Posts from Thursday Jul 16 2009

Big oil’s dividend conundrum

According to Cazenove’s Darren Winder and Robert Griffiths, UK companies are expected to pay £55bn in dividends this year with the biggest contribution (£14.6bn, or 26 per cent) coming from the oil & gas sector.

10446.jpg Read more

CIT death plunge

CIT stock is trading again after being suspended over the course of what now appear to be failed government bailout talks.

Here’s how shares in the beleaguered corporate-lender have opened: Read more

Silver Lake swooping for Tandberg?

Norway’s Tandberg has been quite a-stir of late, with rumours swirling around the market that someone might be lining up an offer for the world’s biggest video-conferencing equipment producer.

Now, with Tandberg reporting second quarter earnings later on Thursday, chief executive Fredrik Halvorsen will have the chance to clear things up once and for all. Read more

No green shoots in structured finance

That’s according to ratings agency Fitch, who have just revised their outlook for European structured finance – ABS, CMBS, CDOs and the like.

Here’s the press releaseRead more

Broking, trading, by royal approval

News in our inbox on Thursday that the Queen has approved a Royal Charter for the Securities & Investment Institute. That, if  you don’t know, is the body that sets the exams for FSA registration.

So, other than leading to a dead posh qualification for everyone in the city from the soon-to-be-called ‘Chartered Institute for Securities & Investments’, if things do financially implode due to lax understanding and implementation of FSA rules et cetera, at least we will have the Queen to blame. Read more

Lunch Wrap

On FT Alphaville Thursday morning,

– JP Morgan reports Q2 net income of $2.7bn. Read more

JP Morgan reports Q2 net income of $2.7bn, EPS $.28

Analysts had expected net income of $1.59bn or 5 cents a share, according to Bloomberg estimates.

And yes, like Goldman Sachs record-breaking second quarter, JP Morgan also had record revenue — $27.7bn to be exact. Read more

Vampire squid, illustrated edition

Matt Taibbi’s description of Goldman Sachs being ” a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” seems to have really captured the world’s attention (at least if this Google news search is anything to go by).

Here at FT Alphaville we have pondered why that might be with the following selection of handpicked illustrations. Read more

Markets live transcript 16 Jul 2009

Live markets commentary from 

Guess the bust

No, not that kind of bust. The financial kind.

Goldman Sachs have issued a note examining previous financial busts and what they had in common. We’ve taken some of their charts and redacted them below. First one to guess which financial bust each of the charts is or is related to (in the comments section below) wins. Click to enlarge. Read more

Calamari Barclays style

It is probably too early to start thinking of Barclays as a baby “vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” – although if Robert E Diamond, Jnr gets his way it won’t be long.

However, an increasing number of people believe BarCap, and by extension Barclays, will do a Goldman and deliver dazzling half-year numbers on August 3rd. After all, BarCap now has a commanding position in the US government debt market and a decent presence in equity underwriting thanks to their Lehman acquisition. These two areas were big profit generators for the giant vampire squid Goldman in Q2. Read more

China: Too much of a good thing?

Official data on Thursday showed China’s economy accelerated by 7.9 per cent in the second quarter, far ahead of analysts’ consensus estimates. But just how solid an indicator is that for the global economy, given most of the surge was driven by the government’s extremely loose fiscal policy?

RBC Capital Markets analysts are among those eyeing the potential risks of the record state-bank lending that took place in the last six months (our emphasis): Read more

Calpers vs Credit Ratings

The California Public Employees’ Retirement System, Calpers, has launched a law suit against the ratings agencies Moody’s, Standard & Poor’s and Fitch.

Zero Hedge has a copy of the complaint, which not only contains a helpful summary of what’s at issue as well as some interesting details, but a surprisingly readable and comprehensive history of SIVs and the ratings agencies in general. Read more

Bolton says ♥ short selling monsters

That’s Anthony Bolton, of course.

Writing in Thursday’s FT, the nearest thing the UK has to a Warren Buffett-style investment guru, says we should learn to appreciate the activities of those fine upstanding citizens of W1: Read more

Things do not always go Goldman Sachs’ way

The anti-Goldman website will be allowed to live.

The bank and proprietor, Mike Morgan, had been engaged in a legal scuffle, centring around copyright issues, since April. Now, however, the site will be permitted to continue — albeit with one giant disclaimer to clarify that it is not in anyway affiliated with the actual IB. Read more

Further reading

Elsewhere on Thursday,

– Another market crash in the making? Read more

Pink picks

Comment, analysis and other offerings from Thursday’s FT,

Bernie McSherry: Investors have to be sure statistics do not lie
The senior vice-president of strategic initiatives at Cuttone & Company writes: In an unsettling development that may speak volumes about the true level of confidence underlying the “green shoots” economic recovery story, many professional traders have begun to doubt the veracity of the US government’s economic reports. Read more

Snap news

Breaking pre-market news on Thursday,

– Sir Richard Broadbent to become deputy chairman of Barclays, Reuben Jeffery III to become non-exec director  — statementRead more

Plan to unveil City high-flyers’ pay

The pay and bonuses of hundreds of traders and financiers will have to be publicly declared under a UK Treasury-backed plan to curb excessive and risky remuneration. Alistair Darling, chancellor, wants banks to be more transparent about what they pay their top earners to expose them to more scrutiny from the media, public and shareholders. An interim report by David Walker, former chairman of Morgan Stanley International, will propose on Thursday that pay, bonuses and pension details should be revealed for all staff earning more than the average executive salary in the boardroom. This could affect between 200 and 300 people most big banks, although the report proposes that the anonymity of individuals be preserved by listing remuneration in bands.

CIT faces bankruptcy filing

The US mid-market lender CIT faced the prospect of a bankruptcy filing as hopes of a government-led rescue plan were dashed. “There is no appreciable likelihood of additional government support being provided over the near term,” CIT said in a statement late on Wednesday. “The company’s board of directors and management, in consultation with its advisers, are evaluating alternatives.” CIT has battled a liquidity crisis and faces $1bn of debt maturing next month, but it is locked out of the wholesale funding markets.

Citi close to FDIC deal

Citigroup is close to an agreement with the Federal Deposit Insurance Corporation, one of its main regulators, that will increase scrutiny of the US bank and force it to fix financial, managerial and governance issues. The proposed agreement requires, among other things, that Citi strengthens its board, better manages expenses and provides more information to regulators on its capital and liquidity.

China’s forex reserves pass $2,000bn

Beijing’s foreign reserve holdings have surged through the $2,000 billion mark, as money pours back into China to take advantage of faster economic growth and rapidly inflating asset prices. The flow of funds threatens to renew pressure for a revaluation of the renminbi at a time when the government and domestic business are focused on financial stability. An economist at a state think-tank said Beijing was caught in a squeeze similar to the one that bedevilled policymakers earlier this century, with a flood of hot money trying to force the government’s hand on the currency. Meanwhile, China’s economic growth accelerated significantly in the second quarter, with GDP expanding by 7.9 per cent, ahead of analysts’ consensus estimates.

Rio accused of widespread bribery

China’s “whole steel industry has been bribed” by Rio Tinto, suggested a lead article in the China Daily newspaper on Wednesday that marks a sharp escalation in a dispute rocking the global steel and iron ore industries. The state-owned China Daily quoted an unnamed “industry insider” claiming Rio bribed each of the 16 Chinese steel companies involved in this year’s negotiations to set the benchmark iron ore price.

Spielberg close to raising $825m

Steven Spielberg is on the verge of completing an $825m financing for his new film venture, nine months after he began looking for capital in the worst funding market in Hollywood’s recent history. The lauded director of Jaws, E.T. and War of the Worlds joined forces last year with Anil Ambani, the Indian billionaire, whose Reliance group has pledged $325m in funding for the new company. However, the deal – a high-profile statement of Reliance’s global ambitions – was contingent on Mr Spielberg and his production partner, Stacey Snider, raising an equivalent sum in debt. The two have been working on a syndicated financing with JPMorgan for nine months and a final sign-off on the deal is now imminent.

Peace threatens to break out at Porsche

Porsche’s family owners were poised to settle their feud over a rescue of the ailing German sports car maker with a compromise deal that would wipe out almost all its debt. The plan includes a sale of half the sports car business for as much as €4bn to Volkswagen, a €5bn capital raising and the sale of options that can be converted into VW shares. The Qatar Investment Authority and the two families, the Porsche and Piëch clans, could inject cash and assets to strengthen the balance sheet.

Takeover Panel’s finances squeezed

The operating income of the UK’s Takeover Panel have fallen by more than a quarter and the head of its executive wing has warned it is likely to incur a deficit this year. The Panel, which regulates takeover bids and other M&A deals involving companies registered or based in the U.K., said in its annual report published on Wednesday that, compared to the year before, operating income fell 27% to £10.7m.

A Tweak?

Twitter on Wednesday fell foul of a potential security weakness that lies at the heart of “cloud”, or internet-based, software applications, leading to the leak of a raft of internal documents from the internet start-up. The leaked documents included a forecast of Twitter’s projected annual revenues in 2013. It was one of more than 300 internal Twitter documents that TechCrunch, the online news site, said it had been sent by an anonymous hacker. The documents were taken from an account that a Twitter employee held at Google Apps, a online service that replicates many of the features of standard PC software but relies on users storing their data on Google’s own servers.