January, 2009
Xstrata, Cookson set for rights issues
Shares in Xstrata tumbled 9% Wednesday as the Swiss mining group prepared to launch a large equity fundraising which could be as much as $5bn and come as early as Thursday. UK companies have been lining up to tap shareholders for cash over the past week to bolster balance sheets strained by the downturn and to offset debt markets drying up.
Yea steps down as 3i chief
Philip Yea, chief executive of 3i, parted ways with Europe’s biggest listed private equity group on Wednesday after its shares fell by almost three-quarters in a year. The surprise move came as the only private equity group in the FTSE 100 said it had written down the value of its 50 biggest investments by 21%,
BofA bonus deferral anger
Bank of America is planning to defer bonus payments to investment banking staff this year – a move certain to inflame tensions between its employees and those of newly acquired Merrill Lynch. Andrew Cuomo,
Hedge funds offers to price in gold
A hedge fund has begun offering investors the chance to have their investment denominated in gold, amid concerns that governments are debasing their currencies by printing money. Osmium Capital Management,
Legg Mason posts $1.5bn loss
Legg Mason said Wednesday it had suffered its biggest loss in at least 25 years after writing down the value of its private client and hedge fund businesses by $1.2bn. The US money manager lost $1.5bn in the three months to December,
Wells Fargo hurt by Madoff fallout
Wells Fargo emerged as a surprise victim of the Bernard Madoff scandal on Wednesday, revealing a $294m loss caused by clients who defaulted on loans from the San Francisco-based bank after losing money in the alleged fraud.
UBS cuts bonus pool
UBS, the European bank with the highest losses from the credit crisis, cut its bonus pool for 2008 by more than 80%, reports Bloomberg. Variable compensation for the bank’s employees excluding brokers in the US is being reduced,
Lloyds to review offers for life business
Lloyds Banking Group is gearing up to consider offers for some of its life assurance assets as it starts to integrate HBOS, the UK’s biggest mortgage lender. Lloyds, which with the acquisition of HBOS has become the UK’s biggest life assurer,
Corus to sell stake in UK plant
Corus is nearing agreement to sell a majority stake in a large UK steel plant on Teesside for about $450m, securing about 2,000 jobs at the site. The deal should give the Anglo-Dutch steelmaker some breathing space as it implements a difficult restructuring plan.
Rio Tinto: Equity-raising an option
Rio Tinto has admitted it will consider selling equity to help repay $10bn of debt, in response to reports that it is gauging shareholder backing for a A$6bn (£2.8bn) rights issue. The mining group’s statement on Wednesday,
Anglogold sells Australian stake
Newmont Mining, the world’s second-biggest gold miner, is paying $1bn to buy out Anglogold Ashanti’s minority share in what is set to become Australia’s biggest gold mine. The transaction will give Colorado-based Newmont 100% control of Boddington Gold Mine in Western Australia.
Starbucks hastens global retreat
Starbucks, the world’s biggest coffee shop chain, is to close more stores, sell a newly delivered $45m corporate jet and slash jobs, headquarters staff and worker benefits as it battles a slump in sales that has tracked the broader collapse in global discretionary spending.
Overnight markets: Optimistic
Asian stocks climbed on Thursday led by Japan and Hong Kong after US stocks rose overnight, extending a global rally as President Barack Obama prepared to set up a so-called bad bank to absorb toxic investments,
Xstrata prepares $5bn cash call
Xstrata, the Anglo-Swiss mining group, is set to launch a large equity fund-raising.
Its shares fell 9 per cent to 623p on Wednesday amid talk that it would be the latest group to turn to equity markets to raise funds.
Fed holds, says expects to continue policy of “exceptionally low” rates
The Federal Reserve on Wednesday voted to leave the benchmark US interest rate unchanged in a 0 to 0.25 per cent range, as widely expected by the market.
From the statement (emphasis ours):
The Committee continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
Las cuentas, claras, y el chocolate, espeso
Roughly translated: keep the accounts clear and the chocolate thick.
From Creditflux via Alea.
Spanish website Cotizalia reports that Spain’s banks and cajas are negotiating on a one-to-one basis with the Bank of Spain to “fine-tune”
European capacity collapse: the preview
French and Italian quarterly production utilisation figures are out and they’re not pretty.
First, JP Morgan’s David Mackie reminds us why they are important:
Capacity utilization plays a critical role in our thinking about the Euro area.
CDS update: Indices tighten in broad-based rally
This CDS report was written by Markit’s Gavan Nolan
The rally continued apace today, with the main indices tightening to levels last seen in mid-November. The Markit iTraxx Europe index threatened to go below 150bp for the first time this year in a broad-based rally that matched stock markets.
Don’t like your rating? Fire your agency!
That would seem to be the rationale behind the decision by Investcorp Bank to terminate its relationship with S&P.
Per this Dow Jones story (H/T James Mackintosh):
Bahrain and London-listed Investcorp Bank B.S.C has terminated its public rating contract with Standard & Poor’s after an “unjustified”
Will the Fed buy longer-term Treasuries?
Let’s face it, the Fed is not going to be cutting rates. Buying longer-term Treasuries is pretty much the only policy action that remains and it’s not as if it hasn’t already been positioned as a viable option.
First impressions from the Davos blogosphere
Yes, the Davos blogging fest World Economic Forum has begun. Here are the “first impressions” from some of the great and good that have taken to posting their daily thoughts from the snowy-set event .
Wall Street accuracy datapoint du jour
Via Bloomberg (emphasis our own):
One of Wall Street’s biggest bears is leaving Morgan Stanley after a year and a half on the job.
Abhijit Chakrabortti resigned yesterday as the New York- based bank’s chief global and U.S.
Bankers’ greatest fear
…is unemployment apparently (and not even their own).
From the Wall Street Journal today:
Despite all the pain in the financial sector, bank executives’ biggest fear has yet to materialize. Now,
‘Banks well capitalised’
So says, err, Citigroup CEO Vikram Pandit.
From Deal Journal’s live-blog of Pandit’s investor day speech yesterday.
12:53: Regulators believe that banks are well-capitalized. Pandit dismissed TCE,
What else pays as well as banking?
In a bid to help out the cash-strapped mistresses of the universe referenced here we thought this list of alternative high-paying careers might be worth publishing (HT to eFinancialCareers who just sent out the memo in its latest subscriber update).
Lunch Wrap
On FT Alphaville Wednesday morning,
- El $600m City fraude.
- Burned Barclays shorts, where? Who?
- Oil speculators debate, revisited.
- Lloyds Banking Group: The defence.
- The curious case of Japan’s CDS debate.
CDS Report: Car makers lead credit markets tighter
European car makers were the main outperformers in credit markets on Wednesday morning, buoyed by news of more government bailouts. On Tuesday, the UK joined France and Germany as the latest EU member to announce government aid for the auto industry.
Markets live transcript 28 Jan 2009
Markets live chat transcript for the chat ending at 12:08 on 28 Jan 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder, FT (BE) NH:Good morning and welcome to Markets Live
El $600m City fraude
From Agence France Presse:
MADRID (AFP)–Spanish police said Wednesday they had arrested six people suspected of involvement in fraud totaling $600 million on the London stock market.
The main suspect in the fraud,
Burned Barc shorts: who?
So the Paulson fund closed out its short position in RBS on Monday. Quite a nice little earner it turned out to be too – netting £270m. Did he exit the market at just the right time?
On Tuesday, ingrates at the Treasury Select Committee berated a panel of bemused hedgies on their shorting activities.