European banks are providing funding to asset management companies in order to fulfil capital requirements demanded by regulators. Royal Bank of Scotland Group Plc is planning to lend about ВЈ600m ($939 m) to aid Blackstone Group LP acquiring portion of ВЈ1.4 bn commercial loans' portfolio from bank after private equity firm did not manage to get outside financing. Deal follows Credit Suisse Group AG's approval to
George Osborne, The British Chancellor next week will submit an autumn report on the outlook of the UK economy. So far the UK managed to escape negative effects of Eurozone debt crisis. However, according to Osborne such situation will not last forever. Growth is smooth, unemployment is surging and exports are fluctuating. Moreover, budget deficit totals 10% of GDP. Osborne predicts that in nearest future
On Wednesday morning trade Euro moved towards six-week record low as economic reports indicated Europe's fiasco to tackle debt crisis harms Eurozone's economic growth. 17-nation currency lost 0.4% against US dollar in London morning trade session and reached $1.3451. Ankita Dudani RBS's strategist claims whole euro area is imprisoned by surging costs of borrowing and absence of growth. Currently EUR/USD is trading at $1.3379.
Industrial orders for European region declined to a 3-year record low, led by France and Germany, indicating debt turmoil is negatively contributing to region's growth. According to EU statistics office, orders in Eurozone region decreased by 6.4% compared to August this year when they added 1.4%. Economists surveyed by Bloomberg had forecast a drop of 2.7%.
FTSE 100 Index closed at 5,206.80 on Wednesday giving up around 0.3% or 15.80 points. On Wednesday morning index opened lower slipping 0.8% to 5,166.4 as China's preliminary manufacturing index dropped to 48, thus indicating contraction. Several UK mining stocks were highly exposed to Chinese report. Fresnillo PLC lost 2% while Rio Tinto PLC fell 2.3%. Stocks of Meggitt PLC declined 3.6% as UBS downgraded lowered
On Tuesday Germany's DAX 30 closed 1.2% or 68.61 points down at 5,537.39 on doubts about Commerzbank's capital reserves. In early Wednesday trading session index fell more reaching 5,515.90. German automakers were among major negative contributors to the index on slower growth expectations in China. BMW AG and Daimler AG each lost 1.2%. However, at the moment of writing DAX 30 has rebounded and trades at
Citigroup Inc and Bank of America are among those banks that might have to delay their plans to buy back stock and increase dividends next year as Fed toughened capital stress tests for largest US banks. Fed's requirements are likely to hamper bank's desire to repay capital to its shareholders. Paul Miller, a former assessor at Federal Reserve of Philadelphia, predicts both banks will struggle
Bank of America Corp. is planning to acquire Allot communications Ltd. Allot increased 2.7% yesterday reaching $15.41 per share. Company has fully recovered from 10-month low on October 3 by advancing about 63%. Allot's shares in S&P 500 are worth 13 times more than earnings. Allot is advancing from developing systems which manage traffic through data networks. Demand for Allot's products benefit from surging demand for smart
Martin Blessing, CEO of Commerzbank, claimed the bank still can recapitalize without state financial aid. Blessing pointed out it is not worthwhile to gamble about the magnitude of capital shortages until European Banking Authority reports stress assessment findings. He also added that Commerzbank's shortfall is about €5 bn which is not a dangerous situation for the company.
IMF accepted several changes to broaden its lending power to counter European debt turmoil. The main goal of proposed reforms is to support troubled countries with cash in hard times and especially to relatively healthy countries with short-term credit crunch or so called crisis-bystanders. According to Christine Lagarde, head of IMF, organization's credit line could be used for insurance or short-term loans to protect
Bank of America is moving towards 2-year low share price of $5.13. On Tuesday at NYSE trading session company's stocks closed at $5.37. Bank of America extended its losses after The Wall Street Journal reported that bank is facing difficulties to meet US regulatory requirements. Share price has already given up 59% comparative to the previous year.
China's stocks are experiencing a decline for a sixth day in a row as government data indicated that national manufacturing is shrinking amid trouble in global economy. Anhui Conch Cement Co and Sany Heavy Industry Co each gave up at least 0.9% as purchasing managers' index sank. China Shipping Development Co dropped 1.3% on less than expected US growth. Shanghai Composite has lost 15%
The euro fell at the Asian trading hours to $1.3465 from $1.3513. The decrease occurred after a fall of stocks in the US and Asia caused by cut in US growth forecast and decrease in China's manufacturing output. Other currencies also declined against USD, British Pound fell to $1.5613 from $1.5637 and Australian Dollar decreased by 0.9%, FactSet reported.
China is reforming its rural credit cooperatives that face competition from the increasing number of the independent rural credit institutions. The government is going to stimulate the development of credit rural cooperatives by transforming them into local commercial banks and inspiring overseas partners to invest in them, said Yin Youxiang, head of the rural financial service division of the CBRC.
Despite US failure to agree on the supercommittee and spreading debt crisis in the euro zone the Conference Board reported that its index of leading economic indicators rose by 0.9% in October as compared to 0.1% increase in September and 0.3% advencement in August. The BlackRock made a forecast that the economic growth will increase by 3% in Q4. However, leading economic indicators are
The World Bank decreased its China's growth forecast to 9.1% for 2011 and 8.4% for 2012. China was impacted by the debt crisis in the euro zone and overall fall in exports. Moreover, the tightening measures aimed at preventing crisis in the real estate industry and at lowering the inflation rate contributed to decline in the growth forecast.
Next week George Osborne, British Chancellor is going to present a report on the economic situation in the country. Experts consider it is probably the worst time as you can present it in any way you want but the general state of the economy remains pessimistic. Growth is low, unemployment is increasing, exports are falling and the deficit is exorbitant-over 10% of GDP. Until now
The Federal Reserve required 31 biggest US banks to assess their trading books and credit portfolios against acute recession and European region market shockwave to make sure they have adequate capital reserves to bear losses. Fed propose 8% drop in GDP, jobless rate at 13% and 21% tumble in home prices as the worst hypothetical scenario banks should be prepared for.
Steve Ricchiuto, chief economist at Mizuho Securities claims US credit rating might be downgraded in a few months or even in a few weeks as the supercommittee failed to arrive at consensus on debt-cut plan. Steve Ricchiuto expects S&P, Fitch or Moody's may downgrade US rating before December 23, date when regulation implementing supercommittee's plan should be ratified. In August S&P cut US credit
In October consumer prices in Hong Kong rose 5.8% on yearly basis, at the same rate as in previous month. Economists surveyed by Bloomberg made a forecast of 5.7%. The increase in inflation rate is mainly associated with surge in rental costs. John Tsang expects inflation to peak in 4th quarter IMF predicts Hong Kong's inflation to slow down to about 4%-5% in 2012.
On Tuesday European stock markets fell on an expensive Spanish bond auction and on US data that showed lower-than-expected GDP growth. France's CAC 40 index lost 0.8% and closed at 2,870.68, German DAX 30 index fell 1.2% to 5,537.39 while U.K's FTSE 100 index slumped 0.3% reaching 5,206.82. Spanish index IBEX 35 declined most and gave up 1.5% closing at 7,904.90.
On Wednesday most Asian equity markets experienced sharp decline after China reported disappointing manufacturing survey and added to anxiety regarding global slowdown. Shanghai Composite Index switched from modest gains and closed lower by 0.4%. Hong Kong's Hang Seng Index lost 2% while Australian S&P/ASX 200 and Korean Kospi fell 2% and and 2.4% respectively. Japanese markets today are closed.
According to managers' preliminary purchasing index Chinese manufacturing industry is expected to face contraction as home sales drop. This month index of 48 estimated by Markit Economics and HSBC Holdings Plc is 3 points less than in previous month. Any estimate below 50 denotes contraction. Analysts say the fall of the index is caused by a 25% decline in home sales last month.
Tech stocks increased on Tuesday: Nvidia Corp. edged up by 2% while Brocade Communications gained 6%. The overall indicator of the industry the Nasdaq composite index increased by 0.3% and Philadelphia Semiconductor Index increased 0.3%. However, HP suffered losses by 4% after the company cut its projected growth forecast. The Netflix Inc. declined by more than 4% after announcement about the sale of $400 million