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July 2012

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  • The Facebook IPO no doubt cast a pall on the summer sunshine for senior Morgan Stanley executives. However, another bank that has had a torrid time recently is Credit Suisse. This is a little unexpected. The bank was a distinct winner from the 2008 crisis: it did not take government money and seemed to adapt quickly to the changing environment. However the share price performance in the past two years has been disastrous – it is down more than 60% since early August 2010 and now trades below its 2009 trough, close to a two-decade low. Other leading global banks have suffered, but not as much. Over the same period, JPMorgan’s share price is down by some 10% and HSBC shares are about 15% lower.
  • Bad bank now ‘inevitable’; Mechanism of bailout still unclear
  • Brazilian house sets limits to expansion; Main focus on pan-Andean growth
  • The country isn’t facing the same problems as its European neighbours. Strong GDP growth, a relatively low deficit and robust monetary policies make it one of the best emerging market sovereign borrowers.
  • FX exchange to relaunch offering; Faces growing competition
  • CEO signs $3.6 billion acquisition; Jumps past 5% foreign-income target
  • Deutsche Bank has grown from being a top-three global markets trader into a top-three global corporate finance house as well: a powerful combination whose architect, Anshu Jain, now hands over to two successors to guide through its most testing period. Deutsche is the master of markets so broken and illiquid that high share is almost a curse, not a blessing. But if better times lie ahead, it will reap rich rewards.
  • After Ackermann, Dallara leaves; But Greece weighs heavy on reputation
  • Government moves squeeze domestic earnings; Foreign-derived profits rise to exceed 50%
  • "I have never in my life seen Spain in such a difficult moment as this. We’re trying to do as much as we can for the country. The situation in the country worries me, but the situation of the bank does not. Santander is in a great position. Our subsidiaries model has been totally vindicated. The group is strong, even when one part of the group is weakened"
  • Hyperactive policymakers have been dancing a frenzied tarantella but the mournful strains of the tango can be heard in the distance. Investors would do well to prepare their portfolios before the jig is up.
  • Planet Investment Banking raises $1.3 billion; Cites “national interest”
  • "We have spent the last 12 months focused on advising and executing clients" We were a bit worried when a bank that has radically reduced the number of core clients it covers told us how it was achieving its strategy
  • Over a pleasant June afternoon at the Queen’s Club in west London, Euromoney learns more than it ever expected to about the economics of tennis sponsorship. BNP Paribas sponsors a lot of tennis tournaments – hundreds in fact, including the majors, many of the ATP tour events, masters, seniors, juniors, possibly extra-terrestrials. Rather than negotiating the contracts en masse, it has a dedicated team that specializes in negotiating each one individually. It’s worth the effort. Many of the lesser tour events are now broadcast on free-to-air national TV channels for many hours each day, offering near constant exposure.
  • Spain cannot expect pan-EU economic reform measures to be introduced quickly enough to save itself from a troika programme.
  • Mutual fund growth will revive; Renminbi liberalization a key factor
  • YPF nationalization deters foreign investment; Even core agricultural sector affected
  • Henrys (high earners not rich yet) are the biggest drivers of consumer retail spending, and have increased their appetite for cruising.
  • Hype builds around new solution; But how to get the German taxpayer to agree?
  • As Facebook fights back – at least in terms of stalling its sagging share price – controversy continues to rage as to who is to blame for the inept IPO. On June 15, a month after the IPO date, Facebook shares languished 20% below their offering price of $38. Many are fingering the stock exchange, Nasdaq, as culprit in chief. For all that Nasdaq chief Bob Greifeld has come out since with his own mea culpa, saying he and his colleagues "owe the industry an apology", I am not so sure.
  • Life is full of surprises: big and little, nice and not so nice. I am trying to sell my apartment in London. One rainy Thursday morning, I flung open the front door to see my estate agent, Simon; an elderly diminutive man so shabbily dressed that I thought he might be a tramp; and a younger, larger man. "Can I please show my client around?" Simon asked politely. "Of course," I replied. "But as it’s pouring with rain, please take your shoes off." There was a stunned silence and then they took their shoes off and the tramp strode into my kitchen and proceeded to inspect the rest of my flat. After the tour was complete, the group gathered in the vestibule and I overheard the agent saying oleaginously to the supposed tramp: "Aha, so you think it’s too small for you." And the group trooped off into the rain.
  • All Spanish banks have been dragged down by their home country’s financial crisis. In Santander’s case, it’s not by nearly as much as you probably think. The bank’s diversified geographic mix has enabled it to continue to generate exceptional earnings. Its model of subsidiaries has been shown to work. Isn’t it about time the markets saw through the clouds of crisis and realized what Santander actually is?
  • Bob Diamond’s appearance before the Treasury Select Committee was culture clash TV. But the MPs failed to score on the most important issue: the swash-buckling, high octane, risk-taking culture that Diamond created at Barclays Capital led to, indirectly, the Libor scandal and more
  • When things get really tough in the eurozone, politicians in the region, rather than perusing A treatise on money or Essays on the Great Depression, have a strange habit of reaching for – an atlas.
  • Oteh on compulsory leave; Personal accusations dominate hearing
  • Greek election sparks brief flotation flurry; Malaysia shows rest of Asia the way
  • The world’s leading banks have been grappling for a long time with the problem of how to use social media.
  • Kitemark launched to revive ABS market; Scheme “paternalistic and patronizing”