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Bank of Ireland to change year end
February 17, 2010--Bank of Ireland has announced that it will change its year end, increasing speculation about an imminent rights issue to avoid having to take further government investment as it struggles to absorb large property loan write downs.
The bank, which hitherto used a March 31 year end, said on Wednesday that it would revert to a calendar year system, reporting the nine months results to December 31 in late March.
Sebastian Orsi, banks analyst with Merrion Capital, a Dublin stockbroker, said the change “provides the flexibility to attempt a rights issue in the second quarter”. He added: “I can see no other reason for doing this at this time.”
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Source: FT.com
First estimate for 2009--Euro area external trade surplus 22.3 bn euro-105.5 bn euro deficit for EU27
February 17, 2010--The first estimate for the euro area1 (EA16) trade balance with the rest of the world in December 2009 gave a 4.4 bn euro surplus, compared with -1.8 bn in December 2008. The November 20092 balance was +4.0 bn, compared with -6.9 bn in November 2008. In December 2009 compared with November 2009, seasonally adjusted exports rose by 3.1% and imports by 1.7%.
The first estimate for the December 2009 extra-EU271 trade balance was a 2.5 bn euro deficit, compared with -11.3 bn in December 2008. In November 20092 the balance was -6.8 bn, compared with -24.4 bn in November 2008. In December 2009 compared with November 2009, seasonally adjusted exports rose by 2.0% and imports by 0.5%.
During 2009, euro area trade recorded a surplus of 22.3 bn euro, compared with -54.7 bn in 2008. The EU27 recorded a deficit of 105.5 bn in 2009, compared with -258.4 bn in 2008.
These data3 are released by Eurostat, the statistical office of the European Union.
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Source: Eurostat
ETF Landscape: European DJ STOXX 600 Sector ETF Net Flows, week ending 12-Feb-10
February 17, 2010--Last week saw US$220.1 Mn net outflows from DJ STOXX 600 sector ETFs. The largest sector ETF inflows last week were in Health Care with US$56.7 Mn and Media with US$44.1 Mn while Telecommunications experienced net outflows of US$105.3 Mn.
Year-to-date, Utilities has been the most popular sector with US$174.9 Mn net new assets, followed by Media with US$159.2 Mn net inflows. Telecommunications ETFs have been the least popular with US$169.3 Mn net outflows YTD.
Visit Blackrock for more information
Source: ETF Research and Implementation Strategy Team, Blackrock
Deutsche Börse Publishes Preliminary Results for 2009
Earnings of €1,053 million before interest, taxes and ISE impairment/ Sales revenue down to €2,062 million/ Impairment charge relating to US subsidiary ISE reduces earnings/ Costs below 2009 guidance before impairment/ Expenses for growth initiatives to be increased by more than 50 percent in 2010/ Streamlining of management structure/ Initiatives resolved to reduce annual costs by some €50 million/ Proposed dividend of €2.10 per share for 2009
February 16, 2010--Based on preliminary figures published by the Company on Tuesday, Deutsche Börse AG generated earnings before interest, taxes and the impairment charge for US options exchange ISE of €1,053.4 million in 2009 (2008: €1,508.4 million). Including the ISE impairment charge of €415.6 million, EBIT amounted to €637.8 million.
Sales revenue for the year was €2,061.7 million (2008: €2,455.1 million). The 16 percent decline was largely due to the reluctance of market participants to trade on the cash and derivatives markets as a result of the financial and economic crisis. Costs before the ISE impairment amounted to €1,264.4 million in 2009, down on the previous year (2008: €1,284.0 million). Net income for 2009 amounted to €496.1 million, as against the previous year’s €1,033.3 million. Adjusted for the ISE impairment, this results in a decrease in net income of 32 percent to €700.2 million.
The company’s Executive Board decided today to streamline the Group’s management structure and to implement further cost initiatives with sustainable cost savings totaling approximately €50 million per year. With these steps Deutsche Börse accelerates its ongoing efforts to further increase operational efficiency. At the same time, the Company will increase its expenses for growth initiatives in 2010 by more than 50 percent to around €100 million. The cost initiatives will be started with immediate effect and are due to be fully implemented by 2011. The Company expects implementation costs of around €40 million, the majority of which will be provisioned in the first half of 2010. The Company reduces its cost guidance for 2010 to a maximum of €1,250 million before taking into account provisions for the cost initiatives of around €40 million. The forecast includes a planned increase in expenses for growth initiatives of more than 50 percent to around €100 million in 2010. The Executive Board proposes a stable dividend of €2.10 per share. Beyond the proposed dividend, the company does not currently plan any distributions in the form of share buybacks.
Reto Francioni, CEO of Deutsche Börse AG, said, “Financial year 2009 was shaped by the effects of the financial market crisis on our clients. Nevertheless, we closed the financial year with a clear profit. This is primarily due to our diversified business model, which is already showing a return to growth in some areas and products. We will further expand our clear strengths in technology, risk management services and product innovation while maintaining our strict approach to cost management.”
Streamlining of management structure and further cost initiatives totaling around €50 million per year
The financial crisis will result in structural changes in the financial markets as well as new customer needs. We will increase expenses for growth initiatives in 2010 by more than 50 percent over the previous year, to around €100 million, in order to seize opportunities arising from the changing market environment. This will serve to expand the Company’s strengths in technology, risk management services and product innovation. At the same time, the Company continues its strict approach to cost management in light of a changing market environment.
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Source: Deutsche Börse
Fund managers desert European banks
February 16, 2010--The popularity of the European banking sector among fund managers fell by the biggest margin ever seen in a single month, according to a survey carried out by Bank of America Merrill Lynch.
The sector’s popularity rating dropped from 16 per cent in January to minus 53 per cent in February, the biggest monthly fall in the survey’s history.
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Source: FT.com
Obama's bank reforms won't work in Europe: Barnier
February 16, 2010--Banking reforms proposed by US President Barack Obama cannot be "transposed" directly into a European context, the EU's financial services chief said on Tuesday.
You can't just copy or transpose the Obama reforms to Europe," said French internal market commissioner Michel Barnier, whose appointment was initially greeted with mistrust in Britain.
He was speaking after attending his first meeting of the European Union's 27 finance ministers since taking up the key role but said he would be visiting Washington and New York in the coming days to find out more.
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Source: EU Business
Turkey to receive $150 million in FDI from India
February 15, 2010--Turkey is expected to attract three injections of foreign direct investment (FDI), worth approximately $150 million, thanks to deals reached during President Abdullah Gül’s official visit to India last week, the Anatolia news agency said on Monday.
According to officials from the Prime Ministry’s Investment Support and Promotion Agency (ISPAT), the investments are expected to create employment for 200 workers. Among the expected investments, companies from India involved in ship construction and renewable energy have expressed the intention of investing in Turkey, the officials said. Another Indian firm operating in renewable energy has plans to produce energy from forest wastes in Turkey, they added.
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Source: Todays Zaman
FSA chairman says past assumptions about the benefits of unlimited financial services liberalisation and innovation have to be challenged
February 15, 2010--Policymakers and regulators have to be prepared to challenge recent assumptions about the unlimited expansion and liberalisation of the global financial services sector, Lord Turner said today.
Speaking at the Reserve Bank of India in Mumbai, Lord Turner, chairman of the Financial Services Authority (FSA), said that both the Asian crisis of 1997 and the recent crisis had made clear that expansion in the scale and sophistication of financial activity is not always beneficial to the global economy. While a consensus has developed over the last two decades in support of ever greater growth and liberalisation of financial markets, this has been based on ideology more than on firm evidence.
Instead, the evidence of both the financial crises of the last 13 years is that there are inherent risks in this ideology. The Asian crisis was rooted in short term capital flows which proved highly susceptible to irrationally exuberant momentum effects and to sudden contagious losses of confidence. The latest crisis was “rooted in over- exuberant credit extension in developed markets, and in the development of complex and opaque forms of securitised credit and of new and risky forms of maturity transformation”. Although speculators can play a useful role in providing liquidity and market information, it is also possible for speculators to produce “destabilising and harmful herd and momentum effects”.
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Source: FSA
Windows closing for private equity
February 12, 2010--Not all private equity-backed initial public offerings are created equal.
Blackstone was forced this week to postpone the planned listings of Travelport, the reservation services company, and Merlin, the theme-park operator, while Apax Partners and Permira delayed plans to float New Look, the fashion retailer.
Yet other private equity-backed companies are still pushing ahead with plans to join the stockmarket. Promethean, which specialises in electronic whiteboards, is expected to announce plans for a flotation on Monday, valuing it at £400m-£500m.
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Source: FT.com
FSA announces annual funding requirement for 2010/11
February 12, 2010--The Financial Services Authority (FSA) has today announced its proposed annual funding requirement for 2010/11. The budget reflects the FSA’s determination to continue delivering intensive supervision and the substantial international regulatory reform agenda. It will require an increase of 9.9% in overall funding.
However, the introduction of a fairer and more transparent fee structure means 60% of firms will actually pay less. The increased cost of intensive supervision will be levied on those firms whose size and impact require the most regulation from the FSA.
The annual funding requirement for 2010/11 is £454.7m, up from £413.8m in 2009/10. The 9.9% increase reflects the FSA’s intention to minimise any fee increases by concentrating only on essential areas of work:
Continuing to deliver intensive and intrusive supervision; The delivery of the credible deterrence philosophy which is central to the FSA’s supervisory approach; The policy reform programme, driven by the Turner Review, which forms the FSA’s response to the financial crisis and covers critical issues such as reforms to liquidity and capital regimes; and Ensuring delivery of the wider policy agenda mandated by the European Union. This includes Solvency 2, the review of the capital adequacy regime for the European insurance industry, and the largest project undertaken by the FSA. Hector Sants, FSA chief executive, said:
“The way the FSA regulates has changed radically, both in approach and intensity over the last three years.
view the Regulatory fees and levies - Rates proposals 2010/11 and feedback statement on Part 1 of CP09/26-consultation paper
Source: FSA.gov.uk
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