US bank shares near 17-year lows US bank shares hit a near 17-year low on Thursday on fears the government will have to nationalise troubled institutions such as Citigroup and Bank of America. BofA shares slid 14% to $3.93, their lowest since 1984. Citi shares were down 13.8% to their lowest since 1991. The KBW banks index fell to its lowest level since 1992. In the debt markets, Citi's bonds were trading at distressed levels. Some banks are believed to be in talks with regulators over plans that would provide them further capital injections but stop short of outright nationalisation. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52710/us-bank-shares-near-
| US, Europe mull joint CDS regulation US, UK, and European regulators are in talks to jointly regulate the $28,000bn credit-default swap market, the Federal Reserve said Thursday, reports Bloomberg. Regulators including the Fed, UK's FSA, German FFSA and the ECB met Thursday to discuss sharing regulation activities and a possible information-sharing agreement. Their goal would be to apply consistent standards to the market and provide support across jurisdictions, the Fed said, adding that the group plans a meeting "in the near future". See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52709/us-europe-discuss-jo
| US seeks more names from UBS The US Justice Department sued UBS to obtain access to 52,000 UBS accounts belonging to US clients - some 30,000 more than previously known - a day after reaching a landmark settlement for the Swiss bank to turn over 250 accounts in a tax-evasion probe, reports the WSJ. While the court filing in Miami was expected, the increased number of accounts being sought was a surprise to UBS. If authorities find evidence of wrongdoing on the part of the account holders, they are likely to bring fraud cases against them. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52708/us-seeks-more-names-
| BofA's Lewis subpoenaed over Merrill Bank of America chairman and chief executive Ken Lewis was issued a subpoena by New York state attorney general Andrew Cuomo, who is investigating whether the bank withheld information from investors, reports the WSJ. Lewis is the highest-profile subject of Cuomo's investigation into BofA's Jan 1 purchase of Merrill Lynch, and whether investors were misled about the depth of Merrill's losses in late 2008 and whether details of Merrill bonuses should have been disclosed to investors. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52707/bofas-lewis-subpoena
| FBI locates Stanford in Virginia FBI agents located Sir Allen Stanford, whose whereabouts had been unknown since being charged this week by the SEC over an alleged $8bn fraud, in Virginia on Thursday and served the Texan billionaire with court orders relating to the SEC civil filing against his investment firm, Stanford Financial Group. He was not arrested, but the FBI is believed to have launched a criminal inquiry into Sir Allen's activities, in conjunction with the US attorney's office in Houston. See SEC statement here, and full coverage in FT Alphaville's "Stanford Series".
See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52706/fbi-locates-stanford
| US politicians in Stanford's net In Categories: People Posted at 05:45 by Gwen Robinson Many US politicians who received campaign donations from Allen Stanford and his associates were scrambling to distance themselves from the Texas billionaire on Thursday as federal authorities investigated an alleged $8bn investment fraud linked to his Antigua-based investment bank. Barack Obama, Hillary Clinton, John McCain and George W. Bush were among more than 100 prominent US politicians who received a total of $2.4m from Stanford Financial Group since 2000 as it sought influence in Washington. Nearly two-thirds of the cash went to Democrats. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52705/us-politicians-in-st
| Australian investors join Rio revolt Australian investors in Rio Tinto have joined their UK counterparts in opposing a deal with Chinalco that could see the Chinese state-owned group double its stake in the Anglo-Australian miner to 18%, reports the FT. They are concerned about dilution if Chinalco converts a $7.2bn bond into equity and about being excluded from a planned rights issue. The deal goes before shareholder meetings in the UK and Australia in May or June, but as it only requires a simple majority for approval, could be decided solely by the London vote. Separately, the Times reports that Rio's independent directors are considering a rights issue (see below). See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52704/australian-investors
| Rio directors test waters Rio Tinto's independent directors are understood to have begun sounding out the miner's top 20 UK shareholders to gauge their support for a multi-billion-pound rights issue, reports The Times. The directors are believed to be considering a climbdown over Rio's controversial plan to raise $19.5bn from Chinese state-owned Chinalco after hostility from institutional investors. It is thought that 10 of the top 12 City institutions have pledged to do whatever necessary to fight Rio over its proposal to raise capital from China. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52703/rio-directors-test-w
| China steel group eyes Fortescue Hunan Valin Iron & Steel Group has joined the growing band of Chinese entities to signal interest in Australia's resources sector after it emerged it had held talks with Fortescue Metals, the country's third-largest iron ore producer behind Rio Tinto and BHP Billiton. Fortescue, which has a long-standing supply agreement with China's Baosteel, this week said it had held talks with Anglo American, the UK-listed mining group, and China Investment Corp, the $200bn sovereign wealth fund. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52702/china-steel-group-ey
| BoJ to buy Y1,000bn of bonds The Bank of Japan on Thursday stepped up measures to ease the country's growing credit squeeze, with plans to buy up to Y1,000bn ($10.6bn) in corporate bonds and extend its emergency purchases of other assets from financial institutions. In a sign of alarm over Japan's bleak outlook, the BoJ said it would buy corporate bonds rated A and higher from next month and will extend its programmes to buy commercial paper and provide unlimited collateral-backed loans to financial institutions. The latest figures showed Japan's economy suffered its biggest contraction in 35 years in the last three months of 2008. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52701/boj-to-buy-y1000bn-o
| LSE eyes joint LCH.Clearnet bid The London Stock Exchange has confirmed it is part of a consortium involving Icap, the inter-dealer broker, and about 10 investment banks that may make a cash offer for LCH.Clearnet, Europe's largest independent clearing house. The development comes as policymakers press for clearing procedures to be applied to areas of the markets where none have hitherto existed – such as in the OTC or bilaterally negotiated markets. LCH.Clearnet, which clears trades done at the LSE, is at the centre of such developments because it is owned by market participants and exchanges. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52700/lse-eyes-joint-lchcl
| BNP Paribas posts Q4 loss BNP Paribas, the French bank embroiled in plans to carve up struggling rival Fortis, on Thursday posted an expected Q4 loss and said market conditions would remain tough in 2009, reports Reuters. France's biggest bank by market cap on Thursday reported a net loss of €1.37bn ($1.73bn), following its forecast last month for a loss of around €1.4bn, against a Q4 net profit of around €1.01bn a year ago. It also cut its dividend by 70% from last year to €1 euro a share. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52699/bnp-paribas-posts-q4
| Axa eyes share issue after loss Axa, Europe's second-largest insurance group, reported its first interim loss for seven years on Thursday, slashed its 2008 dividend and prepared for a possible increase in capital. The French insurer is to ask shareholders to approve the issue of up to €2bn ($2.5bn) in preference shares, which Henri de Castries, chief executive, insisted was "an insurance policy" that would only be used as a last resort to bolster the balance sheet. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52698/axa-eyes-share-issue
| BAE poised for Saudi Typhoon deal BAE Systems, Europe's largest defence contractor, on Thursday said it expected to agree a multi-billion pound deal to provide support and weapons systems for the 72 Eurofighter Typhoon aircraft to be bought by Saudi Arabia this year. Saudi Arabia buys arms from Britain under government-to-government deals and BAE then acts as the prime contractor to the UK. Analysts say orders for armaments and weapons systems on the jets could be worth £5bn, with a further £10bn for maintenance and support. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52697/bae-poised-for-saudi
| Continental to aid ailing Schaeffler Continental, Germany's second-largest car parts supplier, vowed Thursday to slash costs and pledged to help Schaeffler, its heavily indebted majority shareholder, after posting a record loss for the past year. Schaeffler, which holds more than 90% of Conti's shares and is struggling under a €10bn ($12.6bn) debt burden from the takeover of its rival, has asked the state for up to €4bn in credit guarantees and its banks are threatening to take control from the owners, Maria-Elisabeth Schaeffler and her son Georg. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52696/continental-to-aid-a
| Sibir shares suspended after disclosure Shares in Sibir Energy, the UK-listed oil company with assets in Russia, were suspended Thursday after the company revealed that it had lent $325m to one of its shareholders. In a statement, Sibir admitted that Chalva Tchigirinski, a Russian tycoon who owns about 23% of the shares, owed the company $210m more than the $115m it had previously acknowledged. Sibir is listed on London's more-lightly regulated Aim market. At Thursday's price of 174¾p, down 69% in the past six months, its market cap was £676m. See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52695/sibir-shares-suspend
| Overnight markets: Slump Asian stocks fell Friday, after the Dow in New York dropped 1.2% to the lowest close since October 2002, while the S&P500 slipped to the lowest level since January 1995 and futures on the index fell 0.9%. In Asia, the regional benchmark index suffered its biggest weekly slump in three months, on concern the deepening global recession is raising bad-loan costs and hurting corporate profits. Asian markets (Fri)
05:15am GMT
Nikkei down 151.89 (-2.01%) to 7,405.76
Topix down 13.36 (-1.78%) 738.32
Hang Seng down 321.49 (-2.47%) at 12,701.87 US markets (Thurs)
DJIA down 89.68 (-1.19%) at 7,465.95
Nasdaq down 25.15 (-1.71%) at 1,442.82
S&P500 down 9.48 (-1.20%) at 778.94 European markets (Thurs)
FTSE100 up 11.54 (0.29) at 4,018.37
Eurofirst 300 up 0.44 (0.06%) at 763.80 Currencies
05:20 GMT
€/$ 1.2583 (1.2586)
$/¥ 94.10 (93.54)
£/$ 1.4215 (1.4256) Commodities (updated)
05:17 GMT
Brent Crude (Apr09) down $0.60 at $41.39
Light Crude (Mar09) down $0.79 at $38.69
100 Oz Gold (Apr09) down $5.00 at $971.50
Copper (3M 24hr) down $20.00 at $3,275.00 10-year government bond yields (%)
US 2.80 (2.75)
UK 3.51 (3.37)
Germany 3.09 (3.01)
Japan 1.27 (1.25) Sources: FT, Reuters See this article online.
http://ftalphaville.ft.com/blog/2009/02/20/52689/overnight-markets-sl
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