Barclays questioned on funds Lehman Brothers' US liquidators have asked Barclays to explain what happened to an estimated $3.3bn earmarked for bonuses and other liabilities that the UK bank received when it acquired part of the bankrupt Wall Street firm last year. The move highlights the tension between Lehman's creditors and Barclays, which acquired Lehman's North American arms for $1.5bn after it filed for bankruptcy in September. It could also fuel controversy over bonuses paid to Lehman executives who stayed with the UK bank. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53229/barclays-questioned-
| Investors fear GE will lose AAA rating General Electric's shares slid briefly below $6 on Wednesday, a level unseen since 1991, amid fears that the conglomerate could lose its triple A credit rating and make another equity issue. The two scenarios have dragged on GE's shares in recent weeks, even as the company took steps to shore up its troubled finance arm, GE Capital, by diverting $9.5bn in cash from the corporate parent this quarter and slashing its dividend. The stock fell for the 11th time in the past 14 sessions and has lost almost 60% of its value this year, prompting GE to write to investors on Wednesday to reassure on GE Capital's stability. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53228/investors-fear-ge-wi
| Ford to restructure $10.4bn of debt Ford Motor moved on Wednesday to bolster its liquidity and avoid a US government bailout by offering to swap up to $10.4bn in debt for equity and cash. Alan Mulally, chief executive, described the debt restructuring as "a critical step" in Ford's transformation. Unlike its two domestic rivals, GM and Chrysler, Ford has so far managed to steer clear of US government aid, thanks largely to $23bn debt financing arranged in late 2006. But its finances have come under growing strain. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53227/ford-to-restructure-
| China targets 8% growth Premier Wen Jiabao said on Thursday that China will achieve 8% growth this year despite the financial crisis, outlining export support and spending programmes and pledging to "significantly increase" investment in 2009 to meet the growth target. Wen told the National People's Congress that the 8% goal was realistic. Global markets had soared on speculation Wen would add to the Rmb4,000bn ($585bn) stimulus plan unveiled in November. But while he projected a leap in the 2009 budget deficit to Rmb950bn, he announced no increase in the headline cost of the package. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53226/china-targets-8-grow
| Lloyds denies rift over scheme terms Lloyds Banking Group was in tense negotiations on Wednesday night with UK officials over the terms of its insurance scheme as it resists attempts to push the government's voting stake in the bank above 50%. Treasury officials denied that the deal, which had been expected last week, was at risk of falling apart and said progress was being made. Lloyds, which rescued HBOS last year, also downplayed reports of a rift and denied that Eric Daniels, chief executive, had threatened to resign over the talks. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53225/lloyds-denies-rift-o
| Merrill executives face bonus probe New York's attorney-general issued subpoenas Wednesday night to seven executives from Merrill Lynch, each of whom received a bonus of more than $10m for 2008, calling on them to give depositions about the payments. Six of the seven men have stayed on with Bank of America which took over Merrill on Jan 1. Prosecutors from the office of Andrew Cuomo have been investigating the early payment of $3.6bn in cash bonuses at Merrill since late January. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53224/merrill-executives-f
| UBS chairman Kurer to step down Peter Kurer will not seek re-election as chairman of UBS, the Swiss banking group announced Wednesday, in its second move within days to restore its battered reputation. Kurer will be replaced by Kaspar Villiger, a former Swiss finance minister, completing the shake-up begun last week with the appointment of Oswald Grübel as chief executive. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53223/ubs-chairman-kurer-t
| LCH.Clearnet to buy out investors LCH.Clearnet, scrambling to defend its independence as Europe's largest clearing house, plans to buy out its roughly 120 shareholders in a plan to convert into a user-owned utility. After the buy-out, shareholders would be invited to buy back into the clearer following its conversion. The move is designed to pre-empt overtures by a group of eight banks, Icap and the London Stock Exchange, which are expected next week to make an offer for the clearer. That will rival LCH.Clearnet's preliminary deal to merge with The Depository Trust & Clearing Corporation of the US. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53222/lchclearnet-to-buy-o
| Firms pay $70m for SEC charges Fourteen trading firms, including subsidiaries of some of Wall Street's top banks, on Wednesday agreed to pay a total of nearly $70m to settle civil charges that included allegations they "traded ahead" of clients for their own benefit. The settlements announced by the SEC involved violations that allegedly occurred from 1999-2005 on the American Stock Exchange, the Chicago Board Options Exchange, the Philadelphia Stock Exchange and the Chicago Stock Exchange. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53221/firms-pay-70m-for-se
| Agricole hit by Calyon, Emporiki problems Crédit Agricole said it expected the financial crisis to last until the second half of 2010, as it reported a worse-than-expected Q4 loss on writedowns in its Greek retail banking business and higher provisions for Calyon, its investment bank. Crédit Agricole, which this year overtook Société Générale to become France's second-biggest bank by market cap, reported a €309m ($389m) loss in the three months to the end of December, an annual fall of 64%. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53220/agricole-hit-by-caly
| Blackstone marks down Deutsche debt Blackstone marked down the value of billions of dollars worth of debt it bought at a discount from Deutsche Bank to zero, demonstrating that the group bet too early on a recovery. Blackstone bought the debt in April and marked down the value by year-end. The buy-out group disclosed the markdown in a Tuesday conference call with investors. The debt involved in the Deutsche deal was both senior debt and lower quality debt. The loss was compounded by the use of money borrowed from Deutsche at the time. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53219/blackstone-marks-dow
| Cazenove looks to capital raisings JPMorgan Cazenove, the UK investment bank, is relying on capital raising by large companies to power its profits in 2009 as revenues from advising on mergers and trading equities come under pressure. The bank said Wednesday it made a strong start to the year with key roles in the £12.5bn rights issue from HSBC and on the offering by Xstrata, the mining group that is raising £4.1bn from shareholders. JPMorgan Cazenove reported an annual 15% fall in 2008 pre-tax profits to £134.5m, but operating profits grew 7% to £143.9m as the bank increased its share of the UK market. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53218/cazenove-looks-to-ca
| Old Mutual ponders 'simplification' Old Mutual, the UK-listed South African insurer, left the door open to a possible break-up as it scrapped its dividend for this year amid plunging profits. Julian Roberts, the new chief executive, stopped short of implementing a sweeping restructure but made clear he had not ruled out more radical action. Some investors have called for a break-up. Old Mutual on Wednesday reported that 2008 operating profit fell from £1.63bn to £978m yoy, while pre-tax profit fell 66% from £1.75bn to £595m. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53217/old-mutual-ponders-s
| China's SWF pursues commodities China Investment Corporation, the country's fledgling sovereign wealth fund, has turned its attention to the commodities sector, where prices have collapsed partly due to lower demand from China. CIC is seeking investments in natural resources companies, according to bankers and officials, who say the fund's preferred role will be as a financier and facilitator for state-owned companies wanting to make offshore acquisitions. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53216/chinas-swf-pursues-c
| GLG loses Vivendi appeal GLG Partners has lost an appeal against a €1.5m ($1.9m) fine by the French markets watchdog for insider trading in Vivendi shares, in a blow to the UK hedge fund group. The ruling came amid a French investigation of GLG's trading in shares of Infogrames Entertainment, the software group. GLG's problems in France – where it is still pursuing a separate appeal on the Vivendi fine to the Conseil d'Etat, the highest administrative court – continue more than three years after it beefed up compliance systems. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53215/glg-loses-vivendi-ap
| Celebrity chef breaches covenants Accounts filed by Gordon Ramsay Holdings this week showed that the group had breached its banking covenants. The notes to its consolidated financial statements for the year to Aug 31 2007 –filed eight months late – revealed the group was in the process of renegotiating the terms of its facilities with its bankers. GRH did not specify what covenants were breached and did not clarify whether it breached the covenants in the financial year reported or the current period. See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53214/celebrity-chef-breac
| Overnight markets: Up Asian stocks gained for a second day on Thursday, led by commodity and construction companies, after China's Premier Wen Jiabao pledged to "significantly increase" investment in economy. Futures on the S&P 500 Index lost 0.6% after rising 0.5% earlier Thursday. The US gauge climbed 2.4% on Wednesday, while European stocks rose strongly. Asian markets (Thurs)
04:30am GMT
Nikkei up 147.71 (2.03%) at 7,438.67
Topix up 12.13 (1.66%) at 744.17
Hang Seng down 36.47 (-0.3%) at 12,294.68 US markets (Wed)
DJIA up 149.82 (2.23%) at 6,875.84
Nasdaq up 32.73 (2.48%) at 1,353.74
S&P500 up 16.54 (2.38%) at 712.87 European markets (Wed)
FTSE100 up 133.78 (3.81%) at 3,645.87
Eurofirst 300 up 26.597 (3.97%) at 696.23 Currencies
04:27 GMT
€/$ 1.2616 (1.2486)
$/¥ 99.29 (98.47)
£/$ 1.4154 (1.4016) Commodities (updated)
04:25 GMT
Brent Crude (Apr09) down $0.44 at $45.68
Light Crude (Apr09) down $0.30 at $45.08
100 Oz Gold (Apr09) down $4.70 at $911.40
Copper (3M 24hr) down 95.00 at $3,695.00 10-year government bond yields (%)
US 2.98 (2.93)
UK 3.63 (3.56)
Germany 3.15 (3.06)
Japan 1.31 (1.30) Sources: FT, Reuters See this article online.
http://ftalphaville.ft.com/blog/2009/03/05/53182/overnight-markets-up
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