Obama calls for G20 'unity' In Categories: People Posted at 05:14 by Gwen Robinson President Barack Obama has voiced optimism that this week's crucial G20 summit will set the framework for recovery, saying that leaders know they must "deliver a strong message of unity" on the global economy. Speaking to the FT ahead of the April 2 summit in London, Obama played down talk of a split between the US and key European economies. He also admitted it would be difficult to ask the Congress for more money to recapitalise the US banking system until voters are convinced Wall Street is not misusing the money. Read more on the Obama interview here. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54150/obama-calls-for-g20-
| G20 to tighten financial regulation G20 leaders are set to reiterate a pledge to avoid protectionism and complete stalled global trade talks at their April 2 summit this week in London, but offer little in economic stimulus plans. A draft of the summit's final communiqué, obtained by the FT, does not contain specific plans for fiscal stimulus, although it agrees to increase IMF resources and to bring hedge funds under oversight of a new Financial Stability Board to include all G20 members. Non-co-operative tax havens will face unspecified sanctions and be named in a document to be published at the summit. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54149/g20-to-tighten-finan
| Car chiefs ousted The car sector claimed its first two top-level victims on Sunday when Rick Wagoner and Christian Streiff were ousted from GM and Peugeot Citroën respectively. Wagoner is to step down as chief executive of GM at the request of the White House, ahead of President Barack Obama's Monday announcement on auto industry aid. GM is likely to file for bankruptcy protection in coming weeks. Wagner's departure came the same day as Streiff was fired as chief executive of Peugeot. The NYT reports Streiff will be replaced by Philippe Varin, CEO of Anglo-Dutch steel group Corus. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54148/car-chiefs-ousted
| Citi seeks Nikko Cordial bids Citigroup is inviting bids for Nikko Cordial, Japan's third-largest brokerage, in a move that could raise more than $5bn for the troubled US bank. After informal talks with potential bidders, including Japan's three largest banks, Citi has begun soliciting formal offers for Nikko Cordial, which Citi acquired for about $13bn in cash and shares over several years. The auction is part of Citi's strategy of selling non-core assets but also marks a retrenchment in Japan, which Citi has long regarded as crucial to its international plans. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54147/citi-seeks-nikko-cor
| US to announce aid for carmakers US president Barack Obama is expected to say on Monday that GM and Chrysler will receive extra government support on top of the combined $17.4bn they have already received if they fulfil certain conditions. GM has requested an additional $16.6bn in aid and Chrysler has requested $5bn. Obama said Sunday on CBS television that the two carmakers had not yet done enough and would have to come to a deal on costcutting with bondholders and unions. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54146/us-to-announce-aid-f
| Fiat, Chrysler, wait to close deal The boards of Chrysler and Fiat have given executives approval to complete an alliance deal that now hinges on the terms of extra aid for the struggling US automaker, reports Reuters. The news comes ahead of a Monday announcement by US President Barack Obama on auto industry aid, and more than two months after Chrysler and Fiat began developing a business plan to combine operations. Final terms of any deal will depend on what terms Washington imposes on Chrysler for additional aid. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54145/fiat-chrysler-wait-t
| Dunfermline set for UK bailout UK taxpayers are set to take responsibility for up to £750m worth of loans at Scotland's largest building society following disastrous investments in commercial property and mortgage-backed securities. Treasury officials were at the weekend engineering a private-sector takeover of the savings accounts and mortgage book of Dunfermline Building Society although its rivals have refused to buy the entire group. Prospective white knight bidders are thought to include Nationwide, HSBC and the Yorkshire Building Society. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54144/dunfermline-set-for-
| Fresh writedowns, job cuts at UBS Switzerland's UBS is expected to announce more writedowns and job cuts in coming days, according to Swiss newspaper Sonntag, reports Reuters. Shares in UBS fell 7% on Friday amid rumours of a profit warning and Q1 writedowns. The bank has already written down more than $49bn since mid-2007. Sonntag said UBS would write down at least another $2bn on illiquid assets and slash another 8,000 jobs, after cutting more than 7,000 jobs since mid-2007 and announcing in February a further 2,000 cuts. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54143/fresh-writedowns-job
| Spain launches Caja bail-out The Spanish government and the Bank of Spain on Sunday began the country's first bank rescue in the current financial crisis, providing up to €9bn in liquidity to Caja Castilla La Mancha, a troubled S&L institution, and replacing its directors with central bank nominees. Pedro Solbes, finance minister, said the bailout of CCM, which accounts for less than 1% Spain's financial system assets, should not be compared with the rescue of a big bank such as Banesto. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54142/spain-launches-caja-
| UK's Pendragon revs up for debt deal The UK's biggest car retailer, Pendragon, is close to securing a crucial but expensive new financing deal with its banks, reports The Times. It is understood that the highly indebted company will be forced to pay a total of around £25m – more than two-thirds of its market value – for a fresh set of banking covenants amid continued deterioration in the car market, The deal is likely to be announced alongside its full-year results in April. Pendragon, whose net debt stood at £288m in December, was forced to request a covenant waiver from its banks last year. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54141/uks-pendragon-revs-u
| UK deals collapse amid caution The UK has experienced a complete collapse of M&A deals amid growing caution among executives of volatile debt and equity markets. The volume of UK deals has fallen to just $14.6bn, excluding government activity, according to Dealogic – the lowest since its records began in 1995. Including government acquisitions, volumes were still only $46.1bn, roughly half those a year ago. Separately, the FT reports that companies worldwide borrowed $1,500bn in the bond markets during the first quarter, but global M&A activity slumped 36% year-on-year. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54140/uk-deals-collapse-am
| Bond sales drive capital markets Corporate bond sales hit record levels in the first quarter, despite a bleak period for the capital markets and lending businesses of investment banks globally. Equity sales and syndicated loans saw their lowest global volumes since Q1 of 2003, while issuance of preference shares reached the lowest since Q1 of 2000. Overall investment-grade debt issuance was $825.6bn in Q1 of 2009, more than double the $390.9bn a year earlier, with government-guaranteed bonds from banks themselves making up 33% of the market. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54139/bond-sales-drive-cap
| Reforms spur Zimbabwe's gold miners Zimbabwe's gold trade could be reviving, making gold the first industrial sector to benefit from recent economic reforms in the country. Mwana Africa, a miner listed on London's Aim market, plans to reopen the Freda Rebecca gold mine, one of Zimbabwe's largest, by September, after being closed for the past three years during which the central bank bought gold but failed to pay producers in either foreign currency or increasingly worthless Zimbabwean dollars. See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54138/reforms-spur-zimbabw
| Overnight markets: Down Asian stocks declined on Monday for the first time in six trading days, paring the regional benchmark index's best month since 1999, after commodities prices fell and speculation grew of a delayed recovery for banks. Futures on the S&P500 Index dropped 1.1% after the gauge slumped 2% on Friday, despite recording a 21% rise in the preceding 14 trading days. Asian markets (Mon)
04:12am BST
Nikkei down 151.91 (-1.76%) at 8,475.06
Topix down 15.91 (-1.93%) at 808.62
Hang Seng down 237.63 (-1.68%) at 13,881.87 US markets (Fri)
DJIA down 148.38 (-1.87%) at 7,776.18
Nasdaq down 41.80 (-2.63%) at 1,545.20
S&P500 down 16.92 (-2.03%) at 815.94 European markets (Fri)
FTSE100 down 26.35 (-0.67%) at 3,898.85
Eurofirst 300 down 7.87 (-1.06%) at 737.46 Currencies
04:15 BST
€/$ 1.3263 (1.3560)
$/¥ 97.73 (98.41)
£/$ 1.4261 (1.4469) Commodities (updated)
04:20 BST
Brent Crude (May09) down $0.73 at $51.25
Light Crude (May09) down $0.95 at $51.43
100 Oz Gold (Apr09) down $1.00 at $922.20
Copper (3M 24hr) down $25.00 at $4,015.00 10-year government bond yields (%)
US 2.73 (2.75)
UK 3.28 (3.30)
Germany 3.14 (3.12)
Japan 1.31 (1.31) Sources: FT, Reuters See this article online.
http://ftalphaville.ft.com/blog/2009/03/30/54137/overnight-markets-do
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