Letter to the editor: Gulf exchanges 8 Jul 2008 Gary Long, president and COO of Investcorp, says NYSE Euronext s plan to invest $250m in the Doha Securities Market is encouraging, but more progress needs to be made if Gulf markets are to experience truly sustainable growth.
Thain faces fire-sale dilemma at Merrill 7 Jul 2008 Reports suggest the Merrill Lynch boss is leaning towards selling some or all of the firm s Blackrock and Bloomberg stakes to raise capital. But that wouldn t be easy, and would crimp earnings. Raising new equity risks diluting shareholders, but may be a smarter solution.
GLG answers critics with Goldman star raid 7 Jul 2008 Poaching Driss BenBrahim from Goldman to replace Greg Coffey is a coup for the UKbased hedge fund group after recent travails. It's not clear how much of GLG's $250m Coffey pot it had to raid to fund the hire, but it shows the shift in power from universal banks to boutiques.
Venture capital needs less capital 3 Jul 2008 VC firms are stuffed with cash they can't put to work. The IPO market is the worst since 1978 and venturebacked M&A is down over 40% from last year. The flailing economy isn t solely to blame. It's time to return money to investors.
Wounded banks join missing decade club 2 Jul 2008 Lehman blames rumourmongering shortsellers for investors' shortage of confidence. The firm s shares may have fallen hard in recent months, but it isn t alone in taking its shareholders back 10 years. Citigroup, WaMu, UBS and many others are firmer members of the club.
TPG may have get-out clause with B&B. Oops 2 Jul 2008 If the UK mortgage bank is downgraded again and it is already on credit watch the private equity group would be able to pull out of its deal to inject capital. All the more odd that B&B allowed underwriters to renege on an earlier deal to provide equity at a higher price.
Moody’s mea culpa doesn’t restore confidence 1 Jul 2008 The rating firm s admission that employees glossed over CPDO rating errors is no surprise. It is acting to prevent a recurrence. But when ratings have broad implications or, as with CPDOs, when they are in the spotlight, executives are bound to feel pressure to finesse errors.
Bank of America may need to raise more capital 1 Jul 2008 Buying Countrywide for less than a quarter of book value might look cheap. But the mortgage lender could saddle BofA with as much as $30bn in losses and more in legal costs. That would easily wipe out the buffer, and force BofA boss Ken Lewis to shore up the balance sheet again.
SAC departures signal buy-side credit pullback 30 Jun 2008 Steven Cohen s $16bn hedge fund has cut its fixed income business down to the basics. For outofwork bankers hoping hedge funds will snap them up, it s an ominous sign. With chunks of the credit markets illiquid or discredited and leverage scarce, activity is withering.
Basel II-lite fails to reflect crunch’s lessons 26 Jun 2008 US bank watchdogs have issued a lesscomplex version of the capital accord for smaller banks to use. Its authors didn t sleep through the credit crunch entirely: they ve acknowledged that nomoneydown mortgages can be risky. But it retains its big brother s main faults.
LSE-Lehman trading venture is too little too late 26 Jun 2008 The London Stock Exchange and Lehman are making a late plunge into the dark liquidity pool. But competition for concealed block trades is intense, so profits may be elusive. Investors have been waiting for some time for the LSE to make a bold strategic move this isn t it.
Carbon emissions projects ripe for ratings 25 Jun 2008 It s often cheaper to limit carbon emissions in poor countries than in rich ones. Yet many projects have disappointed, or worse, been scams. Independent watchdogs could provide a useful service to investors in these projects.
Marshall Wace hits the growth trail 25 Jun 2008 The Londonbased hedge fund manager is setting up a Hong Kong joint venture with GaveKal, a boutique founded by financial journalist Anatole Kaletsky. With most established financial institutions in trouble, this is a smart time for hedge funds to grow their businesses.
Want a millionaire lifestyle? Go to a poor country 25 Jun 2008 Being a dollar millionaire in a rich country is worth a lot less than it used to be, thanks to grinding inflation. Falling asset prices don t help. But in developing countries, there are more fortunes to be made. And your money will go much further.
Halliburton rightly sent packing by UK courts 25 Jun 2008 The US oil services giant failed in an attempt to delay court approval for the sale of UK rival Expro to Umbrellastream a move that it hoped would allow it to reenter the fray. This was a clear attempt to circumvent UK Takeover Panel rules and the court was right to say no.
LSE left stranded by NYSE Euronext-Qatar deal 24 Jun 2008 The transAtlantic exchange will take a 25% stake in the Doha Securities Market to boost Qatar as a financial hub. The London Stock Exchange s unwritten agreement with the DSM is in tatters. More than ever, London looks to have missed the boat in global exchange consolidation.
US watchdogs don’t eat their cooking on ratings 24 Jun 2008 The SEC says money funds should be able to ignore credit ratings. They should do their own analysis. But even the Fed uses ratings. And many private investors aren t equipped to do indepth credit research. For now, regulators should focus on promoting competition among raters.
The Fed’s call: flippers, financiers, or ‘flation? 24 Jun 2008 Bernanke et al aren t likely to dent fragile economic growth with a rate hike on Wednesday. But hints of what the Fed might do next will matter, especially the balance between propping up the economy, along with financial markets, and fighting commodityfueled inflation.
UK short-selling rules could backfire 24 Jun 2008 Shortsellers usually keep their positions secret so they don t jeopardise their relationship with managements. But now the FSA has forced shorts out into the open, they are free to argue their case publicly. That s good news for price discovery, but bad news for the FSA.
What can Wall Street wring out of the bond insurers? 23 Jun 2008 Some underwriters of CDOs guaranteed by the battered monolines are negotiating to cancel the insurance. But how much should they demand to let insurers off the hook? Hard to say: the monoline guarantees have dropped in value, but the CDOs may be plunging too.