Samberg to close fund amid probe Arthur Samberg, one of the world's best known hedge fund managers, is closing down his hedge fund, Pequot Capital Management, saying public disclosures of the reopening of a government probe into allegations of insider trading made its continued operation "untenable". In a letter to clients on Wednesday (read via WSJ here), Samberg, 68, said he planned to liquidate the company's core funds and return cash to investors, while spinning out two other funds. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56319/samberg-to-close-fun
| Citi, SEC, in talks to settle probe Citigroup is in the early stages of negotiating with the SEC to settle an investigation into whether it misled investors by not properly disclosing the amount of troubled mortgage assets it held as the market began to implode in 2007, reports the WSJ. The talks indicate the SEC could be moving toward resolving a number of civil probes that began in late 2007, when mortgage-related losses began mounting on the books of banks and Wall Street firms. Among issues being debated at the SEC is whether Citi, as a recipient of government-rescue funds, should pay a large penalty in the case. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56320/citi-sec-in-talks-to
| JPMorgan warns on credit card woes Jamie Dimon, JPMorgan Chase chief executive, warned on Wednesday that loss rates on the credit card loans of Washington Mutual, the troubled bank it acquired last year, could climb to 24% by the year end. In the past, credit card loss rates have tracked the unemployment rate but that relationship has been breaking down for more troubled credit card portfolios, such as the $25.9bn in WaMu credit card loans. At the end of the first quarter, 12.63% of WaMu credit card loans were deemed uncollectable by JPMorgan. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56318/jpmorgan-warns-on-cr
| BofA nears capital-raising target Bank of America has struck agreements with several non-government owners of its preferred stock and raised approximately $5.9bn by converting their holdings into common shares, the bank announced on Wednesday. The arrangement comes on the heels of a $13.5bn capital raising by BofA and the $4.5bn (net) sale of a stake in China Construction Bank. BofA said it had raised almost $26bn of the $33.9bn required by US government bank "stress tests". See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56317/bofa-nears-capital-r
| Rising Treasury yields threaten recovery US Treasury yields rose to their highest level in six months and stocks fell on Wednesday, fuelling concern that rising mortgage rates could damp a nascent US economic recovery. The yield on the benchmark 10-year Treasury note rose 24bp to 3.74%, a level last seen in mid-November. The 10-year note has climbed from lows of 2.1% in December. While short-term yields remain stable, longer-term yields have been volatile for several days, raising questions about whether the Fed will have to increase its planned purchases of Treasuries. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56316/rising-treasury-yiel
| Sale of RBS Asian assets to 'drag on' The sale of Royal Bank of Scotland's Asian assets is likely to drag on through the summer after failing to attract enough bids amid uncertainty surrounding the divestment. Potential bidders had until last weekend to table non-binding offers, but HSBC and Standard Chartered, seen as two of the three front-runners, have instead sought further information from RBS. Australia's ANZ, the third bidder, said Wednesday it had made an offer for "selected [RBS] businesses" alongside a capital raising of up to A$2.85bn ($2bn) to help fund any acquisition. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56315/sale-of-rbs-asian-as
| GM fails to agree $27bn debt deal General Motors moved closer to bankruptcy on Wednesday as bondholders failed to agree to a debt-for-equity swap and European governments sparred over the fate of its international operations ahead of the US-imposed June 1 deadline for submitting a restructuring plan. GM's board will meet by Friday to consider strategy after the failure of the debt-exchange proposal, reports the FT. Bloomberg meanwhile says GM has asked for an extra €300m ($415m) for its Opel unit, stalling talks with Fiat and Magna over its European operations. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56314/gm-fails-to-agree-27
| Time Warner close to AOL deal Time Warner is close to a decision to spin off all of its AOL internet business. Although not yet final, executives are known to favour spinning off the whole division rather than a part of it. Over the past year, Time Warner has considered spinning off either its advertising-driven "audience business" or its legacy dial-up internet business. Time Warner's board of directors are expected to approve a decision to start the process on Thursday. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56313/time-warner-close-to
| Permira sells stake in Britvic Permira on Wednesday sold its 14% stake in Britvic for about £81m, ending almost three years of frustration for the UK private equity group in its attempts to agree a buy-out deal with the soft-drinks maker. The market placement of Permira's 30.2m Britvic shares, arranged by UBS, was agreed at an average price just above the 268p per share price at which Permira built up its stake in 2006. Shares in Britvic fell 4% to 275p. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56312/permira-sells-stake-
| US blocks CSL's $3bn Talecris bid The US Federal Trade Commission authorised a lawsuit on Wednesday to block the proposed $3.1bn acquisition of Talecris, a US plasma provider, by Australia's CSL, citing concerns over US antitrust laws. The merger would shrink the number of competitors for key plasma products in US markets and leave CSL and Baxter, its key rival, with more than 80% market share in some products, the FTC said. CSL on Monday foreshadowed the FTC's move. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56311/us-blocks-csls-3bn-t
| UK's B&B set to miss coupon payments Bradford & Bingley, the UK mortgage lender nationalised last year, said it will miss coupon payments on some of its perpetual subordinated bonds and subordinated notes on their next date of payment - all due in June or July. The move riled but did not surprise the market, due to a law that took effect in February altering the terms of B&B's outstanding subordinated bonds, allowing it to defer interest payments. See FT Alphaville on "the delinquent bank". See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56310/uks-bb-set-to-miss-c
| Saudis back oil price increase The world economy has strengthened enough to weather oil prices at $75-$80 a barrel, the Saudi oil minister, Ali Naimi, said on Wednesday, suggesting that Opec, which meets Thursday in Vienna, no longer sees a need to support the global recovery with low oil prices. Naimi's comments, echoed by other Opec officials, suggest a policy shift by the cartel, which earlier this year gave the impression it would not push prices higher too quickly. Oil prices on Wednesday hit their highest level in six months, trading above $63 a barrel, after Naimi's comments. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56309/saudis-back-oil-pric
| Brussels to speed up bank reform The European Commission on Wednesday stepped up the pace for overhauling Europe's patchy system for supervising banks and insurers despite UK concern about ceding binding authority to non-national bodies. EU officials said they hoped to win broad political support for the reforms when EU leaders meet next month, and bring forward detailed legislation in the "early autumn". See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56308/brussels-to-speed-up
| NYSE Euronext opposes LCH.Clearnet bid NYSE Euronext on Wednesday said it opposed a plan by a consortium of 11 banks and Icap, the inter-dealer broker, to buy LCH.Clearnet, Europe's largest independent clearing house. The exchange group is the second largest shareholder in the clearer with 5%. Separately, the FT reports that LCH.Clearnet will on Wednesday unveil plans to offer the first global clearing service for asset managers, pension and hedge funds in interest rate swaps. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56307/nyse-euronext-oppose
| Six arrested over UK insider dealing Five men and one woman were arrested in the UK on Wednesday in connection with an investigation by the London City watchdog into suspected organised insider dealing. The FSA, working with police, arrested the six, aged 27 to 34, and carried out searches at eight addresses in London and Essex. This was the third set of arrests in the past 12 months following an investigation into organised insider dealing. The three actions were not linked, the regulator said. See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56306/six-arrested-over-uk
| Overnight Markets: Mixed Asian stocks fell on Thursday, led by banks and mining companies, after ANZ sold shares and metal prices declined. Futures on the S&P500 Index were little changed after the gauge dropped 1.9% on Wednesday in the biggest slide in two weeks, as Sheila Bair, FDIC chairman, said the asset quality of US banks remains a "major concern."
Asian markets (Thurs)
03:15 BST
Nikkei down 5.28 (-0.06%) at at 9,433.49
Topix up 0.76 (0.09%) at 893.61
Hang Seng up 893.71 (5.26%) at 17,885.27 US markets (Wed)
S&P500 down 17.27 (-1.90%) at 893.06
DJIA down 173.47 (-2.05%) at 8,300.02
Nasdaq down 19.35 (-1.11%) at 1,731.08
European markets (Wed)
Eurofirst 300 up 5.49 (0.63%) at 870.63
FTSE100 up 4.51 (0.10%) at 4,416.23
Currencies
03:40 BST
€/$ 1.3824 (1.3995)
$/¥ 95.8500 (95.2100)
£/$ 1.5971 (1.5975) Commodities
03:50 BST
Brent Crude (ICE) down $0.65 at $61.85
Light Crude (Nymex) down $0.57 at $62.88
100 Oz Gold (Comex) up $6.60 at $946.70
Copper (Comex) down $2.50 at $209.60 10-year government bond yields (%)
03:20 BST
US 3.72 (3.52)
UK 3.74 (3.67)
Germany 3.63 (3.60)
Japan 1.49 (1.48) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/05/28/56302/overnight-markets-mi
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