Citi to hold fast in China, India Citigroup will not sell its stakes in Chinese and Indian banks, said Ajay Banga, chief executive of Citi Asia-Pacific. Banga told the FT that Citi, which received a US government bail-out last year, also planned to expand lending across the region despite the "challenging" economic environment. The Asia-Pacific region accounted for 30% of the bank's revenues last year. Citi this month sold its Japanese domestic securities business to SMFG in a $7.8bn deal. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56262/citi-to-hold-fast-in
| ANZ to raise $2bn in bid for RBS assets In Categories: M&A Posted at 04:58 by Gwen Robinson ANZ, Australia's fourth-largest lender, plans to raise A$2.5bn ($2bn) by selling shares to bolster capital as it bids for Royal Bank of Scotland's Asian assets, reports Bloomberg. ANZ will sell the shares to institutional investors at A$14.40 each, a 7.5% discount to its last traded price, and will not increase the size of the offer, it said on Wednesday. The bank will also sell equity to retail shareholders and will reserve the right to scale back applications under the share-purchase plan if total demand exceeds A$350m. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56260/anz-to-raise-2bn-in-
| Bain leads race for Gome stake Gome Electrical Appliances, China's second-largest electronics retailer, may sell as much as 20% of itself to Bain Capital for about $500m, reports Bloomberg. Bain is competing for Beijing-based Gome with KKR and Warburg Pincus, which are still pursuing the stake. While Bain is in the final stage of talks with Gome, the retailer hasn't formally picked the US buyout firm as its preferred buyer. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56259/bain-leads-race-for-
| Bondholders shun GM's tender offer General Motors has failed to persuade enough bondholders to accept a debt-for-equity swap, setting the stage for the largest-ever US industrial bankruptcy within days, reports Reuters. The event marks a critical disappointment for GM, which has so far failed to gain anywhere near the 90% of bondholder support desired to stave off bankruptcy. Bondholders have until midnight Wednesday to make their final decision on the tender. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56258/bondholders-shun-gms
| UK seeks to secure Vauxhall's fate Britain has intervened in the political manoeuvring over the future of Opel/Vauxhall, explicitly linking its financial support for the spin-off of GM's European operations to the future of two UK car plants in Luton and Ellesmere Port. Lord Mandelson, business secretary, said he had spoken by telephone on Tuesday with Fritz Henderson, GM's chief executive, and Carl-Peter Forster, chief executive of GM Europe, and had "made clear the UK government's commitment to all of Vauxhall's plants". See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56257/uk-seeks-to-secure-v
| Miners set for showdown on ore prices Chinese steelmakers and global miners are heading for a showdown over ore prices after Rio Tinto agreed to cut prices by a third for Japanese steel mills, much less than the reduction Beijing is demanding. Traditionally the first price agreement between a miner and a steelmaker creates a benchmark for the industry but this time, some Chinese steelmakers immediately rejected the deal, insisting on reductions of at least 40%. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56261/miners-set-for-showd
| Freddie launches $1bn bond Freddie Mac on Tuesday began marketing to investors the first commercial mortgage bond guaranteed by a government-sponsored mortgage agency. The new financing tool will help Freddie preserve capital while providing greater liquidity to the mortgage market. The $1bn bond, backed by 62 commercial mortgages for multi-family apartment buildings, will be sold to investors in the second week of June, said the mortgage financier. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56256/freddie-launches-new
| Deutsche Bank sees 'robust' business Deutsche Bank saw "robust" development of business in April and May, Josef Ackermann, chief executive, said on Tuesday, continuing the optimistic tone struck by Germany's largest bank since it returned to profit this year. Ackermann's statement at Deutsche Bank's annual meeting will stoke expectations that it will again report a healthy profit in the second quarter of the year, having earned net income of €1.2bn in the first quarter following last year's record €3.9bn loss. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56255/deutsche-bank-sees-r
| Money market rates rise again Key money market rates rose for the first time in more than two months amid worries that the economic revival could stall as the financial health of banks remains fragile. The cost of borrowing dollars between banks over three months, or dollar Libor, on Tuesday rose for the first time since March 26, edging up to 0.663% from 0.660%. Three-month euro Libor also rose for the fifth day in a row to 1.270%, although sterling Libor continued falling. It has dropped 62 days in a row since Feb 24 and now stands at 1.278%. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56254/money-market-rates-r
| Santander to pay Madoff trustee $235m Spain's Santander, one of Europe's biggest banks, has reached a settlement with the trustee seeking to recover money for Bernard Madoff's victims, agreeing to pay $235m to resolve claims against two of the bank's hedge funds managed by its Optimal investment arm. The deal is the first big settlement for Irving Picard, the trustee, in his quest to get Madoff's investment partners to return about $12bn they withdrew from his business before he admitted running a Ponzi scheme. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56253/santander-to-pay-mad
| IG hit by Japan leverage cap fears Shares in IG Group, Britain's biggest spread-betting company, fell on Tuesday after reports that Japanese regulators may seek to limit the amount of leverage that can be used by retail forex speculators in Japan. Details and timing of the changes are unknown at present but IG, which entered the Japanese market last year with the acquisition of a majority stake in FXOnline, an online forex company, said a leverage cap would only affect a minority of its clients there and would not substantially hit earnings. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56252/ig-hit-by-japan-leve
| Russian group invests $200m in Facebook Facebook said on Tuesday it had accepted a $200m investment from Digital Sky Technologies, a private Russian internet investment group, valuing the fast growing social network's preferred stock at $10bn. The investment, representing a 1.96% equity stake, gives Facebook an additional cash cushion but the $10bn valuation is a come-down. Microsoft invested $240m on similar terms 18 months ago but valued Facebook's preferred stock at $15bn. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56251/russian-group-invest
| Vodafone threatens to join UK exodus Vodafone has raised the prospect of joining the tax exodus from Britain after demanding a "dialogue with the government" on the subject of tax on foreign earnings, reports The Times. Andy Halford, Vodafone's finance director, has urged policymakers to speed up the process of handling cases such as Vodafone's, which centres on legislation on "controlled foreign companies [CFC]" arising from its takeover of Mannesmann, the German phone company, through a Luxembourg-based subsidiary. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56250/vodafone-threatens-t
| PwC: 'Bad banks' should have key role Removing toxic assets from US and British banks' balance sheets could be speeded up if the billions of dollars of government guarantees on these assets can be sold to private investors, according to a report by PwC. The analysis concludes that the creation of a "bad bank" to remove troubled assets from the financial system has a record of success and any delay in adopting such a measure will prevent a full recovery. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56249/pwc-bad-banks-should
| Third ex-Morgan Stanley trader punished A former Morgan Stanley trader has been fined £140,000 and banned by the FSA, the UK financial watchdog, after he traded ahead of clients to profit from their orders, known as "pre-hedging". It was the third trading-related punishment linked to the bank in the past month. The FSA said Tuesday that Shroff, a senior trader, "disadvantaged" clients on seven occasions in 2007. See FT Alphaville for more detail, here. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56248/third-ex-morgan-stan
| NYSE Liffe to launch stock index futures NYSE Liffe on Tuesday said it would launch a suite of US and European stock index futures products based on MSCI Equity Indices, in the first expansion of its product base since the US futures arm of NYSE Euronext launched eight months ago. The move comes after NYSE Liffe started operations in the US with gold and silver contracts, a portfolio of derivatives NYSE Euronext bought from CME Group. See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56247/nyse-liffe-to-launch
| Overnight markets: Rising Asian stocks rose on Wednesday, led by automakers and mining companies, after US consumer confidence jumped the most in six years and commodity prices climbed. Futures on the S&P500 Index lost 0.1% after the gauge climbed 2.6% on Tuesday after the Conference Board's index of US consumer confidence surged to 54.9, the biggest gain since April 2003. Asian markets (Wed)
03:15 BST
Nikkei up 133.66 (1.44%) at at 9,444.69
Topix up 10.37 (1.17%) at 894.14
Hang Seng up 380.90 (2.24%) at 17,372.46 US markets (Tues)
S&P500 up 23.33 (2.63%) at 910.33
DJIA up 196.17 (2.37%) at 8,473.49
Nasdaq up 58.42 (3.45%)) at 1,750.43
European markets (Tues)
Eurofirst 300 up 7.43 (0.87%) at 865.14
FTSE100 up 46.43 (1.06%) at 4,411.72
Currencies
03:40 BST
€/$ 1.3995 (1.3964)
$/¥ 95.2100 (94.7800)
£/$ 1.5975 (1.5877) Commodities
03:50 BST
Brent Crude (ICE) up $0.25 at $61.49
Light Crude (Nymex) up $0.22 at $62.67
100 Oz Gold (Comex) down $2.60 at $950.70
Copper (Comex) down $0.40 at $213.70 10-year government bond yields (%)
03:20 BST
US 3.52 (3.44)
UK 3.67 (3.73)
Germany 3.60 (3.50)
Japan 1.48 (1.45) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/05/27/56246/overnight-markets-ri
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