June, 2009
Citi confirms plan to raise $33bn
Citigroup on Monday confirmed it would launch a long-awaited $33bn capital raising this week in a move aimed at allaying investors’ fears over the offering. The announcement came as the Federal Deposit Insurance Corporation,
US to announce 10 banks to repay Tarp
The US Treasury is preparing to announce Tuesday that it will allow 10 banks to buy back government shares, signalling confidence that some of the largest US lenders will not require further taxpayer rescue,
BlackRock nears $13bn deal for BGI
BlackRock looks set to seal the acquisition of Barclays Global Investors and become the world’s biggest money manager by Wednesday. The US group plans to pay Barclays $12bn-$13bn for BGI – half in cash and half in shares – to create a group with more than $3,000bn in assets under management,
TPG set to sell Shenzhen bank stake
TPG is close to a deal to offload at least part of its $1.5bn controlling stake in Shenzhen Development Bank to Ping An insurance, China’s No 2 insurer, providing an exit route for the US buyout firm’s biggest China investment,
Qatar fund in talks with Porsche
Porsche is in advanced talks to sell a large stake to the Gulf state of Qatar in a deal that could turn the tables in its feud with Volkswagen. Wendelin Wiedeking, Porsche’s chief executive, is talking to the Qatar Investment Authority about selling a stake of up to 25% in Porsche’s holding company.
CSL scraps Talecris deal
CSL ended its proposed $3.1bn acquisition of Talecris Biotherapeutics after the deal was blocked by the US Federal Trade Commission and said it will use some of the cash to buy back its shares, reports Bloomberg. CSL,
Warburg Pincus exits Huiyuan Juice
Warburg Pincus, the US private equity fund, has abandoned its investment in China Huiyuan Juice, becoming the first big shareholder to do so after the collapse of Coca-Cola’s $2.4bn takeover offer. Warburg Pincus had declined to exercise an option to swap its convertible bonds for a 7% equity stake in China’s top juice maker.
Lloyds repays £2.3bn to UK Treasury
Lloyds Banking Group has repaid £2.3bn to the UK Treasury after strong support for its open offer and placing aimed at repaying the government’s £4bn of preference shares. Lloyds is believed to be the first major western bank to repay state equity in the round of bailouts that began last year.
Fortis faces €363m claim
Investors in Fortis, the stricken Dutch-Belgian financial group, faced yet more uncertainty on Monday after a former subsidiary now under Dutch government control said it was seeking €362.5m ($504m) in compensation from its erstwhile parent.
P&G set to replace Lafley as CEO
The board of Procter & Gamble will meet on Tuesday amid speculation it will approve the appointment of Robert McDonald, the company’s chief operating officer, as its new chief executive, replacing AG Lafley.
BofA loses two more directors
Two more Bank of America board members resigned last week as part of a leadership shake-up, reports the WSJ. The departures of Patricia Mitchell and Jackie Ward on Wednesday, disclosed in a securities filing Monday,
Overnight markets: Down
Asian stocks mostly fell on Tuesday after overnight falls in the US and Europe amid concerns that a three-month rally had overvalued earnings prospects. Futures on the S&P 500 Index were little changed after the gauge dipped 0.1% on Monday as a drop in commodities shares counted gains among financial companies.
Lex: BlackRock Global Investors?
Everyone knows what Barclays is after in the mooted deal with BlackRock for its asset management arm: capital – and the more the better. What’s the draw for the US fund manager?
BlackRock’s desire to grab Barclays Global Investors to create a mammoth fund manager with some $2,800bn in assets feels familiar.
Apple’s recession pricing
The recessions comes to Cupertino – Apple broke with its upper-echelon pricing at its annual World Wide Developers’ Conference on Monday, and announced significant price reductions across its flagship lines.
Treasury sell-off goes short
New developments on Monday in THE story in financial markets.
We refer, of course, to the adjustments in the US Treasury curve, the sell-off in which until now was mainly confined to longer-term maturities.
Plan B: By-pass the banks completely
The Bank for International Settlements (BIS) tallies up the unconventional policies undertaken by central banks quite nicely in its latest quarterly review.
The table it provides shows the Bank of England currently stacking up as the most unconventional central bank in the pack:
The ‘part-timezation’ of America
David Rosenberg at Gluskin Sheff flagged a different way of looking at US unemployment figures on Monday; rather than noting the slowing rise in unemployment, he pointed in the direction of the number of people employed part-time and average hours worked.
Wells Fargo and the ‘mud people’
The issue of whether minorities in the US were targeted and subsequently exploited by mortgage lenders has long been a contentious one.
A 2007 story in the San Diego Tribune noted:
African-Americans and Latinos are much more likely to be sold high-cost home loans than white households in San Diego and around the nation,
Krugman: ‘Back at you, Ferguson’
The delightful tit-for-tat that is currently raging between Paul Krugman and Niall Ferguson across the financial blogosphere delivered a fresh installment over the weekend.
This time round it was the Princeton economist’s turn to respond to Ferguson via his New York times blog,
Rio Tinto behaved like a “dishonourable woman”
That’s according to commentators writing for Xinhua, China’s state-backed news agency:
Of course, first of all, the break-up is Rio Tinto’s fault.
Rio Tinto is like a dishonourable woman: once she loved the money in Chinalco’s pocket but she actually did not love the man himself.
Recessionary datapoint du jour, food stamps edition
Reuters reports, emphasis FT Alphaville’s:
One in nine Americans are using federal food stamps to help buy groceries as the country’s deep recession forced another 591,000 people onto the federal anti-hunger program at latest count.
Mystery liquidity sinks, 2007
The Bank of England’s Ouarda Merrouche and Jochen Schanz have written a paper on the behaviour of banks during outages of the Clearing House Automated Payment System, or Chaps. Chaps is the UK’s payment system for large-value,
Lex: How to break a currency peg
The conventional wisdom is that Latvia, like all countries with pegged exchange rates, cannot devalue. If it did, the cost of its foreign currency borrowings would rocket; private borrowers would go bankrupt.
Rigibor: ‘The new’ Libor
Latvia’s lat currency is up on Monday following reports the government staged a major defence of the country’s euro peg last week.
Nevertheless, the country’s interbank rate – known as the Rigibor – continues to soar on nearly a daily basis.
Datapoint du jour: FSA fineflation
… analysis of The Financial Services Authority data in the year to the end of March reveal a 514 per cent increase on fines from the previous year…
From law firm Eversheds.
Update: Actually it’s not from Eversheds,
Lunch Wrap
On FT Alphaville on Monday morning,
- Ireland downgraded – again.
- Yuan-ted: US renminbi bonds.
- Oil is the great unknown for airlines.
- More on maximum negative convexity.
- The dollar,
The dollar, US jobs and a risk that could derail markets
The dollar seems to be bouncing back from its lows last week, due partly to better-than- expected US jobs data last Friday – (despite continuing growth in the overall US unemployment rate) - which fuelled speculation that bearish sentiment towards the US currency might be abating.
Oil is the great unknown for airlines
The International Air Transport Association, IATA, has issued its latest industry earnings forecast and the outlook has deteriorated.
The world’s airlines are now forecast to lose $9bn this year. The newest 2009 forecast is double the level IATA predicted in March,
Markets live transcript 8 Jun 2009
Markets live chat transcript for the chat ending at 12:08 on 8 Jun 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE) Sam Jones, FT (SJ) NH:Good morning NH:and welcome to Markets Live