December, 2009
Lunch Wrap
On FT Alphaville Friday morning,
- Nakheel and the sukuk legal spook.
- Bank bailouts by numbers.
- Goldman’s take on payroll Friday.
- The Dubai crisis in Euroland?
- BA and BT’s promiscuous pensions.
Is Poland selling itself for nothing?
Budget deficits are increasingly being perceived as emerging Europe’s biggest problem.
Austria’s Erste Bank — a lender with more exposure to the region than most — picks up on the issue in a recent note,
BA and BT’s promiscuous pensions
As the market waits with bated breath for an update on British Airways’ triennial review of its pension scheme, we note some parallels with another leviathan of UK corporate pension deficits — BT.
The telephone company released its second-quarter earnings last month,
Markets live transcript 4 Dec 2009
Markets live chat transcript for the chat ending at 12:13 on 4 Dec 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE) Paul Murphy (PM) NH:Good morning NH:and welcome to Markets Live
How utilities are just like banks
As we’ve reported before, UK natural gas prices are destined to stay low for the foreseeable future as a slew of liquefied natural gas cargoes, unwanted elsewhere, is redirected to British shores.
Most cargoes will have originally been intended for the US market,
Nakheel and the sukuk legal spook
This is Caravan I Ltd. — a sukuk set up in Saudi Arabia in 2004:
Does it look familiar?
It’s the same type of sukuk — al-ijarah — as the $3.5bn Nakheel bond.
It’s a sort of asset-based sale-and-leaseback structure where investors receive rental payments instead of interest,
Payroll Friday – the Goldman take
From Jan Hatzuis’ team at Goldman Sachs (emphasis ours):
The best news from the [US] labor market in recent months has been evidence that layoffs continue to decline. However, the other half of the labor market picture—hiring—is still missing as firms largely are utilizing their existing workforces to push up production rather than adding new workers.
Hochtief Concessions IPO flop: an autopsy
Blame Dubai.
That was the message from Hochtief after the German construction company was forced to pull the €1bn flotation of its Concessions infrastructure operator business late last night.
But this is wrong.
Trichet and the Dubai spectre in low-speed Euroland
With the Dubai noise over the past week, it is worth asking where similar debt concerns might suddenly shock markets, says CLSA’s Christopher Wood in his Greed & Fear newsletter. The most vulnerable, in his view,
Frank’s not back (for now)
From the RNS on Friday morning:
Sound Oil, the upstream oil and gas company with assets in Indonesia, announced on 20 October 2009 that it was in discussions about the possible acquisition of a company with oil assets offshore West Africa.
NAO: First the good news…
£850bn is the official figure for Britain’s bank bailouts, according to a report published by the National Audit Office on Friday.
And the organisation tasked with scrutinising UK public spending says the number was worth it:
Further reading
Elsewhere on Friday,
- The man who wrecked Wall Street.
- Guns, Goldman and Bloomberg’s B.S.
- Behavioural finance and misbehaviour.
- Spitzer takes on the Wall Street Journal.
- Trichet puts his money where his mouth is.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Martin Wolf: The post post-Thatcher era begins
Margaret Thatcher became prime minister of the UK on May 4 1979 and remained in office for more than 11 years.
AV after dark
On FT Alphaville late Thursday,
- Hochtief Concessions IPO on a knife edge (later pulled).
- Goldman Sachs raises its 12-month gold forecast to $1350/toz.
Overheard in the Long Room,
- China supporting the wood rally.
Snap news
Breaking pre-market news on Friday,
- National Audit Office releases bank bailout report — statement and report.
- Cisco receives second request from the US DoJ regarding Tandberg acquisition – statement.
BofA raises $18.8bn
Investors on Thursday welcomed Bank of America’s move to raise $18.8bn to repay $45bn of bail-out funds, as relief at its escape from official curbs on compensation and operations outweighed concerns over the huge share issue.
Candover abandons €3bn buy-out fund
Candover has agreed with investors to terminate the €3bn (£2.73bn) buy-out fund it raised last year, turning the once successful UK buy-out firm into the industry’s first large victim of the credit crisis.
Citi strains against official curbs
Citigroup is set to intensify efforts to break free from US government curbs on pay and management following Bank of America’s decision to return $45bn in bail-out funds. BofA’s move, revealed on Wednesday,
Comcast to take control of NBCU
Comcast has sealed an agreement to take control of NBC Universal from General Electric in a deal valuing the media property at $30bn and creating one of the largest US media companies. Comcast will pay about $6.5bn in cash and will own 51% of the combined venture and GE will own 49%.
Goldman seeks to quell bonus anger
Top Goldman Sachs executives are likely to receive their annual bonus in stock this year rather than cash as part of a pay review that could affect thousands of Goldman’s rank-and-file employees. In a bid to quell public anger over probable multi-million dollar pay-outs to the bank’s top bankers and traders,
Lloyds, RBS fuel pay row
Royal Bank of Scotland has indicated it will succumb to pressure to pay its top investment bankers substantially less than rival institutions amid escalating tensions with the government over bankers’ pay,
£30bn of UK real estate ‘in default’
The value of UK commercial real estate debt in default or in breach of key lending agreements more than doubled to about £30bn in the first half of the year, according to a survey by De Montfort University,
More of Taikang up for sale
Potential foreign buyers of a key stake in Taikang Life, a leading Chinese life assurer, are being offered a larger shareholding than previously indicated. Axa, the French insurer, last month put its 15.6% stake in Taikang up for sale,
Dubai banks downgraded
Standard & Poor’s downgraded a clutch of major Dubai banks on Thursday citing their exposure to the troubled, state-owned Dubai World, and warned further demotions could come soon. Fitch Ratings also put four banks on review for a downgrade,
China Longyuan raises $2.3bn
China Longyuan Power Group, the nation’s largest wind-power producer, raised HK$17.5bn ($2.26bn) on Friday in the world’s third-biggest IPO by an alternative energy company, reports Bloomberg. Longyuan sold 2.14bn shares at HK$8.16 apiece,
Deripaska plays down Rusal delay
Oleg Deripaska on Thursday told the FT it was “no problem” if the $2bn IPO of UC Rusal, the Russian tycoon’s aluminium group, was delayed into next year. Russia’s former richest man brushed off concerns that the decision by the Hong Kong Stock Exchange to delay until next week a crucial ruling on the listing could push the flotation into 2010,
Chinese official slams Western banks
A senior Chinese official who oversees China’s largest state-owned enterprises has publicly slammed western investment banks for “maliciously” peddling complicated derivative products that caused huge losses for Chinese companies.
UBS whistleblower challenges ruling
The UBS whistleblower central to the US government’s crackdown on tax evasion through undeclared Swiss accounts has launched a challenge to have his prison sentence overturned. Lawyers for Bradley Birkenfeld,
CME, banks agree CDS initiative
The CME Group announced on Thursday that a group of dealers will support the exchange’s initiative to clear credit default swaps. The move follows talks between the CME and the main dealers in OTC credit derivatives over the past year.
Overnight markets:Down
Asian stocks fell on Friday, reports Bloomberg, dragging the MSCI Asia Pacific Index from a 15-month high, as an unexpected contraction in US service industries sparked concern about the global economic recovery.