Year: 2009

Dubai gets apparently cheap partial rescue

23 Feb 2009

The UAE is to lend the troubled emirate $10bn at a bargain 4% rate. That leaves $5bn of refinancing this year, plus lots of bad property developments to work through. The quid pro quo for UAE? It keeps its own reputation intact and gains political leverage over Dubai.

Deripaska makes himself hostage to fortune

23 Feb 2009

The Russian oligarch says he s not worried about his home country s refusal to help Rusal, the cornerstone of his empire, with its $14bn debt burden. But a vanmaker under his control is looking for a mere $45m of UK state aid. Deripaska s optimism is hard to fathom.

RBS takes first step to de-nationalisation

23 Feb 2009

The statecontrolled UK bank is restructuring around three pillars a core bank, a disposal portfolio and an insured asset pool. The tidyup won t create value by itself. But it s the start of a new strategy. And that paves the way for a future sale of the government s shares.

Private equity split on prospects

23 Feb 2009

Guy Hands sees opportunities. He will buy out the commitments of struggling investors in his Terra Firma. But rival Candover is taking a darker view, returning much of the E3bn raised for its latest fund. Hands dawn may come, but for now the night is still pitch black.

IMF help and euro dreams won’t save central Europe

23 Feb 2009

The prospect that the IMF s emergency fund will be raised to $500bn has provoked a rally in central European markets. But the problems of Poland, Hungary and the Czech Republic will take years to solve. And each country must consider whether the euro offers salvation.

AIG looks like Geithner’s next big headache

23 Feb 2009

The struggling insurer could report a $60bn loss, and need a new load of US government support. Geithner was involved in the original bailout. He probably won t pull the plug now, for fear of risking another market meltdown. Expect more cash to disappear into this money pit.

China and US should row in different directions

23 Feb 2009

Hillary Clinton's claim that the two nations are in the same boat is wrong. True, China's $1.4 trillion in loans to the US give them a common interest in a healthy Uncle Sam. But unwinding an unsustainable codependency, not deepening it through fear, should be the priority.

Obama’s deficit plan could conflict with stimulus

23 Feb 2009

His proposal to reduce the US government deficit to $533bn by 2013 won t work unless there has been a strong recovery in good time. Otherwise, tax increases and spending cuts will provide the opposite of stimulus . That could prolong or revive the recession.

GM, Citi, RBS add to rising tide of economic nationalism

20 Feb 2009

All three need to prove their government aid is being put to work at home. That left GM s Saab unit, Citi s Danish consumer lending business and RBS s Asia ops out in the cold. The moves may be driven more by necessity than preference, but the implications are just as worrisome.

Austria looks anxiously at eastern mess

20 Feb 2009

The country is the most heavily exposed to the crisis in eastern Europe. If its banks suffer large losses, the government may be forced to support them. With Germany as a backstop, actual default is unlikely. But there may be a big tab for taxpayers to pay.

Welcome back Arpe: let the rivalry begin

20 Feb 2009

Italian banking s enfant terrible Matteo Arpe is back. In buying a Milan boutique, he returns to the scene for the first time since quitting Capitalia after a bust up with chairman Cesare Geronzi. His nemesis this time may be Gerardo Braggiotti, Italy s top private banker.

Anglo American right to scrap dividend

20 Feb 2009

The market was stung by the miner s decision not to pay a final dividend. But this isn t the time for financial brinkmanship, and traditionally cautious Anglo isn t the company to try. It still has too much debt for comfort, but fast action may keep it from a forced rights issue.

US casts wider net in UBS tax case

20 Feb 2009

The US government has embarked on a fishing expedition for 54,000 of the Swiss bank s account holders, just one day after UBS agreed to give up 250 names. The US is unlikely to hook Swiss authorities for this big a haul. But some scared American customers could bite.

Lafarge, Saint-Gobain put market to E3bn test

20 Feb 2009

The French companies managed to stay profitable in 2008, despite severe slumps in both cement and building materials. But the two are bracing for even tougher times. They're cutting costs and reducing debts and asking holders to stump up for deeplydiscounted rights issues.

Credit clearing delay worsens bank stock woes

20 Feb 2009

Citi and BofA shares have plummeted and their credit default swap spreads ballooned. Investors are spooked by the threat of nationalisation, but the stock and CDS markets are also driving each other down. If a CDS clearinghouse had launched on time, there might be less carnage.

UK bank insurance plan must be sold properly

20 Feb 2009

Most public sector bank bailouts have thus far foundered on poor communication. As the UK government prepares to divulge details of its Asset Protection Scheme , George Hay argues that the state must properly highlight the benefits of its bank insurance plan.

Markets drown in dreadful news

20 Feb 2009

The omens are worsening from Europe, Japan and the US. The spiral of economic decline is accelerating, the financial sector needs more life support and demands on governments are increasing. No wonder the stock market rally that started last November has been reversed.

Gatwick auction may face hard landing

20 Feb 2009

Two out of five bidders have withdrawn from the bidding for the UK airport, whose sale may be demanded by antitrust authorities. With finance sparse, other bidders may also withdraw. If that happens, Ferrovial, Gatwick s Spanish owner, will hope the regulators show some mercy.

Malone’s Sirius deal looks like valuable spoiler

19 Feb 2009

The mogul can t buy more than 49.9% of Sirius XM s stock for three years. That looks odd after all, he looks to have swooped on its debt as a way toward ownership. But like his previous deals, he can use it as a bargaining chip. It might even help his end game with DirecTV.

BNP Paribas works the government line

19 Feb 2009

The French bank is suffering with markets and the economy, but says it is adequately funded. Still, it is the first in line to take the French state's money. BNP has played the politics well in the crisis. Perhaps that will help it get away with paying E1bn in dividends.

Indonesia sheltered from global slump

19 Feb 2009

With growth of 6% in 2008 and an expected 3.5% in 2009 Indonesia is suffering only mildly from the downturn. Elections this year seem likely to result in the continuation of current policies. Economically and politically, Indonesia is a good partner worth having.

Rights issues: a new fee pool for commercial banks

19 Feb 2009

Conventional sources of underwriting investment banks and hedge funds are drying up. But in the UK, commercial banks are picking up the slack. It s a way of squeezing more out of existing lending relationships. The trend has further to run.

Sprint and Palm may yet prop each other up

19 Feb 2009

The alliance between shrinking US wireless carrier Sprint and hasbeen handset maker Palm looks like two drunks offering each other support. Intriguingly, both show signs of simultaneously sobering up.

Crisis is no reason to abandon cosmopolitanism

19 Feb 2009

Governments are turning populist and some companies seem to be firing foreigners first. The global nature of business is under threat. That s bad for the economy and for culture. Peter Mandelson s four letterword antiStarbucks outburst isn t just bad manners, it is bad policy.

Restructuring boom augurs more toil for fewer fees

19 Feb 2009

Investment banks are redeploying otherwise redundant leveraged finance bankers into restructuring. Some of the skills from boomtime dealmaking may be transferable, but the economics aren t. The return on effort in a complex restructuring is less than in a jumbo buyout.

UBS $780m surrender will not end Swiss tax battle

19 Feb 2009

The giant wealth manager has waved the white flag, admitting criminal behaviour and disclosing client names a big breach in Swiss bank secrecy. But the US isn t done with the case and other countries will be inspired to squeeze the Swiss. This defeat could be the first of many.

BNP confirms purgatory status of fund management

19 Feb 2009

The French lender has moved Alain Papiasse, a star banker at Credit Lyonnais before he joined BNP in 2005, to steer the restructuring of its investment bank. His predecessor, Jacques D Estais, is heading off to what is rapidly becoming banking's bleak outpost: asset management.

UK economy deserves Starbucks’ knocks

19 Feb 2009

Three views on the UK economy: the boss of a coffee shop chain said things were bad, Lord Mandelson swore at him and an ECB board member accused the British of malicious devaluation. The government debt numbers show who was right the man from Starbucks.

Yahoo’s search gains strengthen its hand

19 Feb 2009

New data shows Yahoo gaining search market share for five months running. And it just added video and image advertisements to its listings. It s becoming a tastier morsel for Microsoft and showing search king Google that its dominance has limits.

Erste’s eastern European exposure scares investors

18 Feb 2009

Shareholders aren t taking comfort from the Austrian bank s strong retail deposit base. The shares are tumbling as holders fret over exposure to eurodenominated mortgages in crumbling noneuro economies. Erste has been promised E2.7bn in state capital and could need more.