June, 2009
Snap news
Breaking pre-market news on Monday,
- Punch Taverns to raise £350m via share issue – statement, statement, statement.
- TomTom to raise 430 mln euros via placement, new shares – story.
- Lloyds to take 450 mln stg hit on pubs loan -paper – story.
Citi, IFC form trade funding alliance
Citigroup will on Monday unveil a $1.25bn funding tie-up with the International Finance Corporation, the World Bank’s private sector arm, as part of the bank’s $50bn global trade finance initiative announced in April.
G8 ministers see crisis easing
G8 finance ministers signalled cautious optimism on the weekend that the worst of the global financial crisis might be over and began discussing “exit strategies” to counter the threat of inflation,
Chinese bid £5bn for UK oil explorer
Sinopec, the Chinese state oil group, has made an audacious £4.8bn bid for Addax Petroleum, a UK-listed group with fields in Iraqi Kurdistan and Nigeria, report the Times. Sinopec is understood to have tabled the indicative offer last week,
US broker in landmark Iraq deal
Auerbach Grayson, a New York-based brokerage, is to be the first international company to sell Iraqi securities since the 2003 invasion, after it signed an agreement with Rabee Securities, a Baghdad brokerage,
UK banks warn on FSA rule changes
The trade body for banks will tell the UK’s Financial Services Authority on Monday that proposed changes to capital and liquidity requirements do not “strike the right balance”. The British Bankers’ Association calls in a letter to FSA chief Hector Sants for an urgent assessment of costs of complying with the new rules.
Morgan Stanley, Citi JV frustrates advisers
Morgan Stanley and Citigroup will have to wait up to two years to reap the full benefit of their $14bn-a-year brokerage joint venture, as the process of merging IT systems delays integration. The IT issues are frustrating some of the JV’s 18,500 financial advisers,
Ping An’s TPG deal ‘faces opposition’
Opposition in China is building to a deal in which US buyout firm TPG plans to sell its controlling stake in Shenzhen Development Bank to Ping An Insurance, China’s second-largest insurer, for a profit of more than 150%.
Six Flags files for bankruptcy protection
Six Flags, the US operator of 20 amusement parks, has become the latest highly leveraged leisure company to falter under its debt burden. The company filed for bankruptcy protection on Saturday with what it said was the support of its key creditors,
TomTom plans €430m cash call
TomTom, the Dutch maker of satellite navigation devices and software, is to raise €430m ($600m) by offering new shares and through a private placement. The company paid €2.9bn for digital map maker Tele Atlas in late 2007 and has since struggled under the debt burden.
Huntsman dispute heads to Texas
The final act in the legal drama over the busted buyout of Huntsman is to start Monday, when the US chemical maker squares off against Credit Suisse and Deutsche Bank in a Texas courtroom, reports the WSJ.
Endemol cools on Setanta deal
Endemol, one of the world’s largest TV production companies, is considering taking a share in Setanta, the Irish-based sports broadcaster facing imminent administration. But Endemol’s earlier plans to be an equal partner in Setanta with Access Industries have been scaled down.
Fed faces key policy decisions
The sharp increase in both US bond yields and mortgage rates presents the Federal Reserve with two key decisions next week: whether to increase its purchases of Treasuries and whether to push back against expectations of early interest rate rises.
Buy-out investors at risk of default
One in 10 investors in private equity are likely to default on commitments to invest funds in the next two years, a survey has shown. The research, covering 120 big investors in private equity, was conducted by Coller Capital,
Brazil, HK bourses overtake rivals
Two of the biggest bourses in Asia and Latin America have for the first time overtaken rivals in New York and London by market capitalisation. Hong Kong’s HKEx and Brazil’s BM&F Bovespa have vaulted ahead of NYSE Euronext,
BofA beefs up image with Merrill’s bull
The Merrill Lynch name and the accompanying bull symbol will gain a promotional push from their new owner, Bank of America this week, when BofA launches a $10m print and online ad campaign in the US touting its Bank of America Merrill Lynch division.
Overnight markets: Down
Asian stocks mostly declined on Monday, led by commodity companies, after metals and oil prices fell. Japanese automakers rose as a weakening yen boosted earnings prospects. Futures on the S&P 500 index slipped 0.52% on Monday after the gauge rose just 0.14% on Friday.
The Weekender
On FT Alphaville this week,
- Negative convexity and T-bills.
- US yuan bonds in the making?
- Oops, Ireland downgraded again.
- All eyes on rigibor.
- Krugman, Ferguson at it again.
- A short-end Treasury sell-off too.
CDS report: Markets have returned to pre-Lehman levels
This CDS report was written by Markit’s Gavan Nolan
The venerable economist Paul Krugman, the 2008 Nobel laureate, painted a gloomy picture at a series of lectures held in London this week. Krugman said the risk of a “lost decade”
Quote du jour, instruments of mass destruction edition
Hedge fund manager George Soros tells a banking conference in China (via Reuters):
“Some derivatives ought not to be allowed to be traded at all. I have in mind credit default swaps. The more I’ve heard about them,
Correlated returns
Interesting little tidbit from SEB’s investment outlook for the rest of the year:
(Based on: Equities – MSCI World, FI – JPM Global GBI, Hedge – HFRX, Real Estate – FTSE EPRA/NAREIT Global,
It’s an oil shock, but not as we know it
Having introduced the concept of compartflation here, we bring you the following ‘no-win’ situation for oil prices and the economy, as observed by Monument Securities’ Stephen Lewis on Friday:
…the
Compartflation
Why take two price scenarios into the shower, when you can just take one?
Introducing “compartflation” an economic environment in which both inflationary and deflationary forces compete to generate recession or stagnation.
Lunch Wrap
On FT Alphaville on Friday morning,
- Diamond Bob’s BGI jackpot.
- Profit participating deferred shares, explained.
- How to do a resources deal Down Under — lessons from Minmetals.- The brief Brom bond opp.
Quantitative stealing?
An odd little story this – or perhaps an absolutely massive one – that’s been largely overlooked.
We picked it up from the blog Cryptogon, via OptionARMageddon.
In the Italian/Swiss border town of Chiasso last week- on Thursday the 4th,
130 times earnings
No, it is not some whizzy tech stock, or E&P explorer that claims to have found 4bn barrels of oil in country torn apart by civil war, but the S&P 500.
H/T to reader Carlomagno for this.
(Data from Barrons).
Markets live transcript 12 Jun 2009
Markets live chat transcript for the chat ending at 12:10 on 12 Jun 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE) NH:Good morning NH:and welcome to another session of Markets Live
The brief Brom bond opp
Price of the 2016 Floating Rate Note (FRN) issued by West Bromwich Building Society (Baa3, Moody’s) was down at a low of 43.4 pence on the pound yesterday.
Having opened at around 45 pence on the pound on Friday,