BofA's bleak view hits US stocks US stocks suffered their worst one-day fall in six weeks on Monday as Bank of America rattled investors with a bleak picture of economic conditions in the coming months. BofA's warning came as the US bank reported a better-than-expected $4.2bn in Q1 earnings, reflecting strong results at recently acquired Merrill Lynch. But investors focused instead on BofA's swelling provisions for credit losses and its dire prognosis of the US economy. BofA shares fell 24%, contributing to a 4.3% decline in the S&P500. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54904/bofas-bleak-view-hit
| Oracle in $7.4bn swoop on Sun Oracle chief executive Larry Ellison unveiled a surprise $7.4bn agreed offer for Sun Microsystems on Monday. The deal, at $9.50 a share in cash, came two weeks after IBM's failed bid for Sun and threw the spotlight onto Sun's Java, a programming language developed to counter Microsoft's growing dominance of the software industry in the mid-1990s. Ellison said it was the "single most important software asset" Oracle has ever acquired. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54903/oracle-in-74bn-swoop
| GSK agrees $3.6bn Stiefel buy GlaxoSmithKline, the pharmaceutical group, has agreed to pay up to $3.6bn for Stiefel Laboratories of the US, significantly boosting its presence in dermatology as part of a growing portfolio of consumer healthcare businesses. The deal is the largest acquisition so far undertaken by GSK under Andrew Witty, the chief executive appointed last June, and will create a dermatology operation with sales of $1.5bn, accounting for about 8% of global skincare prescriptions. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54902/gsk-agrees-36bn-stie
| PepsiCo offers $6bn for bottlers PepsiCo on Monday made an unexpected $6bn cash and stock proposal to buy both the Pepsi Bottling Group, in which it owns about a 33% stake, valuing it at $29.50 per share, and Pepsi Americas, in which it owns about 43%, valuing it at $23.27 per share. The deal underscores the urgency for soft drinks companies to change their business models as fizzy drink sales slide. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54901/pepsico-offers-6bn-f
| Pandit faces fresh doubts at Citi Vikram Pandit, Citigroup's chief executive, will on Tuesday try to convince investors at the group's annual meeting that Citi is on the road to recovery, even as it emerged that officials at the Federal Deposit Insurance Corporation have privately discussed replacing Pandit if Citi needed more government aid. The FDIC is just one of various regulators to have a say on Pandit's future if Citi requires a fourth bailout after the completion of "stress testing" of its health. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54900/pandit-faces-fresh-d
| Japan to sell $110bn of bonds Japan's finance minister Kaoru Yosano on Monday said the government will sell Y10.8 trillion ($110bn) of additional new bonds this fiscal year to pay for Prime Minister Taro Aso's record stimulus package, reports Bloomberg. The extra debt sale will bring Tokyo's new bond sales for this fiscal year to a record Y44.1 trillion. Of the additional issuance, Y7.3 trillion will be in construction bonds, with Y3.5 trillion in deficit-covering bonds. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54899/japan-to-sell-110bn-
| UBS sells Brazil arm for $2.5bn UBS's new management on Monday took a first big step to trim the balance sheet and redeploy capital with the $2.5bn sale of Pactual, the Swiss bank's Brazilian financial services operation, to some of its founders. The sale highlights UBS's drive to jettison projects championed by its previous management team while boosting its capital reserves. UBS is selling the business to BTG, a company set up by André Esteves, former head of Pactual, who left the bank last year. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54898/ubs-sells-brazil-arm
| Capital & Regional in Junction rescue Capital & Regional, the property fund manager and investor, has confirmed plans to raise about £65m for the Junction retail park fund, mostly through a placing of units with Area Property Partners, the US private equity group. Area, formerly Apollo Real Estate, will invest £50m, with the balance to be subscribed by existing unit holders. Units in the £734m fund will be issued at about 18p, a discount of about 40% to the March unit price. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54897/capital-regional-in-
| Pearson capital-raising plan rebuffed Pearson, the educational publisher and owner of the FT, has been rebuffed after sounding out investors last week about a possible £270m capital-raising. The company asked some top shareholders to support a placing of new shares equivalent to 5% of the group, to finance unnamed acquisition opportunities. But key investors wanted more detail about specific plans and Pearson did not proceed. Pearson earlier announced the $145m acquisition of Wall Street English, which provides English language training to adults in China. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54896/pearson-capital-rais
| Icap loses 85% of mortgage bond trading Icap, the world's largest broker of trades between banks, has lost 85% of its business over six weeks in the most active part of the mortgage-bond market as Wall Street firms shift trades to their own electronic network, reports Bloomberg.
Goldman Sachs, JPMorgan and seven other banks have moved the brokering business to Dealerweb, the trading platform they own for so-called 'To Be Announced' mortgage securities, from Icap's Brokertec system, which arranged about $6bn in transactions daily in the week to April 8, down from $40bn in February, according to Bloomberg data. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54906/icap-loses-85-of-mor
| EU hedge fund rules attacked The European Commission's plans to regulate hedge funds and private equity threaten to become a key issue in the European parliamentary election campaign after key MPs on Monday criticised draft proposals as "almost worthless". In a letter to José Manuel Barroso, Commission president, the Socialist group, the second-largest bloc in European parliament, said the proposal was so "filled with loopholes" that it would be "highly ineffective". See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54895/eu-hedge-fund-rules-
| UK case tests pre-nup principle In Categories: People Posted at 04:52 by Gwen Robinson One of Germany's wealthiest women is seeking to enforce a pre-nuptial agreement that would leave her former investment banker husband with nothing in the latest landmark divorce case to hit UK courts. Katrin Radmacher, a paper industry heiress, claims that her estranged spouse is reneging on an agreement not to make a claim against her in event of a separation. The case could overturn the principle that pre-nuptial contracts, widely recognised in Europe and the US, are not legally binding in the UK. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54894/uk-case-tests-pre-nu
| Stanford denies Ponzi scheme Billionaire Texan Allen Stanford said on Monday denined he ran a Ponzi scheme, as US regulators have charged, and asserted in what may be a preview of his defense that his companies were well-run until the government seized them in February, reports Reuters. The SEC alleges the financier, two top aides and three of his companies were involved in a $8bn fraud involving high-yield certificates of deposit. Stanford, chairman and founder of Stanford Group Co and its affiliates, said he personally did not oversee the firm's investments. See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54905/stanford-denies-ponz
| Overnight markets: Sliding Asian stocks slumped on Tuesday, dragging the regional benchmark index from a three-month high, as lower-than- expected profit at China Mobile, the world's biggest wireless carrier, weighed on regional markets. Futures on the S&P 500 Index were little changed at 832.90 after the gauge slid 4.3% on Monday - the most since March 2 - as Bank of America increased reserves for future loan losses by 57% since end-December.
Asian markets (Tues)
03:00 BST
Nikkei down 261.92 (-2.93%) at 8,662.83
Topix down 28.12 (-3.31%) at 820.18
Hang Seng down 600.19 (-3.81%) at 15,150.72 US markets (Mon)
S&P500 down 37.21 (-4.28%) at 832.39
DJIA down 289.60 (-3.56%) at 7,841.73
Nasdaq down 64.86 (-3.88%) at 1,608.21 European markets (Mon)
FTSE100 down 101.94 (-2.49%) at 3,990.86
Eurofirst 300 down 28.57 (-3.51%) at 786.12 Currencies
04:10 BST
€/$ 1.2933 ( 1.2996)
$/¥ 98.20 (98.83)
£/$ 1.4536 (1.4725) Commodities
02:15 BST
Brent Crude (ICE) up $0.11 at $49.97
Light Crude (Nymex) up $0.11 at $48.62
100 Oz Gold (Comex) up $0.20 at $887.70
Copper (Comex) down $7.50 at $202.85 10-year government bond yields (%)
03:50 BST
US 2.82 (2.91)
UK 3.22 ( 3.25)
Germany 3.27 ( 3.15)
Japan 1.47 (1.47) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/04/21/54887/overnight-markets-sl
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