September, 2009
Mexican oil bet reaps $8bn windfall
Mexico is set to earn a record $8bn from financial contracts it bought last summer as insurance against weaker energy demand and lower oil prices this year, the FT has learnt. The oil producer’s astute risk management will make it the envy of Opec,
Overnight markets: Mostly down
Asian stocks mostly fell on Tuesday, led down by Japanese banks, after figures showed the country’s lending growth slowed. Technology and commodity companies advanced as computer memory prices and metal prices rose.
UN weighs in on the dollar-reserve debate
Crikey, talk about being blunt.
The UN’s Conference on Trade and Development put out a somewhat forthright view on the subject of international-reserve currencies on Monday. In no uncertain terms, the UN appears to be calling for the end of dollar hegemony.
A Zimbabwe rally effect?
When is an equity rally actually symptomatic of an inflationary environment to come?
That would be when it happens in Zimbabwe.
As Hinde Capital, a gold-focused hedge fund, notes in a recent report entitled “Aurophobia”
Cayman down
Small island-nation. Check.
Host to a plethora of banks and financial institutions. Check.
Rumours of imminent bankruptcy. Check.
This time, however, the state involved is the Cayman Islands — the Caribbean country beloved of hedgies and tax exiles.
Santander subordinates on siesta
What’s red and white and doesn’t redeem itself ’till December?
A Banco Santander LT2 callable bond!
Santander’s announcement last week, that it would not be calling one of its subordinated bonds,
Kradbury: More hot chocolate
Cadbury shares burst through the 800p level this morning, with much chatter in the market over whether Nestle could launch a counterbid.
The main hitch would be that a combined Cadbury-Nestle would hold close to half of the UK chocolate market – something unlikely to get past the Office of Fair Trading and then the Competition Commission.
How to deal with bank hoarding
QE galore in the UK, and yet banks are reportedly still failing to pass on the extra liquidity. A recent report by Investec pointed out commercial banks were holding some £138bn on account at the Bank of England.
Lunch Wrap
On FT Alphaville Monday morning,
- Dear Cadbury’s…
- And Cadbury’s wispas.
- A lucky escape for Cadbury shorts.
- Some emergency, securitised CPR.
- It’s all in a weekend’s work, for AIG.
Markets live transcript 7 Sep 2009
Markets live chat transcript for the chat ending at 12:06 on 7 Sep 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ)
NH:
Good morning and welcome to Markets Live
Lucky escape for Cadbury shorts
This chart, from Data Explorers, shows the Kraft approach hasn’t left too many Cadbury shorts caught in a sticky situation.
Those who got out back in May must be shaking with relief.
British Airways pension tension
As FT Alphaville noted last week, the percentage of British Airways’ shares on loan has been climbing, making it the short-sellers’ favourite airline.
One theory behind the rise is that the carrier’s pension deficit will not make for happy reading when its trustees publish the results of their triennial revaluation sometime in September.
Mideast SWF powers into chips as Temasek exits
An interesting deal on Monday brings further signs of recovering activity among Middle Eastern sovereign wealth funds — and an emerging new force in the global semiconductor business.
Advanced Technology Investment Co.,
Commodity index inflows are back
With much attention focused on commodity exchange-traded-product flows, one could be forgiven for overlooking the passive commodity index-linked mutual fund space.
Nevertheless, as Barcap pointed out in a recent research note,
Cadbury wispas
Shares in Cadbury are trading through the terms of Kraft’s hostile approach on Monday morning, as the market bets on an increased offer or a counter bid.
Kraft is offering 745p in a mixture of cash and stock for Cadbury,
AIG: All in a weekend’s work
It’s nice to see AIG’s new chief executive Robert Benmosche get down to some old-fashioned deal-making, after recent headlines have focused overwhelmingly on the troubled insurer’s protracted and bitter battles over shareholder lawsuits.
Dear Cadbury’s…
Included in Kraft Food’s statement on its £10bn hostile offer for Britain’s Cadbury are two letters from the CEO of the US food and drinks-maker to the confectioner’s chairman, setting out her “strategic rationale”
Further reading
Elsewhere on Monday,
- If HBOS and RBS had gone under the FSA could have turned off their cash machines.
- Why friendliness isn’t insider trading.
- How turnout at shareholder meetings has increased during the crisis.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Comment: hedge funds show the way on bonuses
The world’s finance ministers, meeting in London at the weekend, zeroed in on bonuses as the symbol of financial sector excess.
Snap news
Breaking pre-market news on Monday,
- Kraft makes £10bn hostile offer for Cadbury — statement, statement.
- AIG to sell portion of investment advisory business for $500m — statement.
- Corporate:
G20 puts pressure on banks
European banks face pressure to issue far more shares in order to meet a tough new global regulatory framework outlined at the weekend by G20 finance ministers which calls for much stronger capital buffers.
ATIC bids $1.8bn for Singapore chipmaker
Advanced Technology Investment Co, owned by the government of Abu Dhabi, has agreed to buy Singapore-based Chartered Semiconductor Manufacturing for S$2.5bn ($1.8bn) in cash and plans to combine it with its Globalfoundries Inc,
Chinatrust bids $2.4bn for AIG unit
Chinatrust Financial, Taiwan’s top credit card issuer, offered $2.4bn for AIG’s Taiwan Nan Shan Life unit, outbidding rivals, reports Reuters. Primus Financial, which was competing with Chinatrust for Nan Shan,
Li seals AIG unit purchase
Hong Kong tycoon Richard Li sealed a deal at the weekend to pay about $500m for part of AIG’s asset-management business, reports the WSJ. Li’s wholly-owned investment vehicle Pacific Century Group will pay an initial $300m in cash on closing for AIG Investments,
Lehman leads in ‘lottery ticket’ rally
Almost a year after Lehman Brothers filed for bankruptcy, the value of Lehman shares has soared amid a surge in trading activity that one analyst described as “tulip mania”. Other bankrupt companies,
New UK bank to focus on smaller businesses
A new retail bank aiming to lend to cash-strapped small and medium sized businesses is to be established by one of the UK’s best known banking analysts. Panmure Gordon’s Sandy Chen is part of a team in talks to raise more than £100m through a listing on the Aim market.
Fight is on for T-Mobile UK
A bidding war has started for T-Mobile UK after Vodafone and Telefónica made informal offers worth about £4bn for Deutsche Telekom’s British subsidiary. The cash offers, submitted at the end of August,