November, 2009
CapitaLand in $1.8bn IPO
CapitaLand raised S$2.47bn ($1.79bn) selling shares in its CapitaMalls Asia unit in Singapore’s biggest IPO in at least a decade, reports Bloomberg. Southeast Asia’s largest real estate developer sold 1.165bn shares in CapitaMalls at S$2.12 each,
Time Warner to spin off AOL
Media conglomerate Time Warner said on Monday it will spin off its AOL unit to shareholders on Dec 9, nine tumultuous years after one of the most disastrous corporate mergers in history, reports Reuters.
GM to begin repaying bail-out
General Motors on Monday reported a further loss in its first quarter since leaving bankruptcy, but said it would begin repaying its bail-out loans to the US and Canadian governments next month. The US government-controlled carmaker reported a $1.15bn after-tax loss for the 83 days from then to end-September,
Taiwan to probe Chi Mei trades
Taiwan’s stock market regulator has launched a preliminary probe into apparent irregularities in trading of shares in Chi Mei Optoelectronics before the announcement of its $5.3bn merger with local rival Innolux Display.
NY Fed under fire over AIG payments
The New York Federal Reserve under Tim Geithner “severely limited its ability” to extract concessions from AIG’s counterparties in talks that resulted in $27.1bn of public money being transferred to banks including Société Générale and Goldman Sachs,
Overnight markets: Mostly down
Asian stocks mostly fell on Tuesday, reports Bloomberg, dragging the MSCI Asia Pacific Index from a three-week high as Fed chairman Ben Bernanke warned that “significant economic challenges remain.” Futures on the S&P500 Index were little changed after the gauge rose 1.5% on Monday after data showed that US retail sales increased 1.4% in October after dropping in September.
GMAC’s CEO Alvaro de Molina resigns
Alvaro de Molina, GMAC’s highly-paid chief executive, has resigned on the advice of the lender’s board of directors.
Michael Carpenter, chairman of Southgate Alternative Investments and a former chief executive at Salomon Smith Barney,
Chart du jour: US banks’ exposure to commercial real estate loans
Via Moody’s:
Related links:
The feedback loop of commercial real estate, regional banks and unemployment – FT Alphaville
For America’s small banks, the problems are just beginning – FT Alphaville
CDS report: Defensive sectors underperform as risk appetite returns
Markit’s Gavan Nolan wrote this CDS report
After a brief pause late last week the rally in credit resumed today, helped by a favourable macroeconomic backdrop. The Markit iTraxx Europe index closed at 82bp,
Bringing it back on balance sheet, by the numbers
First the good news: the following numbers are not as bad as they might have been.
Now the numbers, courtesy of Jason Goldberg at Barcap:
C is expected to have the most assets coming back on balance sheet ($154B),
Where fantasy finance meets the real world
Is this a spoof?
There’s a firm called Cyborg Trading, which promises to bring “automation to equity and derivative front-end trading platforms, without eliminating or replacing the individual trader.”
When equities are not enough, HFT turns to FX and futures
When Nasdaq-listed Knight Capital Group reported third quarter earnings on October 21, the numbers took many investors by surprise.
Net income at the electronic-trading provider fell in the period by 9 cents to 31 cents a share or $29.2m,
A car sales mystery in China
Here is a chart, from Standard Chartered, that nicely sums up the mystery of Chinese car and petrol sales:
As Standard Chartered’s Stephen Green notes:
Car sales in China are booming, but gasoline consumption seems to be stuck in the slow lane.
‘US consumption engine of growth for Asia,’ Merrill says
Bank of America Merrill Lynch analyst Ethan Harris is not convinced that the plight of the US consumer — real as it is — will derail an economic recovery.
His clients, on the other hand, have been worried about just that:
Capital in the Hamp-er
For some reason we find the Home Affordable Modification Plan — the US government’s programme to encourage lenders and mortgage servicers to reduce interest payments for certain homeowners — and its impact on banks fascinating.
Krugman gets tetchy
Is it us, or is Paul Krugman — economist extraordinaire — becoming increasingly angry that no one is ‘getting’ his deflationista warnings about the economy?
Take the title of his latest blog missive:
Lunch Wrap
On FT Alphaville Monday morning,
- Cisco capitulate on Tandberg.
- The not-so-small small-bank CRE problem.
- Weird waterfalls and the synthetic CDO stumper, part deux.
- An alpha quadrant for Galleon.
More surprises from the land of the setting sun
Never underestimate Japan’s capacity to wheel out a surprise every now and then — witness the short-squeeze orgy that unfolded in the normally dull Japanese government bond market in recent weeks. And so,
Markets live transcript 16 Nov 2009
Markets live chat transcript for the chat ending at 12:10 on 16 Nov 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:Hey there NH:It’s 11.03
Weird waterfalls and the synthetic CDO stumper, part deux
Last week, the machinations of two Goldman Sachs synthetic CDOs made waves across the internet and structured finance industry.
In short, Goldman Sachs paid off (at face value) some junior tranches of two CDOs — Abacus 2006-13 and Abacus 2006-17 — at the expense of senior tranches.
Cisco capitulate on Tandberg
So, in the end, they bumped. After weeks of talking tough, Cisco’s management has shown itself to be rather squeamish.
Contrary to several sternly worded statements defending the fairness of its offer for Tandberg,
Is Nymex natgas the ‘Yugo’ of the the energy complex?
…according to Stephen Schork, the analyst behind the widely-read Schork report on energy markets, it certainly is. In fact, he provides the following illustration of the communist-era car in his Monday report to emphasise the point:
[Galleon] alpha quadrant
The aim of this document is to show the real life application of the ‘Style Analysis’ feature applied to a hedge fund claiming delivering alphas. We will show how to analyze a fund in terms of its alpha and sector selection skills.
The not-so-small small bank CRE problem
Last week, the Federal Reserve Bank of Atlanta president Dennis Lockhart spoke of a `feedback loop’ between US commercial real estate, regional banks and unemployment — something so acute it could derail the country’s economic recovery.
Further reading
Elsewhere on Monday and the weekend,
- A field guide to wild and woolly financial conspiracies.
- A forensic reconstruction of Goldman’s 2008 prop trading.
- World out of balance.
- China is now the biggest risk to the international economy.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Clive Crook: American dream needs repair
Sooner or later the US will find itself grappling with an immense fiscal problem, writes Crook. The recession and stimulus have combined to produce record-breaking deficits,
Snap news
Breaking pre-market news on Monday,
- Rolls Royce wins £1.5bn contract to supply 20 Air China aircraft with Trent 700 engines – statement.
- Domino’s Pizza UK and Ireland to return £19m to shareholders via a 317p per share tender offer – statement.
JPMorgan takes over Cazenove
JPMorgan Chase is set to take ownership of Cazenove, the 190-year old stockbroker, in a £940m deal that will trigger bumper pay-outs for some of the City’s top financiers. The US investment bank, which entered a partnership with Cazenove five years ago,
UK’s FSA gains extra clout
Errant financial companies in the UK will be barred from engaging in certain business lines under new enforcement powers to be given to the FSA watchdog. The new measures will be unveiled in this week’s Queen’s Speech as part of a broader financial services bill granting the City regulator more authority in certain areas.
TPG lets investors cut exposure
TPG is giving investors a chance to sharply reduce commitments to its specialised financial fund, highlighting the difficulties facing buy-out firms seeking to buy distressed banks. TPG Financial Partners originally gained commitments for a $6bn fund in February 2008 but cut back the size of the fund to $4.6bn in January.