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February 2009

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LATEST ARTICLES

  • Kuwait's central bank has announced new credit facilities for local companies.
  • The Private Banking and Wealth Management Survey 2009 received 1643 valid votes (1244 'part B' votes, 399 'part A' votes), representing $11.8 trillion of Assets under Management.
  • Beleaguered European corporates can only dream of such quick and easy access to equity capital.
  • Claims of special access to the best managers and extraordinary due-diligence skills are not rooted in reality.
  • UBS’s chief executive was the first global bank head to tackle the impact of the credit crunch. His actions may have saved the bank. Much remains to be done. The future of the firm’s investment bank is in doubt. And so will Rohner’s own position be, if he doesn’t quickly return the bank to profit and shut the door on outflows in its wealth management franchise. Clive Horwood reports
  • "The $1.2 million reported in the press was for the renovation of my office, two conference rooms and a reception area. The expenses were incurred over a year ago in a very different environment"
  • The UK Treasury’s latest bank bail-out plan will fail unless it works out what bad assets are worth.
  • The resolution of one Latin America banking crisis in the early 1980s could provide lessons for today’s policymakers.
  • The scale of the loss at RBS plus the talk of full nationalization and the circumstances at Merrill Lynch diverted attention from Deutsche Bank. But its losses are perhaps the most disheartening of the three.
  • Following its takeover of Merrill Lynch, some clarification has started to emerge from Bank of America about its management structure. Chris Allington and Chris Vogel are co-heads of G10 currency trading; Peter Antico is head of Americas rates and local-currency trading; Luke Halestrap is head of EMEA rates and local-currency trading; Chris Hodson is head of global rates electronic trading and market making; Mitch Nadel is head of Japan/Australia rates and currency trading; Nicolas Rabeau and Neh Thaker are co-heads of global rates and currencies exotics trading; Jin Su is head of Asia-Pacific rates and currency trading excluding Japan/Australia; and Frank Rawlins and Behnouche Mostachfi are co-heads of global FX options trading.
  • "Return to profitability in 2009 is our most important priority". The bank’s chief executive details his vision for a new UBS
  • On January 12, Bradesco announced that it had promoted Luiz Carlos Trabuco Cappi to chief executive, replacing Marcio Cypriano. Cappi previously headed the bank’s insurance unit. Cypriano will continue as chairman and chief executive of the bank until the annual shareholder meeting in March. After 10 years in the role Cypriano was not able to renew his contract because he had reached the mandatory retirement age of 65 years.
  • The huge fraud underlines the crucial role of hedge fund administrators and independent prime brokers. An SEC that’s more au fait with hedge funds would also help. Neil Wilson reports.
  • "I’m a new kind of thug with a Washington buzz ‘coz dealing debt pays better than dealing drugs." Watch the video here.
  • European Commission digs its heels in over central counterparty.
  • Can this year be any worse for IPOs? 296 is the number of IPOs withdrawn or postponed in 2008; $1.1 billion is the amount raised from the seven IPOs completed in the US during the second half of 2008, with the $145 million offering by Grand Canyon Education being the only US deal to price in the fourth quarter of 2008, when global IPO revenues to bank arrangers slumped 98% compared with the fourth quarter of 2007. Bankers aren’t enthusiastic about IPO prospects for 2009 but at least the annual comparisons are going to be easier.
  • Sales of distressed real estate assets in Mexico could total more than $10 billion this year. “Mexico is very interesting at the moment,” says a local portfolio manager. “There are four big companies that are struggling that have big real estate portfolios in the country. Now there is an expectation that they will have to sell some of these assets.”
  • Bill Schwab has been appointed global head of real estate at the Abu Dhabi Investment Authority (Adia). Schwab joins from JPMorgan, where he was managing director of European real estate finance.
  • According to Euromoney’s favourite Feng Shui queen, Master Lynn Yap, the coming 12 months will be nothing if not harrowing.
  • "The negative net revenues for FICC in the quarter were due to losses from investments, including corporate debt and private and public equities, and trading in credit products. These results were adversely impacted by unprecedented weakness across the broader credit markets..."
  • Yes, the share prices of RBS, Lloyds and Barclays have been crushed. The equity markets simply must adjust to banks' reduced status
  • Structured products are proving neither as safe nor as lucrative as investors were led to expect. However, discomfited clients are prompting those banks that have survived to devise products better suited to difficult conditions. Peter Koh reports.
  • News that China experienced a severe foreign exchange outflow in the fourth quarter of 2008 came as a major surprise to most analysts and left them searching explanations. According to an initial report written by Stephen Green, Standard Chartered’s head of research for China, the unexplained outflows could have been as much as $240 billion, a figure he described as “a very big, very scary number”.
  • Paulson & Co and Hong Kong financial group Sun Hung Kai Financial are to launch a distressed asset investment fund that will focus on financial companies.
  • GLG Partners has taken on Kaveh Sheibani and Julian Harvey, two of the founders of London-based event-driven fund Pendragon. GLG will become the investment manager of the funds and accounts at Pendragon Capital.
  • HFR data reveal that $152 billion of capital was withdrawn by hedge fund investors in the fourth quarter of 2008 – the largest withdrawal in a quarter on record. Estimates that hedge fund assets would reach $2.25 trillion by 2010 now seem far too optimistic. HFR estimates that the industry at present has $1.4 trillion in assets. The HFRI Fund Weighted Composite Index fell by 18.3% for all of 2008, only the second calendar-year decline since 1990.
  • As the ban on shorting 34 financial stocks lifted in the UK on January 16, shares at first rose but then fell sharply the following week after more bad news from banks. The Financial Services Authority is forcing hedge funds to disclose short sales of financials. Lansdowne Partners admitted to shorting Barclays Bank on one day that the bank lost 25% of its value. There were only six reports of short sales of more than 0.25% of a company. Barclays and RBS, however, saw much of their value wiped out in January as stock was sold off. The Australian Securities and Investments Commission extended its ban on shorting financials that it imposed last September. The ban will remain in place until March 6.
  • Retail FX provider FXCM has launched a new platform, Active Trader, which it says is aimed at the higher end of the market. The platform has greater depth of book transparency and, unlike most other retail offerings, charges commission, determined by volumes, to trade. FXCM says this enables it to pass on tighter spreads from its liquidity providers. Accounts will require minimum deposits of $25,000 or a history of active trading.
  • With the current scrutiny on budgets, it is inevitable that IT spending will come under some pressure. According to a recent report from consultancy Celent Communications: "Global information technology spending by financial services institutions will reach $358 billion in 2008." This is a 4.5% increase over 2007, but is, says the firm, "substantially lower than the 6.4% growth achieved in 2007. The financial crisis and economic uncertainty have financial institutions tightening their belts."
  • Investors who supported those bank capital raisings may be regretting it already.