G20 hails 'new world order' G20 leaders on Thursday declared their summit a "fight back" against recession as global markets surged after they agreed to toughen financial regulation and channel more funds to the IMF. UK leader Gordon Brown, the summit's host, hailed a "new world order" as he unveiled what leaders said was a $1,100bn package of steps to tackle the global downturn, including a $250bn plan to boost the international money supply. See G20 communique here.
See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54431/g20-hails-new-world-
| Steps agreed by G20 The G20 summit on Thursday agreed to tighten limits on hedge funds and other financial companies, triple the IMF's resources and give China and other developing economies more say in managing the global economy. While some of the $1,100bn worth of spending pledged by G20 leaders included reannouncements and half-done deals, equity markets rose sharply on fresh optimism. The summit also agreed to allow the IMF to create $250bn of Special Drawing Rights, based on key national currencies, and to boost trade finance. See also the FT's G20 blog on moves against tax havens. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54430/steps-agreed-by-g20
| ECB rate-cut strengthens euro The ECB cut interest rates on Thursday by a smaller than expected 25bp, triggering a 1.7% rise in the euro against the dollar. The cut, from 1.5% to 1.25%, took official eurozone borrowing costs to their lowest in decades. But amid signs of divisions within its governing council, the central bank saved some firepower for a package of anti-recession measures to be announced in May. For now, says Lex, the ECB stands as "the last domino". See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54429/ecb-rate-cut-strengt
| Non-US banks miss US rule changes Banks following international accounting rules will not get the break awarded to their US rivals, the International Accounting Standards Board said Thursday, after its US counterpart agreed to relax "fair value" accounting. The US rule change (see report here) gives banks more freedom to use their own valuation models, rather than market prices, for assets where markets have become illiquid. IASB meanwhile is conducting its own review of standards. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54428/non-us-banks-miss-us
| Bailed-out banks eye toxic assets US banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan, are considering buying toxic assets to be sold by rivals under the Treasury's $1,000bn public-private partnership plan to revive the financial system. The move comes amid growing controversy over the idea of banks selling each other their bad assets. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54427/bailed-out-banks-eye
| IBM, Sun, near deal at lower price IBM and Sun Microsystems are in final stages of talks to combine the two computer giants but at a lower price than initially discussed, reports the WSJ. Under the proposal, IBM would pay $9.55 a share – or about $750m - for Sun, about $1-a-share lower than previously discussed, valuing the company at about $7bn. In return, Sun wants assurances that IBM will complete the deal, even amid intense regulatory scrutiny. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54426/ibm-sun-near-deal-at
| TCI bows out of D Börse struggle A key chapter in shareholder activism ended at Deutsche Börse when The Children's Investment Fund sold most of its stake, ending its efforts to influence strategy at the German exchange group. The hedge fund followed Atticus Capital, its erstwhile partner, in announcing it had slashed its holding. The funds together had owned almost 20% of the Börse but Atticus cut this to under 2% this week while TCI's stake fell below 1%. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54425/tci-bows-out-of-d-bo
| Wood Mackenzie seeks buyer Wood Mackenzie has hired Goldman Sachs to sell the fast-growing energy research and consultancy group for at least £650m to gain a badly needed cash injection for Candover, its ailing private equity owner. Candover, which has put itself up for sale, will invite bids for some of its older portfolio companies in efforts to prove the value of its listed parent company to potential bidders. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54424/wood-mackenzie-seeks
| American Airlines in talks for Citi cash American Airlines is in early talks to raise cash from Citigroup, its credit card partner, after recently securing a $100m loan from Germany's DVB Bank. The talks, which centre on their co-branded credit card, come after American's three US rivals – Delta, United and Continental– have reaped hundreds of millions of dollars in similar deals with their card partners. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54423/american-airlines-in
| BoC's French bank deal fails Bank of China's plan to buy a stake in a French private bank has collapsed after it tried to renegotiate the purchase price on Beijing's orders. La Compagnie Financière Edmond de Rothschild refused to sell a 20% stake to the Chinese lender at a lower price than the €236m ($317m) agreed in September, the French company said Thursday. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54422/bocs-french-bank-dea
| FSA wins key Winterflood case The UK City watchdog has won a key case in its drive against market malpractice after an independent tribunal backed its belief that market abuse does not have to involve deliberate intent. Winterflood, a stockbroker owned by Close Brothers, took its case to the Financial Services and Markets Tribunal after being fined by the FSA last year for its allegedly "pivotal" role in illegal share ramping of Aim-listed Fundamental-E Investments in 2004. It is seeking the tribunal's leave to appeal the decision. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54421/fsa-wins-key-winterf
| Canary Wharf offers debt buy-back Canary Wharf Group, the London Docklands property developer, has offered to buy back £185m of its securitised debt from bond holders at discounts of up to 85% of face value to take advantage of prices being offered on illiquid corporate debt. Canary Wharf Finance II, the securitisation through which £2.5bn of bonds have been issued, on Thursday offered to repurchase bonds at substantial discounts from holders in three classes of notes. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54420/canary-wharf-offers-
| US charges UBS client US federal prosecutors on Thursday brought the first criminal case against a wealthy US client of UBS after the Swiss bank's recent admission it helped customers evade taxes. Steven Michael Rubinstein, an accountant, was detained in Florida and charged with filing a false income tax return. Prosecutors said the arrest was the first to result from UBS's disclosure of names following its deferred prosecution agreement with the US government in February. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54419/us-charges-ubs-clien
| Barrack eyes distressed bank assets Tom Barrack, a key figure in the US private equity industry and founder of Colony Capital, plans to raise $4bn to buy distressed US banks and impaired assets, as he told the FT that growing financial regulation is creating opportunities for entrepreneurs. Barrack's plan will be welcomed by the Obama administration which is trying to enlist private capital in efforts to revamp the banking system. See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54418/barrack-eyes-distres
| Overnight markets: Summit happy Asian stocks jumped on Friday, sending the regional benchmark index toward its fourth-straight weekly advance, after G20 leaders agreed steps to fight the global recession and China said production expanded for the first time ini six months. Futures on the S&P500 were little changed after the gauge climbed 2.9% on Thursday as G20 leaders pledged more than $1,000bn to the IMF and agreed to tighten financial regulation. Asian markets (Fri)
03:00 BST
Nikkei up 49.94 (0.57%) at 8,769.72
Topix up 14.51 (0.9%) at 833.98
Hang Seng up 52.20 (4.03%) at 14,574.17 US markets (Thurs)
DJIA up 216.48 (2.79%) at 7,978.08
Nasdaq up 51.03 (3.29%) at 1,602.63
S&P500 up 23.30 (2.87%) at 834.38 European markets (Thurs)
FTSE100 up 169.36 (4.28%) at 4,124.97
Eurofirst 300 up 36.34 (4.88%) at 781.48 Currencies
04:10 BST
€/$ 1.34460 (1.3279)
$/¥ 99.78 (98.66)
£/$ 1.473 (1.4500) Commodities (updated)
03:15 BST
Brent Crude (ICE) down $0.73 at $52.02
Light Crude (Nymex) down $0.82 at $51.82
100 Oz Gold (Comex) down $3.90 at $905.00
Copper (Comex) down $1.80 at $187.20 10-year government bond yields (%)
US 2.75 (2.68)
UK 3.37 (3.13)
Germany 3.17 (2.99)
Japan 1.42 (1.36) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/04/03/54416/overnight-markets-su
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