IMF chief accuses G20 leaders G20 leaders are avoiding the critical issue of cleaning up banks' toxic assets and could prolong the global recession, IMF chief Dominique Strauss-Kahn told the FT ahead of Thursday's G20 summit in London. His warning came amid violent protests, and as G20 leaders struggled to bridge differences; France and Germany threatened to block a deal if their "red lines" on tougher financial regulation were not met, raising the prospect of a clash with China over tax havens. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54355/imf-chief-accuses-g2
| G20 protests leave one dead Anti-capitalist protesters are set to march on Thursday on the G20 summit being held in London's heavily-guarded Docklands conference centre, after the Bank of England was besieged on Wednesday and one person died amid violent protests, reports Bloomberg. The FT adds that protesters smashed their way into a nearby RBS bank branch on Wednesday, sparking clashes with riot police although activists had pledged peaceful demonstrations under the 'G20 Meltdown' banner. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54354/g20-protests-leave-o
| China, US agree to co-operate at 'G2' In Categories: People Posted at 05:15 by Gwen Robinson US president Barack Obama and his Chinese counterpart Hu Jintao, agreed on Wednesday to strengthen the financial system and establish a "strategic and economic dialogue" group to meet in Washington later this year. Their meeting, on the sidelines of the G20 summit, marked their first encounter and was described by some as "the G2". The leaders also agreed that Obama would visit China later this year. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54353/china-us-agree-to-co
| KPMG sued for 'negligent' auditing KPMG is being sued for $1bn by the liquidators of New Century, the subprime lender that collapsed in April 2007, in the first big case against an auditor arising from the current financial crisis. In a court filing on Wednesday, lawyers for New Century's liquidators claimed that KPMG "assisted" and "certified" the lender's "materially misleading financial statements" – enabling the lender to use inappropriate accounting that led it to underestimate the provisions it needed to cover bad loans. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54352/kpmg-sued-for-neglig
| China extends banks lock-up Foreign investors in Chinese banks will in future have to accept a lock-up period of at least five years, Liu Mingkang, China's top banking regulator said, after US and European financial institutions including Bank of America, UBS and RBS, sold down all or part of their stakes in Chinese banks as lock-up periods of three years expired. Liu also said ownership limits, which restrict single foreign investors to 20% or a combined 25% stake, in any Chinese bank, would stay in place. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54351/china-extends-banks-
| Dow in $1.7bn sale of Morton Salt Dow Chemical, the biggest US chemical maker, will sell its Morton Salt unit to Germany's K+S Aktienesellschaft, Europe's largest salt producer, for $1.67bn in cash to help finance the acquisition of Rohm & Haas, reports Bloomberg. The transaction is expected to close midyear, Dow said. K+S assumes no debt in the all-cash transaction, Dow said. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54350/dow-in-17bn-sale-of-
| Lotte rejoins bid for InBev unit Lotte Group, the South Korean retail conglomerate that was a favourite to acquire Anheuser-Busch InBev's Oriental Brewery unit, has rejoined bidding for the asset after being briefly ejected from the process. Lotte will now bid against three private equity funds that made the second round - KKR and two Asia-focused funds, MBK Partners and Affinity Equity Partners. The three emerged as surprise frontrunners when AB InBev ruled that Lotte's initial offer was too low. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54349/lotte-rejoins-bid-fo
| Key shareholders hit Lloyds bosses Institutional shareholders of Lloyds Banking Group have told the UK government they want to see the departure of the group's top two executives well before it is sold back to investors, reports The Times. Sir Victor Blank, Lloyd's chairman, and Eric Daniels, chief executive, have drawn harsh criticism over the rushed rescue of HBOS, which pushed the group into £11bn of losses. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54348/key-shareholders-hit
| Highbridge signals upturn for funds After a dismal 2008 for hedge funds that saw record losses and record withdrawals, investors are tentatively returning to the sector, drawn by signs that some funds have made money this year even as markets plunged. Highbridge Capital Management, once the world's biggest hedge fund, was a big winner, ending the quarter with $20bn under management after $1bn of net inflows this year, including $225m from majority owner JPMorgan. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54347/highbridge-signals-u
| Fairfield Greenwich accused on Madoff In the first regulatory action against one of the big so-called "feeder" funds that channelled money to Bernard Madoff, the top securities authority in Massachusetts on Wednesday accused Fairfield Greenwich – which lost more than $7.9bn in investments with Madoff - of deliberately ignoring the former broker's Ponzi scheme. Separately, the FT reports, US authorities in Florida on Wednesday seized two boats – including a yacht owned by Madoff's wife, Ruth – and the Madoffs' Palm Beach estate. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54346/fairfield-greenwich-
| Banks exploit junior debt discounts European banks are boosting their capital bases by repaying billions of euros worth of junior bonds at hefty discounts to face value and booking the difference as profits to add to core equity. Crédit Agricole offered to buy back £750m of junior debt at a 28% discount on Wednesday, becoming the fourth European bank in days to exploit distressed prices of such bonds. UBS completed a similar deal and Lloyds and RBS last week both offered to buy back or exchange junior debt with face values of up to £7.5bn and £15bn respectively. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54345/banks-exploit-junior
| Taylor Wimpey nears debt revamp Taylor Wimpey, the troubled UK housebuilder, has struck a deal with a group of its main creditors, nearing completion of protracted talks to restructure its debt after its failed capital-raising last summer. Approval on Tuesday from key holders of its eurobonds gives the company vital support of members of its three classes of debt for a restructuring. This will ease the pressure from its debt load but hand creditors warrants to subscribe to 5% of stock. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54344/taylor-wimpey-nears-
| UK's Cattles warns of more provisions The future for UK lender Cattles looks increasingly bleak after the company said it may have to take a further £850m of impairment provisions. Cattles has suspended six executives as it reviews its bad debt policies. A report from consultants Deloitte estimates the lender needs to make an extra £700m provision for potential impairment provisions relating to its £3.6bn loan book. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54343/uks-cattles-warns-of
| McKillop stands down from BP Sir Tom McKillop, the former chairman of Royal Bank of Scotland, has quit as a non-executive director of BP following criticism from some of the oil major's key investors over his plan to stand for re-election at this month's annual meeting. His exit leaves BP seeking two new non-executive directors, a new chairman and a deputy chairman this year. Peter Sutherland, BP's chairman, who plans to leave before next year's annual meeting, has promised to refresh the board. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54342/mckillop-stands-down
| Fund manager stuck with divorce deal In Categories: People Posted at 04:55 by Gwen Robinson Cash-strapped financiers have been warned they will not be able to renegotiate hefty divorce payouts because of depleted bank balances. Brian Myerson, the South African fund manager, on Wednesday lost a legal bid in London to scrap his £11m divorce settlement on the grounds that the value of his investment company had collapsed. Lawyers said the case would head off a deluge of similar applications from recently divorced bankers and traders hit by the economic downturn. See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54341/fund-manager-stuck-w
| Overnight markets: Upbeat Asian stocks climbed on Thursday as better-than- expected auto sales and economic reports in the US boosted investor sentiment. Futures on the S&P 500 lost 0.1% in trading after US stocks climbed Wednesday after the Institute for Supply Management said its factory index increased to 36.3 last month from 35.8 in February and a gauge of US pending home resales rose a monthly 2.1% in February. Asian markets (Thurs)
03:00 BST
Nikkei up 251.58 (3.01%) at 8,603.49
Topix up 25.70 (3.2%) at 819.52
Hang Seng up 544.97 (4.03%) at 14,064.51 US markets (Wed)
DJIA up 152.68 (2.01%) at 7,761.60
Nasdaq up 23.01 (1.51%) at 1,551.60
S&P500 up 13.21 (1.66%) at 811.08 European markets (Wed)
FTSE100 up 29.47 (0.75%) at 3,955.61
Eurofirst 300 up 11.45 (1.56%) at 745.14 Currencies
04:10 BST
€/$ 1.3279 (1.3218)
$/¥ 98.66 (99.74)
£/$ 1.4500 (1.4307) Commodities (updated)
02:15 BST
Brent Crude (ICE) up $0.76 at $49.20
Light Crude (Nymex) up $0.67 at $49.06
100 Oz Gold (Comex) up $0.30 at $928.00
Copper (Comex) up $1.05 at $185.95 10-year government bond yields (%)
US 2.68 (2.73)
UK 3.13 (2.68)
Germany 2.99 (2.99)
Japan 1.36 (1.34) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/04/02/54338/overnight-markets-up
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