July, 2009
Delphi lenders prevail in auction
Lenders to Delphi are poised to take control of the bankrupt US auto-parts supplier, scuppering a government-orchestrated $3.6bn deal to sell the company to General Motors and buyout firm Platinum Equity,
Sir Win Bischoff to chair Lloyds
Sir Win Bischoff, the veteran British banker, is tol become the new chairman of Lloyds Banking Group from September. The 67-year-old former chairman of Citigroup will take over from Sir Victor Blank who stepped aside after being blamed by investors for Lloyds’ disastrous takeover of HBOS.
Darling threatens UK banks on loans
The UK government has warned banks to increase the supply of affordable loans to businesses or face the threat of a competition probe if evidence of market failure emerges. Alistair Darling, chancellor,
China warns banks on asset bubbles
Chinese regulators on Monday ordered banks to ensure unprecedented volumes of new loans go into the real economy and are not diverted into equity or real estate markets where officials say that asset bubbles are forming.
Hapag-Lloyd seeks €300m cash lifeline
The owners of Hapag-Lloyd, Germany’s biggest container-shipping line, were locked in talks on Monday night over a €300m ($427m) lifeline for the company amid the industry’s worst slump. The two largest shareholders – Tui,
Commerzbank sells Dresdner unit to LGT
Commerzbank is to sell Dresdner Bank’s Swiss subsidiary to LGT Bank of Liechtenstein as it presses ahead with reorganisation after last year’s troubled takeover. LGT’s purchase of Dresdner Bank (Switzerland) doubles its asset base in Switzerland to about SFr20bn ($19bn) under management for a total of about SFr87bn.
Cost-cuts pay off for Julius Baer
Julius Baer on Monday posted better-than-expected profits after aggressive cost-cutting and a sharp slowing of outflows from its asset management business. The results are the first for the Swiss private bank since it announced plans to split its flagship wealth management arm and its fund management business,
Nomura to boost US staff levels
Nomura is looking to increase headcount in the US by as much as 40% as part of its goal to become a globally competitive investment bank, said Takeo Sumino, its new US chief operating officer. The expansion plans come as Nomura was on Monday reappointed as a US primary dealer for the Treasury market – a sector it left in 2007.
Lansdowne halts new cash to fund
Lansdowne Partners, one of the UK’s largest hedge fund managers, has stopped accepting investments in its flagship fund and several other hedge funds are expected to follow suit. The $8bn Lansdowne UK equities fund,
Friends rejects Cowdery’s offer
Friends Provident has attempted to kill off the chances of a takeover by Resolution, Clive Cowdery’s UK-listed acquisition vehicle, by saying its latest offer – worth £1.7bn – delivered on Sunday was still “wholly inadequate”.
National Express pushes Stagecoach
National Express, the indebted UK bus and rail operator at the centre of a takeover battle, sought to regain the initiative on Monday by demanding details of plans from a Spanish-led consortium and potential bidder Stagecoach.
Temasek to eye internal candidates
Temasek Holdings said it will consider promoting an internal manager after abandoning plans to make Chip Goodyear the first foreign chief executive officer of Singapore’s state-owned investment fund,
Overnight markets: Mostly up
Asian stock markets mostly rose on Tuesday, lifting the MSCI Asia Pacific Index for an 11th day on brokerage upgrades ahead of earnings announcements. Bank and steel stocks rose while energy companies declined.
BlackRock pitching distressed assets to Main Street
The NY Times reported on Sunday that BlackRock intends to open up the market for distressed assets – previously limited to institutional investors and hedge fund types – to “ordinary Americans”:
BlackRock is putting together an investment fund that it says will give ordinary Americans a chance to profit from the financial bailouts that they are paying for.
The ETF blowup begins
H/T Zerohedge for drawing attention to the fact that UBS has suspended purchases of leveraged and inverse ETFs. We’ve now got the official statement from UBS:
“UBS Wealth Management Americas has suspended purchases of leveraged and inverse ETFs to our clients,
CDS report: Credit market rally powers on
This CDS report was written by Markit’s Gavan Nolan
Lacklustre equity markets did little to slow the relentless rally in credit. The Markit iTraxx Europe index was closed at 92bp, off the sub-90bp levels reached this morning but still over 3bp tighter than Friday’s close.
Guest post: Prof Craig Pirrong on the pricing-clearing link in the derivatives market
Prof Pirrong of the University of Houston tackles the complexities of clearing by central counterparties…
Since the late-90s, I’ve emphasized in my academic writing the importance of accurate price information in making clearing efficient-or even possible. It is therefore encouraging to see this article in the FT make the same point. It is important to note,
[The Stanford Series] Sir Allen discovers there’s no air conditioning in jail
Sir Allen Stanford, the Texan businessman who stands accused of operating a $7bn Ponzi scheme, is having a hard time adjusting to the reality of his new circumstances.
The financier, who has denied all the allegations against him,
A quick turn of events in Latvia
There was joy on Sunday night in Latvia as reports suggested the government had — after a week-long stalemate — finally agreed upon terms for the country’s second instalment of IMF financing.
But that wasn’t to last long. As Reuters reported on Monday:
Lex: Hedge funds
Cash may have been pouring into hedge funds at a faster rate in the past quarter, but the little fish may soon find themselves on the hook…
The hedge fund industry remains shakey and needs to string together a series of quarters of stable returns to soothe investors’ nerves.
Sympathy for the ASBs
Pity the accounting boards trying to come up with new fair value, or mark-to-market, accounting rules, with industry feedback like below.
It’s from Valuation Research, which undertook a survey on attitudes towards fair value accounting.
Free money! Honest
The financial world’s attention may be on the high frequency trading programmes employed by numerous banks and hedge funds. But there is another story…
Algorithmic trading, by eliminating the human touch,
Lunch Wrap
On FT Alphaville Monday morning,
- Electronic trading and commodities.
- CDOs, a tendency to liquidate.
- The new equity market consensus.
- KBC – not hollowing out, just quietly self-immolating.
Electronic trading and commodity prices
Yes, everyone — bar the old open outcry pit traders — loves electronic trading in commodities.
Ahead of this week’s CFTC hearings on position limits and speculator influence on prices, however, have the commodity regulators perhaps forgotten to question the obvious? That is,
CDOs, a tendency to liquidate
This is Kent Funding I, a $1bn asset-backed CDO issued by Declaration Management back in 2005:
That is, that was Kent Funding I, since the CDO is reportedly about to be liquidated after hitting an event of default on June 4.
Markets live transcript 27 Jul 2009
Markets live chat transcript for the chat ending at 12:13 on 27 Jul 2009. Participants in this chat were: Paul Murphy (PM) Neil Hume, FT (NH) PM:Welcome PM:It’s Monday.
The new equity market consensus
Another day, another big house predicting further gains for stock markets.
Joining Goldman Squid, Credit Suisse and HSBC, Nomura sees a further upside of 13% for global equities in the second half of the year.
KBC – not hollowing out, just quietly self-immolating
Things have lurched from bad to worse at the Japanese outpost of KBC. But with bosses in the Brussels HQ of Belgium’s third-largest bank fighting far bigger fires, the folks in Tokyo are floating rudderless as their chief executive jumps ship to a cushy job at Deutsche Securities and angry employees fight a potentially troublesome law suit.
The VW Cayenne and other Porsche posers
“The Smartest Guys have now left the room,” notes Max Warburton, the Bernstein analyst who brought us the Porsche/Volkswagen Fruit Machine in October last year.
The reckless idiocy of that VW takeover plan,
UNG goes OTC
Bloomberg reports the United States Natural Gas exchange traded-fund, which has been buying Nymex and ICE natural gas swaps since at least the beginning of June, has now been pushed into the world of OTC bilateral swaps.