We are indebted to Marc Ostwald of Monument Securities for this:
AMSTERDAM, Dec 20 (Reuters) – The Dutch central bank cancelled its interim dividend, thereby increasing the government’s budget deficit, saying it may make a loss in 2011 due to the European Central Bank’s bond buying programme, the Dutch Finance Minister said on Tuesday. Read more
When we last looked at the Cable & Wireless Worldwide share price (about seven hours ago) it was down around 12 per cent.
By the close of play in London it was down 26 per cent. Read more
Farewell then John Pluthero, chairman, chief executive and all powerful being at Cable & Wireless Worldwide.
It’s fair to say you won’t be missed by shareholders, who seem to have come to the conclusion that you aren’t the right man to take the company forward. Read more
The power company at the centre of the world’s worst nuclear crisis in 25 years is tapping Japan’s biggest banks for an emergency loan of up to Y2,000bn ($25bn) as it faces escalating clean-up and rebuilding costs, the FT reports. On Tuesday the Japanese government estimated total rebuilding costs from the twin natural disasters at Y25,000bn – almost 5 per cent of GDP and dwarfing the Y10,000bn spent after the country’s 1995 Kobe quake. While Tepco does not face any immediate funding problems, bankers say the utility is looking to build up an emergency war chest, much like BP did when faced with unknown liabilities following last year’s oil spill in the Gulf of Mexico. Of its $64bn in outstanding bonds, the company is due to repay $4.8bn this year and another $5.6bn in 2012. Reuters, meanwhile, reports that the Japanese government is also looking to pay off the compensation the company will owe to evacuated residents, local farmers and others affected by accident. That figure, they say, could amount to several trillion yen. Tepco will likely forgo its year-end dividend for the first time in 59 years as well. Read more
The US Federal Reserve has rejected Bank of America’s plan to raise its dividend in the second half, dealing the lender and its shareholders a setback just as rivals prepare to increase quarterly pay-outs, reports the FT. The decision threatens to stall any new momentum BofA gained in a special meeting with investors earlier this month and contrasts with the buoyant tone struck by JPMorgan Chase and Wells Fargo as they unveiled plans to return more capital to shareholders. BofA’s proposals were part of stress tests the Fed conducted on 19 large US financial institutions. On Friday, officials approved or rejected the plans. In a regulatory filing on Wednesday, BofA said it still planned to boost its dividend this year but investors surprised by the Fed’s objections drove down BofAs shares 2.5%. DealJournal says the objections “can’t be a good sign” for the bank. Read more
Citigroup has moved to revive its share price, which has languished below $5, revealing a reverse stock split and its first quarterly dividend in more than two years, reports the FT. At one cent per share, Citi’s second-quarter pay-out may offer stockholders more symbolic value than actual income. But for a bank that nearly collapsed in the financial crisis and until recently counted the US government as its largest shareholder, reinstating the dividend is a key milestone for Citi executives, its investors and regulators. Despite the moves, Citi shares fell 1.5% to $4.43 in New York after the news, adds the WSJ, noting that the stock has “become the favoured play thing of high frequency traders”. Read more
Fannie Mae and Freddie Mac have been quietly lobbying the US Treasury to cut the dividend the housing finance groups pay on preferred stock issued as part of their government bail-out, people familiar with the matter have told the FT. A dividend cut would allow $150bn of taxpayer bailout money to be repaid and reduce the amount of preferred stock held by the Treasury. This currently pays out a 10 per cent quarterly dividend, double the amount that is charged to banks given assistance under Tarp. While the sources said that the White House is keen to change the situation, the politics of restructuring Fannie and Freddie is difficult, with concerns that cutting the dividend will reward private investors in the companies before the taxpayer is repaid. Read more
KKR, the publicly listed private equity firm, saw its economic net income, its preferred measure of profitability, fall 61 per cent during the third quarter to $317m as the growth in the estimated value of its holdings slowed, reports the FT. During the year-ago period – before its listing – KKR estimated that it made $823m in economic net income, which includes fee-related earnings but excludes certain expenses associated with compensation. KKR said on Wednesday that its net income was $8.9m in the third quarter, down from an estimated $616.7m in the same period of 2009. In spite of the fall in earnings, the private equity group said that it was nearly doubling its dividend to 15 cents a share. “This is the sixth quarter in which we increased the value of our portfolio,” Scott Nuttall, a senior KKR partner, said on a call with analysts, adding that KKR’s performance was better than that of the stock market. Read more
The incoming boss of BP has been striking a confident tone in recent meetings with City analysts, reports FT Alphaville. The message that Bob Dudley has been keen to convey is that BP is financially sound, the provisions made against the costs of dealing with the aftermath of the Macondo spill should cover the liabilities, and the $30bn disposal programme is going well, according to analysts. And while BP has not made any decision on the optimal size or shape of the business going forward, there is an acknowledgement that it has to change. Read more
When BP finally resummes dividend payments after the 2010 moratorium how much can cash are shareholders expect to receive? The answer, via the dividend swaps market, is a lot less than the 56 cents (or 14 cents a quarter) BP has paid for the past couple of years, reports FT Alphaville. Read more
Payments axed for the rest of the year.
Other breaking news: independent claims fund to be administered by Ken Feinberg, head of the 9/11 compensation fund, BP to make initial payments of $3 and $2bn, fund not a cap on BP liabilities, capex to be cut, targeting divestments of $10bn over next 12-months. Read more
That soundbite is from the Democratic majority leader in the Senate, who helped trigger Monday’s 10 per cent slide in the BP share price with his call for a $20bn escrow account, reports FT Alphaville. Read more
Readers have been asking for short interest data on BP and here, via Data Explorers, it is:
As you can see from the graph, stripping out the spike related to the last (?) dividend payment, the underlying level of stock outstanding on loan (SOOL) has barely budged since the spill Read more
The ignominy continues to pile up for BP, as its share price plunges and credit default protection on it blows out. That’s made a few ‘unthinkable’ scenarios rather less so, FT Alphaville writes, including one analyst’s speculation of a Chinese takeover bid. Read more
Meanwhile, traders claim BP’s CDS has traded at 510bps on Thursday morning, up from 386 at the close on Wednesday. Read more
Nigerian spammers are now trying to profit from its woes, according to Bronte Capital’s John Hempton, who (ahem, ahem, cough, cough) found the following in his inbox on Wednesday:
From: Dudley Caruthers Esq (Barrister at Law)
Subject: BP Related Agreement Entitlement
E-mail: Read more
The price action in BP shares just after 10.30am (BST) on Wednesday.
Wednesday’s early London price action in BP is looking grim, FT Alphaville observes — as the energy giant faces another (Congressional) political stinging. But the prospects for a break-up of BP might be receding a bit. Read more
Morgan Stanley’s Graham Secker offered three reasons, to be precise. But first a bit of context.
Secker calculates that since 1926, the real price return on European stocks has been just 1.3 per cent per annum, compared to a total real return of 5.6 per cent. Read more
1Bernanke weighs in on robot wars; brings Keynes for backup
2Secret liquidity and Scottish independence
3Spain's awful unemployment
4Pump up, debase
5S&P 2,100, by Goldman Sachs
Show more6Buyback to enrich
7Collateral crunch-counting gets sophisticated
8Everlasting credit, the long view
9Apple Operations International, facts (?) du jour
10In which the FTSE puts the crisis behind it
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