The Spanish government called for investor calm on Thursday as shares in Bankia tumbled nearly 30% and Moody’s conducted a sweeping downgrade of other lenders, reports the FT. The deputy finance minister Fernando Jiménez Latorre said it was not true there was a deposit flight. Moody’s downgraded 16 Spanish banks, with three-notch cuts for the “Big Three” lenders – Santander, BBVA and La Caixa. Fitch also warned that it might place all eurozone sovereign ratings on negative watch following a re-run of Greece’s parliamentary election in June. And the government in Cyprus announced it would underwrite a €1.8bn capital raising by Popular Bank of Cyprus, a move analysts said could force the tiny island nation to seek bailout assistance from Brussels.
Facebook shares priced at the top end of an increased range of $34 – $38 each, raising $16bn and making it the biggest tech IPO ever, says Bloomberg. Some experts predict the strong IPO pricing will tamp down any first day “pop”, reports the FT.
The MSCI Asia Pacific index fell 2.5% on Friday, erasing this year’s gains, reports Bloomberg.
Greek voters could return to New Democracy in enough numbers for it to form a government with PASOK, according to the first poll since talks to form government collapsed, reports Reuters. Syriza leader Alex Tsipras said he sees little chance Europe will cut off funding to the country but that if it does, Athens will stop paying its debts, the WSJ reports.
Hewlett-Packard plans to cut its workforce by 25,000 to 30,000 employees, the WSJ says, citing people familiar with the matter. This would equate to about 18% of the company’s workforce and would be the biggest ever job cuts at HP.
JPMorgan’s CIO unit has built up positions totalling more than $100bn in asset-backed securities and structured products, reports the FT. The bank has said the CIO’s derivative activities were intended primarily to help balance risks on its overall balance sheet, but the revelation that it has built up other large, risky positions is likely to raise further questions about the CIO’s remit. Meanwhile, Jamie Dimon has agreed to testify before Congress on the bank’s recent trading loss, says Reuters.
Investors on Thursday voted down the pay report of Cairn Energy and staged substantial rebellions against remuneration at Prudential, Cookson and UTV Media, reports the FT.
COMMENT AND CURIOS
– A Grexit will likely shatter faith in the eurozone forever, says Martin Wolf. (Financial Times)
– Fewer than a quarter 1,500 executives, surveyed between April 13 and May 8, said their companies had contingency plans for a eurozone break-up. (Financial Times)
– The G8 summit that could see Angela Merkel isolated. (Financial Times)
– Sony vs cinemas on 3D glasses. (Bloomberg)
– Facebook: Google or Zynga? (NYT Dealbook)
– Tech start-ups look more hyped than in the late 1990s on one metric. (Wall Street Journal)
OVERNIGHT MARKETS: DOWN
Asian markets were 2.5% lower on Friday, erasing year-to-date gains from the MSCI Asia-Pacific index. [More]