Good morning New York,
FT ALPHAVILLE
The risk of a Japanese VaR shock: David’s post looks at the risks of repeat of 2003 VaR shock in Japan. It’s the smaller banks you have to watch.
A Kazakh muddle: Right, what’s happening here is that Kazakhmys, which declares itself not to be a strategic investor in ENRC despite owning 26 per cent, is being offered shares in itself by its host government as part payment for that non-strategic stake in ENRC. And at a price that’s well below book. Paul does his best to untangle that for you.
NEWS
Yahoo buys Tumblr for $1bn: Sources indicated the acquisition has been agreed, with reports putting the price at $1bn – $1.1bn in cash. The move represents the first big bet by Yahoo’s new CEO Marissa Meyer. Tumblr has 100m users but very little revenue. But the price may be disappointing to early Tumblr investors; at its last round of fundraising, in September 2011, it was valued at $800m. (Wall Street Journal) (Financial Times)
Portuguese banks fear ‘Cyprus virus’: Heads of the country’s two biggest banks in separate interviews both called on Europe’s leaders to moderate their stance towards the periphery, fearing that the precedent set by Cyprus had raised nervousness across the eurozone to dangerous levels. (Financial Times)
Chesapeake taps Anadarko executive Lawler as CEO: “People familiar with the matter said Chesapeake’s directors on Sunday tapped Robert Douglas Lawler, senior vice president of international and deep-water operations at Anadarko Petroleum Corp., to fill the post vacated by Mr. McClendon, who left the company April 1″. (Wall Street Journal)
The yen gained as much as 1.1%, retreating from multi-year weakness after Japan’s economy minister Akira Amari said further losses in the currency would threaten to negatively affect people and the government’s job is to minimise that. Traders said Amari’s comments raised the spectre that most of the yen weakening may have already occurred. (Bloomberg)
Chinese house price data raises overheating fears: China’s new-home prices rose last month in 68 of 70 cities tracked by the government, and increases in Guangzhou, Beijing and Shanghai were the biggest on a yearly basis since a change in data methodology in January 2011. (Bloomberg)
Concern is growing that US banks are making risky corporate loans to fend off competition from rivals and the booming bond market. Bank executives and analysts have voiced fears over dramatic cuts to terms and interest rates, while several regulators have changed lending guidance, particularly on leveraged loans. (Financial Times)
King warns Osborne on Help To Buy risk: The Bank of England governor used a valedictory interview to say that George Osborne’s Help To Buy scheme was “too close for comfort” to the US mortgage guarantee schemes that triggered the financial crisis and must not be allowed to become permanent. Sir Mervyn also criticised new taxes on the North Sea oil sector. (Financial Times)
Cohen is subpoenaed: “Steven A. Cohen has received a subpoena to testify before a grand jury in the government’s insider trading investigation into his hedge fund, SAC Capital Advisors, a development that signals a newly aggressive phase in the multiyear inquiry, according to lawyers and executives briefed on the case.” (NYT DealBook)
Silver is at its lowest price level in more than two and a half years, with traders blaming a move higher by the yen. (Wall Street Journal)
M&A lending remains meagre despite low interest rates: “The percentage of corporate loans going to M&A has fallen from 60 per cent in 2006, when interest rates were comparably low, to 25 per cent so far this year, according to S&P Capital IQ.” (Financial Times)
Co-op’s retiring chief skips meeting: Peter Marks, retiring CEO of the Co-operative Group, opted not to attend its AGM on Saturday. The Group said it did not want members “looking at the past” but rather the future of what Euan Sutherland, the former Kingfisher executive who took over this month, said was the alternative to traditional capitalism. The meeting was closed to the press but delegates seemed mainly satisfied as they left. (Financial Times)
A former Google employee said the company’s UK tax arrangements were a “concocted scheme”. Barney Jones, who worked as a Google sales executive from 2002 – 2006, told The Sunday Times he was ready to hand over contracts, invoices and correspondence to HM Revenue & Customs showing that clients were sold advertising by staff based in London. (Financial Times)
Markets: Global stocks are moving to fresh cyclical highs at the start of a week in which monetary policy remains in focus. The bullish tone sees reduced demand for supposed “havens”, nudging yields of 10-year Treasuries and Bunds up 1 basis point to 1.96 per cent and 4bp to 1.36 per cent respectively. Gold is down $12 to $1,347 an ounce and silver is tumbling 4 per cent to $21.39 an ounce. he FTSE All-World equity index is up 0.3 per cent to 249.6, its best level since June 2008, as the FTSE Eurofirst 300 opens 0.1 per cent higher and with US index futures suggesting the S&P 500 will ease 3 points from Friday’s record close of 1,667.5 writes the FT’s Jamie Chisholm.
