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This week's investment banking buzz and inspiration | Advantage Dealbook

Ocean Tankers – We’ll take Natural gas consignments

The problems in Straits of Hormuz apart , comapring revenues from oil and gas containers on the high seas shows analysts in the pink from betting on carrying Natural gas. Each LNG container can increase heating season costs by another 40% or $60,000 to $200,000 per tanker. Each tanker carries upto 25% of peak daily demand  for the UK according to a Business week study. The average realisation has already jumper over 110% from $46000 per tanker for the transport to $97,000 per tanker this year (2011)

The  Muni Bond surprise

Despite Meredith Whitney’s well considered pronounements for over 120 defaults worth billions int he Muni market banks were able to churn their high cash holdings in the local muni bonds thru the year with Muni funds yielding 12% for 2011. General Obligation warrants and such geeneral exposures remain safe in 2012 though defaults could still cluster in sector sepcific investments. In the Muni bonds, the practice of going for lower rating bonds to lock in the return still holds. Hat tip to Matt Fabian of Muni Market Advisors on Bloomberg TV

Citi faces Gold suit

An ex Citi trade in Singapore is taking banks’ margin trading rules head on with a suit against Citi. Rajaraman left the bank in 2007 and has since left or parted ways with Hedge fund 3 degrees.

His personal trading account at Citi was  subject to auto liquidation in September when Gold fell 11% during the month. According to its agreement with the trader Citi, enforced liquidation when margin limits were triggered forced the trader to incur $1.7 mln in a single day’s losses.  Rajaraman claims the banks should also have waited 24 hours after force sell levels were reached and saved him $1.03 bln more in losses on the position due to this immediate sell execution. As Margin trading agreements were followed to the letter Citi will of course fight the suit tooth and nail.

China home prices slide

Though new projects are down, property developers ahven;t really let prices down as the index slipped by 0.25% falling in 60 out of 100 cities even as Yuan Deposits returned in December after Yuan’s plateau earlier. Almost all economists are sure that China will continue cutting the reserve requirements RRR till it sees favored production levels return and starts on easing monetary policy with rate cuts from Q2 this year

India’s GMR to bid for Sao Paolo Airport

Having already bid for and executed projects in Turkey and Male, GMR aviation is likely to bid for the Sao Paolo airport next, this time for a higher budget of $ 8 bln or more. The Hyderabad and Delhi Airports cost it $1 bln and $3 bln respectively and it has been increasing its Aviation revenues as a proportion of its infra business earlier dependent on Power and Roads alone. Other Indinan private players like GVK also have Global PE attention and HSBC is also entering the Infra financing through a Debt mutual fund set up in partnership with local infra development company IIFCL. India has yet been dependent on development finance for the few and far in between infra projects as the netxt 5 year plan looks for  a $1 Tln funding of infrastructure projects in partnership with global enterprise

Spain sounds the deficit bell

With the elections over, the new government in Spain has been quick to announce that the budget deficit has moved to 8.8% and the unemplyment figures at a n all time high of 50% for youth employment with more than 4.4 mln out of jobs at a 21.5% unemployment rate

 

 

JINAN, CHINA - JULY 02:   Flames shoot into th...

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