Archive for the 'International Finance' Category

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M&A to Hit $3 Trillion in 2011

Published on November 16, 2010 in International Finance. 0 Comments Tags: , .

Global mergers and acquisitions activity is expected to rocket upward 36% next year to $3.04 trillion, getting its strength from the financial and real estate industries, according to a report released Monday by Thomson Reuters.

The report also predicted that two sectors would shine in 2011 for deals: real estate and financial firms. After being pummeled by the credit crisis, many companies from these industries will need to restructure their businesses, pursue consolidation, divest assets or simply play catch-up [Source]. Also check another post on private equity thrives again.

“Financials seem to be the most bullish on a percentage basis,” Mr. Toole said. “This year we saw Goldman Sachs divesting its prop trading desk. … Now we’ll see it on a fuller scale.”

Private Equity Thrives Again

Published on October 6, 2010 in International Finance. 0 Comments Tags: , , .

The private equity industry has emerged from a treacherous two years on relatively solid footing. Default rates among the companies they control have dropped sharply and many have tapped into robust debt markets to push back the huge amounts of debt coming due in the next couple of years.

And private equity’s deal-making machine is revving up again. Last month, 3G Capital struck a deal to take Burger King private in a $3.3 billion leveraged buyout. Other firms are prep-ping holdings for initial public offerings so they can return capital to their investors, who have seen little in the way of profits in recent years.

Private equity, however, may soon be facing its gravest challenge yet. Its most important constituents — the large public pension funds that provide it with more than half its capital — are weighing whether or not to stick with private equity in the coming years [Source].

The breakfast index

Published on August 8, 2010 in International Business and International Finance. 0 Comments Tags: , , .

The cost of breakfast rises. Raw ingredients for breakfast in much of the rich world have increased in price by 25% since the beginning of June.

Severe drought and wildfires in Russia, the world’s fourth largest wheat producer, have destroyed a fifth of the country’s crop and sent prices soaring. Since the end of June wheat prices have more than doubled. But wheat is not alone. The price of orange juice has also risen recently, probably thanks to bets placed on the likelihood of tropical storms. Coffee prices, which hit a 13-year high, are a result of poor harvests [Source].

VCs Go Global

Published on June 8, 2010 in International Business and International Finance. 0 Comments Tags: .

VCs are on the hunt, and it doesn’t matter if a company is in Boston, Beijing, or Menlo Park, they’re looking to fund great ideas anywhere in the world. Some are even opening offices overseas in an effort to find the next big international thing.

For decades, the success of Silicon Valley has been undeniable. Venture capitalists’ investments have spawned some of the world’s most recognizable brands. Apple, Google, Intel, Cisco, Yahoo, eBay, and dozens of other household names were born and nurtured here. However, the model is changing. Venture capitalists and the companies they fund are looking beyond the Valley more often and with an eye to replicating the success of the Valley in other parts of the world ready for entrepreneurialism, risk, and reward. Find the complete article here.

The centre of the venture capital universe happens to revolve near Stanford University in California: Sand Hill Road to be precise. Explore the firms that drive the industry by clicking here for an interactive video.

A volcanic cloud over Wall Street

Published on April 16, 2010 in International Finance. 1 Comment Tags: , .

Is the most powerful and controversial firm on Wall Street about to get the comeuppance that so many think it deserves? Goldman Sachs, the Wall Street powerhouse, has been accused of defrauding investors by America’s financial regulator [Source].

The Securities and Exchange Commission (SEC) alleges that Goldman failed to disclose conflicts of interest. The claims concern Goldman’s marketing of sub-prime mortgage investments just as the US housing market faltered [Source].

Goldman’s shares tumbled, dragging down stockmarkets worldwide [Source]. The charges against Goldman could have far wider consequences.

Stock Markets Recover in 2009

Published on January 2, 2010 in International Finance. 0 Comments Tags: , .

sp500_09

Stock markets around the world staged a recovery in 2009 since March, when most of them hit their lows for the year. It was a year in which governments and central banks around the world took extraordinary measures to get their economies growing.

US share prices also performed well. Despite a drop of about 1% of all Wall Street indexes during the last trading hour on New Year’s Eve, the broad-based S&P 500 index was up nearly 25%, the strongest performance since 2003, while the Dow Jones gained 20%. The technology-driven Nasdaq index doubled those gains, rallying 45%. [Source 1] [Source 2]

A Russian Odyssey: Early Day Investors

Published on December 6, 2009 in International Business and International Finance. 0 Comments Tags: , , , .

Hermitage_Bill_BrowderRussia’s default in 1997 and the stock market devalued rapidly. Browder (founder of Hermitage investment fund) lost, by his estimate, 90% of his money during this time that he had invested in Russia. More onerous, was the wholesale “stealing” by the Russian oligarchs.

Rather than put up with this, Browder met with company employees to hear first-hand about the scams that were going on within the companies. Watch the story yourself at the bottom of this post (7min). For a complete coverage of Browder’s speech at Standford GSB click here.

Browder started with $25 million in 1996, achieving almost tenfold gains in 18 months and then raised $1billion from new investors. At one stage the pot totalled $4 billion and Hermitage became Russia’s biggest foreign portfolio investor.

However, Mr Browder offended someone with great power – he insists that he still does not know who – and in November 2005 was refused re-entry into Russia. Since then Browder is one of the biggest enemies of the Russian state. [Source 1] [Source 2].

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The Era of the Renminbi?

Published on November 21, 2009 in International Finance. 1 Comment Tags: , , , , .

RenminbiA recent side-by-side comparison of the U.S. and Chinese economies produced a startling result: There were $34.8 billion of initial public offerings in China this year and only $13.7 billion in the U.S.

With numbers like that, is it any surprise that Western fund managers are scrambling to get a bite of the immensely profitable Chinese market for new companies? As the New York Times reported, U.S.-based Blackstone Group has formed a partnership with Shanghai’s municipal government to raise a $732 million private equity fund.

What’s different this time is that Blackstone’s fund is denominated in the Chinese currency, which is officially called the renminbi. Blackstone’s idea is to take advantage of capital from China’s increasingly wealthy institutional and private investors. The fund will then use the investments to buy companies and take them public, earning a hopefully large profit along the way. There is plenty of interest in the Chinese market for new companies—Carlyle Group announced this week that it had invested $60 million in three Chinese growth companies. So there is no shortage of domestic companies ripe for turnaround [Source].

Private Equity Goes East

Published on November 21, 2009 in International Finance. 0 Comments Tags: , .

china_Private_equityA few weeks ago, Stephen A. Schwarzman, the chairman of the Blackstone Group, the world’s biggest private equity firm, signed a joint venture here with Shanghai’s municipal government, creating the first Blackstone fund denominated entirely in Chinese currency.

The $732 million fund was the latest example of two trends: global private equity firms seeking to raise capital from increasingly wealthy Chinese individuals and institutions, and the growing international stature of the Chinese currency, formally known as the renminbi.

According to Zero2IPO, a Beijing-based research firm, more than 190 funds denominated in renminbi have been established in the last two and a half years with a combined total of more than $30 billion. In the past, investments in Chinese companies were largely done through offshore holding companies in tax havens like the Cayman Islands.

Chinese private equity funds are emerging in big cities as China promulgates new regulations aimed at creating a homegrown private equity industry, one that Beijing hopes will strengthen the country’s capital markets and fuel private sector growth in an economy overly dependent on government investment [Source].

John Thain on the Financial Crisis and Beyond

Published on November 6, 2009 in International Finance. 0 Comments Tags: , , , .

Former Merrill Lynch CEO John Thain offers his opinions as to what caused the crisis, what can be done to prevent it from happening again, and when it will be over — not just for the financial industry but also for Main Street. This lecture consist out of three videos, which include Thain’s remarks to the audience, questions from the three-member panel and, finally, questions from the audience.

Part 1-3 (Thain’s introduction)
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Part 2-3 (Questions from the Panel)
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Part 3-3 (Questions from the audience)
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