October, 2009
Snap news
Breaking pre-market news on Monday,
- Aviva announces price range of €2.6bn to €3.1bn for Delta Lloyd listing – statement.
- National Express confirms it has received a “highly preliminary” merger proposal from Stagecoach – statement,
Citi could lose Mexican unit
Mexico’s Supreme Court is this week set to probe a case that could potentially force Citigroup to sell its profitable and highly prized Mexican subsidiary. The case stems from claims by opposition senators that the US bail-out of Citi last year placed its Mexican subsidiary,
RBC set for C$1bn in buy-backs
Royal Bank of Canada has indicated it could spend more than C$1bn ($965m) on share buy-backs, underlining the contrasting financial health of Canada’s banks and many US and European counterparts. Canadian banks have built a sizeable capital cushion over the past 18 months through retained earnings and new equity and preferred-share issues.
US gears up after Rajaratnam arrest
US federal investigators are gearing up to file charges against an array of insider-trading networks, some linked to the criminal case against billionaire hedge-fund manager and founder of Galleon Group Raj Rajaratnam who was arrested on Friday,
Russia looks to raise $18bn
Russia is to launch its first international bond in a decade to bolster its public finances and take advantage of surging demand for emerging market debt. Russia, which last issued a bond aimed at international investors in 2000,
US banks see toxic assets rally
US banks such as Citigroup and JPMorgan Chase have earned billions of dollars from their “toxic” portfolios in the past three months as a rally in some of these distressed assets enabled them to book accounting gains or sell them.
CME in talks with CBOE
CME Group, the world’s largest derivatives exchange, is in talks to take over the Chicago Board Options Exchange in a deal that would value the largest US options market at up to $5bn, according to Crain’s Chicago Business,
Kroll to launch ratings business
Jules Kroll, the man who reinvented the detective agency as the global corporate security firm, is now targeting the credit-ratings industry with plans to start a business to challenge the big three credit rating agencies in the first quarter of 2010.
NatEx, Stagecoach in bid clash
A war of words broke out on Sunday night between National Express and rival UK transport group Stagecoach as doubts grew about the future of the troubled rail and bus operator. Stagecoach, which decided against bidding for NatEx in September as the Spanish Cosmen family pursued a bid,
ICBC to raise stake in CS venture
Industrial and Commercial Bank of China is expected to expand its share of a fund management joint venture with Credit Suisse in a move that may bode ill for foreign groups in China’s so-far relatively open fund management sector.
CIT amends restructuring plan
CIT Group has sweetened the terms of a restructuring plan after struggling to win bondholder support for concessions to reduce CIT’s $30bn debt load. The amended terms, announced late Friday, were agreed in talks between the troubled US commercial lender and its bondholders who earlier this year provided CIT with $3bn of rescue financing.
Mideast investors ditch private equity
Middle East families and sovereign wealth funds are slashing their investments and demanding more favourable terms from private equity funds. The region has been a major source of capital for the private equity industry in recent years but many investors are still suffering from the collapse in liquidity after the failure of Lehman Brothers.
Financial services fraud soars 22%
Financial services executives have reported a big spike in fraud, according to a survey that found that average company losses due to financial fraud in the past three years totalled $15.2m, up 22% from 2008’s tally.
Weekend catch-up
In case you missed these stories,
- Rajaratnam, others, charged in insider trade case
Billionaire investor Raj Rajaratnam, founder of the Galleon Group, and present and former executives of Bear Stearns,
Overnight markets: Down
Asian stocks fell on Monday after disappointing results from General Electric and Bank of America prompted concerns about the US economic recovery. Futures on the S&P500 Index fell 0.4% on Monday after the gauge lost 0.8% on Friday as GE’s Q3 revenue trailed analyst estimates and Bank of America led financial shares lower after it reported a $1bn loss.
The Weekender
This week on FT Alphaville,
- China’s liquid real estate bubble.
- Where to find value in a liquidity drunk market.
- Citi of questionable accounting and reserve provisioning.
- Gawker’s crowd-sourced Goldman Sachs witchhunt.
CDS report: This rally has legs
This CDS week in review was written by Markit’s Gavan Nolan
At nearly eight months old, the current rally has proved to be more durable than many supposed. Back in spring, when the markets were shell-shocked,
[Galleon] “I’ll be like Martha ……. Stewart” – FBI cracks alleged Rajaratnam ring
Okay, this looks like a big one. The FBI and other US enforcement agencies on Friday moved against an alleged insider dealing ring stretching from Wall Street to Silicon Valley, by way of Bear Stearns,
Credit Suisse (still) ♥ gold
We hadn’t quite appreciated how much of a gold bug CS strategist Andrew Garthwaite is. Turns out he’s smitten, and has been since March 2007.
A 24-page epistle to the investment bank’s clients on Friday set out his case:
Citi of questionable accounting and reserve provisioning
Citi has never been a paragon of accounting standards, so it’s with little surprise that we read the latest work from the oft-controversial Bloomberg columnist, Jonathan Weil.
Weil has been a vehement critic of Citi,
Lunch Wrap
On FT Alphaville Friday morning,
- A Goldman round-up.
- Smart guys in history: The Trillin debate.
- China’s liquid real estate bubble.
- Unilever to bid for Cadbury?
- Deal break, National Express edition.
BofA reports loss of $0.26 a share, net loss of $1bn
Rounding out a collection of US bank results on Friday was Bank of America, with the first of the week’s earnings misses.
The bank reported a diluted loss per share of $0.26 and a net loss of $1bn on revenue of $26.4bn.
Pimco looks to Asian bonds
When Pimco moves in, you know there’s money to be made.
Amid signs of both currency appreciation and economic recovery among various Asian countries, Bloomberg reports on Friday that Pacific Investment Management Co.,
Goldman round-up
Here’s what we hope could be a helpful collection of analysts’ comments on Goldman Sachs third-quarter results.
The major takeaway is that there’s still a reasonable amount of concern about whether the bank can continue its strong performance in places like Fixed Income Currencies and Commodities.
Markets live transcript 16 Oct 2009
Markets live chat transcript for the chat ending at 12:19 on 16 Oct 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE) NH:Hello NH:it’s 11.03am
The pictorial Lloyds capital raising
Putting Lloyds £15bn capital-raising plans into sharp perspective on Friday, is Jason Napier at Deutsche Bank, click to enlarge:
If Lloyds’ Asset Protection Scheme-avoiding rights issue does come to pass it would be the first line on that chart.
Smart guys in history: The Trillin debate
Author Calvin Trillin has really set something off with “Wall Street Smarts”, a brief and whimsical take on the downfall of Wall Street, published earlier this week in the New York Times.
In brief, he argues that the smart guys caused the financial crisis,
China’s liquid real estate bubble
That is the building which houses the most expensive apartment in Hong Kong. The five-bedroom apartment sold for $56.6m on Wednesday, sparking further speculation that the city — and the rest of China — might be in the grips of a real estate market bubble.
Unilever to bid for Cadbury?
No this isn’t RAW market info but some fantasy M&A from Panmure Gordon.
Analysts Graham Jones thinks Unilever should seriously consider offering 850p a share for Cadbury as it would be earnings enhancing and add meaningful exposure to what is already one of the best emerging operations in the consumers goods industry.