October, 2009
Credit Suisse leads over pay reforms
Credit Suisse on Tuesday became the first big international bank to respond formally to regulatory demands for pay reform, with plans to increase the proportion of bonuses to its top earners paid over a period of years and reflecting longer-term performance.
Deutsche agrees deal on ABN assets
Deutsche Bank has reached preliminary terms with the Dutch government to buy commercial banking assets from ABN Amro, removing a potential obstacle imposed by Brussels on plans to restructure the nationalised Dutch bank.
Santander eyes special dividend
Santander, the eurozone’s biggest bank market cap, is generating capital at such a rate that it may have to return cash to shareholders next year through a special dividend, according to Alfredo Sáenz,
Swedbank braced for Latvian devaluation
Swedbank on Tuesday acknowledged it was planning for a possible currency devaluation in Latvia but suggested that the worst could be over in the troubled Baltic region. Economic turmoil in Latvia and Lithuania pushed Swedbank – which has the largest Baltic exposure among Nordic banks - to its third consecutive quarterly loss,
Bank NY Mellon tops forecasts
Bank of New York Mellon on Tuesday reported a Q3 net loss after a charge to restructure its investment portfolio, but earnings excluding one-time items topped expectations and its shares climbed almost 3%,
Hopu in first deal outside China
Hopu Investment Management, the Beijing-based buy-out fund set up by ex-Goldman Sachs dealmakers, has made its first investment outside China, acquiring a 4.9% stake in Lippo Karawaci, an Indonesian-listed real estate and hospital developer,
California acts against State Street
California has launched a $200m legal action against State Street, accusing the institutional money manager of committing “unconscionable fraud” against Calpers and Calstrs, the largest US pension funds.
Sun axes 3,000 jobs, blames Brussels
Sun Microsystems on Tuesday announced plans to slash 3,000 jobs over the next year, putting the move down to the delay in getting European Commission clearance for its agreed $7bn acquisition by Oracle.
Credit Suisse settles Brazilian case
Credit Suisse International has offered to pay R$19.2m ($10.9m) to Brazil’s securities commission to end an action over alleged insider dealing in shares of Embraer, the Brazilian aircraft manufacturer.
Setback for US oil trade crackdown
US plans for an aggressive crackdown on energy speculation could unravel amid doubts voiced by leaders at the US commodity regulator over proposed reforms. Two commissioners at the Commodity Futures Trading Commission have warned that proposals to cap investors’ holdings in oil and commodities futures could drive trading from US exchanges,
Overnight markets: Down
Asian stocks fell on Wednesday, led by materials and technology companies, on declines in commodity prices and worse-than-forecast US September housing starts. US Treasuries and the dollar advanced, while futures on the S&P500 Index dropped 0.2% after the gauge sank 0.6% on Tuesday.
King gets Churchillian and declares: ‘Break up the banks’
Never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.
That’s Bank of England governor Mervyn King, speaking in Edinburgh on Tuesday night.
The price of cash
The old-fashioned folding stuff has become the global benchmark of value, according to Jan Loeys of JP Morgan.
Painful as it maybe for the likes of David Rosenberg, the “expensiveness” of cash is forcing up the price of virtually all other assets — and the JPM global asset allocation team reckon that as long as the return on cash remains pegged near zero,
Bubble management, Brazilian style
Brazil’s IBOVESPA equity index fell an eye-catching 3,155 points at one stage on Tuesday.
That, of course, amounted to a setback of just less than 5 per cent, taking the index down to 64,076 — Brazil’s high-five-figure corporate indicator being a hang-over from past bouts of hyper-inflation.
Would you like a massage for your stressed VaR?
The BIS has released its analysis of proposed changes, adopted in July, to Basel II capital rules.
It’s basically an exercise in seeing just how much more capital banks will have to hold under the rejigged rules,
[Galleon] The Galleon index
Wall Street, as anyone familiar with the failure of Long Term Capital Management will know, treats a teetering hedge fund as carrion crows do a wounded animal.
And with Galleon investors rushing to withdraw money from the scandal hit fund (the WSJ reports about $1.3bn of its $3.7bn of assets having been pulled) the feeding frenzy has begun.
An own goal in Brazil’s capital controls?
Whoops, so much for that Olympics-inspired Brazilian ETF effect.
Brazil, land of football and painful female grooming, has just imposed a tax on foreign investments in the country.
From the FT:
Brazil has imposed a 2 per cent tax effective from Tuesday on money entering the country to invest in equities and fixed income instruments.
Lunch Wrap
On FT Alphaville Tuesday morning,
- Qataris sell Barclays, Barclays places Barclays.
- On Timis watch – Frank goes for Sound Oil.
- My King-dom for some QE guidance.
- And QE according to Smithers.
QE according to Smithers
Speaking of quantitative easing, as FT Alphaville just has in a neat scene-setter for a Tuesday speech by Bank of England governor Mervyn King, Andrew Smithers of Smithers & Co warns in his latest world market update that asset prices are likely to fall after central banks end their QE programmes.
Markets live transcript 20 Oct 2009
Markets live chat transcript for the chat ending at 12:13 on 20 Oct 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) Paul Murphy (PM) NH:Good morning
Ben sets Asia straight – or does he?
The wheels of diplomacy were nicely oiled on Ben Bernanke’s trolley at the US-Asian economic gabfest hosted by the San Francisco Fed in Santa Barbara on Monday.
In a carefully-crafted rundown on Asia and the global financial crisis,
My King-dom for some QE guidance
Tuesday is a big day for quantitative easing watchers in the UK.
As a reminder, markets are holding their collective breath to see whether the Bank of England will vote to increase, pause or end its £175bn asset-purchasing programme at its November interest rate meeting.
Japan’s minister for disruption strikes the world’s biggest bank
“Two words go a long way to explain why investors seem less enamoured of the administration of prime minister Hatoyama than the electorate is”, in the words of Jonathan Allum, strategist at KBC Financial Products.
Timis watch – Frank goes for Sound Oil
Frank Timis, always a go-go sort of guy, appears to have found a new play thing.
Our favourite hyperactive dealmaker and philanthropist – famed around the City for presiding over, ahem, a bit of a mix up at Regal Petroleum back in 2005 - is now eyeing up dinky Indonesia-focused energy prospect Sound Oil.
Reading the RBA minutes
Want more detail on the decision of Australia’s central bank to hike interest rates?
The move made Australia the first G20 nation to raise rates since the peak of the financial crisis, and prompted much talk of a global economic recovery.
Further reading
Elsewhere on Tuesday,
- The 1987 crash revisited.
- David Einhorn on gold, sovereign risk and more.
- How Moody’s sold its ratings.
- Did easy money fuel the commodity boom?
- Research analysts go renegade.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: How small nations were cut adrift
After the Great Recession, the economic and political tide has turned against small nations.
AV after dark
On FT Alphaville late Monday,
- Chasing (and losing) insiders.
- The tech analysis party poopers.
- The next wave of bank cash calls.
Over in the Long Room,
- A flurry of activity on the new CFA table.
Snap news
Breaking pre-market news on Tuesday,
- Lloyds Banking Group sells Bank of Scotland portfolio management service to Rathbone £35.4m – statement.
- Balfour Beatty wins US contract worth $449m – statement.