May, 2009
Risk Factor 1.3
Lloyds Banking Group will publish the prospectus for its £4bn share placing on Wednesday afternoon and all eyes will be on paragraph 1.3. It covers potential changes Lloyds could be forced to make in order to get EU State Aid Approval for this share placing,
QE and expectation management from the BoE
Minutes from the Bank of England’s last policy meeting – where a £50bn expansion of the existing £75bn quantitative easing plan was decided upon – have just been released.
And they reveal a not inconsiderable degree of uncertainty.
Japan: two lost decades?
So the bad, bad news out of Japan is that its latest GDP figures are the worst ever – an annualised plunge of more than 15 per cent and a quarterly 4 per cent fall. The good news, according to some economists,
Chateau Dick — for sale
$32m buys you the Dick Fuld residence. Servants not included.
Nor alas, the hideous decor below (which, much to our disappointment, is pre-Fuld residency anyway).Via Curbed.
YELLow Directors
Buried in Wednesday’s annual results statement from debt laden directories group Yell was this rather worrying note:
The financial information contained herein has been prepared on a going concern basis.
Further reading
Elsewhere on Wednesday,
- On optimism, chocolate teapots and useless economic forecasts
- Class and the wealth of nations
- Roubini: Is he lucky or just good?
- Kabuki on the Potomac: Reforming CDS and OTC derivatives
- David Rosenberg picks up where he left off
- The failure of old ideas:
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Analysis: Let battle commence
After the first wave of policy reforms unleashed by the administration of Barack Obama in response to the financial crisis,
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Snap news
Breaking pre-market news on Wednesday,
- Lloyds Banking Group announces detail of open offer – statement.
- LSE results: revenue beats expectations – up at £671.4m (2008: £546.4m) – statement.
- Shaftesbury announces 2 for 3 rights issue – statement,
SEC may lose some powers
The Obama administration may call for stripping the Securities and Exchange Commission of some of its duties under a regulatory reorganisation that could be unveiled as soon as next week, reports Bloomberg.
BofA raises $13.5bn in new equity
Bank of America raised $13.5bn in new equity over the past two weeks by selling common stock, the bank said late Tuesday. The sale is part of BofA’s drive to raise $33.9bn in new capital by November,
Three vie for GM’s European units
At least three bidders will make formal offers for a stake in General Motors’ European operations on Wednesday and will be asked to come up with about €650m ($887m). RHJ International, the Brussels-listed car parts company,
Japan’s economy shrinks record 4%
Japan’s economy contracted by a record quarterly 4.0% in the first three months of this year as domestic demand declined and an export rout continued, figures showed on Wednesday. The decline in GDP – equivalent to an unprecedented 15.2% annual fall – highlight the woes facing the world’s second largest economy,
Porsche woos Mideast investors
The corporate saga surrounding Volkswagen and its largest shareholder, Porsche, took another twist on Tuesday when it emerged that Porsche’s chief executive Wendelin Wiedeking had spoken to several Middle East funds – some from Abu Dhabi and Qatar – about taking a stake of up to 25% in the carmaker.
Dimon hits at foreign-worker rules
Rules preventing US banks from hiring foreigners are a “complete and utter disgrace” and could prompt other governments to retaliate against American expatriates, Jamie Dimon, chief executive of JPMorgan Chase,
Shell faces investor rebellion
A global investor backlash over executive pay escalated on Tuesday when shareholders turned on Royal Dutch Shell and voted against its executive pay plan. In one of the biggest investor rebellions over directors’ pay,
Apax, Warburg Pincus eye Ratiopharm
Buyout groups Apax Partners and Warburg Pincus are considering offers for Ratiopharm, the German drugmaker being sold by the billionaire Merckle family, reports Bloomberg. Ratiopharm, the world’s fourth-largest maker of generic medicines,
AIG to return $843m to investors
Investors in AIG will soon receive $843m put aside for them as part of a 2006 settlement with the SEC over accounting mis-statements. Cheques will be sent to more than 257,000 affected AIG investors within the next few months,
MUFG upbeat despite heavy losses
Mitsubishi UFJ Financial Group on Tuesday added to the cautiously upbeat mood among Japanese banks, saying it expected to generate net profits of Y300bn ($3.1bn) this year. MUFG, which earlier paid $9bn for a 20% stake in Morgan Stanley,
UK’s Paragon calls for state funding
Paragon, the UK buy-to-let mortgage lender, has urged the government to allow specialist mortgage lenders to tap state schemes providing access to wholesale funding. Paragon said existing initiatives to improve credit flows to consumers excluded non-bank lenders such as itself that do not take retail deposits.
Lloyds to cut 625 jobs in integration
Lloyds Banking Group will cut a further 625 jobs – including 300 in Scotland – as it integrates the corporate bank of HBOS, the lender it rescued in October. Lloyds, which has cut 2,225 jobs so far this year,
Icap chief in dividend windfall
Icap, the world’s largest inter-dealer broker, on Tuesday gave the first glimpse of the earnings potential from its recently developed post-trade business as Michael Spencer, chief executive, came away with a £23m pay-out from a dividend lift.
Ackman gains support in Target battle
Bill Ackman, the activist investor, has scored another victory in his battle to win seats on the board of Target, the discount retailer, after winning support from RiskMetrics, the top US proxy adviser.
Overnight markets: Mixed
Asian stocks rose on Wednesday, led by commodity companies although financial stocks declined. Futures on the S&P500 Index slipped 0.3% after the gauge dropped 0.2% on Tuesday as figures showed that US housing starts sank 13% in April.
Scrutiny of Spain’s potential banking pain increases
The analysts who work in the ratings unit at Moody’s don’t always see eye to eye with their colleagues in the Capital Markets Research Group, particularly since the latter issue frequent reports pointing out that the bond and CDS markets often disagree with the ratings approved by the former.
A squeeze defreeze
Krrrrr, Krr, Krr, Krr-chunk… and splosh. Or, the crumbling sound of thawing ice as it detaches itself from the Arctic shelf.
That, at least, is the best way we can describe the sound coming from the Bloomberg machine’s Libor-OIS spread page:
CDS update: Rally time
This CDS update was written by Markit’s Gavan Nolan
Credit outpaced equity today, with the major CDS indices rallying sharply. The Markit iTraxx Europe was trading around 127bp, nearly 9bp (6.5%) tighter than yesterday’s close,
Chop, chop, chop the dollar
The FT reported on Tuesday that Brazil and China have come one step closer towards dropping the dollar in trade transactions in favour of their own currencies. Brazilian president Luiz Inácio Lula da Silva is currently visiting Beijing on a state visit.
The downside of those white collars
If you’re a recently-sent-on-gardening-leave financial professional bemoaning your fate – take heart. Yours is not the only sector in turmoil.
Michael Mandel at BusinessWeek’s “Economics Unbound” blog points out that engineers, networking/IT/software workers and ‘creative’ types are also feeling pretty terrible right now.
FTSE reshuffle time …
… is almost upon us – well it is three weeks away – and here are the current runners and riders.
Based on recent prices, just one company, Whitbread, would have exited the FTSE 100, replaced by Wolseley,