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

The CACs, the PSI drama with $35 bln in reduced debt exposure too less for a small country like Greece, and the Regions Financial sale to Raymond James are already old news and well covered in the pace set yesterday. However, just wanted to keep fair series’ going to regular ‘episodes’ and here’s the “you need to know buzz” for going about your business and/or trading & don’t let education interfere with the fun markets are having..or hedge fund capitalists!

Unicredito

The company’s 20 odd underwriters are paying the price for the commission they agreed, as they are required to serve up the EUR 8 bln capital to the Bank which failed to get rights subscription. The underwriters will pick the stake up at EUR1.94 after the shares fell to EUR 1.131 in the carnage last week.

The underwriters have to pick up EUR 6.4 bln worth of Unicredito shares at the deal price. That is a 41% loss unless the terms are revised as that 42% loss means these underwriters are unlikely to come back to underwrite other issues.  EUR6.32 bln worth of rights went abegging at the issue closing and the issue was fully underwritten, while the value of the investment has already dropped to EUR 3.7 bln

BBVA And Santander are also raising equity this month

Blackrock was part of another drama as it retracted its earlier statement regarding divestment of stake in the bank. Its stake remains 3.09%

Alcoa

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Alcoa

Alcoa started the results season with a bang even as commodities traders used this as confirmation of the buying Copper initiated by China last month after China’s imports of Copper came up by 13%. Alcoa produced quarterly sales of a penny under $ 6 bln and a marginal loss of 3 cents per shares excluding some restructuring, leaving a good run to 1300 ont he SPY and SPX too tired of holding shorts through August to December

Geithner visits China, Bill Daley back to Chicago

The visit is unlikely to produce tangible results even s Whitehouse asked white hope Bill Daley to leave . bill Daley was the architect of

Curvy Alcoa Building

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the Jobs Bill and his calling on the GOP before the bill was presented led to the blocking of the bill by the Republicans in August setting the change in tone for Obama’s later posturing with the GOP. Bill Daley came from Chicago, a stint at JP Morgan and an earlier stay as Commerce Secy and believed a tad too much in cooperation on the floor of the house. Geithener has survived however , and his china visit this time is ecxpectred to force China’s hand on Iranian Oil yet most of the action unlikely till the SED dialogue later in the year with China.

The worst that can happen in Europe

Deutsche Borse:For the big board of course it is the deal with Deutsche Borse, as Eurex and Liffe together hold 95% of the

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continent’s Derivatives market. However in their best offer, Francioni and Neiderauer offered to still keep the top 3 centers of London, Paris and Amsterdam, prompting commiss Almunia to recommend a block ont he deal,leaving it with 3 last weeks of scrambled efforts for a political sponsor. Deutsche borse of course is trading up on the news.

Eurozone recession: With the Pan-hellenic summit games on for a second year, it is no wonder that talks of a European recession string along. The same has become the most likely option as manufacturing seemed to struggle in Germany too. That’s no where near Euro not surviving as a currency or Greece having to leave( that might yet happen).

Meanwhile supplies of Aspirin, Clexane And Flixotide are among those affected in Greece as the 10,000 odd pharmacies battle with shortages int he nation, talking to an uneasy disturbance on the ground as it goes thru a sharp  GDP contraction for Austerity(bloomberg.com)

English: IBM's R&D-building at Haifa Universit...

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Samsung vs IBM

Samsung and IBM, neck to neck on gross revenues ( around $110 bln for the year for each) are also #1 and #2 on patents as IBM scored 6180 on the Innovation quotient, Samsung scoring 2/3rds at 4894. Samsung seems to get higher Revenue per patent at more than $2 bln per new patent this year as it extends its lead as #1 in smartphones to #1 in mobiles beating Nokia by the end of the year according to the Speakeasy at CES (Bloomberg) Gini Rommetti’s IBM ( invested by Warren Buffet) will look to create $20 bln in new revenues for IBM in the coming 5 years

The Wheat conundrum

Wheat and other grains increased acreage for the second consecutive year even as Wheat lost most of its 2010 47% price gain, up by

Chinese Bank of China

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only 5% at the end of 2011 . That means US has sown wheat on more than 41.09 mln hectares in 2011(bloomberg) GSCI index for all commodities (24) still tracked only 1.2% for all of 2011. The lower shorts on Wheat are probably also the result of commodity traders shunning the global commodities futures markets as MF Global brings client monies safety into question.

Europe’s Pensions Bill

Bloomberg also reports a $39 tln pension bill for Europe, definitely not peach for the continent in Crisis even as Germany and France together account for almost EUR 14 Tln or 45% of the bill. Aging is the underlying issue as 30% of the European population , compared with 22% for the world will be over 60 by 2050

TOO BIG TO FAIL MAY INCLUDE NATIONAL(Regional) PLAYERS, SHADOW BANKS

The Basel based Financial Stability Board has aoriginal list of 29 TBTF institutions subject to a capital surcharge of 1-2.5% The shadow banking system’s vulnerabilities remain a threat as also players like Erste Bank in Vienna for Hungary as examples Mark Carney’s Financial Stability Board is considering

Shadow banks include money-market mutual funds, special investment vehicles, credit hedge funds, securities lenders and government-sponsored enterprises, such as Fannie Mae and Freddie Mac.

The European Central Bank warned last year that shadow-banks require more scrutiny from regulators on the risks they pose to the financial system, while Michel Barnier, the European Union’s financial services commissioner, said that he will “go as fast as we can” in considering possible rules for them.

Systemically important insurers will get a different set of rules

 

Bloomberg

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This entry was posted on January 11, 2012 by in Amitonomics, Banking, European Sovereign Debt crisis, Financial Markets, Financial Services, Global, US.

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