Chrysler files for Chapter 11 Chrysler filed for Chapter 11 bankruptcy protection on Thursday after hedge funds blocked a restructuring of the US carmaker's $6.9bn debt. Chrysler will emerge from a "surgical" bankruptcy process with more government aid and new shareholders, including Italy's Fiat and the United Auto Workers union, the government said. Bob Nardelli, Chrysler chief executive, will step down as part of the deal. Chrysler will face 30-60 days in Chapter 11, during which it will close most of its US plants, idling tens of thousands of workers. See this article online.
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| Obama hits at hedge funds over Chrysler President Barack Obama criticised hedge funds for blocking an out-of-court restructuring of Chrysler's $6.9bn debt. While praising JPMorgan Chase and other large banks for accepting the terms of the carmaker's restructuring proposal, Obama laid blame for the bankruptcy filing on "a small group of speculators" who refused to buy into an offer to swap Chrysler's debt for $2.25bn in cash. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55377/obama-hits-at-hedge-
| Crucial boost for Citi in Nikko sale Citigroup will receive a $2.5bn boost from the imminent sale of its Japanese brokerage Nikko Cordial, which could strengthen its hand in talks with the US government over its capital needs. Bankers said the sale of the unit to Japan's SMFG, which could be announced Friday, would cause an accounting loss for Citi but increase its tangible common equity – a gauge of financial health that the US government's recent "stress tests" found to be inadequate at Citi. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55376/nikko-sale-to-ease-c
| Recovery hopes boost FTSE UK stocks posted their biggest monthly gains in six years on Thursday as the rally in global equities gained fresh impetus amid hopes that the worst of the global recession is over. Banking stocks led the way as the FTSE 100 entered an official bull market, a rise of more than 20% from recent lows in March. Anthony Bolton, president of investments at Fidelity International, said the bear market appeared "to have ended." The FTSE 100 rose 1.3% for a monthly gain of 8.1%, its biggest jump since April 2003, closing at 4,243.71, its highest since mid-February. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55375/recovery-hopes-boost
| Flowers rejects Berlin's offer for HRE JC Flowers and the German government are heading for a potential clash after the US buyout firm rejected Berlin's offer to buy shares in Hypo Real Estate. The response moves the German government closer to a controversial expropriation of JC Flowers' holdings in the property lender, which Berlin is determined to take into full state control. The bank is being propped up with more than €100bn of state-backed refinancing guarantees. JC Flowers said most of the investors it represents - with more than 14% of HRE's shares - would reject Berlin's current tender offer of €1.39 a share as too low. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55374/flowers-rejects-berl
| Horlick's Bramdean fund courted Bramdean Alternatives, the $182m alternative investment fund managed by Nicola Horlick's Bramdean Asset Management, has been approached about a possible takeover. The offer by an unnamed bidder comes amid shareholder discontent after falls in the fund's investments in private equity and hedge funds and the shares' wide discount to asset value. Some 9.5% of Bramdean Alternatives was invested with funds run by Bernard Madoff, the disgraced financier. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55373/horlicks-bramdean-fu
| Barclays in £3.4bn bond exchange Barclays has become the latest British bank to seek to strengthen its capital ratios by offering to exchange junior bonds for higher-quality debt. The group on April 30 offered to exchange about £3.4bn of so-called upper tier-two bonds at an average price of 76½p, a big discount to their original value, for lower tier-two bonds, which are senior in the bank's capital structure. The offer highlights moves by UK banks to take advantage of depressed prices to boost capital. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55372/barclays-in-34bn-bon
| Macquarie H2 profit plunges Macquarie Group, Australia's largest investment bank, said on Friday that second-half profit dropped 64% as a collapse in asset prices caused larger-than-forecast writedowns, reports Bloomberg. Net income fell to A$267m ($194m) in the six months to March 31, from A$743m a year ago. Macquarie is planning to raise A$540m by selling 20m shares at A$27 each to institutional investors, as part of a broader plan to raise as much as A$1.24bn in share sales, just two months after saying it had no plans to do so, said people familiar with the matter. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55371/macquarie-h2-profit-
| $1bn bill as Syncora halts payouts Banks and other investors face a bill of more than $1bn after a large US bond insurer became the first since the credit crisis struck to cease paying out claims, an event expected to trigger payouts on billions of dollars of credit derivatives. Insurance regulators forced Syncora, better known under its former name SCA, to stop paying claims this week so it could try to negotiate an agreement with banks to reduce its liabilities sufficiently to manage future claims. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55370/1bn-bill-as-syncora-
| UBS in tax data stand-off with US UBS defended itself on Thursday and invoked Swiss privacy laws against attempts by the US Internal Revenue Service to extract names of thousands of American customers holding offshore accounts, telling a federal court that matters should be resolved via bilateral government talks. The Swiss bank was responding to a legal challenge by the IRS to reveal the names of up to 52,000 accounts. UBS agreed in February to pay $780m to settle criminal charges by the IRS that it had aided tax evasion. But a separate civil action gave UBS until April 30 to reveal details of the American clients. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55369/ubs-in-tax-data-stan
| BofA board to stick by Lewis Bank of America board is not planning to remove chief executive Ken Lewis after he was ousted as chairman under shareholder pressure, the WSJ reports. The bank's board did not discuss succession at a meeting on Wednesday or in recent talks with regulators. But its continuing support for Lewis could cause even more friction with shareholders who pushed successfully to split the chairman and CEO positions. Some corporate governance experts meanwhile have criticised the choice of long-time board member Walter Massey, 71, president emeritus of Morehouse College in Atlanta, as BofA's new chairman. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55368/bofa-board-to-stick-
| Stanford tries to surrender in Texas Sir Allen Stanford, the Texas billionaire facing civil fraud charges, attempted to turn himself in at the federal courthouse in Houston on Thursday, but was turned away because there is no warrant for his arrest, his lawyer said, reports Reuters. Stanford will "stand and fight - he's not going to run," said Dick DeGuerin, Sir Allen's criminal attorney. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55367/stanford-tries-to-su
| Buffett to be grilled by investors Warren Buffett will be under pressure at the annual gathering of shareholders in Berkshire Hathaway, his candies-to-insurance group, to explain his worst year ever, with the usually adoring crowd set to probe the renowned investor on his bargain-hunting strategy and succession plans. Buffett-watchers say this year's meeting, in his native Omaha, will depart from the usual pattern of deferential questions and folksy answers and see some criticism of the "Sage of Omaha". See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55366/buffett-to-be-grille
| Deutsche Bank defends chairman Josef Ackermann was ready to quit within weeks as Deutsche Bank's chief executive rather than put the bank through a debilitating succession battle, it emerged on Thursday as Deutsche defended its supervisory board chairman over his role in trying to replace Ackermann. Deutsche's intervention on behalf of Clemens Börsig came after he lost a board power struggle this week over his attempt to leave his non-executive role and become chief executive. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55365/deutsche-bank-defend
| ADB plans $13bn boost to fight crisis The Asian Development Bank plans to pump an extra $3bn into struggling regional economies and boost its project lending by $10bn over the next two years. The ADB's lending boost comes after shareholders approved a trebling of its capital base, from $55bn to $165bn. While the planned capital increase still needs endorsement from national legislators. ADB president Haruhiko Kuroda said this week's agreement meant the Bank could immediately step up financial aid. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55364/adb-plans-13bn-boost
| Swine flu spreads to 11 countries Swine flu reached 11 countries, as governments closed schools, planned for vaccine production and tapped emergency stockpiles of antiviral medicine, reports Bloomberg. More than 250 people have swine flu confirmed by genetic tests, according to WHO. Hundreds more cases are suspected in New York, Mexico and Australia. The health agency said thousands of samples from sick patients are backlogged for testing, and disease trackers are examining whether an outbreak in Spain should trigger a declaration of a pandemic. See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55363/swine-flu-spreads-to
| Overnight markets: Quietly optimistic Japanese stocks rose modestly on Friday ahead of Japan's Golden Week string of holidays as markets in much of the region were closed for a May 1 holiday. US stock futures advanced overnight, indicating the S&P500 Index will extend its biggest monthly gain in nine years, as investors speculated the worst of the recession may be over and official datashowed that US consumer spending grew at the fastest pace in two years last quarter.
Asian markets (Fri - HK closed)
03:00 BST
Nikkei up 23.58 (0.27%) at 8,851.24
Topix up 1.65 (0.20%) at 839.44
Hang Seng (Thurs) up 564.04 (3.77%) at 15,520.00 US markets (Thurs)
S&P500 down 0.83 (-10%) at 872.81
DJIA down 17.61 (0.22%) at 8,168.12
Nasdaq up 5.36 (0.31%) at 1,717.30 European markets (Thurs)
FTSE100 up 54.12 (1.29%) at 4,243.71
Eurofirst 300 up 12.22 (1.50%) at 828.61 Currencies
03:10 BST
€/$ 1.3245 ( 1.3325)
$/¥ 98.6 (97.53)
£/$ 1.4774 (1.4824) Commodities
03:05 BST
Brent Crude (ICE) down $0.18 at $50.62
Light Crude (Nymex) down $0.21 at $50.91
100 Oz Gold (Comex) down $6.20 at $885.00
Copper (Comex) down $4.20 at $205.30 10-year government bond yields (%)
03:50 BST
US 3.12 (3.09)
UK 3.44 ( 3.46)
Germany 3.17 ( 3.16)
Japan 1.41 (1.45) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/05/01/55362/overnight-markets-qu
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