June, 2009
US financial reform plans outlined
The Obama administration will target critical weaknesses in the US financial system, such as thin bank capital cushions and lax lending standards, in a proposed overhaul of financial regulation this week,
US to overhaul securitisation markets
The US Treasury is planning to overhaul securitisation markets with tough new rules designed to reduce the incentive for lenders to originate bad loans and flip them on to investors. The rules will force lenders to retain part of the credit risk of the loans that are bundled into securities,
Judge narrows scope of AIG case
A judge in an AIG civil trial involving Hank Greenberg, the insurer’s former CEO, imposed strict curbs on the scope of the federal court hearing on Monday. The public bail-out of AIG and the furore over its controversial bonuses cannot be discussed in a trial over a $4.3bn lawsuit involving Greenberg;
SMFG eyes $9.4bn share issue
Sumitomo Mitsui Financial Group will raise up to Y923bn ($9.39bn) in the biggest issue of new shares by a Japanese group in eight years. The issue, at Y3,928 a share, was priced on Monday at a 3 per cent discount to the day’s closing price,
UK’s Punch in £375m share placing
Punch Taverns on Monday moved to address long-standing concerns about the condition of its balance sheet by launching a £375m share placing. The heavily indebted pub group said proceeds from the placing – which was done at a price of 100p,
China IPOs point to share sale revival
Everbright Securities, Zunyi Titanium and Sichuan Expressway may be among the first companies to sell shares publicly in China since September as the government prepares to reopen what was the world’s second-largest equity fundraising market in 2007,
US hotel chain files for bankruptcy
In one of the biggest real-estate bankruptcies in the current slump, the Extended Stay Hotels chain filed for Chapter 11 protection on Monday, collapsing under the debt from its $8bn top-of-the-market buyout by Lightstone Group in 2007,
Lincoln slashes bail-out needs
Lincoln Financial will draw less than half of the US bail-out money it has approval for after selling a UK life assurance business for more than $300m to Canada’s Sun Life and announcing plans to raise $1.4bn in stock and bond sales.
Surprise exit for Fortis chief
Fortis Holding on Monday shocked investors with news that its chief executive would leave and that the head of its biggest division had resigned. The move means the fifth chief executive in under a year for the once-diversified Belgian bancassurance group that is trying to rebuild itself as an insurer.
UK’s Horlick rebuffed on Bramdean
Nicola Horlick’s takeover approach for the alternative investment company managed by her firm has been rebuffed by the board. Horlick’s Petersfield Asset Management emerged last week as the company behind an approach for Bramdean Alternatives;
SGX mulls OTC derivatives clearing
SGX, the Singapore exchange, is considering clearing over-the- counter derivatives, in the latest sign that exchanges are capitalising on US regulatory pressure to process such financial instruments through clearing houses.
Overnight markets: Slide
Asian stocks fell for a second day on Tuesday, led by automakers and mining companies, after a New York manufacturing report missed economist estimates and commodity prices sank. Futures on the S&P500 index dropped 0.1% after the gauge slid 2.4% on Monday – the most since May 13.
Moody’s bank downgrades, pain in Spain edition
This time it’s the turn of 25 Spanish banks, all of whose senior ratings were on Monday downgraded by Moody’s. Banco Santander, of “we’re so strong we’re actually going to expand through the crisis” fame,
Moody’s puts UBS on review for downgrade
Just as the ECB warns that commercial banks in the euro-zone may lose another $283bn by the end of next year on financial writedowns, Moody’s finds equivalent cause for concern at Switzerland’s most beleaguered bank,
A little too much liquidity, redux
Merrill Lynch poses the following question in an economic report out last Friday:
Too much money printing?
Pray tell, what is fuelling this sudden bout of concern on the QE front?
Well, it seems the analysts are somewhat worried not only about last week’s sudden rise in short-term Treasury yields but also the general mismatch between asset prices and recovery perceptions.
Absorbing the dash for cash
Re-equitisation shows no signs of slowing. Monday alone has brought cash calls from Punch Taverns (£350m placing and offer), Holcim (€2bn rights offering), Heritage Oil (potential £130m placing) and TomTom (€430m rights issue and private placement).
Art market comeback, or is it?
Last weekend marked the end of the annual art-fest that is ‘Art Basel’, in Switzerland.
By all appearances, the week-long fair looks to have been quite an unexpected triumph. Among the attendees the usual array of high-profile celebs in the form of Brad Pitt and Naomi Campbell,
Say hello to RAMSI
Here’s the lock being attached to the stable door of British finance:
Working Paper No. 372: Funding liquidity risk in a quantitative model of systemic stability
Yup. The Bank of England has published its interim thoughts on how the financial sector should model for the risk that funding markets might close.
Then and now datapoints
Sean Corrigan, chief investment strategist at Diapason Securities provides us with the following list of ‘then and now’ observations:
Then…
DOW ’29: FELL 48% RALLIED 48% FELL 78%
NASDAQ ’00: FELL 40% RALLIED 40% FELL 81%
TOPIX ’89:
Lunch Wrap
On FT Alphaville on Monday morning,
- The detoxified pub company.
- Crisis averted; Latvian central bank buys euros.
- Monsters of…NW1?
- Sinopec swoops on oil explorer — or does it?
- Masters of the universe return.
Russia gagged?
Of all the dollar critics in the world, Russia has been among the loudest. Putin began the dollar-bashing at Davos, Medvedev followed it up on CNBC, and more recently the central bank’s Alexei Ulyukayev continued the trend in Moscow.
Greed, fear, interest rates and bond yields
Too many eyes – and too many concerns – focus right now on the Fed’s next move and the trajectory of US bond yields, worries that, in the opinion of some key commentators, are gaining a momentum of their own and could even derail equity markets in coming weeks.
Markets live transcript 15 Jun 2009
Markets live chat transcript for the chat ending at 12:05 on 15 Jun 2009. Participants in this chat were: Neil Hume, FT (NH) Paul Murphy, FT (PM) NH:Good morning and welcome to Market’s Live
Crisis averted; Latvian central bank buys euros
Ambrose Evans Pritchard of the Telegraph may have written off Latvia on Monday with a scathing comparison to Argentina, but the country’s central bank is not taking the criticism lying down. In fact, as Reuters reports:
The detoxified pub company
Well, sort of.
From Punch Taverns on Monday morning. Emphasis ours:
The board of Punch Taverns plc (“Punch” or the “Company”) today announces: an intention to raise approximately £350 million by means of a Firm Placing and a Placing and Open Offer of New Ordinary Shares;
Sinopec swoops on oil explorer — or does it?
China’s resources drive continues apace, despite the resounding failure of Chinalco’s bid to acquire a big stake in Rio Tinto. According to weekend reports – initially in the Sunday Times – Chinese state-owned oil group Sinopec is stepping up its race to secure access to global oil reserves with an “audacious”
Monsters of…NW1?
The cost-cutting in hedge fund land is getting out of hand. Managers are reportedly avoiding the extravagant rents of London’s Mayfair in favour of such down-at-heel locations as “Lower Regent Street” and “Baker Street,”
Further reading
Elsewhere on Monday,
- Krugman stays the course.
- So your bank account has been wiped out.
- The crucifixion of Latvia.
- A five-point guide to where we are now.
- Bond bust fears are overblown – for now.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: Medicare for all may be the best cure for the US
For the past few months, Barack Obama and his allies in Congress have been striding towards far-reaching reform of the US healthcare system without the public paying much attention.