US banks surge on test hopes US bank shares surged on Monday as investors bet that some of the biggest banks will have to raise less capital than feared after this week's release of the government's "stress test" results for 19 banks. Among 10 or so institutions believed to have been told by regulators to strengthen their balance sheets, Citigroup, Bank of America and Wells Fargo rose on investor optimism that their capital needs will be manageable. Wells in particular rose more than 23% after Warren Buffett, one of its top investors, called it a "fabulous" bank. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55443/us-banks-surge-on-te
| JPMorgan seeks deals: Dimon Acquisitions of retail banks in emerging markets remain JPMorgan Chase's biggest "strategic issue" but the US group is also open to buying smaller lenders in its home market, Jamie Dimon said on Monday. In a call with investors, the chief executive said that JPMorgan's credit card unit was the bank's business under the "most stress" due to the recession, but noted there were signs that financial markets were on the mend. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55442/jpmorgan-seeks-deals
| Porsche, VW clash over rescue plan The feuding families that control Porsche are set for a showdown on Tuesday over rival rescue strategies for the highly-indebted German sports carmaker. Wolfgang Porsche, chairman of the eponymous carmaker, and Ferdinand Piëch, chairman of Volkswagen, laid bare a deep family schism last week when Mr Porsche, whose family branch owns more of Porsche than the Piëch clan, backed a plan by Wendelin Wiedeking, Porsche's chief executive, to merge VW and Porsche into a new holding company. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55441/porsche-vw-clash-ove
| Debt holders move against Chrysler A New York bankruptcy court will hear arguments on Tuesday by a group of Chrysler lenders seeking to block the carmaker's restructuring on the grounds that the process is "patently illegal". The dissident group, which includes about 20 money managers such as Oppenheimer Funds and Stairway Capital Management, was accused last week by President Barack Obama of forcing Chrysler into bankruptcy after refusing to accept its offer to swap $6.9bn of secured debt for $2.25bn in cash. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55440/debt-holders-move-ag
| Obama takes aim at US multinationals Barack Obama on Monday unveiled a sweeping crackdown on offshore tax avoidance by US companies, in a move likely to affect the way Britain taxes profits earned by UK companies operating abroad. Obama said the steps would raise $210bn over 10 years and "make it easier" for companies to create jobs in the US rather than off-shore. But critics said the rules would put US companies at a disadvantage to foreign rivals. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55439/obama-takes-aim-at-u
| TPG highlights buy-out woes US buyout group TPG has highlighted the tough conditions facing the buy-out industry in a letter to investors disclosing it had considered 140 leveraged buy-out deals in recent months – and agreed to none. The letter, sent last month, described LBO deals as "useful at some times during the cycle but not at other times". Having agreed to none in the six months to March 31, TPG said it has shifted its focus to investing in debt at a discount. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55438/tpg-highlights-buy-o
| PBG rejects PepsiCo takeover Pepsi Bottling Group on Monday rejected last month's takeover offer from PepsiCo, its largest shareholder, calling the proposed price per share "grossly inadequate". Eric Foss, chief executive of PBG, argued in a letter to Indra Nooyi, head of PepsiCo, that the offer had been "opportunistically timed" before the bottler of PepsiCo drinks issued better-than- expected quarterly results. He also said it failed to account for possible synergies, and was "substantially below PBG's intrinsic value". See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55437/pbg-rejects-pepsico-
| Hedge funds reap Barclays gain Two of the hedge funds that bet UK bank stocks would fall have made almost £200m between them on the back of Barclays' soaring share price, reports the Telegraph. Odey Asset Management and Lansdowne Partners invested in the bank close to the share price trough in January of 51p. Barclays shares have since risen around 450% to 279p on growing confidence that its finances are sound. Odey now owns 1.5% of Barclays and Lansdowne is thought to own 1%. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55436/hedge-funds-reap-bar
| Fiat expansion hits obstacles Fiat's plan to build a European car group with Chrysler and GM's German unit, Opel, ran into obstacles on Monday as Berlin issued a string of conditions for any Opel buyer, and dissident Chrysler creditors said a sale to Fiat would be "patently illegal". The moves came as Sergio Marchionne, Fiat's chief executive, met government and union officials in Berlin in the first round of his campaign to secure political backing by the end of May for a merged car group. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55435/fiat-expansion-hits-
| Constellation ties up with Highbridge Constellation Growth Capital, a former Bear Stearns venture capital group focused on media and communications, has closed a $200m fund to further investments and joined Highbridge Capital Management, the hedge fund manager controlled by JPMorgan Chase. The news, coming a year after Bear Stearns was sold to JPMorgan, forms part of Highbridge's efforts to build a long-dated diversified asset management business to equal its $20bn alternative investment business. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55434/constellation-ties-u
| Noble raises Gloucester bid to $363m Noble Group, a Hong Kong-based commodity supplier, raised its cash offer for Gloucester Coal by 24% on Tuesday, to thwart a rival bid for control of the Australian producer, reports Bloomberg. Noble offered A$6 a share, valuing Sydney-based Gloucester at A$490m ($363m). The increased offer is subject to Gloucester, in which Noble has a 21.7% stake, dropping an agreed merger with rival Whitehaven Coal. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55444/noble-raises-glouces
| HK launches insider trading trial Hong Kong's highest-profile insider trading trial began on Monday, as the territory's prosecutors seek to extend their streak of recent court victories in market misconduct cases. Du Jun, a former Morgan Stanley investment banker, faces 10 counts of insider trading related to advisory work he did in 2007 for Citic Resources, an arm of China's largest investment conglomerate. Du pleaded not guilty to all counts. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55433/hk-launches-insider-
| Merger spells end for Liba The two largest US and European trade associations for banks and brokers in the securities markets will on Tuesday announce a merger of their European operations, spelling the end of the London Investment Banking Association in its current form. Liba will be combined with the European unit of the US-based Securities and Financial Markets Association (Sifma), which represents 650 banks, brokers and asset managers. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55432/merger-spells-end-fo
| Holiday weekend catch-up In case you missed these stories: - Buffett hits out at stress tests
Billionaire investor Warren Buffett criticised the Obama administration's stress tests on the 19 largest US banks, a a one-size-fits-all attempt to identify capital shortfalls was inappropriate. - BofA and Citi in last push on funds
Citigroup and Bank of America are working on plans to raise more than $10bn each in fresh capital, even as they launched last-ditch attempts to convince the US government they do not need to bolster their balance sheets. - Numis names Arculus as chairman
Numis, the UK-listed stockbroker for smaller companies, has appointed Sir David Arculus, the former media executive, as chairman, replacing Michael Spencer, who quit in February. See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55431/holiday-weekend-catc
| Overnight markets: Up Asian stocks rose on Tuesday, although some key regional markets including Japan were closed for holidays, extending a rally in which global equities have wiped out their 2009 losses, as better-than-expected US home sales added to signs the worst of the global recession has passed. S&P500 Index futures lost 0.3% after the gauge climbed 3.4% on Monday, erasing its declines for the year as figures showed existing home sales jumped 3.2% in March. Asian markets (Tues - Japan closed)
03:00 BST
Nikkei (Fri) up 149.11 (1.69%) at 8,977.37
Topix (Fri) up 29.05 (3.98%) at 841.04
Hang Seng (Tues) up 109.29 (0.67%) at 16,490.34 US markets (Mon)
S&P500 up 29.72 (3.39%) at 907.24
DJIA up 214.33 (2.61%) at 8,426.74
Nasdaq up 44.36 (2.58%) at 1,763.56 European markets (Mon - UK closed)
FTSE100 (Fri) down 0.49 (-0.01%) at 4,243.22
Eurofirst 300 (Mon) up 13.05 (1.57%) at 842.70 Currencies
03:10 BST
€/$ 1.3387 ( 1.3245)
$/¥ 98.77 (98.60)
£/$ 1.5001 (1.4774) Commodities
03:05 BST
Brent Crude (ICE) down $0.37 at $54.21
Light Crude (Nymex) down $0.35 at $54.12
100 Oz Gold (Comex) up $3.40 at $905.60
Copper (Comex) up $1.00 at $215.50 10-year government bond yields (%)
03:50 BST
US 3.15 (3.12)
UK 3.55 ( 3.44)
Germany 3.25 ( 3.17)
Japan 1.40 (1.45) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/05/05/55361/overnight-markets-up
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