April, 2009
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Richard Lambert: Britain’s Budget has no room for big bucks
The director-general of the CBI employers’ federation writes: the UK’s public finances are now on an unsustainable path.
Snap news
Breaking pre-market news on Monday,
- Allied Irish Banks Plc to raise further E1.5bn on top of existing E3.5bn plan through asset sales, further equity issuance if necessary – statement.
- UBS sells Brazilian financial services business UBS Pactual for $2.5bn to BTG Investments – statement.
US to put conditions on Tarp repayment
The White House is moving to tighten criteria for banks that wish to repay their government bail-out loans, saying repayment proposals would have to pass three basic tests to determine whether they are in the national economic interest,
Darling to admit £60bn bail-out bill
UK chancellor Alistair Darling will concede for the first time that the government will not recoup the full costs of its banking interventions and that the bill could be as high as £60bn. Following the US example,
Pepsico in $6bn deal for bottlers
PepsiCo launched a $6bn takeover bid for its two largest independent bottlers late Sunday, in a strategy shift that signals an overhaul of the manufacturing and distribution of its products, reports the WSJ.
GSK in talks to acquire Stiefel
GlaxoSmithKline is nearing a deal to acquire Stiefel Laboratories, a US maker of skin care pharmaceuticals, for about $3bn. A deal between UK-based GlaxoSmithKline and privately-held Stiefel, controlled by the Stiefel family and part-owned by buyout group Blackstone,
Carlyle to stop using ‘finders’
US buyout group Carlyle has decided to stop using placement agents to solicit money from public pension funds after the indictment of a New York state political figure to whom it paid $12m in finder’s fees.
First Reserve raises £9bn fund
First Reserve will on Monday strengthen its position as the energy sector’s biggest private equity investor by announcing it has raised almost $9bn for its new buy-out fund, even though the year-long fundraising fell short of its $12bn target,
GM could ‘sell Opel’ stake for nil
General Motors is prepared to part with a controlling stake in Opel/Vauxhall for nothing but a pledge to invest directly in a new company formed from its European operations, said people close to its plans.
Candover board to discuss bids
The board of Candover will meet early this week to discuss bids received for the buyout group, which put itself up for sale after suspending the €3bn fund it raised last year. The UK-based group had received “a small handful” of early indicative offers to buy Candover Investments,
Heineken mops up Globe debt
Heineken, the Dutch brewing group, has bought up 30% of the senior debt in Globe Pub Company, the struggling pub operator owned by UK invesetor Robert Tchenguiz, at a sizeable discount. The surprise purchase – announced at the weekend – sees Heineken acquire £60.2m of Globe’s Class A1 securitised debt at an undisclosed discount.
Ross and Molson Coors eye Cobra
Wilbur Ross, the US investor, and Molson Coors, the brewer, have emerged as possible buyers for Cobra Beer as the sale process of the Indian-themed lager – created in the late 1980s to introduce UK drinkers to an ‘authentic’ Indian beer – draws near to a close.
Europe rushes to exit hedge funds
Rich Europeans, who were the first to invest in hedge funds and comprised the majority of investors, have been the first to exit in the downturn, according to a study by the Bank of New York Mellon and research firm Casey Quirk.
Steel Partners riles investors
Investors owning more than half the assets in Warren Lichtenstein’s largest hedge fund have asked to pull out, resisting a push to convert the fund into a publicly traded partnership, reports the WSJ (via Reuters).
LSE to use Baikal platform
The London Stock Exchange plans to use its Baikal block trading platform to spearhead a push across continental Europe and will try to boost its UK market by attracting high-frequency electronic trader to its SETS order book.
Weekend catch-up
In case you missed these stories:
Results boost for Citi, GE
Citigroup and General Electric, two of the biggest corporate victims of the economic crisis, on Friday won some respite by reporting better-than-expected profits in the first three months of the year.
Overnight markets: Shaky start
Asian stocks declined on Monday, dragging the regional benchmark index from a three-month high, on speculation that companies will take advantage of a six-week rally to sell shares and shore up their finances.
The Weekender
On FT Alphaville this week,
- A forex trading booms in 2009.
- The blowout Q1 banking results begin with Goldman.
- A message to our friends in the North from the FSA.
- The finance of flying fat.
California unemployment rate hits record 11.2%
The latest regional unemployment data from the US Labor Department continues to paint a startling depiction of how great the job loss chasm that splitting the United States is.
While states like Michigan,
Time to smell the coffee over at HMT
It’s budget time for the UK on Wednesday April 22. And as can be expected most economists are predicting nothing but bad news on the state of the UK’s public finances.
Among the key questions economists are asking:
The Susan Boyle factor
What do equity rallies have in common with the whizzing around in cyberspace of the latest Youtube sensation — a clip of Britain’s Got Talent contestant Susan Boyle wowing the judging panel of Simon Cowell,
CDS report: Credit unmoved by equity rally
European credit-derivative markets failed to follow the joy that pushed equities higher on Friday morning.
The European iTraxx Crossover index of mostly junk-rated borrowers’ CDS — contracts that provide a form of protection against default on debt– were relatively unchanged,
Lunch Wrap
On FT Alphaville Friday morning,
- IMF: “worrisome parallels” with the Great Depression.
- Hot money, hot banker.
- JP Morgan, your space is my space.
- “Eaten alive by investment bankers.”
IMF: “worrisome parallels” with the Great Depression
The IMF has pre-released two chapters from its forthcoming World Economic Outlook.
Chapter 3: From recession to recovery: How soon and how strong?
Chapter 4: How linkages fuel the fire: The transmission of financial stress from advanced to emerging economies
The following excerpts rather put all the recent talk of green shoots into perspective.
GE profits fall 35 per cent in Q1
GE has just reported its first quarter results fell 35 per cent on the year– a little less than analysts had estimated. Here’s the statement:
GE reports 1Q ’09 EPS of $.26;
Technology & Energy Infrastructure Earnings +11%;
Citigroup sort of in happy bank club
Well, it’s not a profit for shareholders but it is a bit better than expections of a loss of 34 cents a share. From Citi’s Q1 release.
Citi Reports First Quarter Revenues of $24.8 Billion
Net Income of $1.6 Billion,
Markets live transcript 17 Apr 2009
Markets live chat transcript for the chat ending at 12:18 on 17 Apr 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE) NH:Hola NH:Good morning and welcome to Markets Live
JPMorgan: your space is my space
FT Alphaville readers, we give you warning: make sure you always pay your dues to JPMorgan. If you don’t, Jamie Dimon will hunt you down.
First though, he sends in the heavies for your children.
New York Cityfile (HT,
Hot money, hot banker
This paragraph, if you strip out the names, looks strikingly familiar:
To fund his purchases ***** has relied on brokered deposits, known as hot money in the banking business. A year ago ***** Bank had $49 million,