September, 2009
China Unicom in $1bn Telefónica deal
China Unicom and Spain’s Telefónica are to broaden their alliance through an initial deal to buy equity stakes in each other worth $1bn apiece. It is the first time a China telecoms group has taken an equity stake in a European operator.
Xstrata keeps investors guessing
Lonmin, the South African platinum miner, could receive a renewed bid from Xstrata as early as next month, a possibility sent Lonmin’s shares up 14% last week amid speculation that acquisition-driven Xstrata might turn to smaller targets as its proposed merger with Anglo American loses momentum. A renewed bid for Lonmin,
European banks cut external providers
European investors may lose out as the continent’s banks cut out all but a handful of external fund providers, according to some big fund houses. A system of open or “guided” architecture - introduced by Germany’s Commerzbank in 2001 – has become the standard in Europe,
Huntsman seeks deals in China
Huntsman, the US chemicals group, is considering spending part of a $2.7bn compensation package from the collapse of a buy-out plan to acquire specialty chemical plants in China. The group, which moved its textile chemicals business HQ from Basel to Singapore earlier this year,
Jon Moulton plans swift comeback
Jon Moulton, the outspoken veteran of the UK private equity industry, is planning to stay in the sector despite quitting Alchemy Partners, the firm he founded, after a bust-up with Dominic Slade, his chosen successor,
Overnight markets: Up
Asian stocks rose on Monday for a third trading day, led by technology companies and automakers, as a $1.8bn bid for Chartered Semiconductor fuelled merger speculation. Futures on the S&P 500 were little changed after the stock gauge climbed 1.3% on Friday after employment figures showed that US companies cut fewer jobs last month than economists had estimated.
The Weekender
On FT Alphaville this week,
- China’s derivative threat caused a stir.
- Hybrid heroes and villains were revealed.
- Surprise! Spanish banks were not hiding their losses!
- QE was so money,
Deutsche warn on the liquidation risk facing commodities
The closure of Deutsche Bank’s Powershares DB Crude Oil Double Long exchange-traded-note this week sent a sizable ripple through both the exchange-traded products and commodities space.
For the commodity markets,
Mixed signals from fickle China
The Chinese foreign exchange regulator, the State Administration of Foreign Exchange (SAFE), announced proposals on its website on Friday to allow individual qualified foreign institutional investors to invest up to $1 bn in local yuan-denominated stocks.
Delusions, corporate credit edition
Scenario 1: The eurozone will grow by 1.5 per cent over the next year.
Scenario 2: Parts of the European corporate bond market are tear-jerkingly deluded.
The chart below shows how BBB-rated non-financial investment grade European corporate debt has gone from pricing in a depression at the end of last year to becoming “modestly overvalued”,
UK property, building castles in the sand
How often do you see a research report on UK property kicked off by a Jimi Hendrix quote?
The third edition of JP Morgan’s annual European Property Handbook came out earlier this week, and it makes for poetic,
US August non-farm payrolls fall by 216,000
US non-farm payrolls fell by 216,000 jobs in August, the Bureau of Labor Statistics said on Friday.
That compared to a general consensus figure for a loss of 225,000 jobs, according to Reuters.
The unemployment rate rose from 9.4 per cent in July to to 9.7 per cent last month — the highest since June,
Lunch Wrap
On FT Alphaville Friday morning,
- Hybrid debt attack hits RBS.
- The hybrid conundrum.
- Buffett dumps more Moody’s shares.
- When Goldman met Lloyds.
- HFT in commodity ETFs.
- Japan’s first post-LDP week.
HFT in commodity ETFs
When looking through the top holdings of the Powershares DB double long crude ETC, the leveraged commodity ETF that is about to be liquidated, we were intrigued to discover that the largest owner of units was one EWT LLC,
The hybrid conundrum
RBS shares are up 2.7 per cent in London trading — on news that the bank will be alienating its bondholders by not calling four of its Tier 2 subordinated, or hybrid, bonds.
While not calling the bonds means RBS gets to keep a cheap source of capital for a while longer,
Markets live transcript 4 Sep 2009
Markets live chat transcript for the chat ending at 12:08 on 4 Sep 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE) Tracy Alloway, FT (TA) NH:good morning NH:and welcome to Markets Live
The ups and downs of Japan’s first post-LDP week
It has been a very bad week for stocks and (LDP) politicians in Japan. Commentators might still be excited over the landslide election that ended the LDP’s multi-decade hold on power and ushered in the opposition DPJ last Sunday.
When Goldman met Lloyds…
. . . on Thursday night.
GS meeting with management. Key takeaway: “everything is proceeding according to plan with regards to the [UK Government's asset protection scheme], however, the board will always look out for shareholders and should an alternative,
Hong Kong hauls over the gold
Thanks to our readers for pointing out a report that Hong Kong is planning to open a new precious metal depository at its international airport.
The announcement from the Hong Kong authorities came on Wednesday September 2,
The Geithner plan for banks
The key points from Friday’s FT comment piece.
First, capital requirements for banks simply must be higher across the board. Bringing more capital into the banking system is vital. It is equally crucial to hold the largest,
It’s an economist-eat-economist world
Paul Krugman, never the shy retiring type, could well have started something akin to the debate sparked by Michael Lewis’s take on the “end” of Wall Street with his exhaustive and thought-provoking New York Times article — “How Did Economists Get It So Wrong?”
Hybrid debt attack hits RBS
Fresh from the LSE — a bombshell for the British bond market, courtesy of the FSA and the European Commission:
Released 4-Sep-2009
In the context of ongoing discussions between the UK Government and European Commission about the RBS restructuring plan and the Commission’s recent communication on restructuring,
Further reading
Elsewhere on Friday,
- How did economists get it so wrong?
- The insanity of Kaupthinking.
- Football, statistics and agency problems.
- Citi, the perfect hedge.
- Peak oil and the hamster on a wheel.
Pink pinks
Comment, analysis and other offerings from Friday’s FT,
Financial stability depends on more capital
US Treasury secretary Tim Geithner writes: A year ago, deep concerns about excessive leverage almost brought down the global financial system.
Snap news
Breaking pre-market news on Friday,
- FSA objects to RBS calling four suboordinated debt instruments — statement.
- Corporate: Elan, Fyffes, John Lewis.
G20 plans for stimulus exit
World leaders on Thursday set out the first steps toward withdrawing emergency support for the global economy even while warning the crisis was not over. The US, UK, France and Germany called for work to start on “exit strategies to be implemented in a co-ordinated manner as soon as the crisis is over”.
Europeans urge bank bonus rules
The leaders of Europe’s three largest nations, Britain, France and Germany, called on Thursday for “binding rules” to rein in bankers’ bonuses as G20 finance ministers prepared to meet in London this weekend.
Credit Suisse in talks for Mesirow unit
Credit Suisse Group is in talks to acquire a Chicago investment business with $11bn in assets, reports the WSJ. The Swiss bank is in discussions with Mesirow Financial, a privately owned trading and investment-advisory firm,