May, 2009
So who says there’s no oil/dollar correlation?
When oil behaves irrationally at the moment, it seems there’s usually only one explanation offered: it’s trading in an opposite direction to the dollar.
RBC Capital sums up the return of this significant correlation in the following chart:
CDS report: Factoring in ‘feel good’
The cost of insuring European corporate debt against default dropped sharply on Tuesday, as credit spreads tightened amid a rally in global equity markets and rising sentiment that the recession may have passed its peak.
The battle of Ferrexpo
Things are hotting up at the Ukrainian iron-ore pellet maker that is actually based in Switzerland.
Company statement, May 19:
The Board of Ferrexpo announces that a circular convening a general meeting (the “General Meeting”) is being posted to shareholders today.
Lunch Wrap
On FT Alphaville on Tuesday morning,
- For TCI, what a difference a year makes.
- CPI inflation falls to 2.3%, RPI at record low.
- UK: The attractive investment choice.
- Not-too-big-to-tap.
Markets live transcript 19 May 2009
Markets live chat transcript for the chat ending at 12:09 on 19 May 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE)
NH:
Hello
NH:
and welcome to Shambles Live
For TCI, what a difference a year makes
It was almost a year ago that UK activist investor The Children’s Investment fund was making huge waves in Japan, not least with its full-frontal assault on Electric Power Development Co, the Japanese electric power wholesaler and nuclear energy company known locally as J-Power.
CPI inflation falls to 2.3%, RPI at record low
The UK’s consumer price index (CPI) measure of inflation fell to 2.3 per cent in April (year-on-year), versus 2.9 per cent in March, according to figures from the Office of National Statistics. While the number was lower than expected by the market,
UK: The attractive investment choice
Lest it be forgot, sterling suffered a rather tremendous collapse in fourth quarter of 2008. With the collapse of Lehman Brothers and thereafter, for a while, the precarious tottering of RBS and Barclays,
Not-too-big-to-tap
What’s this? A common sense piece of regulatory reform?
America’s Federal Deposit Insurance Corp is apparently planning to levy its charge on banks based on total assets, instead of deposits. At a stroke Sheila Bair will shift the financial burden of underwriting US banks sharply towards the bigger institutions.
India: Time to change those Asian asset allocations?
Get rid of a few Communists and see what happens… India did just that in its weekend election, handing the ruling Congress Party a definitive victory, putting a rocket under the country’s stock markets and allaying fears of an unwieldy coalition.
Further reading
Elsewhere on Tuesday:
- Don’t blame the lap dancers
- Five factors that push a recession into recovery
- Forget the Baltic Dry Index
- Financial branding league tables – in Chinese
- Three
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Indian democracy has an ugly side
Despite a sharp economic slowdown and a series of destabilising terrorist attacks, India’s 420m voters have just calmly voted the Congress party back into government,
Snap news
Breaking pre-market news on Tuesday,
- Vodafone full-year profit rises on pound drop, emerging markets – statement.
- Dana discovers further gas condensate at Fulla, offshore Norway – statement.
US banks race to repay Tarp cash
US banks are vying to be in the first wave of lenders to repay US bail-out funds after Washington said it would allow five or six big financial groups to repay their Tarp loans before the rest of the industry to avoid a “rush for the exit”,
Brazil, China consider superceding dollar
Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank. The move follows recent Chinese challenges to the dollar’s status as the world’s key currency.
Indian markets leap on Congress victory
Share prices on India’s benchmark stock index surged 17% on Monday – recording their biggest one-day gain in almost two decades – after the Congress party’s weekend election victory. The gains on Bombay’s Sensex index,
Alliance Boots buys back £400m debt
Alliance Boots, the UK retailer that was taken private in Europe’s biggest buy-out almost two years ago, has bought back more than £400m of debt at a steep discount from distressed sellers. Stefano Pessina,
Daiwa to buy Close Brothers’ arm
Daiwa SMBC, one of Japan’s top three investment banks, is buying the financial advisory business of Close Brothers for €75m in a deal that highlights Japanese financial institutions’ push overseas.
Morgan Stanley in HK insider case
Morgan Stanley compliance officers approved the trades of investment banker Du Jun, who is at the centre of Hong Kong’s highest profile insider dealing trial, an HK court heard Monday. In February 2007 Samantha Ng,
AIG plans $5bn IPO for Asian arm
AIG on Monday said it would list its Asian life insurance operations in order to raise capital after it abandoned a sale of the assets earlier this year. Depending on market conditions, the IPO of American International Assurance is expected to fetch $5bn to $10bn when it floats next year.
State Street begins stock sale
State Street has begun selling $1.5bn in stock and will sell at least $500m in senior debt as part of the group’s plan to repay money received under the US Tarp scheme, in the latest in a wave of capital-raising by financial institutions following the Treasury-administered “stress tests”.
Porsche moves to restart VW talks
The family owners of Germany’s Porsche scrambled on Monday to revive stalled merger talks with Volkswagen as thousands of workers at the debt-ridden sports carmaker gathered to protest against Ferdinand Piëch,
Ospraie shows hedge fund confidence
US hedge fund Ospraie Management is launching two funds focusing on commodities and other liquid securities just eight months after it was forced to close its flagship fund amid huge losses on commodities trades.
US companies face higher hedging costs
Companies using trillions of dollars of derivatives contracts to hedge interest rate, currency and commodity price risks could face higher collateral costs under the proposed overhaul of US rules on derivatives,
Turquoise to launch new service
Turquoise on Monday became the latest trading platform to tackle the increasing fragmentation of liquidity in European equity markets, saying it had received UK regulatory approval for a new service that aggregates large orders and routes them out to other trading venues.
Australia’s Great Southern collapses
Great Southern, Australia’s largest listed managed investment scheme manager, has collapsed into bankruptcy with debts of close to A$700m ($525m). The company, which bundles agricultural assets into investment products for retail sale,
Terengganu plans SWF bond sale
Malaysia’s oil-rich state of Terengganu plans to raise M$5bn ($1.4bn) with a bond issue guaranteed by the federal government this week to help finance its new M$11bn sovereign wealth fund. The move comes amid growing appetite among international investors for sovereign bond issues by Asian governments.
Amex to slash 4,000 jobs
American Express on Monday said it plans to eliminate 4,000 jobs, or 6% of its workforce, as the weakened economy causes higher customer defaults, reports Reuters. The cuts are part of Amex’s plan to save $800m in 2009 and are in addition to 7,000 job cuts and an expected $1.8bn of savings from a restructuring announced in October.
Lazard man joins US Treasury
Jim Millstein, a banker with investment group Lazard, joined the US Treasury on Monday in a newly created position of senior restructuring officer. In a memo to friends, Millstein said his role would be to assist Tim Geithner,