James Fontanella
More companies struggle with liquidity
The number of companies with weak cash flow and limited access to capital has risen to the highest level in five years as the world economy comes under increasing strain from the deepening financial crisis.
New US tax regime to aid property derivatives
The nascent US property derivatives market is expected to attract much more interest from US and foreign investors following a recent ruling by the US Internal Revenue Service that reduces taxes paid on such investments.
Former Cazenove partner faces prosecution
UK financial investigators will launch today an insider dealing prosecution against a veteran former Cazenove partner in a riposte to critics who say they lack the will to threaten traders with jail sentences.
Conti to consider possible Schaeffler tie-up
Continental, the German automotive parts group, yesterday opened the door to a possible tie-up with Schaeffler, but said its rival’s hostile takeover bid undervalued the company. Manfred Wennemer, Conti’s CEO,
Centrica takes control of Belgium’s SPE
Centrica has fulfilled a long-standing vow to take control of Belgian power company SPE, frustrating Gaz de France’s plans to sell its stake to EDF. The British-based utility exercised a pre-emption right over GDF’s 25.5% in SPE for €515m in cash,
Merrill Lynch hit by $9.4bn writedown
Merrill Lynch spoiled investors’ appetite for financial stocks yesterday with larger-than-expected writedowns of $9.4bn that underlined the bank’s continuing struggles to emerge from the credit crunch.
Little comfort in SIV Portfolio asset auction
A benchmark auction of distressed debt assets has given investors a gloomy guide to the prospects of recovering cash from the troubled structured investment vehicles that have been at the heart of the credit crunch.
Shorting ‘makes billions’ for fund managers
Conservative fund management firms and custody banks are making billions of dollars from short-selling by lending stocks to facilitate such trades in exchange for lucrative fees. Even as short-sellers attract blame for driving big falls in financial stocks,
Oil price fall eases inflation pressures
Oil prices plunged below $130 a barrel yesterday, a fall that helped lift Wall Street out of bear market territory. The steep fall from last week’s record high of $147.27 opens the door to lower inflationary pressures,
IMF warns emerging markets on inflation
Emerging economies must make the fight against inflation their “top priority”, the International Monetary Fund said yesterday as it sharply raised its forecast for price increases in the developing world.
Fresh Ambani dispute threatens MTN deal
The corporate sparring between India’s Ambani brothers intensified yesterday after arbitration proceedings were started against Reliance Communications, a move that could derail the company’s proposed tie-up with South Africa’s MTN.
CBOE to launch commodity volatility indices
The Chicago Board Options Exchange plans to launch a family of volatility indices for commodities, after the introduction this week of a volatility index for oil prices. The move will replicate its widely-followed “Wall Street fear gauge” – the S&P 500 Vix index.
Natixis jumps 11% on rights issue news
Shares in Natixis clawed back some of the losses made in recent weeks in reaction to the announcement by France’s fourth-largest bank that it would launch a €3.7bn ($5.9bn) rights issue. The shares closed 11% higher at €5.34 yesterday on relief that the bank’s capital base would be put on a firmer footing after its two main shareholders,
Underwriters braced for hit as HBOS slides
Underwriters to the HBOS rights issue were preparing yesterday night to pick up the tab for the UK mortgage bank’s £4bn cash call after a fresh slump in the stock made it highly likely that shareholders would shun the fundraising.
UBS used ‘cloak of secrecy’ on US tax
US Congressional investigators today will accuse UBS and Liechtenstein’s LGT Group of using the “cloak of bank secrecy laws” to help US clients evade billions of dollars in taxes. The Senate-led
IndyMac under investigation
IndyMac, the failed bank that was taken over last Friday by the FDIC, is under investigation by the FBI for alleged fraud related to risky home loans, according to AP. The investigation is focused on the company and not on IndyMac’s executives,
Banks expected to feel pain until 2010
Traders are betting that the credit crunch will still be hurting banks at the end of 2010 with financial institutions expected to be scrambling for cash to shore up their end-of-year balance sheets. A popular so-called butterfly trade in the money markets is showing expectations of three to four times the stress at the end of 2010 as before the credit crisis started to bite last summer.
Co-op agrees £1.57bn Somerfield takeover
The Co-operative Group agreed to buy Somerfield yesterday after the private equity owners of the supermarket chain dropped the price tag from £2.5bn to £1.57bn. Somerfield’s owners – a consortium of Apax Partners,
Merrill set to sell Bloomberg stake
Merrill Lynch is set to sell its 20% stake in Bloomberg for about $4.5bn but will retain its far more valuable 49% holding in money manager BlackRock. The sale of the Bloomberg stake back to Michael Bloomberg,
S&P to bring transparency to buy-outs
Private equity groups will soon have more financial information disclosed publicly about the performance of the European companies they invest in under changes to Standard & Poor’s debt ratings. From December,
SWFs cut exposure to weak dollar
Some of the world’s largest sovereign wealth funds are seeking to scale back their exposure to the US dollar as continuing market turbulence has further shaken their faith in US policy and policymakers.
Short-sellers caught out by higher costs
The cost of borrowing shares for short sales on Wall Street has been rising steeply in recent weeks, hampering the ability of hedge funds and other sophisticated traders to profit from market declines.
US consumer price jump fuels inflation fears
Ben Bernanke on Wednesday told Congress that inflation was “too high” and bringing it down to an acceptable level was a “top priority” for the Federal Reserve, as data showed that US consumer prices rose 1.1 per cent in June – their highest monthly jump since hurricane Katrina.
Cleveland-Cliffs in $10bn coal deal
Cleveland-Cliffs has agreed to buy Alpha Natural Resources, an Appalachian coal mining company, for nearly $10bn in cash and stock, in another indication that companies with solid credit ratings and a strong strategic rationale can still ink deals in spite of tight lending markets.
Natixis to launch €3.7bn rights issue
Natixis, France’s fourth-largest bank, said it would launch a €3.7bn rights issue yesterday after revealing that it would make €1.5bn of subprime-related writedowns when it announces its first-half results next month.
US worries hit banks as Bernanke highlights risks
Ben Bernanke highlighted the “numerous difficulties” facing the US economy in a sobering testimony yesterday that sent markets on a rollercoaster ride as he signalled serious risks on both the growth and inflation fronts.
Schaeffler swoops on €11bn Continental
Schaeffler Group triggered what would be the biggest takeover in Europe this year when it launched a bid for Continental yesterday in a deal valuing the German tyre and automotive company at about €11.2bn.
Fortis slides amid regulator’s checks
Shares in Fortis plummeted yesterday after the Dutch regulator revealed that it was looking into whether the banking and insurance group had misled investors. Fortis closed down 11.2% at €8.45. The bad news follows the exit of Fortis CEO Jean-Paul Votron,
Convertible bonds tumble
Convertible bonds – especially for auto companies and financial firms – suffered sharp declines yesterday amid forced selling by hedge funds specialising in such securities, market participants said.
Callan to head hedge fund unit at Credit Suisse
Erin Callan, former Lehman Brothers chief financial officer, has been hired by Credit Suisse to fill the new position of global head of its hedge fund business, the company said yesterday. A rising star at Lehman,