October, 2009
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Wolfgang Munchau: Making the case for a weaker dollar
Imagine a world with a small current account deficit in the US, a somewhat larger deficit in the eurozone and a not too excessive Asian surplus.
Snap news
Breaking pre-market news on Monday,
- JJB Sports confirms it’s finalising equity issue to raise £100m — statement.
- Bishop drops out of race for ITV chair — FT.
- Corporate: Carillion, Xstrata,
Blackstone plans listing spree
Blackstone, the world’s largest buy-out firm, is planning to list up to eight companies it owns and sell at least five others, in a marked reversal of its pessimistic view of financial markets. In a letter sent to investors on Friday,
Citi fined in tax crackdown
Citigroup is to be fined over derivatives transactions that were partly designed to help foreign clients avoid taxes on dividends, in a move that could herald a wider crackdown against US banks that used similar strategies.
Loan losses to hit US banks in Q3
Third-quarter earnings results from big US banks this week are likely to be dampened by continuing problems in consumer credit and commercial real estate. Strong results are expected from Goldman Sachs on Thursday although it is not certain it can top its record Q2 performance.
US option grants draw scrutiny
Numerous companies have awarded stock options to their top executives while engaged in negotiations to be acquired, reports the WSJ. The practice, which experts say appears legal under US federal law, typically results in the target company’s executives gaining a bigger payout when the takeover is later announced.
BofA urged to seek outsider
Pressure from institutional investors is building on Bank of America’s board to name an outsider to replace Ken Lewis, who retires as chief executive at year end. Three institutional investors are said to have urged BofA to consider external candidates,
US ‘pay tsar’ takes hard line on AIG
Kenneth Feinberg, the Obama administration’s “pay tsar”, has signalled a tough stance on executive pay at AIG, the state-controlled insurer that sparked outrage over bonus payments earlier this year.
GI falls short on new fund
GI Partners, the Anglo-American private equity group, plans on Monday to announce a new $1.9bn fund, a quarter less than its target but a sign that investors are still backing buy-out groups with solid records.
More investors hit buy-out fees
Pressure is building on buy-out groups to cut the fees they charge their backers. Watson Wyatt, the investment consultant, has proposed fairer terms for investors, including a 1.75% management fee based on a five-year commitment and 20% of gains over a preferred return of 8%.
Anglo Irish to sell €1bn of property
Anglo Irish Bank is in talks to sell a €1bn (£925m) real estate portfolio, including UK properties such as Liverpool’s Metquarter shopping centre, to Stephen Vernon, the British property entrepreneur.
New delay sought on NatExpress
The Spanish-led consortium bidding for UK rail and bus operator National Express is seeking an extension of the official deadline for making its bid, worth £765m, which expires at 5pm on Friday. The UK Takeover Panel has already extended the “put up or shut up” deadline from Sept 11.
UK’s FSA probes Cattles
The UK’s FSA watchdog is investigating charges of share price manipulation at troubled Cattles, the sub-prime lender, in a move that could see some of its former directors facing jail for up to seven years,
Bear Stearns duo to stand trial
A US federal jury will this week start to hear the first and only criminal case against Wall Street executives arising from the credit crisis. The trial in a Brooklyn, New York courtroom of Ralph Cioffi and Matthew Tannin,
Lazard’s Wasserstein hospitalised
Bruce Wassertstein, chairman and chief executive of investment bank Lazard, is in “serious” condition after being hospitalized for an irregular heartbeat, the company said in a statement, reports Bloomberg.
China in push for Guinea resources
The military-backed government of Guinea is negotiating with a Chinese fund to bring in billions of dollars of financing for infrastructure and minerals projects – and to prospect for oil. Talks could be concluded by the end of the year,
Weekend catch-up
In case you missed these stories,
- Citi to sell Phibro unit to Occidental
Citigroup said on Friday it has sold its controversial commodity unit Phibro to Occidental Petroleum, for a cut price amid US government pressure over the compensation of star trader Andrew Hall.
Overnight markets: Mostly up
Asian stocks mostly rose on Monday after Singapore raised its 2009 economic forecast and New Zealand house prices increased for a fifth month. Japan was closed for a public holiday. Futures on the US S&P500 Index were little changed after the Dow rose 0.8% on Friday to a one-year high helped by gains in technology and health-care shares.
The Weekender
On FT Alphaville this week,
- Do not sell equities, Credit Suisse says.
- Aggressive FX marketing goes mainstream.
- The end of Kobe beef burgers, or how thrift stole Christmas.
- The segmented commercial real estate crash in the UK.
CDS report: The week in perspective
Markit’s Gavan Nolan wrote this CDS report
A sense of foreboding enveloped the credit markets last week. A plethora of economic indicators – leading and lagging – gave investors cause to question the V-shaped recovery being priced into credit spreads.
Would you invest with the Cruz Missile?
Zoe Cruz, who was ousted in late 2007 as a co-president at Morgan Stanley, is preparing to make a come back. According to the Wall Street Journal – and people familiar with the situation – Cruz is working on plans to launch a hedge fund.
Overheard in the Long Room
The members of FT Alphaville’s private forum, the Long Room, enjoy (and regularly engage in) spirited debate. Here’s a selection of what’s been said and posted just recently.
- On the mining table, a comprehensive guide to decoding the explorers.
Fuming with Dave
Regulars will know that we look forward each day to “Breakfast with Dave,” the regular market musings of David Rosenberg at Gluskin Sheff.
Sometimes it’s called “Lunch with Dave”, presumably when he’s travelling or had a late night.
Et tu Bernanke?
Societe Generale’s Dylan Grice, the Robin to Albert Edward’s Batman, has published a fresh bit of research on Friday.
As can be expected of the bearish duo, the note does not disappoint on the bleakness front.
A new twist on people familar with the matter
Journalists may not advertise the fact, but leaked information and documents from anonymous and not-so-anonymous sources come in useful in the news business.
Regular readers of FT Alphaville will be familiar with the bandits,
Earth to Earthport, come in
We have been quietly following this international payment services company, Earthport, for some time now, as rumours of a profits warning and a failed strategic review have swirled round the market.
Yet each time FT Alphaville has contacted the company or its representatives we have been told the speculation was false.
The return of the commercial mortgage backed security
The moribund market for CMBS may be coming back to life, according to a Bloomberg story on Friday. The headline on the piece is “Goldman Sachs seeks to restart commercial-backed bond sales.” Really, it should have been “Goldman,
Occidental to buy Phibro (and Andrew Hall)
Weeks of speculation about what may or may not happen to Phibro, Citigroup’s energy trading arm, and finally some cold hard facts. A company release confirms Occidental Petroleum is buying out Phibro – and the trading unit’s controversial boss Andrew Hall is included in the deal.