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Friday Papers: IMF in challenge to Berlin over crisis

Friday Papers: IMF in challenge to Berlin over crisis

Top stories

  • Financial Times: The IMF on Thursday challenged Berlin’s game plan for pulling the eurozone out of its crisis by advocating a series of short-term fixes, like resumption of bond buying by the European Central Bank and pumping bailout money directly into teetering banks, that the German government has resisted.
  • Financial Times: Fifteen of the biggest global banks were downgraded by Moody’s Investors Service on Thursday, adding to pressure on their borrowing costs and potentially triggering multibillion-dollar collateral calls.
  • The Daily Telegraph: Spain's embattled banks need a cash injection of up to €62 billion in order to help them weather the financial crisis, the country's central bank said on Thursday.
  • The Guardian: Italy's prime minister, Mario Monti, has warned of the apocalyptic consequences of failure at next week's summit of EU leaders, outlining a potential death spiral whose consequences would become more political than economic.
  • Financial Times: The eurozone is stuck firmly in a sharp economic contraction, with the region’s escalating debt crisis hitting Germany with increasing severity, according to a Markit survey.
  • Financial Times: Air France-KLM said on Thursday that it was seeking agreement with unions to reduce workforce by 5,122 by the end of next year as part of a €2 billion cost-cutting programme.
  • The Daily Telegraph: BP has further soured its fractious relationship with its oligarch partners in TNK-BP, sending them a warning letter complaining about their handling of the Russian joint venture.
  • Daily Mail: Marks & Spencer and BT both lavished their top executives with large quantities of stock, which will pay out as a reward for their long-term performance.
  • Financial Times: Royal Bank of Scotland is set to receive up to £300 million less than it expected for a package of branches it is selling to Santander UK because the business has failed to hit a number of targets outlined in the deal.
  • Financial Times: Xstrata’s $65 billion merger plan with Glencore is facing a fresh threat after the Association of British Insurers, a leading UK investor group, admonished the miner’s plans to pay £173 million to retain its senior management if the deal goes through.
  • The Daily Telegraph: Morgan Stanley has been ordered by a US regulator to pay $5 million in compensation for allegedly making false promises to two brokers it hired just before the financial crisis.
  • Financial Times: Apple has been fined $2.29 million after admitting it misled customers over the compatibility of its latest iPad with high-speed 4G networks in Australia.
  • The Independent: Defence giant BAE Systems has won a £500 million contract to build and upgrade armoured vehicles for the Norwegian army.

Business and economics

  • Financial Times: The European Central Bank is expected to give Spanish banks a much-needed boost with a significant loosening of rules on collateral required to obtain its liquidity, which could be followed by steps to reduce the role of credit-rating agencies in its operations.
  • Financial Times: Royal Dutch Shell is facing a fresh assault on its plans to drill for oil in Arctic waters off Alaska as Sir Paul McCartney and a host of Hollywood celebrities join a Greenpeace campaign to ban offshore drilling in the region.
  • Financial Times: Nasdaq OMX, the transatlantic exchanges operator, is set to launch a London-based derivatives platform to trade interest rate products in a move that puts it in direct competition with Deutsche Börse and NYSE Euronext.
  • Financial Times: Yields on Spain’s 10-year bonds recently rose above 7% after the country requested to borrow up to €100 billion from its eurozone partners to recapitalise Spanish banks.
  • Daily Mail: Mortgage lending rebounded 24% to £12.2 billion in the UK last month after hitting a 12-month-low in April.
  • Financial Times: The China Securities Regulatory Commission has announced it will allow international fund managers with as little as $500 million under management and two years’ operating history to apply for investment licences.
  • Financial Times: The US Federal Reserve’s decision to extend Operation Twist will reduce liquidity in the short-term funding market that helps facilitate smooth trading of US government bonds, traders have warned.
  • The Guardian: Royal Bank of Scotland was forced to keep at least 1,000 NatWest branches open until 7 pm on Thursday following a technical glitch that caused chaos for millions of customers.
  • Financial Times: Everything Everywhere will pay a bonus dividend of £250 million to Deutsche Telekom and France Telecom, which jointly own the UK’s largest mobile group that is at the centre of private equity bid interest.
  • Daily Express: Water group Severn Trent has launched inflation-linked bond to raise between £50 million and £100 million initially.
  • Financial Times: UBS’s international life assurance arm has been hit with Ireland’s first ever fine of €65,000 for failing to comply with a 2010 law aimed at preventing financial companies from being used to launder money and finance terrorism.
  • The Guardian: The Yves Saint Laurent ready-to-wear collection is to be rebranded Saint Laurent Paris.
  • Financial Times: Micro Focus International has reported a full year pre-tax profit of $120 million from $96 million a year ago; it has proposed a final dividend of 23.4 cents a share – up from 16.2 cents a year ago.
  • Financial Times: Chesapeake Energy, the US gas producer, has appointed Archie Dunham, former head of ConocoPhillips, as its new chairman.
  • Financial Times: Aquarius Platinum has closed its second mine in two weeks in an effort to conserve cash, saying that strikes and depressed platinum prices had made the Everest mine in South Africa unprofitable.
  • The Guardian: The electricals retailer Dixons is hanging on to its stores in Greece, although it admitted the Kotsovolos chain was now worthless in book-keeping terms.
  • Financial Times: Shares in Evergrande, one of China’s largest property developers, closed down 11.4% on Thursday after a US shortseller accused the company of fraud, bribery, and reckless spending on football teams.
  • Financial Times: A High Court judge has attacked the “hardball approach” employed by HBOS that contributed to the collapse of Farepak, the Christmas hamper savings club, and £37 million incurred in losses by 120,000 customers.
  • Financial Times: Intense speculation about the future strategy of Vivendi, the French media and telecoms group, has turned a normally discreet annual corporate get-together on the Mediterranean island of Corsica this weekend into a highly anticipated summit meeting.

Share tips, comment and bids

  • Financial Times: Shares in Invensys tumbled more than 15% in early London trading on Thursday after the UK-based engineering group admitted that it had received a “highly preliminary” approach from Emerson Electric of the US but stressed that talks were now over.
  • The Independent: The Office of Fair Trading has referred Dods' £12.8 million acquisition of the politicial intelligence division of DeHavilland to the Competition Commission.
  • Financial Times: Goldman Sachs, Templeton Asset Management and BlackRock have agreed to team up with the Russian Direct Investment Fund to invest in Russian companies ahead of their initial public offerings.
  • The Daily Telegraph: Mining giant Xstrata has put its stake in a Papua New Guinea mine up for sale after a slide in the copper price.
  • Financial Times: Plans for a $3.2 billion initial public offering by Malaysian palm oil group Felda Global Ventures were dealt a blow on Thursday as a deal under which Louis Dreyfus Commodities of Switzerland would become a “strategic investor” in the issue appeared to be unravelling.
  • The Independent: The British founders of AKQA, the world's biggest independent digital advertising agency, are celebrating after Sir Martin Sorrell's WPP bought a majority stake which values the business at around $540 million.
  • Financial Times: Triton, the northern Europe-focused private equity firm, has offered to take over European Directories after accumulating a sizeable share of the directory company’s debt.
  • The Guardian (Comment): The German chancellor's critics should stop accusing her of Teutonic arrogance. Why should she take on everyone's debts?
  • The Guardian (Comment): Insatiable demand for consumption means soon facing the natural limits of growth.
  • The Daily Telegraph (Comment): Xstrata shareholders should not fear losing their costly chief executive.
  • The Daily Telegraph (Comment): IMF help would set the eurozone on the road to fiscal and political union – let’s not encourage it.
  • Daily Mail (Comment – Alex Brummer): The losses of £37 million incurred by the 116,000 people who were left high and dry when Farepak collapsed in 2006 may look trivial in the greater scheme of things.
  • Financial Times (Lex): Rio Tinto: the Pilbara project in Western Australia ticks all the boxes for Chinese steelmakers.
  • Financial Times (Lex): Credit Suisse: the Swiss bank’s chief executive deserves criticism for prioritising dividends over capital conservation
  • Financial Times (Lex): KPN and América Móvil: higher turnout at shareholder meetings would be one way to correct a perceived imbalance of influence.
  • Financial Times (Lex): Invensys: after being the subject of takeover speculation for so long, the UK engineering group risks ending up as an also-ran.

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