Tag Archive for 'Capital Markets'

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Recession, Set, Go

Published on July 1, 2008 in International Finance. 0 Comments Tags: , .

Stock MarketHow much more can markets digest?

Inflation worries, near-record oil prices and fears of further bank losses have led to a sell-off of shares across global stock markets.

Key share indexes in India and China both fell 3% while Japan’s main index fell for its ninth consecutive day for the first time in four years.

In Europe, the FTSE 100 fell 2% while Paris and Frankfurt saw similar losses.

Lack of confidence also hit US markets, with the Dow Jones Industrial Average opening down more than 100 points.

Banking and airline shares were especially weak, the former hit by talk of further sub-prime related losses.

UBS’ Confession

Published on April 23, 2008 in International Finance. 0 Comments Tags: , , .

UBS UBS AG together with Citigroup and Merrill Lynch are the top three losers of the US subprime mortgage crisis, together they wrote down US$106 billion to date.

During UBS’ annual meeting on Wednesday April 23rd in Basel, shareholders were asking just one question: How did UBS manage to lose $37 billion betting on American mortgage-backed assets, battering its core capital and share price in the process?

The UBS internal investigation report on the write-downs gives three broad explanations for the bank’s woes. The investment-banking arm’s preoccupation with growth, the reliance of the control team on flawed measures of risk, and the culture of the bank. A more detailed explanation on all three causes can be found here. The credit squeeze is graphically explained by the Financial Times here and by the BBC here.

The Mood in The City

Published on April 14, 2008 in International Business and International Finance. 0 Comments Tags: , , , .

The mood in London financial markets is not good. House prices are going down, and with them the British pound. Investment bankers within UBS are looking around for jobs, and the Royal Bank of Scotland is sweeping ABN Amro’s trading floor clean with incredible lack of style:

ABN’s structured credit traders were apparently told on Thursday that they should report to RBS’ London office in preparation for a move there on Monday. Terminals needed to be checked and such like. And when they got there… they were all fired (full story).

Luckily, the British have a great sense of humour, and I couldn’t stop laughing at this economic assessment of London 2010 from the price of everything blog:

London, April 2010 – Wall Street firms have just announced their latest results for FY 2009;

300 million staff have been “written down”, leaving just two (Sid and Doris Bonkers) to manage the investment banks’ remaining worldwide debt, equity, merger and advisory, securitisation, syndication and prime brokerage businesses.

Marti Peeps, sole analyst at the last remaining research house, Teletext, welcomed the results as “a bold step in the face of ongoing bad debt provisioning,” though conceded that the City’s newly “rightsized” payroll might struggle to take on board the burgeoning supply of new issuance, namely the packet of Walkers Crisps rumoured to be hitting the primary market in late summer 2012.Hopes for a recovery in Wall Street earnings have for several quarters hinged on the prospects for the successful completion of a 40p private placement of a bag of Salt and Vinegar flavour crisps on behalf of the Walkers Crisps Company. Lead underwriters JPCitigroupMerrill, a subsidiary of the US government, and Northern Rock SocGen KFW Nomura, a wholly owned subsidiary of Tesco plc (Neasden branch), are rumoured to have “solid” interest for the underwriting, most notably from Asia, itself a subsidiary of Texas Pacific Group, but declined to go into further detail. (click here for pdf version. Enjoy!)

Update @ April 15th: London’s financial services sector faces a loss of 20,000 jobs over the next two years. Cuts by Citigroup and RBS are the tip of the iceberg (BusinessWeek).

JPMorgan Chase

Published on April 11, 2008 in International Finance. 1 Comment Tags: , .

JPMorgan Chase M&A Bear Stearns

Asian Markets

Published on March 26, 2008 in Emerging Markets and International Finance. 0 Comments Tags: , , .

The Korea Composite Stock Price Index or KOSPI (코스피지수) There’s a paradox in Asian markets, according to Rafael Nam of Reuters. Balance sheets of Asian companies look like they’re in good shape, yet the cost of insuring against debt defaults by these businesses is even higher than it was a decade ago, during the Asian crisis. That makes life harder for them, but it could create an opportunity for investors.

In this case, the only rational explanation seems to be that investors – who are ultimately the ones doing the insuring – simply prefer to keep their money in highly liquid securities denominated in dollars or euros. Yet to the extent that investors’ preferences for the United States and the euro zone come from habit rather than from economic fundamentals – and habit is undoubtedly a part of it – the opportunity in Asia is real. So, who will take advantage?

This Week’s Market Coaster & Chocolate!

Published on January 24, 2008 in International Finance. 0 Comments Tags: .

Market coaster!

A symbolic visual for this week’s ups and downs at stock markets across the world.

Kit kat green Tea JapanOn the bright side of all the market tumble news, I just found out that Western chocolatiers experimenting with new flavours aimed at targeting Asian markets in order to fuel growth in a saturated Western chocolate market. You can think of ginseng, red bean and green tea flavours! What’s more to come? As I just finished reading the book “The Long Tail by Chris Anderson” creating more product variety aimed at niche markets has a big future! A glimpse into the beginning of a world with unlimited variety of chocolate can be found here.

Fasten Your Safety Belt?

Published on January 15, 2008 in Global Strategy and International Finance. 0 Comments Tags: , , , , .

Financial TraderToday, the world’s biggest bank delivers dreadful results. Citigroup recorded a net loss of $9.8 billion, driven by a whopping $18.1 billion in pre-tax write-downs and credit costs on exposure to subprime mortgages.

Worse, it is no longer just collateralised-debt obligations and other complex securitised products that are hurting the world’s largest bank (by assets if no longer by market value). Credit cards and other consumer-finance businesses are deteriorating fast as America’s economy flirts with recession.

Capital markets around the world ended the day all in red digits. What more can we expect the upcoming weeks when other leading financials record their 4Q and FY2007 results? How much more write downs can capital markets digest? How can we fix it?

Best Performing Stockmarkets in Emerging Markets

Published on January 5, 2008 in Emerging Markets. 0 Comments Tags: , .

Stockmarkets in emerging economies
Source

PetroChina world’s most valuable company

Published on November 7, 2007 in International Finance. 1 Comment Tags: , , .

petrochina1And in a class all by itself, the US$1 trillion (1,000,000,000,000) club.

On Monday, the 4 billion A-share offering, priced at 16.7 yuan per share, finished its first day of trading on the Shanghai Stock Exchange at 43.96 yuan, rising as high as 48 yuan intraday. At US$1.005 trillion, PetroChina’s market cap is more than twice that of its US peer, Exxon Mobil (USD $486 billion), even though Exxon Mobil generated four times as much revenue last year and trades at only a quarter of PetroChina’s price to earning ratio, 13 to PetroChina’s 55.

But the craziness doesn’t end there. The lofty market cap comes with an asterisk: US$1 trillion only if you go by PetroChina’s local valuation. Shares traded overseas (Hong Kong and New York) values the company at roughly US$400 billion. One HK share (H-share) confers equity holders the same amount of ownership as one A-share, and one share of ADR traded on the NYSE grants 100 times as much ownership.

While PetroChina’s A share closed up today at 43.96 yuan, its H-share finished down 8.2 percent at HKD $18, or 17.65 yuan (1 yuan=1.02 HKD). The gaping difference is a function of many factors: Beijing’s restriction on capital flow, lack of investment choices in China, and of course, out-of-control greed coupled with widespread ignorance on the part of Chinese retail investors.

In a related story, billionaire investor Warren Buffet sold his entire PetroChina stake several months ago, calling the price action in China “carried away.”

Global Equity Marketplace

Published on April 14, 2007 in International Finance. 0 Comments Tags: .


Seven exchanges. Six countries. Two continents. One global market group.

NYC-EuroNext

 

Above the advertisement of the first truly global exchange group; NYSE Euronext. I love the slogan and love the advertisement even more! The advert displays distinctive buildings of each single country represented in NYSE group including the manor houses in Amsterdam (left corner)!

Check out the official webpage of NYSE Euronext for all informatives concerning this newly created global equity stock exchange. It is created via a merger between the New York Stock Exchange and Euronext.