Stocks fall on US bank plan US stocks fell to their lowest level since 1997 on Monday as US authorities outlined plans to inject capital into troubled institutions and the government moved closer to taking a big stake – possibly up to 40% - in Citigroup. The Treasury, the Fed and three bank regulators said the government would start to "stress test" banks this week to see if they had sufficient capital to withstand a sharp recession. For those failing the tests, the government would provide a "temporary capital buffer" in the form of so-called convertible preferred shares. More FT analysis here. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52815/stocks-fall-on-us-ba
| AIG in talks for another bail-out AIG is in talks with the US government over a new bail-out aimed at giving the stricken insurer, already 80% state-owned, fresh capital to absorb an expected Q4 loss and more time to sell assets. AIG could announce the plan as early as next week, together with Q4 results that are likely to show a loss bigger than its $24.5bn Q3 loss. Under what would be the third bail-out of AIG in five months, the government would swap some of the $60bn five-year loan it extended to AIG in November, and maybe some of the $40bn in preferred stock it owns, for equity. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52814/aig-in-talks-for-ano
| Rivals demand curbs on Citi Citigroup's rivals are lobbying the US government to shackle its investment banking business and international operations if the authorities nationalise or take a large stake in the troubled group. The calls come as talks progress on a plan for the US government to take a large stake – possibly of 40% - in return for throwing Citi its third lifeline in under four months. Separately, the FT reports that the plan could be announced as early as the end of Tuesday, although officials said it could be delayed if the Treasury asked for substantial changes. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52813/rivals-demand-curbs-
| Thain ordered to 'name names' A New York judge has ruled that John Thain, former CEO of Merrill Lynch, must name names in a state probe into bonuses paid out at Merrill in late December, just days before Bank of America acquired the firm. The ruling is a victory for New York attorney general Andrew Cuomo, who is investigating Merrill's $3.6bn bonus pay-out to staff in a year in which the firm reported losses of $28bn, and a potential setback to BofA, which had warned Thain not to discuss details of the payments. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52812/thain-ordered-to-nam
| Central Europe bolsters currencies Central Europe's battered currencies rallied on Monday after four of the region's central banks issued co-ordinated statements calling recent currency weakness unjustified and raising the possibility of intervention on forex markets. It was the first time that banks from the region's four ex-communist countries with floating currencies had co-ordinated policies, a testament to the seriousness with which falls in Poland's zloty, Hungary's forint, Czech Republic's koruna and the Romania's leu are being treated. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52811/central-europe-bolst
| Lloyds makes lending pledge UK chancellor Alistair Darling is set to drop the £480m annual interest bill charged to Lloyds Banking Group on a taxpayer loan in exchange for a promise by the bank to provide billions of pounds in extra mortgage funding and loans. The chancellor is prepared to convert £4bn of government preference shares – which carry a 12% coupon – into other forms of non-voting equity, to prevent the government's 43% stake in the bank rising above 50%. The possible move is part of Darling's wider negotiation to extract quantifiable lending commitments from Lloyds and from RBS. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52810/lloyds-makes-lending
| JPMorgan slashes dividend 87% JPMorgan Chase surprised investors late on Monday by slashing its quarterly dividend by 87% to preserve capital. The bank said it had cut the dividend from 38 cents a share to 5 cents to bolster its balance sheet against a potential "highly stressed environment". The move will save $5bn a year. JPMorgan, which has accepted $25bn in capital from the US government, said it had been "solidly profitable" in the first quarter and had $81bn of tangible common equity on its balance sheet. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52809/jpmorgan-slashes-div
| Murdoch to run Fox as Chernin exits In Categories: People Posted at 05:19 by Gwen Robinson Peter Chernin, president and chief operating officer of News Corp, is leaving after failing to agree a new contract with Rupert Murdoch, who will step in and take direct control of the Fox studio and broadcast businesses that his right-hand man has run for 12 years. James Murdoch, Mr Murdoch's younger son, remains the favourite to eventually succeed the 77-year-old media mogul, but rathe than step in at Fox, he has chosen to stay in charge of its European and Asian operations See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52808/murdoch-to-run-fox-a
| Concerns grow over GE Capital Investors' discomfort with General Electric's exposure to the troubled financial services industry deepened on Monday after an analyst warned that the conglomerate might need to inject more equity in its GE Capital division. GE shares have dropped for three straight days to their lowest since 1995. Nigel Coe, an analyst at Deutsche Bank, cut his target price for GE to $12 from $17 and cast doubt on its $5bn forecast for GE Capital's 2009 earnings, warning the shortfall might leave the finance unit in violation of a fixed charge covenant on its debt. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52807/concerns-grow-over-g
| Cattles halts new lending Specialist UK lender Cattles has stopped lending money to new customers, it said on Monday. Cattles' main business, Welcome Financial Services, which provides secured and unsecured loans to customers with poor credit histories, will continue to offer renewals to existing customers, it said. The announcement comes three days after the subprime lender said it was delaying annual results while it reviewed its provisions for bad loans, and warned that profits would be "substantially lower" than expectations. See FT Alphaville on "no money for the poor". See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52806/cattles-halts-new-le
| China to consolidate automakers A Chinese government plan to strengthen the automobile sector aims to reduce the number of major auto-making groups through mergers to 10 at most from 14, the official China Securities Journal said Tuesday, reports Reuters. The plan, approved by the cabinet this month, also says the government will provide subsidies worth Rmb 5bn ($732m) from March to the end of 2009 to aid purchases of autos in rural areas, the report added See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52805/china-to-reduce-auto
| Japanese lender files for bankruptcy SFCG, a lender to small businesses, filed for court protection on Monday with debts of Y338bn ($3.5bn), in Japan's 10th and biggest corporate collapse so far this year. The company, formerly known as Shoko Fund, said it could not raise funds to settle payments due at month's end because of tight credit conditions and the failure of borrowers to repay debts. See FT Alphaville on the - colourful - exploits of SFCG founder and chairman Kenshin Ohshima. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52804/japanese-lender-file
| HK court delays PCCW deal The saga surrounding the $2bn privatisation of PCCW, Hong Kong's largest telecoms firm, will drag on for at least another month, after a High Court judge gave the territory's market regulator three weeks to present the results of its investigation into the alleged rigging of a shareholder vote earlier this month. The court extended the same deadline to any shareholders or creditors who wish to object to the proposed privatisation by Richard Li, PCCW chairman, and China Unicom, the company's second largest shareholder. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52802/hk-court-delays-pccw
| ADB's lending revamp under threat Controversial plans by the Asian Development Bank to change its lending criteria could be dropped, amid mounting concern in Washington that the overhaul will water down social and environmental standards for project financing. The ADB is concerned that wrangling over changes to the criteria could hinder efforts to win shareholder approval to double or triple its capital to $115bn. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52803/adbs-lending-revamp-
| Europe exodus widens at Merrill Merrill Lynch is suffering an exodus of senior bankers in Europe. Among them, Ian Carton, co-head of global markets and financing in Europe, on Monday became at least the ninth high-profile managing director in the region to resign since mid-September, when Bank of America rescued Merrill. Other departures include Bob Wigley, former European chairman; Brent Clapacs, head of equities for the region; Richard Slimmon, Michael Findlay, David Jimenez-Blanco, Steve Zander, Jean-Tardy Joubert and Stuart Graham. See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52801/europe-exodus-widens
| Overnight markets: Sliding Asian stocks slid on Tuesday following steep falls in the US and Europe, dragging the regional benchmark to the lowest in more than five years as the global recession forced companies to sell shares to bolster their balance sheets. Futures on the S&P500 Index added 0.5%, following the index's 3.5% slide to its lowest since April 1997.
Asian markets (Tues)
05:00am GMT
Nikkei down 180.27 (-2.44%) to 7,195.89
Topix down 11.83 (-1.61%) 723.45
Hang Seng down 230.27 (1.81%) at 12,929.44 US markets (Mon)
DJIA down 250.28 (-3.41%) at 7,114.78
Nasdaq down 53.51 (-3.71%) at 1,387.72
S&P500 down 26.72 (-3.47%) at 743.33 European markets (Mon)
FTSE100 down 38.33 (-0.99%) at 3,850.73
Eurofirst 300 up 6.35 (-0.86%) at 729.39 Currencies
04:50 GMT
€/$ 1.2713 (1.2923)
$/¥ 94.92 (92.87)
£/$ 1.4547 (1.4523) Commodities (updated)
04:55 GMT
Brent Crude (Apr09) down $0.38 at $40.61
Light Crude (Apr09) down $0.36 at $38.08
100 Oz Gold (Apr09) down $7.00 at $988.00
Copper (3M 24hr) down $25.00 at $3,210.00 10-year government bond yields (%)
US 2.78 (2.81)
UK 3.45 (3.41)
Germany 3.00 (3.01)
Japan 1.26 (1.26) Sources: FT, Reuters See this article online.
http://ftalphaville.ft.com/blog/2009/02/24/52795/overnight-markets-sl
| |
No comments:
Post a Comment