 | April 28, 2010 |
Kill the Competition: Sachs questioned ... Delay warning ... Greek junkWednesday, April 28, 0730 GMTTop stories The Times: US Senators extensively questioned senior Goldman Sachs executives who defended their actions in selling complex mortgage-related investments. http://tinyurl.com/2fwd8ga The Daily Telegraph: City traders were warned there may be a 10-day delay before the next Government is announced in the event of a hung Parliament. http://tinyurl.com/2akgqca The Times: Investors fled financial markets on news that Greek Government sovereign bonds had been declared as junk by Standard & Poors, a leading rating agency. http://tinyurl.com/2ddgpo3 Comment Ian King in The Times: Speculators are now homing in on Portugal and Spain. Unlike Greece, Spain already has a coherent plan for reducing its deficit. http://tinyurl.com/2ayhz6a Jeremy Warner in The Daily Telegraph: The eventual profit to the UK public purse of the bank bailouts could easily run to tens of billions of pounds. http://tinyurl.com/2exdjvh Stephen Foley in The Independent: For Wall Street, time is money, and Capitol Hill politics are providing the delays to change. http://tinyurl.com/27efxbf Upside The Times: BP’s first-quarter profits surged 135 per cent but the oil giant’s shares fell on concerns about ongoing problems in the Gulf of Mexico. http://tinyurl.com/25qusu7 Wall Street Journal: Ford, the US car maker, reported a better-than-expected $2.1 billion (£1.4 billion) first-quarter profit on rising US sales. http://tinyurl.com/26yz2nc The Times: Lloyds Banking Group, the UK’s largest retail bank, returned to profit in the first three months of this year. http://tinyurl.com/24mxseq Downside The Times: Sir Richard Branson, the founder and president of carrier Virgin Atlantic, allegedly ordered secret talks with arch rival British Airways. http://tinyurl.com/2dl9cat Wall Street Journal: US regulators set up a probe to see if hedge funds abused tools known as "side pockets" to stop clients from withdrawing assets in the financial crisis. http://tinyurl.com/2czzsxz The Independent: The volcano crisis cost airlines more than £2 billion ($3 billion), but European governments may provide bailout funds. http://tinyurl.com/26lphj6 Mergers and shakers The Times: The Prudential met with Capital World Investors to confront its largest shareholder about its potential break-up plan for the insurer. http://tinyurl.com/29lz99s New York Times: Apple, the iPhone maker, bought Intrinsity, a small maker of zippy versions of computer chips often found in mobile devices. http://tinyurl.com/25fpgfz Wall Street Journal: Peugeot Citroën and Mitsubishi, the French and Japanese car makers, announced their fourth joint project but stopped short of an alliance involving shareholdings. http://tinyurl.com/25pp9o6 Around Asia The Times: Elan Microelectronics, a Taiwanese touchscreen maker, accused Apple, the iPad maker, of "knowingly and deliberately" infringing its multi-touch technology patent. http://tinyurl.com/28w34pm Financial Times: The world-leading Indian diamond industry says China is locking up the supply of rough diamonds by direct deals with African governments. http://tinyurl.com/2ftcj9a Wall Street Journal: Sheldon Adelson, the gambling tycoon, opened Marina Bay Sands, an ambitious $5.7 billion (£3.7 billion) casino-resort, in Singapore. http://tinyurl.com/2d7zc84 Look ahead The Times: Iconix, the new owner of Charlie Brown, expects the Peanuts characters to generate about $75 million (£49 million) in annual royalties. http://tinyurl.com/25qrs8x Bloomberg: Carbon emissions targets being negotiated by the International Maritime Organisation and the shipping industry may be adopted in 2012. http://tinyurl.com/2e73g8e Reuters: DuPont, the chemicals company, forecasts higher 2010 earnings, and expects good global sales of photovoltaic and semiconductor materials. http://tinyurl.com/2dweuar MARKETS FTSE 100 5,603.52 down 2.6% (Tuesday close) Dow 10,991.99 down 1.9% (close) S&P 500 1,183.71 down 2.3% (close) Nasdaq 2,471.47 down 2% (close) Nikkei 10,935.99 down 2.5% (latest) Hang Seng 20,931.22 down 1.6% (latest) Currencies Sterling $1.5266/1.1567 euros (latest) Euro $1.3198 (latest) Commodities Brent crude $85.52 down 26 cents (latest) West Texas crude $82.20 down 24 cents (latest) Gold $1166.10 up $3.90 (latest) New York Reuters: US stocks tumbled as downgrades of Greece and Portugal fueled fear about euro-zone economic stability, and a grilling of Goldman Sachs heightened the possibility of financial reform. US-traded shares of the National Bank of Greece fell 15.9 per cent on the nation’s downgrade. The combined trading volume on the New York Stock Exchange, the American Stock Exchange and Nasdaq was the second highest this year. The sell-off was broad, with sectors such as materials, energy, financials and consumer discretionary each falling around 3 per cent. Energy giant Chevron fell 2.9 per cent and was among the biggest drags on the Dow. Investment bank Goldman Sachs rose 0.7 per cent, bucking the market’s sharp downward trend. Diversified manufacturer 3M rose 0.6 per cent on better-than-expected quarterly profits. http://tinyurl.com/24t3b96 Asia Bloomberg: Asian stocks fell in morning trade, extending a global rout, after a credit-rating agency downgraded Greece and Portugal. Mitsubishi UFJ Financial, Japan’s biggest bank by market value, fell 2.2 per cent and Westpac, the Australian bank, fell 1 per cent on mounting credit concerns. Companies which export to Europe suffered. Billabong International, an Australian surfwear maker, fell 2 per cent. LG Display, the television maker, fell 2 per cent. Canon, a camera maker, fell 2.7 per cent and Toyota, the car giant, fell 2.2 per cent as the euro weakened against the yen. BHP Billiton, the world’s No. 1 miner, fell 2.4 per cent and rival Rio Tinto fell 2.6 per cent on lower commodity prices. Mitsubishi, which trades commodities, fell 1.8 percent. The MSCI Asia Pacific Index fell 1.5 per cent to 125.34 in morning trade. http://tinyurl.com/2579w36 Michael Beh michaelwbeh@gmail.com London HSBC set investment bankers’ hearts aflutter yesterday by floating the idea that BHP Billiton could "revert to plan A" and launch another bid for Rio Tinto. BHP - nicknamed "The Big Aussie"- walked away from an offer for Rio 18 months ago after the credit and commodity markets took at turn for the worse. Instead, the two biggest mining groups in the world decided to pursue a $116 billion (£75.7 billion) iron ore joint venture. However, HSBC's mining experts warned yesterday that the planned tie-up may yet fail due to regulatory hurdles and reckoned BHP should consider another move for the whole of Rio. Rio would be an even more attractive proposition this time around after divesting $10 billion of non-core assets and cutting debt by more than half. Based on the 2008 deal, an offer from BHP would be the equivalent to a 27 per cent premium on Rio's current share price, 197p lower yesterday at £36.07. BHP fell 90p to £20.61. It was dismal day for stock markets generally after ongoing fears over the financial health of Greece and other European countries were fanned by Standard & Poor’s. The ratings agency declared both Greece and Portugal now more likely than they were to default on their debts. Investors worried that the problems may not be confined for long to those two countries alone. The FTSE 100 tumbled 150.33 points to 5,603.52, its steepest fall for five months. Only two of the Footsie’s 100 constituents made headway. Banks and insurers were among those hardest hit by those sovereign debt worries. Standard Chartered bank eased 41p to £17.31, despite bumper quarterly results from Lloyds Banking Group, 2.07p lower at 68.17p. Legal & General fell 4.35p to 85.15p Those same worries about European sovereign debt placed the euro under pressure and saw the dollar climb. Investors switched from commodities into the greenback, a traditional safehaven, and sent miners and oil producers sharply lower, too. Kazakhmys was among those hardest hit. The Kazakh copper miner fell 91p to £13.89. A weaker oil price - Brent crude eased $1.67 to $85.87 a barrel - saw Tullow Oil fall 56p to £11.68 and Cairn Energy lose 17.9p to 395.3p. Gary Parkinson Gary.Parkinson@thetimes.co.uk |
