February, 2009
In Japan, an heroic collapse
One rare colourful spot in Japan’s ongoing tale of deepening gloom and doom came on Monday, emerging from the rubble of the latest corporate collapse.
SFCG, a Japanese lender whose creditors include Citigroup,
A Queen-sized deal at 3I
Michael Queen is wasting no time in addressing market concerns about debt levels at 3i, Europe’s largest listed private equity company.
Fresh from selling a £60m stake in its infrastructure fund, Mr Queen has now launched a bid for another 3i spin-off – its Quoted Private Equity fund.
US U-turn on tangible common equity
Here is your bitter-sweet good news of the morning, from the Wall Street Journal (HT Rolfe Winkler):
Citigroup Inc. is in talks with federal officials that could result in the U.S. government substantially expanding its ownership of the struggling bank,
Further reading
Elsewhere on Monday,
- Humpty Dumpty markets.
- What do Barclays, Premier Foods and Rio Tinto have in common?
- Rahmbo revealed.
- How to put sex into your stimulus plan.
- Travelling rough with Citi.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Wolfgang Munchau: The Eastern crisis that could wreck the eurozone
In Hungary, almost every mortgage is a foreign currency mortgage, mostly denominated in Swiss francs.
Snap news
The latest on Monday,
- RBS to restructure and create non-core unit — Reuters.
- ICAP joined by JPMorgan, Deutsche Bank in bid for LCH.Clearnet – Bloomberg.
- Corporate: Albermarle & Bond pawn book up 18 per cent at half-year,
US eyes larger stake in Citi
Citigroup is pressing for a new capital injection that would raise the US government’s stake in the troubled bank to as much as 40% but stop short of outright nationalisation. The talks come after Citi’s shares fell last week to below $2 on nationalisation fears.
EU leaders turn to IMF
European leaders called Sunday for a doubling of the IMF’s resources, to $500bn, to tackle escalating problems in eastern Europe, reports the NYT. In a statement clearly aimed at hedge funds and other private pools of capital,
Asia agrees $120bn currency pool
Asian nations will form a $120bn pool of forex reserves that can be used by countries to defend their currencies in an expansion of efforts to battle fallout from the global financial crisis, reports Bloomberg.
Swiss warn US on bank secrecy
Switzerland’s finance minister has accused US authorities of “shock” tactics to compel holders of undeclared UBS accounts to come forward, but warned that court action to discover the names of thousands of clients would not succeed.
RBS to slash balance sheet
Royal Bank of Scotland will this week unveil plans to shrink its balance sheet by up to 25% over three to five years as Stephen Hester, chief executive, sets out a strategy to return the state-controlled bank to the private sector as a smaller retail and commercial bank focused on the UK and US,
RBS, Lloyds agree to UK scheme
RBS will this week become the first bank to sign up to the UK government’s proposed asset protection scheme, which will cap the bank’s future losses on loans worth £200bn-£250bn. Lloyds Banking Group,
Fears rise on Russian foreign debt
Western bankers are increasingly anxious about Russian companies’ ability to repay $500bn in foreign corporate debt after the government said this month it was suspending a $50bn bail-out programme due to dwindling reserves.
Hands buys out investors
Guy Hands has bought three cash-strapped investors out of their holdings in his Terra Firma private equity fund at a heavily discounted price that underlines concerns about its indebted investments, notably music group EMI.
Cerberus to close HK office
Cerberus, the US buyout firm, is in advanced discussions to close its Hong Kong office in the latest sign of industry giants scrambling to reduce costs amid the global economic slowdown. Cerberus’s move comes less than two years after it opened the Hong Kong office in expectation of a steady rise in China-related business.
Northern Rock to launch drive
Northern Rock is to embark on a £14bn mortgage sales drive to resuscitate Britain’s sluggish housing market, fuelled by a hefty injection of fresh government funding for the state-owned lender to be announced Monday.
UAE to lend Dubai up to $10bn
The UAE is to lend Dubai $10bn to ease the emirate’s debt repayment schedule in an effort to rescue the struggling economy. The UAE central bank subscribed to half a $20bn five-year bond programme launched by the Dubai government,
De Beers mothballs diamond mines
The world’s biggest and most valuable diamond mines have been mothballed since the start of the year when De Beers put its Botswana production on hold as sales of the precious stones slumped. The mines,
Barton to head McKinsey
McKinsey & Co, the management consultancy, will announce on Monday that Dominic Barton, its Shanghai-based Asia head, has been chosen by his peers to take over as managing director. McKinsey’s 400 senior partners elected Barton,
Weekend catch-up
In case you missed these stories:
- Kirin sets sights on 49% stake in San Miguel
Kirin on Friday unveiled plans to acquire up to 49% of San Miguel Brewery in a deal that highlights the Japanese beer company’s overseas ambitions.
Overnight markets: Weak start
Asian stocks were mixed on Monday, although technology and finance companies rose largely on speculation that the US government will raise its stake in Citigroup to ease the global financial crisis. Futures on the US S&P500 Index rallied 1.2% following the Citi news,
The Weekender
On FT Alphaville this week,
- We bring you the ‘Stanford affair’
- The Eastern Europe blowup, and domino theory
- China hates you, and hates you some more
- Hiring American
- Trouble in Tokyo
- An RBS bonus bonanza
- Oh yeah,
[The Stanford Series] Eastern Caribbean Central Bank “takes control” of the Bank of Antigua
The Eastern Caribbean Central Bank, the monetary authority for eight island nations including Antigua, on Friday assumed control of the Bank of Antigua, part of Sir Allen Stanford’s financial empire.
Bank of Antigua is a strictly domestic and retail operation with three branches on the island,
CDS wrap: from LBOs to rights issues, or there and back again
This CDS report was written by Markit’s Gavan Nolan
In theory, credit spreads and stock prices should have a stable, predictable relationship. After all, shareholders have the most to lose from a company defaulting,
[The Stanford Series] SIB and Stanford Trust Company Limited put into receivership
Nigel Hanilton-Smith and Peter Wastell, Client Partners at Vantis Business Recovery Services, a division of Vantis, the UK accounting, tax and business advisory group, were appointed by the Financial Services Regulatory Commission (FSRC) of Antigua and Barbuda as Joint Receivers on 19th February 2009 of Stanford International Bank Ltd.
Commodity ponzi alert
This fresh from the CFTC, the regulator that looks after the commodity markets:
Federal Court Order Freezes Assets of Illinois Commodity Pool Operator Brookshire Raw Materials Management, LLC and its Canadian Principals Based on CFTC Charges of Misappropriating More Than $4.6 Million in a Ponzi Scheme
Washington,
Fun with maths at Airbus
Saj Ahmad, of aerospace blog FleetBuzz Editorial, points us in the direction of some interesting numbers from Airbus yesterday.
The European planemaker announced a cut in production rates for its aircraft on Thursday.
Is WTI becoming an ETF derivative?
It’s rollover day for the March WTI contract on Friday. And the WTI disparity continues to hold, something analyst Olivier Jakob at Petromatrix increasingly thinks has more to do with the United States Oil Fund (USO) than any real fundamentals.
CDS report: My kingdom for a house!
Sovereign risk proved to be the highlight of the credit markets this week with the perceived worthiness of some leading European nations weakening for the first time.
Credit default swap protection against Austrian sovereign debt was 85 basis points wider in the week,
Rick Santelli has had enough!
We like CNBC’s Rick Santelli. In an octabox of soundbite opinion, he refreshingly tells it as it is.
And it appears Mr. Santelli has simply had enough with all the bailout talk – “The government is promoting bad behaviour!”.