October, 2009
Capitalising on recapitalisation…
… is something that can be done by buying European banks’ Tier 1 bonds — even hybrid ones — according to Société Générale credit analysts.
The whole thesis is based, firstly, on the idea that under new regulation (the strengthened Basel II,
Latvia preparing for devaluation?
On Tuesday, we reported that Latvia’s government was taking legislative steps to change the sums lenders could collect on outstanding mortgages to better reflect the current market value of the properties.
Reflation, deflation, greed & fear…
Should we be worrying about inflation? Deflation? Reflation?
Or, perhaps, as CLSA’s Asian equity strategist Christopher Wood suggests further down, none of the above?
But first, the FT’s John Authers kicks off the debate with his Short View column on Wednesday,
Charting Spain’s flujo de fondos
A Spanish chart bonanza courtesy of JP Morgan.
The second-quarter flow of funds data, which documents things like spending and savings behaviour, for Spain is now available and JPM has helpfully provided us with the charts.
Further reading
Elsewhere on Wednesday,
- Wall Street’s near-death experience.
- How to take advantage of Australia’s interest rate.
- “Who is going to benefit from bank [property] sales?”
- The Fed’s own commercial real estate crash presentation.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Where are we and where do we need to go?
A year ago, the world economy fell into a deep recession. Now, happily, we see financial stabilisation and economic recovery.
AV after dark
On FT Alphaville late Tuesday,
- When did BoA chief Krawcheck stop beating her spouse?
- One from the dot com(edy) archives.
- Outlook for US consumer-facing sectors still poor, S&P says.
- Reading the news flow.
Snap news
Breaking pre-market news on Wednesday,
- Julius Baer to buy ING Swiss private bank – statement.
- Spain’s Banesto 9-month net down 15.3 per cent on the year – report.
- Corporate: Air France KLM,
Australian rate rise boosts gold
Gold prices hit a record high and stocks rallied after Australia’s surprise interest rate rise on Tuesday boosted confidence in a global recovery. Australia stunned the markets, becoming the first G20 country to raise rates in more than a year by lifting the key rate 25bp to 3.25% and driving the Australian dollar to a 14-month high of $0.899.
ING may sell Swiss unit to Julius Baer
ING, the Dutch financial services company, may sell its Swiss private-banking unit to Julius Baer Group for about $500m and could announce the deal as early as Wednesday, reports Bloomberg. ING, which received $14.7bn in state aid last October,
Citi eyes Phibro sell-off
Citigroup is working on a sale of Phibro, its controversial commodities trading unit, in a move that could raise hundreds of millions of dollars and deflect political anger over a potential $100m payout for its star trader Andrew Hall.
SocGen plans €4.8bn fund raising
Société Générale hit the acquisition trail on Tuesday with a €1.4bn ($2bn) war chest after launching a €4.8bn rights issue to repay state aid. In one of his first big strategic moves since becoming executive chairman in May,
Banco Santander targets $8bn IPO
Banco Santander’s Brazilian unit is raising about 14.1bn reais ($8bn) in an IPO to fund expansion as growth accelerates in Latin America’s largest economy, reports Bloomberg. The bank is selling 600m units at a price of 23.5 reais apiece,
BofA narrows list of CEO candidates
Bank of America directors have narrowed the internal candidates to succeed retiring CEO Ken Lewis to the bank’s chief risk officer, Gregory Curl, and small-business banking chief, Brian Moynihan, reports the WSJ.
Exxon takes $4bn stake in Ghana field
ExxonMobil has agreed to acquire a large stake in Ghana’s Jubilee oil field from its private equity owners, paying about $4bn for one of Africa’s most potentially lucrative oil discoveries. The deal,
Alliance Bank in deal with creditors
The Kazakh government this week secured a deal with creditors to restructure Alliance Bank in a move that allows it to emerge as a going concern from the credit crisis. The restructuring plan, which involves creditors writing off part of Alliance’s $4bn gross debt in exchange for a stake in the bank’s equity,
Companies fear derivatives rules
Europe’s biggest industrial companies face the prospect of having to raise tens of billions of euros due to a proposed regulatory crackdown on OTC derivatives. Eon, Europe’s largest utility, said it would have to raise about €7.5bn ($11bn) in new credit lines or extra cash reserves if proposals from the European Commission were passed.
Boeing to take $1bn hit on 747-8
Boeing will take a $1bn charge in the third quarter on its 747-8 programme – the updated and stretched version of its 747 jumbo – making it the second high-profile new aircraft project to hurt the US group’s profitability in recent months.
Macquarie adds to star hires
Macquarie Group has made the latest in a string of high-profile international hires after naming Sam Small, a former managing director of Citigroup’s M&A unit, to head its European M&A business on Tuesday.
FSA acts on Dresdner traders
Two Dresdner Kleinwort bond traders are to be publicly censured by the UK’s FSA on Wednesday in a case that could trigger more challenges to the watchdog’s decisions. The pair have escaped both a fine and ban from the finance industry after moving to fight the market abuse case against them at a committee that oversees FSA decisions.
Merrill upgrade boosts financials
European stocks regained momentum on Tuesday boosted by strength in the financial and oil sectors. Bank stocks rose after the European banking sector was upgraded to “overweight” by BofA-Merrill Lynch,
Overnight markets: Up
Asian stocks rose on Wednesday for the second trading day, led by miners and banks, as gold prices surged to a record, metal prices rose and brokerages upgraded some companies. Futures on the S&P500 Index were little changed after the gauge added 1.4% in New York on Tuesday amid speculation that Q3 corporate earnings will top estimates.
When did BoA chief Krawcheck stop beating her spouse?
From Dealbreaker on the alleged fact that Sallie Krawcheck is campaigning for Ken Lewis’ old job at Bank of America:
Doubtful! Oh, but not so, says the the Post, claiming that not only does SK want the job,
One from the dot com(edy) archives
Now this is a blast from the bubblicious past. Bloomberg reports (emphasis ours):
Morgan Stanley and Credit Suisse Group AG are among banks winning final approval of a $586 million settlement of a lawsuit over initial public offerings of technology stocks,
Outlook for US consumer-facing sectors still poor, S&P says
It looks like US consumers’ thriftiness really will wreck Christmas, as far as US retailers and restaurateurs – and Standard & Poor’s – are concerned.
In a report on Tuesday, the rating agency said the consumer products,
CDS report: Equity investors’ exuberance proves contagious
Gavan Nolan of Markit wrote this CDS report
European credit markets continued to tighten today as the positive sentiment from yesterday’s session lingered. The Markit iTraxx Europe index was trading around 89.5bp,
Reading the news flow
Deflation, deflation, deflation, Deflation, deflation, deflation, Deflation, deflation, deflation, Deflation, deflation, deflation, Deflation, deflation, deflation, Deflation, deflation, deflation, Deflation,
Defcon Latvia, Swedish krona edition
Another day, another Latvia development.
Although, as Danske Bank note, it’s getting harder to determine what’s really going on the ground. From their report on Tuesday:
Most recently, it seems Latvia’s prime minister has decided to change the sums lenders can collect on outstanding mortgages to better reflect the current market value of the properties.
A gold/dollar chart fest
Gold was going nuts on Tuesday; and the dollar got Fisked. That is, there was an initial, shocked reaction before doubts began to set in over supposedly secret talks to undermine the dollar.
Anyway,