Archive for the 'International Finance' Category

Buffett Broadens Portfolio by Spending $23.9B In Quarter

Published on November 7, 2011 in International Finance. 0 Comments Tags: , .

Warren Buffett’s Berkshire Hathaway Inc. invested $23.9 billion in the third quarter, the most in at least 15 years, as he accelerated stock purchases and broadened the portfolio beyond consumer and financial-company holdings.

Buffett, 81, drew down Berkshire’s cash as Europe’s debt crisis and Standard & Poor’s downgrade of the U.S. pushed stocks to their worst quarterly performance since 2008. The investments disclosed Nov. 4 include $6.9 billion of equities, $5 billion for preferred shares and warrants in Bank of America Corp. and the acquisition of Lubrizol Corp. for about $9 billion [Source].

Norway rides wave of prosperity on back of oil

Published on August 31, 2011 in International Business and International Finance. 0 Comments Tags: , , , , .

Blessed with large petroleum reserves, as well as robust public finances, Norway’s economy has managed to largely circumvent the EU debt crisis.

Blessed with large petroleum reserves, Norway is riding a wave of prosperity brought by high oil prices and robust public finances while the rest of Europe is mired in a debt crisis.

This Scandinavian nation of 4.9 million is the biggest oil producer and exporter in western Europe, with most of the oil production taking place offshore in the North Sea. Norway was also the world’s second largest exporter of natural gas after Russia last year, when crude oil, natural gas and pipeline transport services made up nearly 50% of its exports value.

To make sure future generations also benefit from the oil resources first discovered in 1969 and which will eventually run out, Norway saves petroleum revenues in a pension fund valued at roughly $550 billion. The so-called 4% fiscal rule limits the swings in the Norwegian economy; under the rule, the government aims to spend only 4% of the pension fund annually, though the exact percentage can vary [Read more].

Northern light: Sweden’s economy ‘a little Germany’

Published on August 31, 2011 in International Business and International Finance. 0 Comments Tags: , , , , .

Sweden is one of Europe’s fastest growing economies and its success is noteworthy given
the debt woes plaguing southern Europe.

Residents of this capital radiate a sense of well-being and it’s not only because they live in a beautiful city built on 14 islands that draws comparisons to Venice. It’s also because they call home one of Europe’s fastest growing economies.

The success of this export-oriented Nordic nation is noteworthy, because it’s in stark contrast to the debt woes plaguing Greece, Portugal and other southern euro-zone countries. Sweden is a member of the European Union, but it has chosen to keep its own currency. Public debt levels are relatively low and the government expects a budget surplus this year [Read more].

Japan opens $100bn fund to help firms beat yen strength

Published on August 26, 2011 in International Finance. 0 Comments Tags: , , , .

The Japanese government has announced a new $100bn (£61bn) fund to help companies combat the strength of the yen.

The Ministry of Finance said the fund will help firms expand their overseas operations and secure energy resources.

The move comes as the yen hovers near record levels against the US dollar.

A stronger currency hurts Japan’s export-dependent economy, and companies have warned that they may lose business to foreign rivals.

“We decided to compile the package to show our strong determination that we will act if current yen rises persist, or if the yen rises further,” Japan’s finance minister Yoshihiko Noda said [Source].

For Hedge Fund Investors, Brazil Is the Country of Now

Published on April 1, 2011 in Emerging Markets and International Finance. 0 Comments Tags: , , , .

Ten years ago, Goldman Sachs proclaimed that Brazil was among the new economic powerhouses. Now it is the next frontier for hedge funds. Looking to capitalise on the fast-growing region, global hedge fund managers have started to descend on Brazil. In all, hedge fund assets devoted to the region rose 75 percent, to $21.4 billion, in 2010, according to data from Hedge Fund Research.

The appeal is obvious. While many developed countries have sputtered amid weak economic growth, Brazil has continued to thrive, given its rich reserve of natural resources and growing middle class. Last year, the country’s gross domestic product increased 7.5 percent — helping catapult Brazil ahead of Britain and France to become the fifth-largest economy in the world.

“In the past five years, about 34 million Brazilians entered the middle class,” said Oscar Decotelli, a partner at Vision Brazil Investments, a $2 billion alternative investment firm based in São Paulo. “This for a population of 200 million is significant. Brazil is not just a commodity story, but a very strong domestic story.” [Source]

Deutsche Boerse and NYSE Euronext Seal Deal

Published on February 15, 2011 in International Finance. 0 Comments Tags: , .


Deutsche Boerse AG and NYSE Euronext on Tuesday unveiled a widely expected merger agreement that would create an exchange powerhouse by becoming the world’s largest owner of equities and derivatives markets [Source].

The merger deal creates an unprecedented exchange powerhouse with more than $20 trillion (12.4 trillion pounds) in annual trading volume and operations in Germany, France, Britain, Amsterdam, Portugal, Belgium, and the United States [Source].

Together, Deutsche Boerse’s Eurex unit and NYSE Euronext’s London-based Liffe unit would dominate European exchange-based futures trading, with more than 90 percent overall, raising antitrust questions among market regulators. After a few years off that included the financial crisis and the beginning of a global regulatory revamp, the world’s exchange operators are back in the takeover game [Source].

“Overall, we find this transaction compelling on an operational and strategic basis,” wrote BMO Capital Markets analysts in a Monday note examining the potential tie-up between Deutsche Boerse and NYSE Euronext.

“However, we also have concerns about the deal, most of which relate to timing and likelihood of regulatory approvals, synergy realization, as well as longer-term management and cultural issues,” BMO [Source]

Dow Closes Above 12.000

Published on February 2, 2011 in International Finance. 0 Comments Tags: .

Despite the turmoil in the Middle East, the market powered to a 30-month high, closing above 12.000 Tuesday.

The key driver was a slew of strong earnings reports. The last time we saw Dow 12,000 was on June 19, 2008.

Across the board, the major averages were strong. The Dow climbed 148,23 to 12,040,16, S & P 500 rose 21,47 to 1307,59, and the NASDAQ surged 51,11 to 2751,19, as reported in the Wall Street Journal.

Dow 12.000: Pit Stop or Market Top?

Published on January 25, 2011 in International Finance. 0 Comments Tags: .

The tug-of-war between the U.S. stock market’s bulls and bears continues, and the next demarcation line appears to be the psychologically-significant Dow 12.000 level.

The market’s bulls argue that the worst financial and economic news is behind us, and that the Dow’s recent rise from about the 9.500 level in July to near 12.000 this winter is a signal by institutional investors that better days are ahead.

The market’s bears argue that the substantially smaller U.S. workforce, stagnant incomes in many job segments, an economy that’s short – - at minimum — about 15 million full-time jobs, and that lingering problem — a housing market still trying to stabilise amid an above-normal foreclosure rate — mean the Dow is sending a false signal, and is headed for a fall [Source].

Chinese I.P.O. Bubble?

Published on December 14, 2010 in International Finance. 0 Comments Tags: , .

China-based companies have gone public on the U.S. market in record numbers in 2010. Last week, shares of Youku, called the YouTube of China, rose 161 percent in the first day of trading on the New York Stock Exchange. E-commerce China Dangdang, an online retailer heralded as the Chinese Amazon.com, popped 87 percent after its initial public offering the same day.

Amid a sluggish I.P.O. market, companies from China are finding a home in the United States. Last week, six Chinese stocks started trading on the New York Stock Exchange and Nasdaq, the most ever in a single week. The 35 Chinese offerings so far this year have accounted for 23 percent of I.P.O.’s in the United States, up from 1 percent in 2000, according to Thomson Reuters.

The trick for investors— as in the late 1990s dot-com bubble — is separating the future Amazons from the Pets.coms. While I.P.O.’s can make investment bankers and founders rich, regular investors who do not get the initial price rarely make the same returns.

[Source 1] [Source 2]

General Motors I.P.O. now World’s Biggest

Published on November 27, 2010 in International Finance. 0 Comments Tags: .

General Motors Co’s underwriters exercised their full overallotment option, making the initial public offering of the U.S. automaker the biggest in the world, at $23.1 billion. GM has now raised $23.1 billion, outpacing Agricultural Bank of China’s $22.1 billion July IPO and making GM the biggest IPO globally [Source].

The largest IPO in U.S. history, came a year and a half after the U.S. government rescued the automaker and forced a massive overhaul. It also marked the beginning of the end of the government’s 61 percent ownership stake in the company, which the Obama administration said it hopes to shed entirely by mid-to-late 2012 [Source].