wireless Information Network), provider of connectivity services to ringtone companies) - BENCHMARK: CHINA (Chinese businesses are continuing to show an interest in buying some of the most famous American firms), TATE & LYLE (has received plaudits over the last 12 months thanks to its diversification away from sugar and the development of its zero calorie sweetener Splenda. But its response to the latest European Union proposals to reduce subsidies paid to sugar producers in the face of criticism from the World Trade Organisation and pressure groups smacks of a company that does not understand how the world is changing), HEDGE FUNDS (Bailey Coates won't be the last hedge fund to liquidate itself this year. But don't expect the next ones to attract such alarmist headlines)

The Mail on Sunday
COMPANIES AND MARKETS: PARTYGAMING (Successful flotation could be a boon for other gambling businesses), REGENT INNS ( could return as early as this week with an improved offer for nightclubs operator URBIUM) - SECRET DEALINGS: GAMING CORPORATION (Executive chairman Jason Drummond, his brother Justin, who is chief executive, and non executive director Damion Greef last month bought 580,000 shares between them for up to 13-1/2 pence) - MIDAS: Half yearly review of Portfolio: ENTERTAINMENT RIGHTS (Hopes of cracking the US market), TULLOW OIL (likely to go higher with the oil price), ENNSTONE (Broker KBC Peel Hunt thinks the shares could hit 56 pence after recent takeover speculation), HOLIDAYBREAK (On course for profits of 33 mln stg, implying an undemanding price to earnings ratio of 14), BEDE (plans to double turnover this year and move into the black), BARCLAYS (failed to excite as bid hopes fade)

The Observer
THROG STREET: Richard Wachman comments on PRUDENTIAL and AVIVA (A city rumour that will not go away is that PRUDENTIAL and AVIVA will end up merging to create a British insurance giant that can take on continental powers such as AXA of France, ALLIANZ of Germany and GENERALI of Italy), CARPHONE WAREHOUSE (Europe's largest independent mobile-phone retailer Deputy chairman David Ross has followed chief executive Charles Dunstone by selling millions of shares, netting a cool 10 mln stg. Do they know something), NTL and TELEWEST (The long-awaited merger between cable television companies NTL and TELEWEST will be announced next month, but has anyone stopped to wonder what the Office of Fair Trading will think)

The Sunday Telegraph
EQUITY VIEW - BLUE CHIP VALUES: KESA ELECTRICALS (In the current environment the company's outlook is far from electrifying. Avoid); LOOK WHO'S TRADING (Gerald Kaye, the development director and Mike Brown, the investment director both exercised and sold options, making 908,811 and 974,899 respectively. Looks like a good time to follow suit; SMALL CAP COMMENT: HIGHLAND GOLD (Sell), ML LABORATORIES (Buy), NEXT FIFTEEN COMMUNICATIONS (Buy), FUTURAGENE (Punters happy with the risks of the biotechnology sector should take a look) -

The Sunday Times
JUDGMENT DAY: SHOULD YOU BUY SHARES IN BPB Andy Brough, fund manager at Schroders, says Sell, but Tim Steer, fund manager at New Star, says BPB is a cheap growth stock on 12 times earnings, Buy - INSIDE THE CITY: SOMERFIELD (shareholders should bank their profits and leave the hedge fund whiz kids to gamble on whether a bid will happen), STAGECOACH (time to take profits); MARKET MOLE: GKN (Andrew Green bought 612,000 shares to take the GAM UK Diversified fund's stake to 1.5 mln. Bob Morris picked up 370,000 shares for the HSBC UK Income & Growth fund in June to take its holding to 2.2 mln stg)

Good morning traders!

The big news this morning is that New York's main oil contract, light sweet crude for delivery in August, was trading at $60.45 a barrel in Asia, up 61 cents from the all-time closing high of $59.84 in the United States on Friday.

This had a knock on effect on the Asian bourses with the Nikkei down 133.32 points at 11,403.71 at the noon break, its biggest drop since April 18th. In early trade in Hong Kong, the Hang Seng was down 45.61 points at 14,184.68.

Back soon with UK breaking news.

G.

PS Thanks to Supermum for her weekly chart and Digger for the comprehensive news......

ITV UPGRADED TO 'BUY' VS 'HOLD' AT DEUTSCHE BANK

CENTRICA UPGRADED TO 'OVERWEIGHT' VS 'EQUAL-WEIGHT' AT LEHMAN BROTHERS

Centrica upgraded to 'overweight' vs 'equal-weight' at Lehman

Northgate Information Solutions. Baird Equities forecasts year to April pretax profit before exceptionals and goodwill 26.3 mln stg vs 9.9 mln.

EASYJET UPGRADED TO 'OVERWEIGHT' VS 'UNDERWEIGHT' AT MORGAN STANLEY

Outlook http://www.moneyam.com/action/news/showArticle?id=844393

AFX UK at a glance share guide - 3

MARKETS
Tokyo: Nikkei midday 11,403.71 down 133.32
Hang Seng midday 14,165.28 down 65.01

BREAKING NEWS - MONDAY
* Rise in bankruptcies feared; Bank of England warns on corporate insolvencies; slowdown in profits growth expected; derivatives seen as a problem area - FT
* Rising energy prices outstrip capacity of users to absorb them in consumer charges - FT
* Hardliner in Iran has oil market spooked; new president's threats and unrest in the Gulf kindle fresh price warnings - Telegraph
* Wal-Mart chief reveals expansion plans in central and eastern Europe, a development likely to send shivers down the backs of European retailers such as Metro, TESCO and Auchen - FT
* Travellers could soon have to pay a 1 stg levy on flights and holidays to protect them from the collapse of airlines and tour operators - FT
* Colin Smith, new director of engineering and technology at ROLLS-ROYCE, says the government is dragging its feet on a plan to increase public spending on aerospace research and development - FT
* ITV may abandon its licences for public service broadcasting if industry regulators fail to offer cuts in licence fees - FT
* House prices have fallen every month for a year; the value of the average home dipped by another 0.2 pct this month, says Hometrack - Independent
* Archie Norman, former head of Asda, denies he is seeking a role at WILLIAM MORRISON - Independent
* AMEC tells government that it will bid for British Nuclear Group, the clean-up arm of British Nuclear Fuels, if it is put up for sale - Times

PRESS COMMENT
THE LEX COLUMN comments on PARTYGAMING (having a large pool of players already could give PartyGaming an edge; but there are several snags), US newspapers, Telecom regulation
Independent
Small Talk: Michael Jivkov comments on EASIER scandal (Fulton bid could finally end the saga over Easier), BANGO (to expand overseas after debut on AIM)
Express
THE INVESTMENT STRATEGIST: Hilary Cook, director of investment strategy at Barclays Stockbrokers recommends switching BT shares into VODAFONE

PSN http://www.moneyam.com/action/news/showArticle?id=844640

Brokers recommendations
http://www.moneyam.com/action/news/showArticle?id=844999

LONDON (AFX) - World oil prices surged to fresh record levels, approaching 61 usd a barrel in New York on heightened supply worries, and amid an election victory for the ultra-conservatives in OPEC heavyweight Iran.

New York's main contract, light sweet crude for delivery in August, shot up 76 cents to 60.60 usd a barrel in electronic deals today.

It had reached a historic high of 60.64 usd earlier today -- the highest level since it was first traded in 1983 -- after reaching 60.47 usd overnight.

In London, the price of Brent North Sea crude oil for delivery in August jumped 74 cents to 59.10 usd per barrel after earlier hitting 59.21 usd -- a new historic high.

Persistent supply concerns could push prices up even further, analysts said.

'People are getting more and more concerned about the second half. OPEC is going to be very streched in the fourth quarter to meet demand,' said Investec analyst Bruce Evers.

'I think we could see 65 dollars, 70 dollars quite quickly.'

Prices are reaching fresh records amid continued fears that refineries will struggle to turn enough crude oil into heating fuel to meet fourth-quarter demand amid the onset of the northern hemisphere winter.

Meanwhile, traders were keeping an eye on developments in Iran, the second biggest member of OPEC, after news yesterday that the ultra-conservative Tehran mayor, Mahmood Ahmadinejad was elected president.