September, 2009
Markets live transcript 9 Sep 2009
Markets live chat transcript for the chat ending at 12:07 on 9 Sep 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:Hello NH:Good morning
Spanish catastrophe, datapoint del dia
Comes courtesy of UBS banking analyst Alastair Ryan.
He notes that novations — loans whose terms have been changed without the borrower or lender changing — now look like this:
As the chart should suggest — an increase in novations hints at stress in the mortgage market.
Kraft’s credit
Can Kraft afford to raise its £10.2bn offer for Cadbury, and if so, by how much?
It is a question we have been asking since the approach was revealed on Monday morning and the following was disclosed:
The taxation of WTOW 2006-3
More trouble for CMBS backed by properties owned by real estate magnate Simon Halabi — tax problems.
From the Irish Stock Exchange:
RNS Number : 6233Y
White Tower 2006-3 PLC0
7 September 2009
WHITE TOWER 2006-3 plc
THIS NOTICE CONTAINS IMPORTANT INFORMATION OF INTEREST TO THE BENEFICIALOWNERS OF THE NOTES.
Bonfire of the bears – Yell edition
Wednesday’s early price action.
And over the past week..
Date Chg % Chg
Tear down this hybrid capital wall
The crackdown on hybrid capital begins and the Basel Committee on banking supervision is on the case.
From the FT:
The rules will force banks to substantially improve the quality and extent of the capital buffers they hold to absorb shocks.
Kradbury: The homespun side of mega-bid battles
There’s nothing like some small, local stories to add a human touch to a tense, cross-border, mega-bid battle.
Such is the case with Kraft’s $16.8bn bid for UK confectionery group Cadbury.
As the war of words – and speculation about counter-offers – heats up,
Further reading
Elsewhere on Wednesday,
- $37bn says that deals are back.
- Why Goldman always wins.
- Four of the best and worst performing (US) stocks.
- Dick Fuld’s comeback.
- His mother loves him anyway.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Why it is still too early to start withdrawing stimulus
“Our unprecedented, decisive and concerted policy action has helped to arrest the decline and boost global demand.”
Snap news
Breaking pre-market news on Wednesday,
- NYSE Euronext announces plan to sell stake in NYSE Amex options market – statement.
- Merck KGaA aquires Suzhou Taizhu Technology for €28m – statement.
- Vivendi launches amicable €2bn tender offer for Brazil’s GVT – statement.
Kraft hints at hostile move for Cadbury
Kraft, the largest US food maker, has warned that Cadbury will struggle to stay independent if the UK confectionery group continues to spurn its £10.2bn takeover approach, reports the FT. Irene Rosenfeld,
Mobile JV puts heat on Vodafone, Telefónica
Vodafone and Telefónica of Spain are under mounting pressure to strengthen their positions in the UK after the publication of plans for a joint venture between France Telecom’s Orange UK and Deutsche Telekom’s T-Mobile UK.
Crackdown ‘threatens’ bank profits
The global regulatory crackdown in the wake of the financial crisis is likely to cut long-term profitability at US and European investment banks by nearly a third, forcing them to cut bonuses and shed staff,
Ackermann calls for capital rules
Banks must accept the need for tougher capital requirements, Josef Ackermann, chief executive of Deutsche Bank and one of the banking industry’s top figures, said on Tuesday, after politicians and regulators moved this week to require institutions to hold bigger buffers against possible losses.
BofA sought advice on ‘MAC’ clause
Bank of America executives were so concerned about the worsening financial condition of Merrill Lynch last year that they sought legal advice about the applicability of a “material adverse change” clause before the Dec 5 shareholder vote on the acquisition,
Bankers sue for bonuses
Seventy-two City bankers are suing Dresdner Kleinwort and Commerzbank for €33m ($47.8m) worth of unpaid bonuses in the biggest case of its kind in the UK. The lawsuit, filed on Tuesday in the High Court,
Spending cut pledges help UK’s rating
A growing political consensus on the need to cut public spending is set to preserve Britain’s top-notch triple A credit rating. Moody’s, the rating agency, will announce on Wednesday that a downgrade is unlikely even though Britain’s budget deficit will soon be the worst among advanced economies.
UK pension shortfalls near £200bn
Surging equities markets last month failed to offset the effects of falling gilt yields, sending the aggregate shortfall of UK pension schemes towards £200bn. According to the Pension Protection Fund’s 7800 Index,
CNPC gains $30bn loan for expansion
China National Petroleum Corp, parent of PetroChina, the world’s biggest company by market value, has gained a $30bn loan from a state Chinese bank to fund its “rapid overseas expansion”, reports Bloomberg.
Battle escalates for PAI Partners
Investors in PAI Partners will meet in Paris on Wednesday to discuss the fate of the biggest buyout house in continental Europe, which is embroiled in an acrimonious battle for control. After PAI’s two top executives – Dominique Mégret,
Lone Star in J-Reit rescue attempt
The attempt by Lone Star to acquire New City Residence, Japan’s first real estate investment trust to file for court protection, appears likely to fail on Wednesday when creditors meet for a second time to vote on the US hedge fund’s proposal.
Overnight markets: Mostly down
Asian stocks mostly fell on Wednesday. Futures on the S&P500 Index lost 0.3% after the gauge rose 0.9% on Tuesday after metal prices jumped as the dollar weakened and Goldman Sachs boosted its forecasts
US consumers: massive deleveraging in full swing
Consumer credit outstanding – think credit card debt and auto loans – tumbled a seasonally adjusted annual rate of 10.4 per cent to $2,472bn, the Federal Reserve said on Tuesday.
Revolving credit decreased at an annual rate of 8 per cent,
CDS report: Kraft’s debt burden leaves an opening for Nestle
Markit’s Gavan Nolan wrote this CDS report.
European credit indices continued to tighten today, helping to reverse the widening seen last week. The Markit iTraxx Europe index was trading around 92bp,
“The simple fact is that Cadbury is worth what someone is willing to pay for it”
In an age of calculated leaks and a 24-hour news cycle (and of course, the ubiquity of social media), releasing statements purely via RNS – the official news service of the London Stock Exchange – is looking increasingly passe.
For Kaupthing’s creditors, ‘recovery’ means ’20 cents on the dollar’
Creditors of Kaupthing, the failed Icelandic bank with a fondness for over-the-top advertising, are unlikely to be having a good week.
As Bloomberg reported on Tuesday, those with claims on the bank will get back about 20 percent of what they are owed,
ECB secret QE, or not?
Edward Hugh pointed us towards an interesting ECB factoid at A Fistful of Euros this week: Net purchases of euro area government bonds by ECB Monetary Financial Institutions (MFIs) totalled €217bn between October 2008 and April 2009.