Cognetas is risking a clash with its investors after the European mid-market private equity group proposed a more generous performance fee for its ailing second fund, the FT reports. At least one large investor is already rebelling against a plan to link the management’s performance fee to gains on the portfolio’s depressed net asset value at the end of June, http://ftalphaville.ft.com/thecut/2011/10/28/714861/cognetas-angers-investors-with-fee-plan/
Samsung Electronics surpassed Apple as the world’s top smartphone maker in the third quarter, Reuters reports, as the company announceda record profit from handset sales in the third quarter on Friday, with more than 40 per cent shipment growth. Samsung, http://ftalphaville.ft.com/thecut/2011/10/28/714736/samsung-take-smartphone-crown-in-q3/
Companies round the world rushed to sell bonds on Thursday after a eurozone deal to tackle the region’s sovereign debt crisis sparked a rally, writes the FT. In the US, IBM, BP and Verizon were among the issuers that sold more than $12bn of debt in what was one of the busiest days for investment-grade issuance this year, http://ftalphaville.ft.com/thecut/2011/10/28/714731/market-bouyancy-prompts-rush-of-debt-issuance/
European leaders reached a deal with Greek debtholders on Thursday morning that would see private investors take a 50 per cent cut in the face value of their bonds, a deep haircut that officials believe will reduce Greek debt levels to 120 per cent of gross domestic product by the end of the decade, http://ftalphaville.ft.com/thecut/2011/10/27/713356/eurozone-agreement-reached/
Europe’s banks will be forced to find about €106bn of extra capital by the end of June, under a mandatory scheme agreed by European Union leaders to temporarily bolster the defences of the banking system. A recapitalisation plan overseen by the European Banking Authority will require around 70 banks to meet a higher 9 per cent threshold of the “highest quality capital”, after revaluing sovereign debt at market rate. http://www.ft.com/intl/cms/s/0/ede0bc94-ffee-11e0-ba79-00144feabdc0.html#axzz1bxFOLwak
South Korea has doubled its currency swap arrangement with China to Rmb360bn ($57bn), further increasing the firepower available to protect its financial system from any turmoil in the eurozone. This latest swap agreement with Beijing, announced during a visit to Seoul by China’s vice premier Li Keqiang, comes only a week after Seoul increased its swap facility with Japan to $70bn from $13bn.http://www.ft.com/intl/cms/s/0/35911e14-ffd4-11e0-89ce-00144feabdc0.html#axzz1bxFOLwak
Amazon shares plunged 12 per cent in after-hours trading after the online retailer forecast a possible operating loss in the fourth quarter as it spends heavily on launching its tablet computer rival to Apple’s iPad,http://ftalphaville.ft.com/thecut/2011/10/26/712106/amazon-falls-12-after-warning-of-possible-loss/
Italy’s prime minister was fighting on Tuesday night to stave off a collapse of his centre-right coalition government over European Union demands for more concrete economic reform measures in time for Wednesday’s highly anticipated summit of eurozone leaders, http://ftalphaville.ft.com/thecut/2011/10/26/712086/italian-government-on-brink-of-collapse/
Chinese Premier Wen Jiabao said that economic policy will be fine-tuned as needed and the industry ministry said it is studying “stimulative policies” for smaller companies as a global slowdown threatens growth,http://ftalphaville.ft.com/blog/2011/10/26/712051/wen-talks-of-fine-tuning-policy/
Euro Circus, By Open Europe.
So, by Wednesday, EU leaders will have held nine meetings in five days, which is extraordinary. In addition, they will also have seen through a huge number of rows. So how many rows can we count to, over the last week or so? Here we rank them in order of their feistiness:
1) The ‘you shut up’ row: French President Nicolas Sarkozy finally lost it with David Cameron’s consistent criticism of the eurozone leaders’ handling of the crisis, reportedly telling him he “had lost a good opportunity to shut up”, while also trying to cut Cameron out of important meetings deciding the bank recapitalisation plan (a move that eventually failed). You can understand Sarkozy’s frustration but if he snapped at everyone who criticised the handling of the crisis we’d imagine he wouldn’t have too many people to talk to.
Result: Sarkozy 0 Cameron 1
Full reading here.
German banks – may be able to mark up their bund holdings to help cushion the effect of a writedown on Greek govt debt as part of a rescue for the country: people briefed on the matter:
European leaders – outlined plans to aid banks and ruled out tapping the ECB’s balance sheet to boost the region’s rescue fund yesterday in their 13th crisis management summit in 21 months.
The complete blueprint will be announced on Oct. 26. includes:
1) a sweeping recapitalization of European banks,
2) a substantial restructuring of Greece’s debts,
3) a bigger bailout fund,
4) and even possibly fresh efforts to entice fresh capital into the region.
Banks have reportedly offered to write down 40 % of their Greek debt while politicians are demanding a haircut of at least 50 %. Still no mention of a Spanish and Italian haircut with the Italian 10 year at 6 % +, Ireland was bailed out at 7 %…..
Cristina Fernández, Argentina’s populist president, cruised as expected to a landslide re-election victory on the back of a booming economy and secured a new four-year term which she sees as a sweeping endorsement of her heterodox economic policies, http://ftalphaville.ft.com/thecut/2011/10/24/709421/fernandez-wins-re-election-in-argentina/
Volkswagen will become the world’s biggest carmaker this year – a full seven years earlier than its management’s aim to replace Toyota in the industry’s top spot, according to three leading consultancies.http://ftalphaville.ft.com/thecut/2011/10/24/709406/vw-heading-for-car-industry-crown/
More than 200 people were confirmed killed and hundreds more feared dead after an earthquake hit parts of southeast Turkey Sunday with rescue teams working through the night to free trapped survivors, Reuters reports. Early Monday, http://ftalphaville.ft.com/thecut/2011/10/24/709366/turkey-quake-death-toll-reaches-over-200/
Latest on the Greek mess.
Jean-Claude Juncker confirmed on Saturday there are talks for a Greek debt haircut in excess of 50 percent.
Junker said there were negotiations for the reduction of the value of Greek state bonds by more than 50 percent, but no details were given.
Greek banks were asked on Friday to take heavier losses than the onez outlined by the July 21 agreement, back then haircuts of 21% were discussed.
Les Echos quoted on Saturday a source saying that the Eurogroup decided on Friday to ask Greek commercial banks for a haircut of 50 to 55 percent, or we could expect a Greek default.
Ex European Central Bank vice-president Papademos wrote in Friday’s Financial Times;
“the likely financial benefits of debt restructuring would be much smaller than is often envisaged, [as] the process entails significant risks for Greece and the euro area. For institutional, political and legal reasons, there can be no debt restructuring resulting in losses that would burden official debt holders,”
Stay tuned, as this will be another interesting weekend.
Apple missed bullish quarterly earnings expectations for the first time in years, sending its shares down almost 6 per cent in after-hours trading, reports the FT. The maker of the iPhone, iPad and Mac computers still reported strong numbers, http://ftalphaville.ft.com/thecut/2011/10/19/705776/apples-results-fall-short-of-expectations/
Foreign direct investment in China grew in September at the slowest pace in three months, reports Bloomberg, gaining 7.9 per cent to $9bn, compared with growth of 11.1 per cent in August and 19.8 per cent in July. http://ftalphaville.ft.com/thecut/2011/10/19/705766/chinas-fdi-growth-slows/
US Federal Reserve chairman Ben Bernanke said that communication about future policies will become an increasingly important tool for central banks, in a possible hint about its strategy, says the FT. Addressing a Fed conference in Boston on Tuesday about the effects of the recession, http://ftalphaville.ft.com/thecut/2011/10/19/705756/bernanke-hints-at-communication-changes/
Chinese stocks led a broad-based decline in Asian markets after data showing the world’s second-largest economy grew at its slowest pace in two years, the FT reports. China’s Shanghai Composite index lost 1.3 per cent with slowing economic growth sparking fears of a hard landing and the MSCI Asia Pacific index was off 1.2 per cent, http://ftalphaville.ft.com/thecut/2011/10/18/704216/chinese-gdp-data-leads-to-asian-markets-fall/
Apple has sold a record 4m of its latest incarnation of the iPhone in its first three days on sale in spite of criticism that the new product was a more limited technological leap forward than its predecessors,http://ftalphaville.ft.com/thecut/2011/10/17/704171/iphone-4s-sales-hit-record-4m-on-launch/
Citigroup’s investment bank weighed on its third-quarter performance, with derivatives positions and proprietary trading – which is set to be banned under new regulations – helping drag down overall revenue, http://ftalphaville.ft.com/thecut/2011/10/17/704146/citigroup-earnings-jump-74-to-3-8bn/
The improvement in US mortgage delinquencies has flattened or reversed, according to quarterly earnings from three of the four biggest US lenders, sparking fresh fears over the resilience of the American consumer, http://ftalphaville.ft.com/thecut/2011/10/17/704126/improvement-in-us-mortgage-delinquencies-ends/
Asian shares rose on Monday and the euro held near a one-month high amid hopes that a crucial week for the eurozone crisis will see policymakers finally come up with a plan to resolve the region’s debt woes and recapitalise its banks,http://ftalphaville.ft.com/thecut/2011/10/17/703106/rising-markets-adds-to-pressure-for-eurozone-deal/
Regulators ordered MF Global Holdings, the brokerage firm led by former New Jersey governor Jon Corzine, to boost its net capital in August after they grew concerned about its exposure to European debt,http://ftalphaville.ft.com/thecut/2011/10/17/703126/mf-globals-eurozone-exposure-led-to-capital-boost/
Barack Obama, US president, offered more support for protesters against the global financial system after a weekend of demonstrations in cities around the world, but called on them not to “demonise” those who worked on Wall Street.http://ftalphaville.ft.com/thecut/2011/10/17/703101/obama-indicates-support-for-ows/
Singapore’s exports unexpectedly fell in September as weakening expansion in the world’s biggest economies eroded demand for electronics and petrochemicals, says Bloomberg. Non-oil domestic exports fell 4.5 per cent from a year earlier, http://ftalphaville.ft.com/thecut/2011/10/17/703056/singapore-exports-unexpectedly-decline/