From the FT’s Lombard column.
Simon “Scissorhands” Treacher has added to the list of clumsy ways in which financiers can fall foul of the Financial Services Authority. BlueBay Asset Management’s experienced emerging markets fund manager cut and pasted erroneous figures into his monthly valuations, then misled the UK regulator about what he’d done. Read more
Iberian stock markets look to have seen a ghost on Wednesday afternoon:
In early 2007 Bloomberg published this little story:
Boxing Bankers Pummel Each Other for Fun at London Fight Club Read more
Just a day after its offer for the British chocolatier was declared unconditional, Kraft is looking to refinance the £7.1bn bridge loan it took on to fund the £11.7bn cash-and-scrip bid.
The US food company is planning a “jumbo” four-part debt sale, at a minimum of $1.0bn per tranche. The offering is expected to include 3.25-year, 6-year, 10-year and 30-year senior unsecured notes and will be priced either later today or tomorrow morning. Read more
Ambac, the bond insurer that warned in November it was rapidly running out of cash, has brought in Blackstone to advise on a restructuring strategy, according to Reuters.
The news agency, citing sources, said the bond insurer is working on a strategy to address its “liquidity issues”. Both Ambac and Blackstone declined to comment. Read more
The US Securities and Exchange Commission has been roundly and rightly criticised for its failure to investigate Bernard Madoff’s fund-turned-Ponzi; a story in the Washington Times on Tuesday suggested the regulator’s staff may have spent more time keeping an eye on other, erm, assets.
From the Washington Times: Read more
Courtesy of Moody’s, a reminder of the financial crisis’ impact on emerging economies:
Blowing emerging bubbles – FT Alphaville
The European Commission’s position on Greece may have been the key focus of market attention on Wednesday, but there was another country that also managed to draw some criticism from Brussels.
That country was Poland: Read more
The Spanish bank surprised markets last week with an earnings miss, causing its shares to fall about 6 per cent on the day. Read more
On FT Alphaville Wednesday morning,
- Central bank DeathMatch!
The European Commission’s just-released review of Greece’s Stability Programme may have approved the country’s plan to cut its deficit, but it did not do so in few words:
Live markets commentary from FT.com
The European Commission has just published its review of Greece’s Stability Programme.
Reuters headlines are below: Read more
For a prime example of investor chutzpah, look no further than China Investment Corp, the country’s mega sovereign wealth fund, which has just done a deal with Apax to invest €685m (£599m) in the UK private equity group’s €11.2bn buy-out fund.
Even after heavy domestic criticism – and some international derision – for spending $3bn two years ago to acquire 10 per cent of Blackstone just before shares in the US buy-out group tanked – CIC has come roaring back with a big appetite for big deals. This after sitting on the sidelines for most of last year with about 90 per cent of its available funds in cash. Read more
By Matthew Kennard.
To mangle Karl Marx: A spectre is haunting Indaba – the spectre of China. I know I keep banging on it but its everywhere. It’s strange I haven’t seen too many Chinese operators – probably because while the rest of us are sinking drinks on the party circuit they are sitting in their hotels colouring different African countries in pink. Read more
Back in December, Thai prime minister Abhisit Vejjajiva told attendees at a conference in Bangkok that the country’s central bank has been considering setting up a sovereign wealth fund.
According to a report in AsianInvestor, PM Vejjajiva believed a sovereign wealth fund would allow the Bank of Thailand to have “more flexible management of surplus reserves”: Read more
These little PIIGS eurozone countries issued a lot of short-term debt:
After his recent and widely disseminated quip on CNBC that “Obama makes Bush look like a genius”, Marc Faber is now offering some insights into how the US can get out of its “debt trap”.
In his latest GloomBoomDoom market commentary, the irrepressible pundit concludes that the US has basically two choices: default on obligations or massively monetize US debts and reduce the debt through inflation. Read more
Elsewhere on Wednesday,
- “The bear isn’t there yet.” Read more
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Sustaining the world’s convalescence
We have a globalised economy, but politics remains local. In times of crisis, the pressure to look after the former dominates the latter. But now we face a different task: that of convalescence and the associated return to politics as usual. As the global balance of power continues to shift year by year, the challenge must be met. If it is not, the global economy and global co-operation might yet founder. This is my principal lesson from Davos. Read more
Breaking pre-market news on Wednesday,
- Autonomy full-year adjusted EPS rises 42 per cent – statement. Read more
Asian stocks rose and commodity prices advanced for a second day, reports Bloomberg, after a report showed US pending home sales increased and spurring confidence in the recovery of the world’s biggest economy.
Nikkei 225 up +39.23 (+0.38%) at 10,410
Topix up +4.38 (+0.48%) at 917.20
Hang Seng up +261.16 (+1.29%) at 20,533 Read more
Paul Volcker, former Federal Reserve chairman, made a direct pitch to Congress on Tuesday to prevent his proposed ban on banks’ proprietary trading from being diluted or scrapped by sceptical lawmakers. No member of the Senate banking committee voiced outright opposition to the plan – announced by Barack Obama last month – but both Democrats and Republicans criticised the manner and lack of detail of the announcement.
The European Commission said on Tuesday it would endorse Greece’s plan to rein in its public sector deficit, which last year reached almost 13% of GDP. But the EU’s executive arm warned Athens it had not escaped its fiscal problems. José Manuel Barroso, Commission president, said Greece’s proposal was “feasible but subject to risks”. Athens is next week due to unveil detailed measures on incomes policy and a new tax system aimed at increasing revenues by 10% a year.
Istithmar, the investment arm of the troubled Dubai World conglomerate, has put Inchcape Shipping Services, the UK-based port and shipping agent, up for sale for $600m-$700m, in a deal that has drawn interest from buy-out groups including Advent International, Cinven, Charterhouse, Montagu, TPG and KKR. Istithmar bought ISS for $285m at the start of its buying spree from 2006 and is now selling assets to help Dubai World restructure its $22bn of debt.
China Investment Corp has invested €685m (£599m) into Apax Partners’ €11.2bn fund in a landmark deal that could encourage other buy-out groups to solicit investments from the Chinese sovereign wealth fund. Apax gained approval from the UK’s FSA watchdog this week to complete the deal, in which CIC has also acquired a 2.3% stake in the management company of one of Europe’s biggest private equity funds.
The first bond issue by English football club Manchester United has become one of the market’s worst performers this year barely two weeks after its launch. While the club secured the £500m funding it needs to refinance its bank debt, the paper losses suffered by investors could affect its ability to return to bond markets, after the bid price of its £250m of sterling-denominated bonds tumbled to just 93% of their face value.
The identity of the key co-operating witness in the Galleon insider-trading case was disclosed on Tuesday with the unsealing of a plea agreement struck in December between federal prosecutors and David Slaine, a former employee of hedge fund Chelsey Capital. Slaine, 50, ico-operated with the probe of Galleon and wore a secret recording device to capture conversations with at least one defendant in the case, said people close to the case. He pleaded guilty to conspiracy and securities fraud charges that helped generate $3m in profits for his hedge fund.
Bank of New York Mellon on Tuesday announced it would pay $2.31bn to acquire the back-office operations of PNC Financial Services Group, fuelling expectations that more financial firms will shed businesses to shore up capital and repay bail-out funds. The deal will allow PNC to exit a non-core business while helping to repay $7.6bn in government Tarp funds. PNC also said it would sell $3bn of common stock and up to $2bn of senior notes to repay federal aid.