Funds ramp up Porsche case Hedge funds have gained more ammunition for their legal complaints against Porsche after the German sports carmaker revealed it had made almost €400m ($514m)by placing bets on several German blue-chip shares, in addition to last year's controversial trades in Volkswagen options. Holger Härter, Porsche's CFO, recently said Porsche gained €392m in liquidity in its last fiscal year from option trades of companies in the Dax index. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52468/funds-ramp-up-porsch
| Rio seeks to soothe UK shareholders Rio Tinto, the mining group locked in an acrimonious battle with some key shareholders over plans to raise $19.5bn in fresh capital from Chinese state-owned metals group Chinalco, is in talks with investors about possible concessions including altering the structure of the deal. Chinalco is injecting $19.5bn in cash in exchange for convertible bonds that would allow it to double its stake to 18% and also buy stakes in some Rio mines. It is unclear whether all shareholders will be able to buy new shares or the convertible bonds. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52467/rio-seeks-to-soothe-
| UK toughens stance on bonuses The UK government on Sunday suggested it would veto payments to senior staff in lenders partly or wholly owned by the taxpayer. Lloyds Banking Group has defended plans to pay its staff bonuses, reported to total £120m, despite receiving £17bn in public funds and reporting record losses at its HBOS subsidiary. The government's shift coincided with growing pressure on prime minister Gordon Brown to act more decisively to thwart plans by RBS and Lloyds to pay hundreds of millions of pounds in bonuses. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52466/uk-toughens-stance-o
| Anxious eye on Lloyds shares The UK government will monitor the share price of Lloyds Banking Group on Monday, as it seeks to avoid marking this week's first anniversary of the nationalisation of mortgage lender Northern Rock by taking another bank into public ownership, reports the FT. Officials at the weekend sought to quash speculation that the £10bn loss for 2008 by Lloyds' subsidiary HBOS, which sent the group's shares down 35% on Friday, could tip Lloyds over the brink. Lloyds itself dismissed talk of nationalisation as 'tosh', reports the Telegraph. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52465/anxious-eye-on-lloyd
| Wall St to lobby over US rescue plan Wall Street banks are planning to lobby the Obama administration to reconsider its plans for "stress testing" their financial health and proposals for capital injections that could leave it as a key shareholder in many of those institutions. Some banks argue that under Obama's $2,000bn financial rescue plan, the sale of preferred shares in banks - which, if converted, would give the government a sizeable stake - would amount to "creeping nationalisation" of the sector. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52464/wall-st-to-lobby-ove
| Japan GDP shrinks more than feared Posted at 05:18 by Gwen Robinson Japan's economy shrank at an annual 12.7% pace last quarter, the most since the 1974 oil shock, as recessions in the US and Europe triggered a record drop in exports, reports Bloomberg. GDP fell for a third straight quarter in the three months to Dec 31, down a quarterly 3.3%, the government said Monday in Tokyo. Exports plunged an unprecedented 13.9% from the third quarter as demand for cars and televisions collapsed amid a slump that the G7 nations said will persist for most of 2009. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52463/japan-gdp-shrinks-mo
| Land Securities set for £750m issue Land Securities the UK property company is poised to launch a discounted rights issue later this week in the latest demand for emergency funds from investors in the beleaguered sector. The issue is set to target as much as £750m and to be fully underwritten, although details of the equity raising are still being worked on and the company has not given the issue the final green light. Land Securities plans potentially to launch the issue on Thursday. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52462/land-securities-set-
| Europe rights issues lift stock supply The amount of stocks in Europe is increasing for the first time since 2005 as the financial crisis forces companies to raise new money from shareholders, reports Bloomberg. If history is a guide, higher prices for equities will follow. Xstrata, the miner, Cookson Group, which makes ceramic linings for metal smelters, and Swedish bank SEB rose more than 20% after tapping shareholders this year. Prices for 72% of 391 European companies with so-called rights issues in the past decade advanced in the next six months, according to RBS data. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52461/europe-rights-issues
| Fresh questions over Stanford An offshore bank at the centre of two US federal investigations recently curtailed financing commitments to two small US companies, reports the WSJ. Stanford International Bank of Antigua recently failed to provide some $16m in funding to a small Florida telecoms company while a small Alabama healthcare company said it was unable to complete a $62m merger after funding fell through. The disclosures raise new questions about the activities of Stanford International Bank, part of a sprawling financial-services network controlled by Texas businessman R. Allen Stanford. The FBI and securities regulators are examining the bank's marketing of high-interest certificates of deposits through affiliates in Texas and elsewhere. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52460/fresh-questions-over
| Hedge funds face new redemptions Hedge funds are facing a second round of redemptions after several big investors hit by Bernard Madoff's alleged $50bn fraud began liquidating portfolios, according to leading hedge fund managers. The scale of the redemptions is not as bad as the heavy withdrawals that hammered the industry in October and November, but is still creating problems for managers struggling with the hangover of last year's withdrawal requests, they said. Hedge funds were hit by redemptions estimated by Morgan Stanley at 20% - close to $400bn - in the second half of 2008, with another 10-20% to come by the summer. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52459/hedge-funds-face-new
| Endeavour shutting flagship fund Endeavour, a $3bn London hedge fund which lost a quarter of its value in a day last March, is in the final stages of shutting its flagship fund after Barclays walked away from a planned rescue. Endeavour decided to shut down its main fund and return money to investors in a smaller sister fund after the flagship failed to recover from big losses on Japanese government bonds and ended the year down more than 40%. A provisional agreement with Barclays Global Investors was not completed, and the hedge fund has laid off all but 16 of its 60 staff, with 10 more jobs at risk. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52458/endeavour-shutting-f
| Sirius XM weighs up offer Sirius XM is weighing up a financing offer from Liberty Media ahead of a Tuesday deadline to repay $175m in bonds in a potential transaction seen as thwarting EchoStar's attempt to take over the US satellite radio company. Sirius is not expected to decide until at least late Monday or Tuesday. Liberty Media, run by cable pioneer John Malone, is offering a senior secured loan that will allow Mel Karmazin, chief executive of Sirius XM, to repay $175m in bonds held by EchoStar that are due Tuesday, or risk filing for bankruptcy protection. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52457/sirius-xm-weighs-up-
| White House scraps 'car czar' idea The Obama administration will not name a "car czar" to help oversee the auto industry's restructuring and will instead create an inter-agency task force to deal with the issue, reports the WSJ. Treasury Secretary Tim Geithner and Lawrence Summers, who heads the National Economic Council, will jointly oversee the task force, with Geithner overseeing the $17.4bn in federal loan agreements between the automakers and the US government. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52456/white-house-scraps-c
| Weekend catch-up In case you missed these stories: Lloyds hit by £10bn HBOS losses
Investor confidence in Lloyds Banking Group was shaken further Friday after it warned that the newly acquired HBOS had suffered a £10bn loss in 2008, triggering a share price collapse for the combined bank. - Credit Suisse must pay $406m auction-rate award
A US arbitrator ordered Credit Suisse to pay STMicroelectronics more than $406m to settle claims it misled the semiconductor company into buying auction-rate securities. - US stocks end worst week of 2009
Further selling of financials characterised the end of US stocks' worst week of the year so far on Friday, which was dogged by concerns over the Obama administration's plans to shore up the stricken banking sector. See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52455/weekend-catch-up-24
| Overnight markets: Sober start Asian stocks mostly fell on Monday, led by finance and material stocks, as Japan's economy shrank the most since 1974 and G7 finance chiefs said the economic slowdown will persist through most of 2009. Technology shares advanced. Futures on the S&P500 Index dropped 0.6% after the index along with other US stock gauges on Friday ended their worst week so far this year.
Asian markets (Mon)
04:35am GMT
Nikkei down 30.29 (-0.39%) to 7,749.11
Topix up 4.66 (0.61%) 769.25
Hang Seng down 257.92 (-1.9%) at 13,296.75 US markets (Fri)
DJIA down 82.35 (-1.04%) at 7,850.41
Nasdaq down 7.35 (-0.48%) at 1,534.36
S&P500 down 8.35 (-1.0%) at 826.84 European markets (Fri)
FTSE100 down 12.65 (-0.30) at 4,189.59
Eurofirst 300 up 4.81 (0.61%) at 796.50 Currencies
04:32 GMT
€/$ 1.2755 (1.2924)
$/¥ 91.61 (90.83)
£/$ 1.4218 (1.4377) Commodities (updated)
04:30 GMT
Brent Crude (Apr09) down $0.12 at $44.69
Light Crude (Mar09) down $0.01 at $37.50
100 Oz Gold (Feb09) down $3.40 at $938.80
Copper (Mar09) down $85.00 at $3,360.00 10-year government bond yields (%)
US 2.89 (2.78)
UK 3.55 (3.47)
Germany 3.13 (3.07)
Japan 1.28 (1.26) Sources: FT, Reuters See this article online.
http://ftalphaville.ft.com/blog/2009/02/16/52420/overnight-markets-so
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