To our readers: The final Cut of 2008 Posted at 05:07 by Gwen Robinson FT Alphaville, including the 6am Cut, Markets Live and our daily blog, is taking a break from lunchtime (GMT) today, Dec 23, and will return in full force on Jan 5, although our new Long Room will remain open in the period. We wish all our readers, commentators and Long Room participants a turmoil-free Christmas and New Year. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50700/to-our-readers-the-f
| Madoff probe investigates key aide US investigators probing the alleged fraud carried out by Bernard Madoff are examining the role of Frank DiPascali, who dealt with client accounts and worked at Madoff's firm for more than 30 years, and have also issued a subpoena to the accountant who audited the firm's financial statements, seeking documents going back to 2000, reports the WSJ. Authorities are trying to identify who helped Madoff carry out what appears to be at least a 30-year scheme that may have caused at least $50bn in losses, and are probing the accountant that handled Madoff's audits for decades. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50699/madoff-probe-investi
| Madoff investor warned its clients A big investor in Bernard Madoff's alleged $50bn fraud explicitly warned its clients that his brokerage "could abscond with those assets", but still attracted $2.75bn, according to documents sent to investors, reports the FT. Kingate Global, which invested clients' money with Bernard L Madoff Investment Securities, highlighted the risk of giving custody of its assets to its investment manager – Madoff, although he was not named in the documents – and said it would not check the accuracy of statements he provided. The question of what investors knew about the feeder funds' links to Madoff is crucial to the first Madoff-related court case to be filed by an investors, the New York Law School, against Ascot Partners. Another case - against Fairfield Greenwich - was filed Monday in New York, reports DealBook. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50698/madoff-investor-warn
| Toyota warns of first ever operating loss Toyota Motor warned Monday it would suffer its first loss since it began reporting results 68 years ago, amid the global deterioration in vehicle demand. Katsuaki Watanabe, chief executive, said the Japanese carmaker would slash business investment, cancel executive bonuses and review its dividend pay-out. Cautioning that conditions were unlikely to improve in the short term, Toyota also cut its forecast for the year to March 31 by a further 700,000 units to 7.54m, a full 15% below last year's volume – raising fears worldwide of job losses at Toyota plants. Moody's said it was reviewing its triple A debt rating on Toyota for a possible downgrade, following S&P's decision last week to review the company. Fitch lowered its rating from triple A last month. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50697/toyota-warns-of-firs
| Lex on Toyota: Survival is not enough Investors "can hardly be shocked" about Toyota's profits warning, says Lex. Automakers everywhere are selling fewer cars, and Toyota has clipped its annual forecast to 7.5m vehicles - 15 fewer than it sold last fiscal year. Where Toyota goes from here is anyone's guess. Unusually, the company gave no sales or production forecasts for next year. But comparing Toyota with its stricken US peers offers some comfort. The chances of requiring government aid, for example, look remote – Toyota had over $20bn in cash and equivalents on its balance sheet at end September. But slashed capex limits growth and the dividend is surely vulnerable. Survival alone is not enough to entice investors. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50696/lex-on-toyota-surviv
| US watchdog probes IndyMac resuce The US Treasury Department's inspector general is probing the Office of Thrift Supervision for permitting a backdated capital infusion into IndyMac Bancorp a few months before its collapse in July, reports the WSJ. The infusion allowed the bank to be classified as "well capitalised," instead of "adequately capitalised," at the end of the first quarter, enabling it to escape regulatory sanctions. A top OTS official who approved the backdating has been removed from his job, according to the office of Charles Grassley, the top Republican on the Senate finance committeer. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50695/us-watchdog-probes-i
| Financial crisis fells Belgian leadership The Belgian government on Monday night became the first national administration to fall as a direct result of events linked to the global financial crisis, reports the FT. Belgium's King Albert II formally accepted the resignation of the coalition government led by Yves Leterme, prime minister, after he offered the government's resignation three days ago amid accusations that officials had tried to influence an appeal court ruling that blocked the dismantling of Fortis, the troubled financial services group. The fallout underlines the uncertainty over the €14.5bn sale of Fortis to BNP Paribas. Bloomberg reports Tuesday that the King appointed Wilfried Martins, a former premier, to begin consultations on forming a new government. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50694/financial-crisis-fel
| JPMorgan acquires two UBS units JPMorgan said Monday that it was acquiring two units of UBS, as the Swiss bank continues to trim its investment banking arm. UBS has agreed to sell its Canadian commodities energy business and also its global agricultural business in a deal expected to close in Q1 2009. The terms of the deal were not disclosed. JPMorgan said the acquisition would allow it to expand its client base in Canada and develop a greater presence in the country's gas, oil, power and financial markets. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50693/jpmorgan-acquires-tw
| EDF cleared to buy British Energy Centrica, owner of British Gas, hopes to agree a deal by the end of next month to take a 25% stake in British Energy for about £3.1bn, after EDF of France gained approval from Brussels to buy the owner of most of the UK's nuclear power stations. The European Commission on Monday approved EDF's £12.5bn bid for British Energy, subject to conditions including the sale of two fossil-fuel power stations and a promise to auction some of its nuclear power stations' output on the open market. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50692/edf-cleared-to-buy-b
| Mortgage activity surges at US banks US banks have seen a surge of mortgage applications spurred by dramatically lower interest rates, after record loan defaults and thousands of job cuts have stretched mortgage industry resources to the limit. Applications for home loans more than doubled in the two weeks after the Fed said it would buy mortgage bonds to help stabilise the market, prompting mortgage rates to fall by more than 75bp. With average rates for a 30-year, fixed-rate mortgage now at about 5.2%, borrowers have an incentive to refinance, although tighter underwriting standards and other issues are likely to restrict the supply of new mortgages. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50691/mortgage-activity-su
| Barclays warns on European fund Barclays has expressed concern that a £14bn European fund for smaller business loans has been mistakenly presented as a lifeline for companies with cash flow problems, reports the Daily Telegraph. UK prime minister Gordon Brown and chancellor Alistair Darling have heralded the release of the first £1bn from the fund as evidence that the government is involved in helping smaller businesses access lines of credit. But Barclays, the first UK bank to tap European Investment Bank funds, has emphasised that the money is only available for companies with sound trading prospects – not those in need of loans to cover temporary trading problems. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50690/barclays-warns-on-eu
| Cemex banks agree to refinance Mexico's Cemex, the world's third-biggest cement maker, said Monday its banks had agreed to refinance nearly $2.2bn in debt maturing in 2009 and 2010, edging it away from default, reports Reuters. Cemex, under pressure from investors with slumping sales and $6bn in debt maturing in 2009, said that debt will now be payable in February 2011. Monterrey-based Cemex said creditors had also agreed to extend almost half its $3bn syndicated loan facility due in December 2009. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50701/cemex-banks-agree-to
| FASB reviews valuation method Accounting watchdogs are fast-tracking an effort to provide a small dose of "mark-to-market" relief for financial firms, as banks and life insurers continue grappling with deteriorating investment holdings, reports the WSJ. The Financial Accounting Standards Board last week took preliminary steps to loosen a rule concerning when financial firms must book losses on a narrowly defined subset of lower-rated mortgage-backed securities, commercial-backed securities and certain other structured securities. Late Friday, FASB asked for public comment on the proposal, a sign it is under serious consideration. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50689/fasb-reviews-valuati
| Bond and loan volumes slump Bond and loan volumes this year crashed to lows last seen in 2000 – at the height of the dotcom meltdown – in one of the most turbulent periods for the debt markets in decades. Bond volumes slumped 29% to $4,330bn in 2008, while syndicated loan volumes fell 44% to $2,740bn, according to Dealogic. The year also saw the creation of a new asset class – government guaranteed bank debt - which curbed issuance of government and government-backed agency debt and reached $186.3bn within just two months. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50688/bond-and-loan-volume
| Cancelled M&A deals hit record in 2008 A record number of deals were cancelled in 2008, resulting in a sharp fall in fees for investment bankers. The total volume of worldwide M&A reached $3,280bn in the year to date, down 29% from the full year 2007 amid financing difficulties and volatility in valuations. Companies abandoned 1,309 transactions valued at a total of $911bn, according to data provider Dealogic. In 2007, there were 870 withdrawn deals valued at $1,160bn. JPMorgan was lead advisory globally for M&A, working on 348 deals valued at a total $814.5bn. Goldman Sachs was second with 291 deals valued at $752.2bn. Citigroup was third with 286 deals totalling $666.7bn. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50687/cancelled-ma-deals-h
| Overnight markets: Mixed Asian stocks were mixed on Tuesday (and Japan was closed for a holiday) after US stocks sold off on Monday and European and Japanese government bond yields retreated as the economic outlook in both Europe and Asia worsened, Toyota forecast its first annual operating loss and price movements were exaggerated by thin year-end trading conditions. In the US, investors reacted to more bad news from the embattled auto sector as the truncated Christmas week got off to an uncertain start:
Asian markets (Tues, Japan closed)
04:25am GMT
Nikkei (Mon) up 135.26 (+1.57%) to 8,723.78
Topix (Mon) up 14.29 (+1.71%) to 848.72
Hang Seng (Tues) down 252.90 (-1.67%) at 14,874.61 US markets (Mon)
DJIA down 59.34 (-0.69%) at 8,519.77
Nasdaq down 31.97 (-2.04%) at 1,532.35
S&P500 down 16.25 (-1.83%) at 871.63 European markets (Mon)
FTSE100 down 37.77 (-0.88%) at 4,249.16
Eurofirst 300 down 13.59 (-1.65%) at 809.78 Currencies
04:28GMT
€/$ 1.4005 (1.3974)
$/¥ 90.23 (89.98)
£/$ 1.4843 (1.4942) Commodities
04:30 GMT
Brent Crude (Feb09) down $0.35 at $41.10
Light Crude (Feb09) down $0.80 at $39.11
100 Oz Gold (Feb09) down $1.20 at $846.00
3M 24HR Copper down $5.00 at $2,955 10-year government bond yields (%)
US 2.17 (2.14)
UK 3.13 (3.17)
Germany 2.94 (3.00)
Japan 1.22 (1.21) Sources: FT, Reuters See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50686/overnight-markets-mi
| Generali, Manulife, Axa eye AIG unit AIG has started talks on the sale of its Philippine unit, part of a plan to divest assets throughout Asia as it tries to repay a $60bn US government loan, reports Bloomberg. Assicurazioni Generali, Europe's third-biggest insurer, and Canada's Manulife Financial are among bidders for AIG's Philippine American Life and General Insurance, the nation's largest insurer. Axa, France's largest insurer, has also expressed interest in the unit, which may fetch about $1bn. See this article online and view or leave comments.
http://ftalphaville.ft.com/blog/2008/12/23/50702/generali-manulife-ax
| |
No comments:
Post a Comment