April, 2009
Mizuho warns of $5.9bn net loss
Mizuho Financial Group, Japan’s second largest bank, on Thursday warned it would report a full-year loss of Y580bn ($5.9bn) rather than a profit of Y100bn in the year to March 2009. The news came after third-ranked SMFG revised its full-year figures from a Y180bn profit to a Y390bn loss.
Credit Suisse returns to profit
Credit Suisse surprised investors on Thursday with a sharp move into profit in the first quarter as private banking earnings remained robust. The net profits of SFr2bn ($2.6bn) followed positive earnings at many US rivals and pointed to a thaw in frozen credit markets.
SEC to end broker vote rule
America’s SEC plans to toss out decades-old rules in a move that will give activist investors significantly more power to determine who sits on corporate boards, reports the WSJ. The change centres on a rule that has allowed brokers since 1937 to vote on their clients’ behalf in director elections,
Gilts fall on growth worries
Gilts prices fell for a second consecutive day on Thursday amid growing concern over the UK’s rising debt levels. Investors took fright after the government’s annual Budget on Wednesday revealed that borrowing would soar in coming years,
Pound weakens on UK rating fears
The pound fell against the dollar and the yen after a news report that credit ratings agencies Moody’s and S&P are reviewing the UK’s AAA credit rating on concern about the UK’s rising debt burden,
Northern Rock heads for large loss
Northern Rock has predicted it will be “substantially loss-making” in 2009, in large part due to higher provisioning against bad loans. The lender, which was nationalised last year, said on Thursday that 3.67% of its residential mortgage loans had now been in arrears for more than three months,
Brussels eyes cap on bank bonuses
Bankers’ bonuses and golden parachutes would be capped in all EU countries under a draft policy circulating in Brussels. The European Commission recommendations, seen by the FT, include asking the 27 EU countries to adopt tougher remuneration rules for financial institutions with an office within their borders,
Hennessee fined over Bayou fraud
Hennessee Group, which advised clients to invest in the Bayou hedge funds that were later discovered to be fraudulent, has agreed to pay $814,644 in fines to settle charges that it failed to properly investigate the funds.
City exodus feared over tax rate
Commentators and figures in London’s City financial centre warned UK chancellor Alistair Darling on Thursday that his new 50% income tax rate would drive financial talent from the City and discourage entrepreneurs.
Overnight markets: Mixed
Asian stocks were mixed, as gains by financial companies helped off-set concern that the global recession is hurting earnings. Futures on the S&P 500 Index lost 0.4% after the gauge rose 1% as better-than-expected earnings at companies from Marriott International to ConocoPhillips and EBay eclipsed falling home sales and higher jobless claims.
Cuomo confidential
In testimony leaked to the Wall Street Journal on Thursday, Bank of America chief Ken Lewis suggests that former US Treasury secretary Hank Paulson forced his hand on the Merrill deal.
Lewis had his doubts about the transaction,
The French do it better?
Well, their small and medium-sized enterprises (SMEs) up until Q4 2008 do, anyway.
(From a Credit Suisse presentation)
An unconventional truth for Credit Suisse
In a bid to support the Swiss economy and particularly the export sector from a rapidly appreciating Swiss franc, the Swiss National Bank (SNB) began intervening in foreign exchange markets on March 12.
Richard Li’s bad movie hasn’t ended yet
With allegations of vote-rigging, nepotism, shady phone calls and dramatic portrayals of small investors fighting a greedy tycoon, the PCCW saga is like a cheesy movie with a bad ending, particularly for the star “actor”,
CDS update: Credit markets outperform equities
This CDS report was written by Markit’s Gavan Nolan
European credit indices outperformed their equity counterparts today, continuing the trend from yesterday. The Markit iTraxx Europe index tightened 152bp,
The Ecuadorian haircut and the philosophy of debt
Ecuador did a pretty bold thing this week, to put it mildly.
April 20 (Bloomberg) — President Rafael Correa offered to repay holders of Ecuador’s defaulted bonds as little as 30 cents on the dollar as the country’s foreign reserves plunge amid slumping oil prices.
Dick Fuld, worst chief executive ever. Ever.
So declares the latest issue of Condé Nast’s Portfolio magazine, which features a list of “leaders who helped drive their companies into the ground”.
The list is compiled in consultation with a panel of “experts”
Stress test appeal
The US government begins briefing financial institutions on the results of its bank stress tests tomorrow, Friday.
From the New York Times:
Bank executives were notified early this week to prepare for meetings with top regulators at the Federal Reserve Bank in their district.
CDS report: European credit derivatives tighten
European credit spreads tightened on Thursday as activity in the primary corporate bond markets boosted sentiment.
Markit’s investment-grade iTraxx Europe index of CDS on leading European corporates was at 151 basis points,
Lunch Wrap
On FT Alphaville Thursday morning,
- UK Budget, what the pundits say.
- Northern Rock, “substantially loss-making”.
- New Q1 happy bank club member: Credit Suisse.
- Grammatical hilarity, JPM Chase edition.
Markets live transcript 23 Apr 2009
Markets live chat transcript for the chat ending at 12:14 on 23 Apr 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hello NH:we are early
Credit Suisse joins Q1 happy bank club
Shares up 6.4 per cent and, surprise, surprise, investment banking is the star.
From the Thursday’s press release:
Credit Suisse Group reports net income of CHF 2.0 billion in the first quarter of 2009
• Strong return on equity of 22.6%,
Rock:”Substantially loss making” for 2009
Generally a poor set of results from Northern Rock on Thursday, encapsulated really by the bank’s statement that it will be “substantially loss making” for the duration of the year. Of course, the government is now running Northern Rock as part of the economic stimulus package as much as it is running it back to rude health as a viable private concern.
That UK Budget — what the pundits say
There aren’t many kind words out there in pundit land and the blogosphere for Alistair Darling, Gordon Brown and their 2009 UK Budget. We can, however, always trust the Guardian to endorse anything that taxes the rich (see Polly Toynbee,
Further reading
Elsewhere on Thursday,
- David Kellerman is not alone.
- Bill Ackman’s plan to fix the crisis.
- The scary rise of the empty creditor.
- Paying for performance can be a terrible idea.
- Don’t worry – worse is yet to come.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
UK Budget 2009
See FT.com’s in-depth report for analysis, reports and commentary from a team of reporters, industry experts and FT commentators.