Paul Murphy

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Paul Murphy is the founding editor of FT Alphaville and an associate editor of the Financial Times. He joined the FT in London in 2006 as development editor of, concentrating on the expansion of the online business. Prior to that, he served as the Guardian’s financial editor for seven years. He has also held senior positions in business journalism at the Sunday Business newspaper and the Daily Telegraph. Murphy is a graduate of the London School of Economics.

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Banco Encephalopathy Spongiform

Relisted in Lisbon, Banco Espirito Santo, down 45 per cent at pixel…

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Banco Espírito Santo: call a policia?

Following the disclosure of the exposures to Espírito Santo Group to the market on July 10th, 2014 the Board of Directors learned about the existence of two letters issued by Banco Espírito Santo in favour of creditors of Espírito Santo International, which had not been approved in accordance with the internal procedures in place at the Bank and was not registered in its accounting records as at June 30th, 2014.

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“Another two weeks and we’ll take out the 1929 instance”

That’s permabear John Hussman, who simply refuses to capitulate. Some extracts from his latest letter…

Make no mistake – this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme. The main difference between the current episode and that of 2000 is that the 2000 bubble was strikingly obvious in technology, whereas the present one is diffused across all sectors in a way that makes valuations for most stocks actually worse than in 2000. The median price/revenue ratio of S&P 500 components is already far above the 2000 level, and the average across S&P 500 components is nearly the same as in 2000. The extent of this bubble is also partially obscured by record high profit margins that make P/E ratios on single-year measures seem less extreme (though the forward operating P/E of the S&P 500 is already beyond its 2007 peak even without accounting for margins). Read more

RBS — the bank that outperformed

From Lex Live at noon on Friday…

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STAN: “We do not accept these media rumours”

We should just note the livid statement from Standard Chartered on Thursday morning…

The Board of Standard Chartered PLC “The Board” notes rumours in some media outlets on succession planning for the Group Chief Executive, and Chairman. Read more

On Russian sanctions and Belgian beer…

Given that Russian subjects are reportedly being force fed a diet of Putin-esque mis-information over the downing of Malaysia Airlines Flight 17, it seems worth noting what strategists employed by Russian investment banks are saying about the threat of deeper sanctions against Russia.

Here’s Charlie Robertson, global chief economist at Renaissance Capital (emphasis ours)… Read more

Camp on camera – I

Here’s a two-part round up of the videos produced at last week’s Camp Alphaville festival in London. We hope it was fun and informative for those attending. Next year we’ll fix the audio, have wifi that works and we might even introduce an evening dinner…


An introduction from Cardiff…

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Camp on camera – II

Izy talks cryptocurrencies and a future cashless society…

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The 6am London Cut

Markets: The meteoric rise of Cynk Technology, a former penny stock which appears to boast one employee and no reported revenues, stalled abruptly on Thursday when shares of the would-be social media company tumbled by as much as a third. Cynk listed for 5 cents a share in May and then saw its shares multiply by 36,000 per cent to give the practically unknown company a market value of $6bn – more than Sina, the Chinese operator of Weibo, a microblog with more than 100m active users. (Financial Times)

Banking: Barclays is ditching the role of the traditional bank cashier as part of its efforts to overhaul high-street banking as customers increasingly use digital services. The bank said its 6,500 cashiers would take on new positions focused on giving customers advice on managing their finances rather than processing simple transactions. (Financial TimesRead more

The 6am London Cut

Markets: The influential head of the US House Financial Services Committee has called on US Treasury secretary Jack Lew to investigate whether sweeping financial reform has impaired the $10tn market for US corporate debt and risks amplifying an interest rate shock for large companies.In a letter sent this week to Mr Lew, Congressman Jeb Hensarling argued that it was the responsibility of regulators to ensure that the Volcker rule, a core element of the Dodd-Frank financial reforms that bans banks from proprietary trading, does not harm US capital markets. (Financial Times)

UK ministers, led by business secretary Vince Cable, have ordered a review into the sell-off of state assets, just days before MPs publish a report that is expected to criticise last year’s privatisation of Royal Mail. Lord Myners, former City minister, will lead a panel of experts to examine alternatives to initial public offerings for privatising state assets, as well as whether the process of gauging what investors are willing to pay for shares can be improved. (Financial TimesRead more

Disrupting the rating agencies

Is this an S&P/Moody’s/Fitch killer? Maybe, in time.

Credit Benchmark, a London-based start-up, on Wednesday completed a $7m venture capital financing round, led by Index Ventures, to fund its initial expansion into the $6bn credit risk information market. Read more

A price spike story

The FCA is in danger of attracting regular readers to its Market Watch newsletter. Here’s an extract from Edition No. 46, about this momentary spike in the price of HSBC back in January…

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Welcoming Matomy, with eager anticipation… (updated)

Sorry, at pixel the doc was still not available for the leading digital performance-based marketing company, Matomy Media, which is joining the London market. We’ll update this post if and when we can. The Matomy Media prospectus has arrived (Wednesday, belatedly), so we can replace the placeholder image with the real doc…

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A Shire bump

Click to read:

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Probe Gotham? Er, no. Gowex is bust

On Tuesday, US short selling specialist Gotham City Research declared Spain’s Let’s Go Gowex to be a fraud. When the shares collapsed, triggering a suspension, the immediate response of regulators at Spain’s alternative stock market regulator, the Mercado Alternativo Bursatil, was to fire off angry missives to America’s SEC and the UK’s FCA. It wanted to “determine if there have been illegal operations” on the part of Gotham and its managers.

Lo and behold it looks like any illegality may just have been a little closer to home. Click to read (spanish)…

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The 6am London Cut

The Last Camp Alphaville Promo of 2014. The fun starts at 11am today. Pack cash.

The Cut is taking a short break for the rest of this week while we clear litter and (some of us) eat hotdogs. Read more

A warm welcome to Fundsmith Emerging Equities Trust

Wait! This post has been mis-tagged.

Terry Smith has achieved the rare feat of publishing a flotation prospectus before dealings actually commenced. Read more

A belated welcome to Allied Minds

This IP specialist, sitting on the end of an $XXbn R&D pipeline from American universities and the US military, quietly floated in London last week. As a private entity, Allied Minds has been funded to date by Neil Woodford, the star manager who is now setting up his own firm. But the conditional public market price has so far stuck at the initial float price — 190p.

Maybe giving more information to a wider pool of investors will help… Read more

A belated hello to Zibao Metals Recycling

This wannabe penny dreadful — ‘reselling’ copper and aluminium into the Peoples’ Republic of China — escaped our notice last week.

That’s fixed now. Read more

A belated welcome to Zoopla

We were all experts on this one before the prospectus even went to the printers. But here, for the record, is the Zoopla doc…

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A belated welcome to MySale

A particularly challenged new addition to the London market, this one. A Philip Green-backed ‘flash’ sale specialist, MySale had its opening price quoted in pound sterling rather than pence. Amidst the confusion, the price tanked.

That was last week. Now we finally have the actual numbers. Click to view. Read more

Welcoming the AA (updated)

This is the first in a new occasional series.

It’s become the norm for companies listing in the UK via an institutional placing (rather than a full public offer) to delay publication of their prospectus until after conditional dealings in the stock start.

Why? To control the news, clearly. Media treatment is restricted to the narrow confines of the offer price announcement; by the time the prospectus comes out the press spotlight has invariably moved on… Read more

LIVE draw for Camp AV robots (updated with the winners!)

UPDATE: Here are the lucky four people who have won the chance to attend Camp Alphaville on July 2 via an Awabot telepresence robot:

Peter J from New York
Jamal M from Florida
James H from Scotland
Markets Live regular Fjp73


Now you have to do training. See the email we’ve send you for details.———

Join Markets Live at 11am London time to see whether you have secured free use of an Awabot telepresence robot at Camp Alphaville on July 2.

We have just FOUR spare robots (others are being used by speakers, panelists and FT journos abroad on the day.)

We’ll pluck names from a gmail folder at 11.45, with members of the ML Rabble invited to choose the numbers. Read more

FTAV off-grid on Genel? Maybe. A bit

Small Kurdistan-related storm on Wednesday (aside from the headline news of the Isis overthrow of Mosul)…

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The Great Camp Alphaville Quiz, July 2 – a call for entries

Think you are smart and know stuff? Do you have two or three friends or colleagues who are similarly gifted?

Then enter our fab quiz on July 2 at Camp Alphaville, under canvas on the grounds of the Honourable Artillery Company, London. Read more

On the legalities of running a Markets Live session at Camp Alphaville…

Open question here.

You’ll have seen from the main stage rundown for Camp AV that myself and Bryce are planning to do our regular Markets Live session under canvas on July 2, at the Honourable Artillery Company grounds.

But answer this:

If we share some price-sensitive RAW information — and attendees at Camp AV are able to see (and maybe act on) this info before it is transmitted to the regular Markets Live Rabble — are those attendees on the right or wrong side of the market abuse regime? Read more

Litigation risk, charted

Given the repeated hints from across the pond that BNP Paribas is going to get clobbered with a $10bn fine by the US authorities for alleged sanction busting, etc, we should not be too surprised that the European banks team at Credit Suisse has almost doubled its estimate of continent-wide litigation costs. The CS base case has been hiked from the $58bn guessed at in February last year to $104bn now.

To put that number in context, $104bn is roughly half the losses registered during the subprime crisis. And CS reckons some $39bn has yet to be provided for, so litigation risk is inevitably going to be a drag on growth and capital return for the foreseeable…

We’ll share the CS charts below, but first a quick glance at the main areas of potential pain: Read more

Pregnant women past 1st trimester may not gaze

A possible addition to the Camp Alphaville line-up? Maybe. Maybe.

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Last season’s adjustments?

More than a fashion faux pas from the Institute for Supply Management…

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The Still Failing Funding for Lending Scheme

We continue to be utterly bemused by this Bank of England support facility. Here’s net lending to UK businesses and “non-bank credit providers” by FLS extension participants in Q1…

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