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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.
  • 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.
  • Beleaguered European corporates can only dream of such quick and easy access to equity capital.
  • 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.
  • Claims of special access to the best managers and extraordinary due-diligence skills are not rooted in reality.
  • "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"
  • 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 decision of the Federal Reserve to turn on the printing presses will result in a re-run of the 1970s. For investors the best safe havens are hard assets, including gold – Keynes’ “barbarous relic”, writes Lincoln Rathnam.
  • The fallen of Wall Street have a new way to lift their spirits. Apparently, New York bankers’ latest craze is hypnotism.
  • "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..."
  • The UK Debt Management Office is canvassing market opinion on the merits of conducting gilt sales via supplementary measures such as mini-tenders, syndication and even direct placement of gilts with end investors. The size of the UK Treasury’s borrowing requirement led the DMO to consult its Gilt Edged Market Makers in a process that ended on January 28. The DMO is seeking to raise the supply of long-dated and index-linked gilts, in particular. In light of the high financing requirement of £143 billion ($194 billion), £147 billion and £135 billion for the next three years from 2009/10, the government’s medium-term strategy is to skew issuance to long-dated maturities. This strategy seeks to take advantage of strong actuarially driven demand at the long end from pension and insurance funds. The last UK syndicated gilt issuance took place in September 2005 when the DMO sold a £1.25 billion 50-year linker. That was a response to the poor auction outcome of a conventional 50-year gilt in May of that year. The results of the consultation will be announced at the time of the UK budget in March.
  • Yes, the share prices of RBS, Lloyds and Barclays have been crushed. The equity markets simply must adjust to banks' reduced status
  • "I’m a new kind of thug with a Washington buzz ‘coz dealing debt pays better than dealing drugs." Watch the video here.
  • The Commodity Futures Trading Commission’s requirement to increase the amount of net adjusted capital needed to operate in the retail FX market to $15 million on January 17 has led ODL Securities to decide it is no longer worth operating in the US. Sources close to ODL say that having pulled out from the west, it will now refocus on the east.
  • Academics at the University of Portsmouth are undertaking an unconventional study into new business methods, commissioned by transition consultants Advanced Workplace Associates (AWA).
  • The UK Treasury is understood to be considering the establishment of a conduit-style fund that would source investment directly from institutional investors such as pension funds and insurance companies to fund its infrastructure investment programme. The UK government would own the conduit and take the first-loss risk in the vehicle. Management of the conduit would be outsourced to a third party – insiders suggest that one of the monoline guarantors is being considered. The conduit could be launched in the next three to six months.
  • "I’ve no interest in Davos. I don’t know how they keep the snow from melting with all the hot air. What has Davos ever achieved except perpetuating the belief among participants that they are so very special?"
  • The US Commodity Futures Trading Commission is continuing its efforts to put an end to some of the sharper practices that have plagued the country’s retail foreign exchange market. On January 15, the regulator announced it had charged James Ossie of Atlanta, Georgia, and his company, CRE Capital Corporation (CRE) of Alpharetta, Georgia, with operating a Ponzi scheme. The CFTC claims that the scam sucked in more than 100 apparent clients and involved about $25 million. Neither Ossie nor CRE had ever been registered with the CFTC.
  • Investors who supported those bank capital raisings may be regretting it already.
  • Foreign exchange prime brokers and their exchange-traded product counterparts, the full commission merchants (FCMs), will be fully aware of the complexities involved in modern risk management. To an extent, the uptake of electronic trading has made their task far easier – there are clear audit trails, and trade confirmations are, in most cases, sent out in almost real time.
  • According to Euromoney’s favourite Feng Shui queen, Master Lynn Yap, the coming 12 months will be nothing if not harrowing.
  • Goodbye SLS, hello APF.
  • 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.
  • "Return to profitability in 2009 is our most important priority". The bank’s chief executive details his vision for a new UBS
  • Cost savings accelerate move towards independent administrators.
  • Where there is market turmoil, you can bet your bottom dollar there will be a lawsuit. And indeed, more than betting, these days investors are handing over money on a long-term basis to fund managers who will pick out lawsuits that are likely to pay out.
  • Premier Foods seeking approval for rights issue and placement.
  • Banco do Brasil has agreed to buy a 50% stake in Banco Votorantim for R$4.2 billion ($1.84 billion), much less than originally expected. Last year there were rumours that Banco do Brasil would buy 49% of Votorantim for R$6.5 billion. The combined entity will have R$553.3 billion in assets, R$275.7 billion in deposits and a credit portfolio of R$232.8 billion.
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