August, 2009
Betting on Brent
The contango is widening, floating storage is on the increase, and Brent’s premium to WTI is intensifying by the day (note chart below) — which means only one thing: stocks at Cushing, the physical delivery point for the WTI Nymex contract,
Another day, another Chinese resources deal Down Under
China certainly likes a good fight – and a good resources deal, as it is signalling yet again. One might think that the protracted, costly and ugly saga of the failed attempt by Chinese state-owned aluminimum group Chinalco for a $19.5bn investment in Rio Tinto – not to mention the subsequent detention of four Rio executives in Shanghai on spying allegations – would have been enough.
The mystery of China’s disappearing mega oil-bid
There’s obviously a lot of damage-control going on in China, and possibly in Argentina and Spain, following a report on Tuesday – and a denial – of talks over what could rank as the energy deal of the year,
A friendly resolution
Phew.
It took an improved offer, but Clive Cowdery’s Resolution has done it. UK-listed insurer Friends Provident has accepted a takeover offer from the specialist Guernsey-based buyout group on Tuesday — although it pretty much hinted as much on Monday.
Further reading
Elsewhere on Tuesday,
- Judge Rakoff wants facts!
- Where next for commodities?
- ‘Will work for stock options.”
- Charting car sales and the unemployment rate.
- Bernanke: Did I really say that?
- Hedge funds up as equities continue to work.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Niall Ferguson: A runaway deficit may soon test Obama’s luck
Six months in, ‘Felix the Prez’ still has the look of a lucky, two-term president.
Snap news
Breaking pre-market news on Tuesday,
- Resolution to buy Friends Provident for $3bn – statement.
- Friends Provident posts £131m underlying profit – statement, statement
- Collins Stewart H1 profit drops 36 per cent – statement.
Judge rejects BofA’s SEC settlement
A US federal judge refused to accept a proposed $33m settlement between regulators and Bank of America over allegations it misled investors and urged the SEC at a Monday night hearing to name those at BofA responsible for the alleged misstatements.
Repsol denies getting Chinese bid
Repsol YPF SA, Spain’s largest oil producer, on Tuesday denied receiving an offer for its Argentine YPF unit following a report that Chinese companies had proposed buying its stake for $17bn, reports Bloomberg.
UK in tax deal on Liechtenstein accounts
About 5,000 British investors with an estimated £2bn to £3bn in secret Liechtenstein bank accounts will be asked to come clean under a ground-breaking deal to be signed on Tuesday. HM Revenue & Customs will offer UK investors the chance to volunteer details of their deposits in return for limited penalties.
Testing week for US bond investors
US bond investors are braced for a testing week, dominated by a record $75bn in debt sales by the US Treasury and the Federal Reserve’s policy meeting, which concludes Wednesday. Treasury yields have risen to levels last seen in early June.
Whitehall wary over Lloyds’ £15bn plan
Lloyds Banking Group’s tentative plan to raise £15bn-£20bn in a rights issue to reduce its reliance on the government face scepticism in Whitehall and among investors. Lloyds last week suggested that terms of its participation in the government’s asset protection scheme might be open to renegotiation after its Q2 results were better than expected.
Resolution on brink of Friends deal
UK insurance entrepreneur Clive Cowdery is poised to strike to take over Friends Provident, in a deal that values the UK life insurer at £1.87bn, two years after Cowdery tried to merge his first Resolution vehicle with the company.
Short shrift for UK voting rights plan
Lord Myners, UK Treasury minister, has been criticised by investors for suggesting that shareholders should be able to buy and sell their voting rights in companies. The minister’s idea is the latest in a string of controversial proposals he has put forward in efforts to spearhead reform of corporate governance practices.
S&P cuts Baltic states’ ratings
S&P on Monday cut Latvia’s credit rating for the fourth time in a year as the country revealed its economy shrank by a fifth in the second quarter. The downgrade highlights the plight of the Baltic region amid the EU’s deepest recession.
China cools on Rio deceit claims
Chinese officials distanced the government from allegations on a state-backed web site that employees of mining giant Rio Tinto had used years of deceit to obtain state secrets that cost China’s steel industry $102bn,
Chinese group offers stake in Lenovo parent
The Chinese state institution that controls Legend Holdings, parent of PC-maker Lenovo, is offering to sell a 29% stake for Rmb2.76bn ($405m). The Chinese Academy of Sciences, a state body that owns 65% of Legend,
Facebook acquires FriendFeed
Facebook, the social networking site, on Monday announced it will buy the innovative social sharing service FriendFeed, in a move that reinforces its drive to embed itself more widely throughout the web.
Dynegy sells $1bn in power assets
Dynegy, the mid-sized US power producer, on Monday said it would sell eight power plants, plus its share in one under construction, to LS Power for $1bn as the US power industry struggles in the downturn.
New York Fed in hiring spree
The Federal Reserve Bank of New York is aggressively hiring traders as its seeks to manage its burgeoning securities holdings, making the central bank one of Wall Street’s most active recruiters of financial talent.
Goldman ordered to yield personnel file
Goldman Sachs Group will have to give up its personnel information on a former employee accused of stealing trade secrets, after a US judge on Monday denied the firm’s motion to quash a request by the computer programmer’s lawyer,
Pequot referred to SEC 45 times
Stock exchange monitors referred Pequot Capital Management to the SEC for possible securities violations, including insider trading, at least 45 times between 2005 and this year, the commission has revealed in a letter to the US Congress.
Overnight markets: Mostly up
Asian stocks mostly rose on Tuesday, led by insurers, although mining stocks fell on declining metals prices. Futures on the S&P500 Index lost 0.1% after the gauge slipped 0.3% on Monday as US stocks fell,
US CMBS delinquencies could exceed 5% by year end
That 5 per cent delinquency statistic comes from Fitch’s latest assessment of the US CMBS market, which also found that loan delinquencies – as measured by its proprietary index – gained nearly a half-point to end the month of July at 3.04 per cent.
More pain for Latvia: shrinking GDP and a sovereign downgrade
It’s only Monday, but Latvia is already having a poor week.
First up: a whopping decline in GDP. The country’s gross domestic product shrank by 19.6 per cent in the second quarter compared to the same period a year ago,
CDS report: Markets drift as traders search for direction
This CDS report was written by Markit’s Gavan Nolan
European credit spreads continued to rally today in the wake of Friday’s better than expected US jobs report. The Markit iTraxx Europe index was trading around 85bp,
The history of US corporate bailouts, 1970-2008
Click for full extended image. (H/T The Big Picture)
Spreadtastic returns for UK plc.
Healthy headline figures sometimes obscure more disturbing underlying details.
The latest report by International Financial Services London, the independent organisation promoting UK financial services,
On misreading non-farm payroll data
We reported last week how Trimtabs CEO Charles Biderman was concerned investors were misreading initial US non-farm payroll data on account of not fully understanding the methodology that goes into compiling the estimates.
Goldman getting the hint on programme trading?
Here’s an interesting report from Securities Industries News, which finds that in the week between July 27 and July 31, Morgan Stanley nearly replaced Goldman Sachs as the most active programme-trader on the New York Stock Exchange.