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GS | Goldman raises top end of legal loss estimate | Reuters Goldman Sachs Group Inc N GS raised the top end of the range for possible legal losses to about 5 9 billion the bank said in a regulatory filing on Monday In May the Wall Street bank estimated 3 8 billion in legal losses above what it had already set aside Goldman said on Monday that it was in talks with U S regulators to resolve claims tied to the sale of residential mortgage backed securities prior to the financial crisis The bank said potential resolution of this matter may result in significant penalties and other costs
Goldman reported its smallest quarterly profit in nearly four years in July as it set aside more than 1 45 billion to cover potential mortgage settlements | 8/3/2015 |
GS | Tech lift to productivity overlooked The Fed doesn t think so | By Ann Saphir SAN FRANCISCO Reuters Steve Gutmann used to have a basement that he never used His Honda Civic sat idle in front of his Portland Ore house Now strangers use Getaround com to book Gutmann s 6 an hour car for errands and travelers stay in his newly refurbished basement apartment listed at 115 a night on AirBnb Gutmann and a business partner are developing a new app that lets people get more use out of their possessions The apps mean pretty significant productivity gains for a full range of things from empty rooms to idle cars and bikes and all the other things that are marooned in people s garages Gutmann says That sharing economy has lured billions of dollars from investors yet so far it barely seems to register in U S economic data Productivity an area of the economy particularly sensitive to technological advances has grown at just 1 25 percent a year since the 2008 2009 crisis half its pre crisis average The decline has some economists arguing that official figures are simply failing to capture the effects of the sharing economy and other innovation and that true productivity growth is much higher If that is the case then the Federal Reserve should feel more comfortable raising its interest rates for the first time in almost a decade But here is the catch better productivity also lowers business costs So if the sharing economy makes things easier to find and cheaper to obtain for example by using AirBnb s user generated ratings system it may also cause official data to overstate inflation leaving the Fed further away from its 2 percent inflation goal Consequently the effects of any possible productivity understatement could effectively cancel each other out from the point of Fed policy If you think we think we are mismeasuring productivity as too low you are also arguing that inflation is lower than we are measuring This is a pretty important issue San Francisco Fed President John Williams said earlier this month However for Williams and several other Fed policymakers the decline in productivity growth from the pace of the late 90s to mid 2000s is real That view implies slower potential economic growth and suggests that subdued wage growth may be part of a new normal rather than a hurdle to raising short term interest rates INFLATION PARADOX The sharing economy also called a gig economy has grown quickly Listings on AirBnb by far the largest company offering peer to peer room rentals now top 1 million more than the biggest hotel chains Uber the largest firm in the transportation sharing sector operates in hundreds of cities and is valued at 50 billion Still it is hard to put too much stock in the idea that these two companies or their much smaller rivals are making much of difference to the economy on their own There s the potential for things to change in a large way says Joshua Gans chief economist of the University of Toronto s Creative Destruction Lab of the effect of the sharing economy on productivity and growth But those things seem way into the future Some economists argue that technology s impact on productivity is underestimated in part because government number crunchers are not adequately factoring in quality improvements Two Goldman Sachs NYSE GS economists recently argued just that and concluded that inflation as measured by the Fed s favorite gauge may actually be well below the current 1 25 percent estimate Fed policymakers and their staff for the most part are having none of it John Fernald a leading researcher on productivity on the San Francisco Fed s staff discounts mismeasurement as the cause of the drop in productivity saying there is no reason to believe any miscalculations are any greater than in the past To Fernald the most likely reason for any understatement of productivity is a difficulty in anticipating how much a new technology could change the world That is what happened in the 1990s when it took years for businesses and households to make enough use of the Internet for it to show up in the data No one saw the productivity slowdown in the 1970s No one saw the temporary productivity boost in the mid 1990s Fernald said in an interview Statistically there are huge uncertainties about that which is just inherent in the fact that it s hard to figure out which innovations are really going to be important Productivity data is notoriously volatile innovations take years to feed into the economy and the damage to productivity wreaked by the recession may prove not so permanent after all as new technologies help save time and money That is the view of Fed board economist David Wilcox one of the central bank s productivity optimists
Wilcox who did not agree to be interviewed for this story but whose published papers make clear his views has argued that a large part of the drop in productivity growth since the 2007 2009 financial crisis is reversible as demand returns and start ups embodying the latest technologies get the funding they need | 8/4/2015 |
GS | Alibaba hires former Goldman banker Evans as president | BEIJING Reuters Alibaba Group Holding Ltd N BABA has hired former Goldman Sachs Group Inc N GS partner Michael Evans to oversee the e commerce company s international expansion a top priority as the firm looks beyond China to sustain its heady growth rates Evans who spent two decades at the investment bank in positions including vice chairman and head of Asia has occupied a board seat at Alibaba since mid 2014 before the company held a record setting public listing in New York Alibaba by far the largest e commerce player in China said hiring Evans signaled its intention to ramp up cross border commerce in earnest after it spent years focusing on securing its domestic market position Top executives have long touted the idea that connecting increasingly wealthy Chinese consumers with say South American meat producers or European toy makers would generate billions in additional revenue for the firm Evans who once headed Goldman s equity underwriting arm has no direct experience in e commerce but is trusted by Alibaba s management having known founder Jack Ma and Vice Chairman Joseph Tsai for years He will continue as a management director and lead Alibaba growth strategy outside of China reporting directly to Chief Executive Daniel Zhang the company said His position is newly created Zhang said in a statement that glamorization is Alibaba Group s most important strategy for the coming decades
He added that Evans has been a close advisor to Alibaba Group for many years and we greatly value his deep knowledge of our business his experience as a proven business builder and leader globally and his more than 20 years of experience in China | 8/4/2015 |
GS | Alibaba pins U S growth hopes on Goldman s China rainmaker | By Lawrence White HONG KONG Reuters Alibaba NYSE BABA Group Holding Ltd is hoping a Canadian Olympic gold medalist once tipped to be the next chief executive of Goldman Sachs Group Inc NYSE GS will help them make it big in the United States Michael Evans who turns 58 this month retired from the U S investment bank in 2013 having forged a reputation as one of the most prolific deal makers in Alibaba s native China during a seven year stint in Hong Kong between 2004 and 2011 Now he is tasked with leading the e commerce giant s expansion outside its homeland an assignment that will be particularly tough in the U S given regulators sometimes hostile attitude to Chinese firms buying American technology assets Evans was Mr China back when he was at Goldman said Eugene Tan head of Asian Investment Banking at Oppenheimer Investments Asia limited For a Westerner he was regarded as knowing how the country works and he ll be a useful face for Alibaba to fight off negative sentiments as they try and break into the U S market Reuters was unable to contact Evans outside of normal working hours in the U S where he is currently based As well smoothing the way for acquisitions Evans will be expected to seal partnership arrangements for Alibaba with brands and retailers across the U S as well as in Europe and the rest of Asia Tan who knew Evans when they both worked at Goldman said the appointment is part of a wider strategy at Alibaba to hire bankers who can help the company secure valuable technology outside of China They are hiring up almost every tech banker I know Jack Ma is a smart guy he realizes you don t need to develop tech yourself all the time you can just buy it MEDAL WINNER Evans is the second former Goldman Sachs banker to take a senior role at Alibaba following Michael Yao who joined in 2012 as its head of corporate finance Yao was responsible for guiding Alibaba to its record 25 billion U S initial public offering in 2014 Evans also worked on the listing and has sat on Alibaba s board as an independent director ever since He won his Olympic gold in the men s eights rowing during the Los Angeles 1984 Summer Olympics competing on the same team as his twin brother Mark who also worked at Goldman Sachs The pair s father John Evans was a successful cardiologist businessman and philanthropist
Michael Evans had been tipped to take over at the top of Goldman from current chairman and CEO Lloyd Blankfein surprising many in the industry when he instead stepped down as its vice chairman and head of the emerging markets division | 8/5/2015 |
GS | Online meal firm HelloFresh prepares for listing this year sources | By Arno Schuetze and Alexander H bner FRANKFURT Reuters Online meal preparation firm HelloFresh is readying a stock market listing this year as it seeks to capitalize on buoyant equities markets and investor appetite for the Internet food market according to three people familiar with the matter Majority owner Rocket Internet and co investors have mandated Morgan Stanley NYSE MS and Goldman Sachs NYSE GS to organize the listing the sources said The initial public offering IPO in Frankfurt may take place as early as October and could value the company at more than 1 billion euros 1 1 billion one of the people said German e commerce investor Rocket Internet Morgan Stanley and Goldman Sachs all declined to comment HelloFresh has 250 000 regular subscribers serving over four million meals a month in countries ranging from the United States to Germany Britain and the Benelux countries U S peer Blue Apron which sells 3 million meals per month in June secured funding which valued it at more than 2 billion HelloFresh which was founded in 2011 has estimated annualized revenues of around 120 million euros according to a Rocket Internet investor presentation on its own 2014 earnings But no profit figures have been released In February HelloFresh secured 110 million euros in new financing from its owners which also include Insight Venture Partners Phenomen Ventures and Vorwerk Direct Selling Ventures valuing it at 624 million euros The company would join a raft of companies planning to list in the second half of the year including Germany s biggest digital classifieds group Scout24 Rocket Internet has invested in more than 100 start ups But HelloFresh is one of only a handful in which it holds a majority stake with 51 7 percent The e commerce investor is also preparing flotations of other groups according to sources familiar with the matter Other Internet IPOs that could take place in the next two quarters include food ordering service Delivery Hero emerging market fashion retailer Global Fashion Group and furnishings retailers Westwing and Home24 the sources said | 8/5/2015 |
GS | Energy Future favors Hunt debt repayment plan to exit bankruptcy | By Tom Hals Reuters As Energy Future Holdings Corp nears a deadline for ending its bankruptcy Texas s largest power company has crowned a group supported by Hunt Consolidated Inc as the new leader in the effort to craft the best plan Hunt has teamed up with junior creditors of Energy Future Holdings to raise about 12 1 billion to repay the power company s debt and convert its power distribution business known as Oncor into a real estate investment trust or REIT Energy Future Holdings filed an amended plan of reorganization on Thursday In a court document it said the Hunt backed plan was considered superior to a competing reorganization plan backed by investment firm Fidelity Management Subject to the resolution of certain critical issues which the debtors believe can be resolved the debtors view the REIT transaction as the superior path to exit because it would resolve the vast majority of contested issues in this case Energy Future said in a court document In June the company said the Fidelity plan which would convert Energy Future debts to equity was more advanced and was the more likely path out of bankruptcy The U S Bankruptcy Court in Wilmington Delaware is expected to hold hearings to confirm an exit plan as soon as October The Hunt backed plan envisions raising 5 1 billion from a rights offering backed by junior creditors including affiliates of BlackRock Centerbrige Partners Goldman Sachs NYSE GS and Avenue Capital That money would be used to repay more senior debt in full according to court documents We look forward to working diligently with EFH in the coming days to be chosen as the final bankruptcy plan Hunter Hunt chief executive of Hunt Consolidated Energy said in a statement Energy Future s 80 percent stake in Oncor the largest power lines business in Texas is considered the company s crown jewel thanks to its steady cash flows Creditors have estimated its value at 19 billion Both plans envision spinning off the company s Luminant power generation and TXU utility businesses to senior creditors Energy Future filed for bankruptcy protection in 2014 squeezed by weak power prices and unsustainable debt Much of the company s 42 billion in debt stems from a record 2007 leveraged buyout of TXU Corp led by KKR Co TPG and the private equity arm of Goldman Sachs
The case is In re Energy Future Holdings U S Bankruptcy Court District of Delaware No 14 10979 | 7/24/2015 |
GS | Facebook defeats shareholder litigation over IPO | By Jonathan Stempel NEW YORK Reuters A federal appeals court on Friday said Facebook Inc NASDAQ FB officials including Chief Executive Mark Zuckerberg cannot be sued by shareholders who said the social media company concealed threats to its growth prospects before its May 2012 initial public offering The 2nd U S Circuit Court of Appeals said investors who lost money on shares they bought after the 16 billion IPO lacked standing to sue Facebook directors and underwriters led by Morgan Stanley NYSE MS over alleged inadequate disclosures made before the company went public Shareholders said Facebook should have publicly revealed its internal projections on how increased mobile usage might reduce future revenue rather than quietly warn its underwriters which then cut their earnings forecasts They said the stock price was hammered after the truth came out Circuit Judge Dennis Jacobs however wrote that the plaintiffs could not have owned Facebook shares before the IPO and thus could not demonstrate contemporaneous ownership while the directors were breaching their fiduciary duties A proper plaintiff must have acquired his or her stock in the corporation before the core of the allegedly wrongful conduct transpired Jacobs wrote for a 3 0 panel The decision upheld a February 2013 dismissal of the so called derivative litigation by U S District Judge Robert Sweet in Manhattan Sweet also oversees shareholder class action litigation against Facebook itself over the IPO Lawyers for the plaintiffs did not immediately respond to requests for comment A Facebook spokeswoman said the Menlo Park California based company is pleased with the decision The defendants also included Facebook Chief Operating Officer Sheryl Sandberg Goldman Sachs Group Inc NYSE GS and JPMorgan Chase Co NYSE JPM among others Andrew Clubok a Kirkland Ellis partner representing them declined to comment Facebook began trading on May 18 2012 after going public at 38 per share only to see its share price fall to 17 55 on Sept 4 2012 and stay below the IPO price for more than a year The price has kept rising and peaked at 99 24 on Tuesday Nasdaq OMX Group Inc in April agreed to pay 26 5 million to settle shareholder litigation over technology problems that plagued the IPO
The case is In re Facebook Inc Initial Public Offering Derivative Litigation 2nd U S Circuit Court of Appeals Nos 14 632 14 1309 14 1445 14 1784 and 14 1788 | 7/24/2015 |
GS | Goldman Sachs must pay 1 8 million for reporting failures FINRA | By Suzanne Barlyn Reuters A Goldman Sachs Group Inc N GS unit must pay 1 8 million for not reporting substantial details about its alternative trading system orders to a system that tracks that information and also for other lapses Wall Street s industry funded watchdog said Goldman Sachs clearing and execution unit failed to send a substantial number of details about orders to a Financial Industry Regulatory Authority auditing system during a seven year period the regulator said on Monday Alternative trading systems also known as dark pools are broker run trading venues that let investors trade shares anonymously and only make trading data available afterwards reducing the chance of information leaking about trade orders Goldman Sachs in reaching the civil settlement with FINRA neither admitted to nor denied wrongdoing We re pleased to have concluded this matter a Goldman spokeswoman said Goldman reported many of the issues to FINRA voluntarily took steps to fix those issues and provided assistance to FINRA during its investigation she said
Other violations by Goldman included sending inaccurate order data to FINRA for more than eight years FINRA said In addition Goldman did not have adequate controls in place to detect and prevent the violations The various violations occurred during several periods between 2006 and 2014 according to FINRA During one period between 2011 and 2013 Goldman Sachs failed to send details about more than 6 3 billion order events to FINRA the regulator said The figure represents 6 1 percent of all order information that Goldman was required to send during the period according to FINRA | 7/27/2015 |
GS | RBS to sell 2 2 billion Citizens shares to take stake below 25 percent | By Steve Slater LONDON Reuters State backed Royal Bank of Scotland L RBS intends to sell up to 2 2 billion shares in U S bank Citizens N CFG which would cut its stake in that business to less than a quarter RBS said on Tuesday it would sell 75 million Citizens shares in a public offer plus an option to sell up to another 11 25 million If all the shares are sold that would represent 16 percent of Citizens and reduce RBS s holding to 132 7 million shares or 24 7 percent RBS bought Citizens based in Providence Rhode Island in 1988 and expanded it with 25 acquisitions including the 10 5 billion purchase of Charter One in 2004 RBS 78 percent owned by the British government after being rescued in the 2008 financial crisis has been reducing its holding in Citizens as part of a retreat to its retail and commercial banking business in Britain RBS said it would no longer consolidate its Citizens stake in its accounts following the latest sale But the bank will have to continue to include the business for regulatory reporting purposes which will delay a boost to RBS s capital ratios RBS should get a boost of about 200 300 basis points to its core capital ratio once Citizens is fully stripped out industry sources have said Britain s financial regulator will have to approve when that can happen potentially whenever RBS sells another tranche of shares A capital boost would be valuable to RBS whose capital could be weakened when it settles claims it misled investors in U S mortgage backed securities The bank could have to pay anything between 3 billion and 9 billion pounds to settle the matter analysts estimate It has set aside 1 9 billion pounds for a settlement which could come this year RBS sold a first slice of Citizens in an initial public offering in September and sold another chunk of shares in March Citizens intends to buy back 250 million of the shares being sold Its shares closed at 25 94 in New York on Monday up 21 percent from their IPO sale price of 21 50 and valuing the business at 14 billion
Morgan Stanley N MS and Goldman Sachs N GS are global coordinators and joint book runners for the sale and JPMorgan N JPM and Citigroup N C are joint book runners | 7/28/2015 |
GS | Accounting probe may pressure Toshiba to write down Westinghouse | By Ritsuko Ando and Reiji Murai TOKYO Reuters Toshiba Corp is set to overhaul its management after an investigation into its accounting practices concludes early next week but a more thorough housecleaning including a writedown on its Westinghouse nuclear business may be needed to regain confidence amid Japan s biggest corporate scandal in five years Toshiba said an independent committee it commissioned to look into accounting irregularities which a person directly involved in the probe told Reuters were part of Toshiba s corporate culture would submit its report to the company on Monday The company will hold a news conference the following day it said The report is likely to show irregular book keeping led to profits being overstated by more than 170 billion yen 1 37 billion over the past several years people familiar with the investigation said this week more than three times Toshiba s initial estimate The findings are likely to lead to 300 400 billion yen 2 4 3 2 billion in charges related to overstated profits and various writedowns said other individuals familiar with the matter A Toshiba spokesman said it has not yet compiled any estimates One theory investigators were looking into was that executives worried about the impact of the 2011 Fukushima disaster on its nuclear unit set overly aggressive targets in new businesses such as smart meters and electronic toll booths encouraging costs to be understated and revenues overestimated The panel will also say that top executives including CEO Hisao Tanaka and former company presidents Norio Sasaki and Atsutoshi Nishida received summary reports from managers on how they were delaying the booking of losses The executives pressured divisions in emails and meetings to meet budget targets exacerbating the accounting improprieties the person directly involved in the investigation said on Friday Improper accounting which extended across virtually all business areas of the semiconductor to nuclear conglomerate was part of Toshiba s corporate culture the person said A company spokesman said he could not comment as the panel s report has not been released A FRACTION OF WHAT IT COST Toshiba s 87 percent stake in Westinghouse has not been among the group s businesses found to have past book keeping issues but investors have long held concerns that the value of assets and goodwill related to Westinghouse were overstated Toshiba has said it is looking to reduce its stake in the business though analysts say it could be hard to find a buyer Most expect any stake sale to be worth just a fraction of what Toshiba originally paid It spent 5 4 billion for a majority stake in 2006 at the height of the nuclear industry boom The market s confidence in Toshiba isn t going to recover overnight They need to come up with a new management structure and show investors that they have it right said Yoshihiro Okumura an analyst at Chibagin Asset Management At the moment there are various uncertainties including the Westinghouse shares they hold Nuclear power has become less popular especially in the aftermath of the Fukushima disaster which prompted many countries to freeze nuclear energy expansion plans Goldman Sachs NYSE GS analyst Ikuo Matsuhashi suspended coverage of Toshiba this month because of the uncertainties citing Westinghouse as a concern With the outlook for the nuclear power plant market having been lowered partly due to the fall in crude oil prices we think it is harder for Toshiba to find a strategic partner he wrote in a note last week Shares in Toshiba have lost more than a fifth of their value since the end of April to a little over 13 billion The stock closed more than 2 percent higher on Friday
1 124 0500 yen | 7/17/2015 |
GS | Fed to adopt new capital surcharges for eight largest U S banks | By Douwe Miedema and Michael Flaherty WASHINGTON Reuters The Federal Reserve will meet on Monday to adopt a new rule for the eight largest U S banks to hold more equity capital amid fears on Wall Street that the measure may make it less profitable The rule was largely similar to when it was proposed in December when the U S central bank said the banks would face a surcharge of between 1 percent and 4 5 percent of their assets The Fed also gave numerical estimates of what the rule would mean for each of the banks The numbers were in line with an estimate by Goldman Sachs N GS analysts in December Regulators want U S banks whose failure could threaten markets to fund themselves more with shareholder equity and less with borrowed funds They also want to discourage banks from relying on unstable short term borrowing a key contributing factor to the demise of Lehman Brothers at the height of the financial crisis in 2008 JPMorgan Chase Co N JPM faces the highest surcharge at 4 5 percent followed by Citigroup N C at 3 5 percent All the firms were on their way to meet the surcharges over the three year period during which they will need to implement the measure the Fed said Seven already meet it now Only JPMorgan faces a shortfall of 12 5 billion at the moment Federal Reserve staff said on a conference call In December that number still stood at some 20 billion The company said in February that it would do whatever it takes to keep the surcharge below 4 5 percent The rule does not require the firms to meet the surcharges in the Fed s so called stress tests an annual health check during which banks have to run through a simulated severe economic and financial crisis But the Fed later this year would look at changing the stress test procedures to better address systemic risk arising from the largest financial institutions Fed Governor Daniel Tarullo said in a statement
While incorporation of some or all of the capital surcharges would be one way to account for those risks it is only one among a number of possibilities all of which we will want to evaluate Tarullo said | 7/20/2015 |
GS | Goldman bets on European stocks steers clear of U S | LONDON Reuters With market jitters over Greece receding Goldman Sachs NYSE GS is advising clients to load up on European stocks at the expense of U S assets
The investment bank upgraded its short term view on European equities to overweight from neutral in a note dated July 20 which cited the recent deal to start negotiating a new Greece debt package as one of the reasons for a more positive view and downgraded U S equities to underweight from neutral
The euro s weakness against the dollar the European Central Bank s quantitative easing program and accelerating economic growth should fuel European stocks outperformance versus U S stocks the note said
The STOXX Europe 600 has rallied nearly nine percent in the last two weeks as an impasse between Greece and its creditors was broken and they agreed a cash for reform deal
European equities have been one of the key asset classes to benefit from a fading of Greek risks Goldman Sachs strategists said
While performance potential might be limited in the near term after the strong rebound several supportive fundamental factors should help outperformance of European vs U S equities until year end | 7/21/2015 |
GS | Special Report Blackstone champions hedge funds for the little guy | By Lauren Tara LaCapra NEW YORK Reuters John McCormick has been on a mission for the past five years to bring hedge funds to the masses That may seem like a tough sell Traditional hedge funds those lightly regulated investment pools open exclusively to large institutions and rich individuals have been duds lately trailing the U S stock market s performance every year since 2009 by an average of 10 percentage points according to Hedge Fund Research Inc data But already McCormick a senior managing director at Blackstone NYSE BX Group LP has been wildly successful He has done so as a tireless evangelist for what are called liquid alternative investments or liquid alts Like hedge funds they invest in everything from simple stocks and bonds to all sorts of complex derivatives and other alternative assets The main difference is that liquid alts are packaged as mutual funds and marketed to retail investors who can t invest in traditional hedge funds Any investor who wants access to alternative strategies should have access to them as long as they are suitable for the investor and properly explained McCormick said in an interview Apparently investors agree Though critics complain about high fees opaque strategies and other factors that they say make liquid alts inappropriate for small investors these products have become one of the fastest growing types of mutual fund Liquid alt assets under management in the U S and Europe have surged to about 440 billion according to Preqin a research firm specializing in alternative investments In 2008 analysts estimate the figure was less than 100 billion Blackstone and its chief rival in this market Goldman Sachs Group Inc NYSE GS manage half of all liquid alternative assets sold by big brokerage firms according to Dover Financial Research The appeal is not outsize returns Liquid alts have delivered even less than hedge funds in recent years The reason for their popularity McCormick said lies in the 2008 financial crisis and the damage it inflicted on many small investors portfolios You have baby boomers nearing retirement who experienced a scary event in 2008 he said People who thought they had diversification and didn t really have it The long lists of assets liquid alt funds hold are designed to provide that diversification he said Now McCormick is among the scores of fund marketers pushing to get liquid alts on the menu of options for U S workers employer sponsored tax deferred 401 k retirement savings plans a pool of money that totals 4 4 trillion To date these accounts have offered little to no exposure to alternative assets like hedge funds private equity and real estate DIFFICULT CALL It hasn t been easy The trustees who approve what s offered in 401 k plans have so far rejected liquid alternatives as a viable option for workers who manage their own retirement savings Liquid alts certainly offer diversification said Gregg Thorsen a Southwest Airlines Co executive who helps put together plans for 8 billion to 10 billion in employee retirement money But he said the question is really around the best way to offer the benefit of that diversification in a retirement plan with a diverse participant base with wide ranging communication needs and varying education on investments And with the higher fees of these funds he said the decision becomes an even more difficult call For an idea of what goes into some of these products consider the Columbia Adaptive Alternatives Fund a 177 million liquid alt fund launched by Columbia Management in collaboration with Blackstone in January Among the assets it or its underlying funds hold common stocks preferred stocks corporate bonds foreign and domestic government bonds bonds issued by agencies run by governments real estate investment trusts exchange traded funds exchange traded notes residential and commercial mortgage backed securities asset backed securities credit default swaps collateralized bond obligations collateralized loan obligations currency swaps futures total return swaps money market funds and other liquid alternative funds including one that in turn invests in other hedge funds All that diversity hasn t yielded much to cheer about From its launch in late January to mid July the Columbia Adaptive Alternatives Fund generated negative returns of about 2 percent compared with a positive 2 percent for a Morningstar index of comparable funds and a 5 percent gain for the S P 500 Index We believe that alternative investments can complement a client s traditional equity and bond allocations by offering the potential for diversification stability and positive expected returns over a complete market cycle said Carlos Melville Columbia s chief spokesman The fund isn t uniquely lackluster In the five years ended in April alternative mutual funds in North America delivered an average annual return after fees of 5 8 percent while similar funds in Europe returned 3 4 percent both below the average 7 6 percent for hedge funds according to Preqin On the same basis the S P 500 Index returned 11 9 percent and 14 3 percent including reinvested dividends For those results investors in liquid alt funds pay a lot Liquid alternative funds charge an annual management fee of 1 76 percent on average compared with 1 22 percent for actively managed mutual funds according to Morningstar Simple instruments like index funds charge annual fees that are a small fraction of 1 percent Many liquid alternative funds also charge sales commissions that go to intermediaries like brokers The more complicated the fund the higher the fees The Columbia Adaptive Alternatives Fund for instance charges an initial sales fee of up to 5 75 percent and annual operating fees of 2 68 to 3 83 percent depending on the share class Some investors are also charged a redemption fee for selling the fund within 18 months PAYING THE PRICE McCormick said higher fees reflect the added value of a layer of professional management He added Sometimes articles are written to say liquid alts are taking advantage of retail investors because they charge such high fees The reality is it s much less expensive than what you pay for hedge fund exposure Hedge fund managers have historically charged investors a 2 percent annual fee and taken 20 percent of investment gains Blackstone does not concern itself with marketing liquid alt funds directly to investors That s done by what McCormick calls gatekeepers firms like Fidelity Investments Morgan Stanley NYSE MS and Merrill Lynch that have signed marketing deals with Blackstone It s their job to explain the products to investors and help them decide whether the funds are a good fit Regulators are looking at the business to make sure that happens The Financial Industry Regulatory Authority an industry funded group and the U S Securities and Exchange Commission have been examining sales and marketing of liquid alts to ensure that funds are not distorting elements of their investment strategies or policies And the SEC has been looking into funds disclosure of illiquid assets which can be up to 15 percent of the fund in the United States One worry is that in a broad market downturn liquid alts may not be so liquid after all When investors rush en masse to cash out of a mutual fund the fund s managers have to sell assets to raise cash But when markets are falling unusual assets like those held in liquid alts can be hard to sell forcing down prices even farther That s what happened in the financial crisis when mortgage backed securities collateralized debt obligations and related derivatives were rendered virtually worthless The SEC plans to draft a rule or recommendation for managers of liquid alt funds on their use of derivatives a person familiar with the matter told Reuters On July 15 Massachusetts Secretary of the Commonwealth William Galvin announced he was beginning an investigation into the sales practices of registered investment advisers in connection with alternative mutual funds These funds Galvin said can be accidents waiting to happen when they are sold to investors who do not understand the risks and downside associated with the product Paul Jacobs chief investment officer of Palisades Hudson Financial Group which has 1 3 billion in assets under management has analyzed dozens of liquid alt funds Many of them he said used a black box strategy meaning it s hard to either get a good explanation of the strategy or to understand the strategy even if you do get an explanation He s found only one he thinks is worth investing in the Merger Fund one of the oldest liquid alternative funds managed since 1989 by Westchester Capital Funds Its returns an average annual 6 6 percent since inception through Dec 31 are not very sexy Jacobs said but he understands what s in it and how it will perform IT S ALL ABOUT DIVERSITY McCormick and other proponents of liquid alts say the critics are missing the point It s not about promising outsized returns and getting people excited that way he said It s about diversification to protect against a broad protracted downturn in financial markets As Goldman Sachs Asset Management says on its website Elevated stock market valuations and the prospect of rising interest rates may mean lower returns in traditional portfolios However alternative investments have historically delivered attractive relative rates of return in challenging equity and fixed income environments It s hard to put that to the test though since most liquid alt funds available today were launched since the current bull market began in March 2009 Ultimately McCormick and other liquid alt proponents argue it s up to the investor to decide whether the benefits of the funds are worth the fees and risks A graduate of Vassar College and Yale Law School McCormick worked as a McKinsey Co consultant and a corporate lawyer before he joined Blackstone in 2005 Now 47 years old he credits much of his success in building Blackstone s liquid alts business to teamwork with colleague Brett Condron 38 who joined Blackstone from Putnam Investments in 2010 as well as others at the firm who green lighted his endeavor and helped create the guts of the products Together they were able to persuade hedge fund managers to develop liquid alts with Blackstone and sign up brokers to sell them The financial crisis made the job easier Until then premier hedge fund managers tended to shun retail investors During and after the crisis hedge fund performance flagged big investors started pulling back and fee income shrank McCormick was then able to convince big name firms like Two Sigma Investments and Wellington Management that it was worthwhile to manage money for Main Street The investor base for hedge funds has continued to evolve and individual investors could represent the next big wave of demand said Nobel Gulati chief executive officer at Two Sigma Advisers LLC part of the firm that manages money for institutional investors With established fund managers on board it was easier to get big brokerage and financial services firms to market the funds Executives at outfits like Morgan Stanley Merrill Lynch and Fidelity knew that many retail investors wanted to get into hedge funds but couldn t because they either didn t qualify as accredited investors under SEC rules or couldn t afford the large minimum investments Liquid alts would meet that demand By and large sales forces need little convincing beyond the prospect of a sales commission The next goal getting the funds into retirement savings plans is a challenge and not just because of subpar performance and high fees Plan sponsors are held to a much higher standard than financial advisers This so called fiduciary standard means they must ensure that products offered are truly in investors best interests Matt Smith who manages the Bank of Montreal s retirement services business noted that many fiduciaries want to see a three year track record but most liquid alt funds haven t been around that long He said plan sponsors might be open to including liquid alts as part of a portfolio say packaged into a target date fund But they are wary of offering them as standalone options in which workers who aren t financially sophisticated can put all their money McCormick counters that most institutional investors including some pension funds own far more alternative assets than individual investors do
Still McCormick s boss Tom Hill who runs alternatives at Blackstone said at the company s investor day last year that the firm faces significant hurdles to getting liquid alternatives into 401 k plans Blackstone he said hadn t cracked the code yet Edited by Dan Wilchins and John Blanton | 7/22/2015 |
GS | New York bank regulator seeks info about new instant messaging tools | By Karen Freifeld NEW YORK Reuters New York state s banking regulator sent a letter to Symphony Communications Services LLC on Wednesday requesting information on instant messaging and other communications tools it says Goldman Sachs NYSE GS and other banks are likely to begin using Palo Alto California based Symphony Communications markets products with guaranteed data deletion and encryption according to a July 22 letter from New York Department of Financial Services acting superintendent Anthony Albanese | 7/22/2015 |
GS | Qualcomm slashes jobs and costs says may split itself | By Lehar Maan and Anya George Tharakan
Reuters Chipmaker Qualcomm Inc O QCOM said it may break itself up as it delivered its third profit warning this year and announced plans to slash jobs and spending in the face of rising competition
The company said it would reduce costs by about 1 4 billion cut about 4 500 full time staff or 15 percent of its workforce and boost capital returns to shareholders
Qualcomm s shares fell about 1 percent to 63 50 in after market trading on Wednesday The stock has lost a fifth of its value in a year
Hedge fund Jana Partners is pushing for Qualcomm to spin off its chip business from its highly profitable patent licensing income
The chipmaker agreed with Jana to add two fund nominees to Qualcomm s board
The company faces intense competition from Taiwan s MediaTek Inc TW 2454 and a handful of small Chinese companies that specialize in making chips for low priced phones
Qualcomm makes software and chips used in smartphones tablets and gaming devices and is known for its Snapdragon processor used in high end smartphones made by Samsung Electronics Co Ltd KS 005930 HTC Corp TW 2498 and ZTE Corp SZ 000063
This year longtime customer Samsung said it would its own processor for the new Galaxy S6 smartphone instead of Snapdragon
The waning competitive position occupied by Qualcomm in supplying mobile chipsets that s the fundamental issue and there is nothing they can do other than hope that Samsung goes away which I believe is not going to happen Drexel Hamilton analyst Richard Whittington said
Qualcomm which has about 30 000 employees said it would significantly reduce its temporary workforce and the locations in which it operates
The company said it expected to complete its strategic review by the end of the year
Qualcomm is being advised by investment banks Goldman Sachs NYSE GS and Evercore Partners Inc according to people familiar with the matter
The Wall Street Journal reported on Monday that Qualcomm was considering splitting itself up
The Information news website reported on Monday that the chipmaker was preparing to lay off several thousand employees
Qualcomm cut its full year revenue forecast to 24 5 billion 25 5 billion from 25 billion 27 billion and cut its adjusted profit forecast to 4 50 4 70 per share from 4 60 5 00
Revenue fell 14 3 percent to 5 83 billion in the third quarter the first quarterly fall in five years and missed the average analyst estimate of 5 85 billion according to Thomson Reuters I B E S
The company said it planned to return a minimum of 75 percent of free cash flow to stockholders through dividends and share repurchases | 7/22/2015 |
GS | Goldman Sachs Sees Iran Deal As Downside Risk To Oil Price Forecast | By
SINGAPORE Reuters This week s nuclear deal between Iran and major global powers puts downside risk to oil prices as Iran s vast reserves gradually start to return to the market in 2016 in greater volumes U S bank Goldman Sachs NYSE GS said
Under the agreement sanctions imposed by the United States the European Union and the United Nations are to be lifted in exchange for curbs on Iran s nuclear program
Iran a member of the Organization of the Petroleum Exporting Countries OPEC exported almost 3 million barrels per day bpd of crude at its peak before sanctions over its alleged ambitions to build a nuclear bomb saw shipments collapse to about a million bpd over the last 2 1 2 years
The timeline of the sanctions relief implies that this agreement will have no impact on 2015 oil balances the bank said in a note to clients
We view the 2016 prospects for higher OPEC production including from Iran as a growing downside risk to our oil price forecast it added
Goldman s current oil price forecast is for Brent crude oil prices to average 58 per barrel in 2015 and for 62 next year while it expects U S crude to average 52 and 57 per barrel this year and in 2016 respectively | 7/15/2015 |
GS | Goldman Sachs down 1 after Q2 earnings results | Investing com Goldman Sachs NYSE GS shares declined in pre market trade on Thursday following the release of disappointing quarterly earnings results
The largest U S investment bank said earnings per share came in at 4 75 in the three months ended June 30 easily surpassing expectations for earnings of 3 84 a share and up from 4 10 a share a year earlier
During the quarter the firm recorded 1 45 billion in net provisions for mortgage related litigation and regulatory matters These provisions reduced diluted earnings per common share for the second quarter of 2015 by 2 77
The firm s second quarter revenue totaled 9 07 billion down 0 5 from the same period a year earlier but beating estimates for revenue of 8 78 billion
Goldman Sachs reported its highest first half net revenues in five years reflecting record first half results in Investment Banking and Investment Management
Investment Banking produced net revenues of 2 02 billion reflecting the second highest quarterly performance in Underwriting and strong net revenues in Financial Advisory
We are pleased with our performance for the quarter said Lloyd C Blankfein Chairman and Chief Executive Officer
Shares of Goldman Sachs were down 0 95 in pre market trade at 211 00 from Wednesday s closing price of 213 03
Meanwhile U S stock futures pointed to a modestly higher open The Dow futures pointed to a gain of 0 35 the S P 500 futures tacked on 0 4 while the Nasdaq 100 futures advanced 0 45 | 7/16/2015 |
GS | Corzine others settle MF Global lawsuit for 64 5 million | By Jonathan Stempel NEW YORK Reuters Jon Corzine and other former MF Global Holdings Ltd officials have reached a 64 5 million settlement of litigation brought by investors seeking to hold them liable for the now defunct futures brokerage s 2011 bankruptcy The all cash settlement with Corzine who was MF Global s chief executive and previously New Jersey s governor and nine other defendants resolves the last major piece of litigation by MF Global stock bond and convertible bond investors over the company s rapid descent into Chapter 11 U S District Judge Victor Marrero in Manhattan on Tuesday evening granted preliminary approval of the settlement which was disclosed earlier in the day He scheduled a Nov 20 hearing to consider final approval The class action accord would boost the investors recovery to 204 4 million including 74 9 million from underwriters and 65 million from the auditor PricewaterhouseCoopers Investors led by the Virginia Retirement System and the Canadian province of Alberta accused MF Global officials of inflating the company s ability to manage risk obscuring risks from Corzine s 6 3 billion bet on European sovereign debt and improperly accounting for deferred tax assets Other settling defendants included former Chief Financial Officers J Randy MacDonald and Henri Steenkamp and seven former independent directors All denied wrongdoing and their insurers will cover the settlement payments court papers show Andrew Levander a lawyer for Corzine declined to comment In a court filing the investors lawyers said the 204 4 million recovery represents 18 percent of the maximum reasonably possible an excellent result given that MF Global went bankrupt Salvatore Graziano a partner at Bernstein Litowitz Berger Grossmann representing the investors declined to comment It is unclear how much that firm and co lead counsel Bleichmar Fonti Tountas Auld will request in fees Some claims remain against banks that helped underwrite 325 million of MF Global bonds in August 2011 MF Global filed for Chapter 11 protection on Oct 31 2011 as worries mounted about its sovereign debt exposure credit rating downgrades margin calls and news that customer funds had been used to cover liquidity shortfalls Thousands of former brokerage customers have recouped the 6 7 billion that a court appointed trustee said they were owed Corzine is also a former Goldman Sachs N GS co chairman The U S Commodity Futures Trading Commission is suing him over MF Global s collapse and seeking civil fines and a commodity futures industry ban MF Global settled related CFTC claims for 100 million
The case is In re MF Global Holdings Ltd Securities Litigation U S District Court Southern District of New York No 11 07866 | 7/7/2015 |
GS | Oil under 60 beyond 2016 suggests market rethinking shale | By Jonathan Leff and Jessica Resnick Ault NEW YORK Reuters The almost 10 percent nosedive in headline oil prices this week has many hallmarks of a shocking but short lived slump triggered by a confluence of external events and exacerbated by safety seeking investors and momentum chasing traders By Tuesday afternoon the crowded race to the exit was winding down with prices recovering from three month lows as traders reassessed the factors they blamed for the worst slide in four months Greece s debt woes China s stock market meltdown talks with Iran over its nuclear program a stronger dollar a rise in the number of U S oil rigs a breach of key technical triggers Yet a deeper look at the market suggests an important and more lasting rethink may now be afoot longer term oil prices normally less volatile and reactive than immediate delivery have suffered an almost equally violent collapse pushing crude prices for 2017 to below 60 a barrel for the first time ever If U S shale drillers the world s new swing producers can still turn a profit at below 60 a barrel then the fall in long dated oil prices may be rational If not as some bullish market analysts worry then lower prices could be choking off new supplies the world may need as soon as next year If you take the curve at face value it appears to be saying that U S shale can grow if WTI stays below 60 for three years That doesn t seem very likely Paul Horsnell global head of commodities research at Standard Chartered LONDON STAN said referring to West Texas Intermediate crude One would guess that all those companies that had been holding back from cutting projects and jobs over the past few months are not going to hold on much longer and another shakeout will start And it probably won t be long before U S rig counts start to dive again Link to chart U S oil futures for December 2017 delivery have dropped by as much as 5 a barrel or 8 percent in the past two days an even deeper retreat than last November when OPEC s surprise decision to maintain oil output despite a global glut sent markets into a deepening tailspin The more liquid frontline prices for delivery in August this year have fallen only slightly further this week and are still several dollars above their trough from March Longer dated futures are plumbing contract lows testing the break even economics for U S shale oil drillers The cause of this unusual tumble is still a topic of debate Some link it to a future shift in fundamentals such as the expected boost in Iran s oil exports next year Others say it may reflect the realization that oil industry costs are falling faster than expected as activity slumps A few wonder if it is an unusually large producer hedge or a big macro economy fund trade unwinding IRAN RIGS OR Longer term oil futures are normally insulated from the speculative short term fluctuations and factors that afflict immediate prices Too illiquid to attract fast money they tend to trade on more strategic themes whether a long term bet on prices or a corporation seeking to hedge its price risks Front month oil futures have posted a daily change of more than 1 a barrel on 62 occasions this year trading in a range of over 20 December 2017 has moved by that magnitude only 18 times trading between 61 and 67 a barrel The fact that this week s activity has affected both ends of the futures curve in nearly equal measure is unusual says Credit Suisse SIX CSGN analyst Jan Stuart This isn t a simple front month correlation trade or a dip in demand he says This is investors who invest all along the curve picking up the ball and going home That s what this looks like Some fundamental factors are also in play Negotiations over Iran s nuclear program which may conclude this week in Vienna have increased the likelihood that a country that was once OPEC s second largest producer will ramp up exports as sanctions are eased likely adding more supply to the market next year at the earliest Others pointed to the latest U S rig count data released last Thursday showing the first increase in oil drilling since December The addition 14 rigs was a bigger rise than expected The rise suggests that at 60 a barrel producers can ramp up activity given improved returns with costs down nearly 30 percent and producers increasingly comfortable at the current costs revenue funding mix Goldman Sachs NYSE GS which is predicting a deeper and prolonged oil slump said in a note on Monday A HEDGE TOO FAR Some suggested that the selloff which began last week ahead of the U S Independence Day holiday may have provoked reticent oil producers to hedge locking in far forward prices for fear they may fall much further Oil option volatility fell last month to its lowest level in seven months making hedging relatively cheaper for drillers who had locked in only 15 percent of their 2016 prices according analysts at Tudor Pickering Holt Co The oil VIX index a proxy for options pricing in the main oil ETF has surged alongside oil prices in recent days rising from 33 8 to over 42 its highest since mid April in a possible sign of increased demand to buy options protection Yet market sources saw little immediate evidence of a big hedge that could explain the price move Trading volumes in the December 2016 and 2017 WTI contracts which were the fourth and fifth most active in the market on Monday was elevated but not unusually so The 2016 contract traded just over 35 000 lots double the 30 day average but a hair less than on July 1 data show
We have not seen a lot of activity in the last 24 48 hours said John Saucer vice president of research and analytics at Mobius Risk Group which advises companies on hedging We saw a lot last month | 7/8/2015 |
GS | Clinton gets tough on Wall Street vows to tighten oversight | By Luciana Lopez and Jonathan Allen NEW YORK Reuters U S presidential candidate Hillary Clinton toughened her stance against Wall Street on Monday vowing to tighten oversight of the financial industry and warning of serious risks in the shadow banking industry In her first major economic speech of the 2016 election campaign Clinton assailed financial institutions in detailed terms as she pledged to cut the income gap and spur wage growth for ordinary Americans The Democratic front runner stopped short of calling for the break up of big banks as some liberal Democrats have sought Clinton has no plans to reinstate the Glass Steagall Act to split commercial banks from their investment operations Clinton economic adviser Alan Blinder told Reuters Nevertheless Clinton said that if elected in November next year she would appoint strict overseers to ensure that financial firms never again indulge in the kind of risky behavior that helped cause the 2008 banking crash Speaking at a liberal university in Manhattan s Greenwich Village Clinton a former secretary of state devoted an unexpectedly large part of her address to Wall Street Teresa Ghilarducci a labor economist at The New School who has been informally advising Clinton s campaign said her remarks on Wall Street ended up being lengthier than a draft circulated on Friday suggested they would be Clinton laid out a series of ideas that could change the way major U S companies work She said banks cannot be too big to fail She is the clear favorite to win the Democratic nomination but faces a growing challenge from Bernie Sanders a U S senator from Vermont and self styled socialist who is drawing large crowds at campaign events Despite the tough talk Clinton and her husband Bill Clinton have deep ties with Wall Street Both have been paid handsomely for speeches by major financial and investment institutions in recent years including Goldman Sachs NYSE GS and the Carlyle Group NASDAQ CG Hillary Clinton who represented Wall Street as part of her constituency when she was a U S senator for New York has long looked to people in the financial industry for large campaign donations TOO BIG A PROBLEM Clinton said in her speech As we all know in the years before the crash financial firms piled risk upon risk and regulators in Washington either couldn t or wouldn t keep up I will appoint and empower regulators who understand that too big to fail is still too big a problem Clinton said She proposed encouraging firms to share profits with employees and ensuring that stock buybacks are not used just for an immediate boost in share prices She said she will announce a plan to reform capital gains taxes to reward longer term investments and not just quick trades Clinton hinted at tougher regulations to stem the serious risks she said were emerging from the shadow banking system of hedge funds high frequency traders and non bank finance companies She referred to them as so many new kinds of entities which receive little oversight at all Clinton put the fight for higher wages for working Americans at the heart of her economic agenda although her speech was short on specific policy proposals The measure of our success must be how much incomes rise for hard working families not just for successful CEOs and money managers she said BEYOND DODD FRANK Clinton will unveil more specifics in a series of speeches in coming weeks Liberal Democrats flirting with Sanders are seeking more details of her plans on increasing the minimum wage creating universal preschool and investing in infrastructure Putting some meat on the bones of her economic policy could divert focus from issues dragging on Clinton s popularity including a controversy over her use of a private email account while she was America s top diplomat Clinton said Americans lose job protection and benefits when they rely too heavily on sources of income like renting out a spare room designing websites or driving their own car Those remarks were read as directed at start ups such as car ride company Uber and short term home rental service Airbnb which are part of the sharing economy Republican presidential hopeful Rand Paul described Clinton as out of touch America shouldn t take advice on the sharing economy from someone who has been driven around in a limo for 30 years Paul wrote on Twitter NYSE TWTR Clinton promised to go beyond the 2010 Dodd Frank law that imposed stronger regulations on the financial industry after the banking crash But Blinder an economist who advises Clinton s campaign told Reuters the candidate did not plan to resurrect the Glass Steagall Act that split commercial banks from their investment operations The act passed during the Great Depression in the 1930s was repealed in 1999 Both Sanders and Maryland Governor Martin O Malley another Democratic challenger for the nomination support breaking up the banks In her speech Clinton called out HSBC bank for allowing itself to be used to launder drug money from Latin America in a case that led to the bank receiving a record 1 92 billion in fines in the United States An HSBC spokesman Rob Sherman replied to her comment As the Justice Department has noted we have made material progress toward meeting the most stringent compliance standards imposed to date upon a global financial institution he said Clinton also criticized other big banks that have pleaded guilty to conspiring to manipulate currency exchange and interest rates
Her speech earned an unusual level of approval from a group that represents the Democratic Party s liberal wing The Progressive Change Campaign Committee a political fundraising group said the address shows that Clinton sees a rising economic populist tide in our politics and wants to be part of it | 7/13/2015 |
GS | Weak U S retail sales hint at slower economic growth | By Lucia Mutikani WASHINGTON Reuters U S retail sales unexpectedly fell in June as households cut back on purchases of automobiles and a range of other goods raising concerns the economy was slowing again Tuesday s weak retail sales report together with signs of some softening of the labor market dampened expectations a bit for an interest rate hike from the Federal Reserve this year which most economists expect could come in September The underlying tone of this report suggests that the recovery is beginning to show some signs of strain If anything it will temper at the margin any consideration for a September rate hike said Millan Mulraine deputy chief economist at TD Securities in New York The Commerce Department said retail sales slipped 0 3 percent last month the weakest reading since February after May s downwardly revised 1 0 percent increase Retail sales excluding automobiles gasoline building materials and food services dipped 0 1 percent following a 0 7 percent gain in May These so called core retail sales correspond most closely with the consumer spending component of gross domestic product Economists had forecast retail sales rising 0 2 percent last month after a previously reported 1 2 percent jump in May Core retail sales had been expected to increase 0 4 percent The dollar fell against a basket of currencies while prices for U S Treasury debt rose U S stocks were trading higher as stronger than expected second quarter profits from JPMorgan N JPM lifted sentiment Coming on the heels of June s disappointing employment report and sharp drop in small business confidence last month the weak retail sales data suggests the economy might have lost some momentum at the end of the second quarter having struggled at the start of the year GROWTH FORECASTS CUT The economy contracted at a 0 2 percent annual rate in the first quarter The soft core retail sales prompted Goldman Sachs NYSE GS to lower its second quarter GDP growth estimate by two tenths of a percentage point to a 3 0 percent pace Forecasting firm Macroeconomic Advisers cut its forecast by the same margin to a 2 6 percent rate The weakness is retail sales is surprising given that savings are at multi year highs boosted by the windfall from last year s plunge in gasoline prices and solid job gains Consumer confidence is also at lofty levels The second quarter growth outlook was also dimmed by another report from the Commerce Department showing retail inventories excluding automobiles rose only 0 1 percent in May This component which goes into the calculation of GDP increased 0 5 percent in April The backdrop of tepid consumer spending and low inflation which was underscored by a third report from the Labor Department on import prices complicates matters for the Fed Import prices dipped 0 1 percent in June after increasing 1 2 percent in May Import prices have now declined in 11 of the last 12 months in part reflecting the lingering effects of a strong dollar Fed Chair Janet Yellen said last Friday she expected the U S central bank to tighten monetary policy at some point later this year Yellen could offer more clues on the timing of the first interest rate increase since 2006 when she delivers her semi annual monetary policy report to Congress on Wednesday and Thursday Strains on household budgets such as rising housing and healthcare related costs may be crowding out purchases of retail goods I see no compelling reason at this time for the Fed to raise interest rates in September said Alan MacEachin an economist at Navy Federal Credit Union in Vienna Virginia Retail sales last month were broadly weak with receipts at auto dealerships falling 1 1 percent after rising 1 8 percent in May Clothing stores sales dropped 1 5 percent the largest decline since September 2014 Receipts at building material and garden equipment stores fell 1 3 percent and sales at furniture stores declined 1 6 percent the biggest drop since January last year There were also declines in sales at online stores and at restaurants and bars Rising gasoline prices supported sales at service stations where receipts rose 0 8 percent Sales at electronics and appliance stores rose 1 0 percent the biggest rise since September | 7/14/2015 |
GS | JPMorgan profit beats estimates as tax bill and expenses fall | By Sweta Singh and Richa Naidu Reuters JPMorgan Chase Co N JPM kicking off the second quarter earnings season for U S banks reported a stronger than expected rise in profit on Tuesday helped by a drop in legal and restructuring expenses and a smaller tax bill Like other banks the biggest U S lender by assets has been under pressure to cut costs because low interest rates have weighed on revenue for far longer than expected At the same time regulators have demanded that banks hold more capital and hire additional staff to control risks and comply with new regulations JPMorgan s non interest expenses fell 6 percent to 14 50 billion in the quarter helped by efforts to streamline its business as well as lower legal and mortgage banking expenses Legal expenses fell 57 percent to 291 million The bank paid an effective tax rate of 25 percent down from 30 percent in the same quarter last year as its tax bill dropped 13 percent to 2 81 billion That helped net income attributable to common shareholders rise to 5 78 billion or 1 54 per share from 5 57 billion or 1 46 per share a year earlier Analysts on average had expected earnings of 1 44 per share according to Thomson Reuters I B E S But net revenue fell 3 2 percent to 24 53 billion largely due to a fall in revenue from mortgage banking and fixed income trading Their beat was mainly driven by a lower than expected tax rate and if you held their tax rate constant the quarter is not as good as it looks FBR analyst Paul Miller said JPMorgan s shares were up 1 1 percent at 68 85 in afternoon trading BOND MARKET DRAGS Revenue from the bank s fixed income business fell 21 percent to 2 93 billion Adjusted for the sale of a physical commodities business and other changes revenue from fixed income trading would have fallen 10 percent Many banks are expected to report underwhelming bond trading results due to a downturn in bond trading markets in June Investor worries spanned the globe last quarter ranging from the Greek debt crisis to concerns that the U S Federal Reserve would not be able to raise interest rates this year The quarter was dominated by EMEA with a bond selloff and economic and political uncertainty including Greece Chief Financial Officer Marianne Lake said on a call with analysts This uncertainty slowed the momentum we saw in the first quarter and kept clients on the sidelines in currencies and emerging markets JPMorgan said its return on tangible common equity a key measure of profit performance was unchanged from a year earlier at 14 percent The company s longer term target is 15 percent The bank s net interest margin an important ingredient of profitability that is being closely watched in this quarter s bank reports fell to 2 09 percent from 2 19 percent Net interest margin represents the difference between a bank s cost of funds and the yields received from loans and securities Total assets stood at 2 45 trillion at the end of June compared with 2 58 trillion at the end of March JPMorgan the second largest U S mortgage lender after Wells Fargo Co N WFC according to Inside Mortgage Finance said mortgage banking income fell 20 percent to 584 million The bank made 29 3 billion of home loans an increase of 74 percent but income was hit by intense competition Wells Fargo which also reported on Tuesday said its mortgage banking revenue fell 1 percent to 1 71 billion
The bank s overall profit also fell for the second quarter in a row | 7/14/2015 |
GS | Goldman settles SEC charges over 2013 trading incident | By Jonathan Stempel Reuters Goldman Sachs Group Inc N GS will pay 7 million to resolve U S Securities and Exchange Commission charges stemming from a programming error that caused the stock options market to be flooded with erroneous orders roiling traders and prices Tuesday s settlement in which Goldman did not admit wrongdoing arose from an Aug 20 2013 incident that was among a series of high profile mishaps including the 2010 flash crash linked to computers The SEC said Goldman mistakenly sent about 16 000 mispriced options orders to various exchanges It said this caused about 1 5 million options contracts representing 150 million shares to be executed within minutes after markets opened though Goldman tried to cancel the orders The SEC said the problem was compounded when an employee in Goldman s Mission Control unit which monitored the bank s trading systems manually lifted circuit breakers designed to block errant orders believing he had authority and because no one objected Goldman was charged with violating the SEC s market access rule which requires brokerages that provide customers with direct market access to have reasonable risk and supervisory controls designed to prevent disruptions Firms that have market access need to have proper controls in place to prevent technological errors from impacting trading SEC enforcement chief Andrew Ceresney said Goldman s control environment was deficient in several ways significantly disrupted the markets and failed to meet the standard required of broker dealers In a statement Goldman said it was pleased to settle and has strengthened its controls and procedures The market access rule was adopted after the May 6 2010 flash crash in which computer activity caused the Dow Jones Industrial Average to briefly plunge more than 1 000 points wiping out nearly 1 trillion of market value A London based high frequency trader Navinder Singh Sarao was in April criminally charged over his alleged role in that case The SEC said the Goldman orders in question were placed for options on stocks and exchange traded funds with ticker symbols beginning with the letters I through K It said Goldman lost 38 million from the incident and could have lost 500 million had many trades not later been canceled or received price adjustments under options exchanges rules governing clearly erroneous trades
Last November Wedbush Securities agreed to pay 2 44 million and admit wrongdoing to settle SEC charges it violated the market access rule by improperly allowing thousands of essentially anonymous overseas traders to access U S markets | 6/30/2015 |
GS | Interactive Data Corp taps banks for sale or IPO sources | By Liana B Baker and Greg Roumeliotis Reuters Interactive Data Corp one of the world s largest financial data providers has hired banks for a potential sale or an initial public offering that could value it at more than 5 billion including debt people familiar with the matter said on Tuesday IDC s owners private equity firms Silver Lake Group LLC and Warburg Pincus LLC have asked Credit Suisse Group AG VX CSGN and Goldman Sachs Group Inc N GS to run an auction for the company the people said Silver Lake and Warburg Pincus are also working with banks that include Morgan Stanley N MS and Barclays Plc L BARC on an IPO that would take place if the auction attracted offers that did not meet expectations the people added The sources asked not to be identified because the matter is not public IDC did not immediately respond to a request for comment Representatives of the banks and the private equity firms either declined to comment or did not respond to a request for comment IDC a competitor of Bloomberg LP and Thomson Reuters Corp TO TRI provides financial data to clients who subscribe to its fixed income evaluation services real time market data trading infrastructure and analytics IDC s customers include 48 of the top 50 U S banks 49 of the top 50 global asset managers and all of the top 50 U S mutual funds according to its annual report Bedford Massachusetts based IDC was taken private in 2010 by Silver Lake and Warburg Pincus for 3 4 billion IDC had adjusted earnings before interest taxes depreciation and amortization in 2014 of 362 4 million up from 351 6 million a year earlier | 6/30/2015 |
GS | China s Xiaomi names DST partner Chew as chief financial officer | By Gerry Shih
BEIJING Reuters Beijing based smartphone maker Xiaomi Inc said on Wednesday it has hired private equity investor Shou Zi Chew as chief financial officer further bolstering its executive ranks in a period of rapid international expansion
Chew the Hong Kong based partner of DST Investment Management Ltd first helped the prominent late stage technology fund invest in Xiaomi in 2011
Chew s appointment comes at a critical juncture as Xiaomi one of the world s most richly valued private tech companies at 45 billion looks to expand its footprint in the global marketplace with recent high profile debuts in India and Brazil
The four year old handset maker which has swept through the Chinese market with its combination of affordability and chic design is looking to replicate its success in other large developing markets to justify the 45 billion valuation it received in December from investors including DST Hopu Investment Management and Singapore sovereign wealth fund GIC
Xiaomi last month named San Diego chip giant Qualcomm NASDAQ QCOM Inc s China head Wang Xiang as senior vice president to handle the company s burgeoning overseas partnerships
Chew one of several bankers who left Goldman Sachs NYSE GS London office in the late 2000s to join Russian billionaire Yuri Milner s DST has been involved in the fund s investment in e commerce firms Alibaba NYSE BABA Group Holding Ltd and JD com Inc as well as Didi Dache China s leading ride hailing app
Although DST s investment in Xiaomi originated from Milner s longstanding relationship with Xiaomi co founder and chief executive Lei Jun Chew a Singaporean national known for his analytical skills has been a key behind the scenes booster for Xiaomi during recent capital raising deals
In a statement Xiaomi s Lei described Chew as a successful investor with unique insights and financial skills who recognized Xiaomi s value early on | 7/1/2015 |
GS | Yelp temporarily decides not to pursue a sale Bloomberg | Reuters Yelp Inc N YELP operator of consumer review website yelp com had temporarily decided not to pursue a sale Bloomberg reported citing people with knowledge of the matter The company has had several interested suitors after which it hired Goldman Sachs Group Inc N GS to help find a buyer Bloomberg said on Thursday The company s shares fell as much as 15 percent to a two year low of 36 10 in afternoon trading Yelp had a market capitalization of about 3 2 billion as of Wednesday s close Yelp may pursue a sale again if Chief Executive Officer Jeremy Stoppelman changes his mind Bloomberg said The report did not name the suitors or say why Stoppelman had taken the decision to halt the sale process The company could not immediately be reached for comment Yelp was working with investment bankers to explore a sale that could fetch more than 3 5 billion the Wall Street Journal reported last month
The company s subscriber growth has been slowing in an increasingly competitive U S market and it has been trying to expand in other markets and diversify into restaurant bookings event management and payments | 7/2/2015 |
GS | Philip Morris to cut stake in Indonesian unit could raise over 1 billion | JAKARTA SINGAPORE Reuters U S cigarette giant Philip Morris International Inc N PM plans to sell a stake worth at least 1 billion in Indonesian unit PT HM Sampoerna Tbk JK HMSP to comply with free float rules two people familiar with the matter said on Monday Philip Morris currently owns 98 18 percent of Sampoerna Indonesia s biggest cigarette maker by market value and which is worth 23 billion Philip Morris has short listed Goldman Sachs NYSE GS Credit Suisse SIX CSGN AG JPMorgan NYSE JPM Citigroup NYSE C and Mandiri Sekuritas to sell down its holding by at least 5 68 percent to make the publicly available shares in Sampoerna equivalent to at least 7 5 percent of its total share base one of the sources said Both people declined to be named due to the confidentiality of the matter The stock exchange requires all listed Indonesian firms to have a free float of at least 7 5 percent by Jan 30 2016 It was not clear when Philip Morris planned to sell its stake the sources added Sampoerna shares rose 0 8 percent on Monday outperforming the broader Jakarta stock exchange JKSE which was down 1 2 percent The company has previously said it was exploring ways to comply with the new free float requirement Citigroup declined comment while Goldman Credit Suisse and JPMorgan did not give an immediate comment Mandiri Sekuritas was not immediately available to comment
Sampoerna sells some of the most popular cigarette brands in Indonesia a country where smoking remains widespread It said it had a market share of nearly 35 percent last year | 7/6/2015 |
GS | Goldman Sachs eyes tilt to EU if UK backs Brexit paper | FRANKFURT Reuters Goldman Sachs N GS would shift resources toward locations in continental Europe and away from Britain should the country s voters choose to end the country s membership of the EU a senior executive told the Frankfurter Allgemeine Sonntagszeitung We would not completely leave Britain but we would certainly strengthen our presence in other locations within the EU Richard Gnodde co chief executive officer of Goldman Sachs International and co head of the Investment Banking Division was quoted as saying in an interview British Prime Minister David Cameron who won an unexpectedly decisive victory in a general election last month has promised to renegotiate Britain s membership of the EU and hold a referendum on membership by the end of 2017 Some investors chief executives and allies have warned that a Brexit or vote not to stay in the bloc would be politically and economically costly for Britain whose economy is the world s fifth largest Gnodde said it was in everyone s interest and particularly the UK s that the country stay in the Union Britain must remain part of a larger economic bloc Anything else would damage the broader economy as well as the financial sector he said in an excerpt of the interview released on Saturday ahead of publication on Sunday However should the vote unexpectedly turn against the EU Frankfurt home of the European Central Bank could benefit
I m not revealing any secret when I say that in the unlikely event of a Brexit we would certainly put more resources into Frankfurt Gnodde said | 6/27/2015 |
GS | Wall St tumbles as investors flee equities on Greek debt crisis | By Sinead Carew Reuters U S stocks fell sharply in heavy trading on Monday and the S P 500 and the Dow had their worst day since October after a collapse in Greek bailout talks intensified fears that the country could be the first to exit the euro zone The European Central Bank froze funding to Greek banks forcing Athens to shut banks for a week to keep them from collapsing And Greece appeared to confirm it was heading for a default after a government official said the country would not pay a 1 6 billon euro loan installment due to the International Monetary Fund on Tuesday U S investors also worried about Puerto Rico s debt problems and a bear market in China the day before quarter end and ahead of Thursday s U S jobs report and the long weekend for U S Independence Day None of that bodes well for people stepping in and buying the dips as has been the mentality most of the year Michael James managing director of equity trading at Wedbush Securities in Los Angeles who said U S shares could fall again Tuesday Could that reverse itself tomorrow It s going to take a lot of good news from Greece he said noting that portfolio managers would not want to show risky equities on their books at the end of the second quarter The S P and Dow Jones Industrial Average DJI had their worst days since Oct 9 and both turned slightly negative for the year to date The last annual decline for both indexes was 2008 The Nasdaq had its biggest one day percentage decline on Monday since March 25 Volatility rose sharply and all 10 S P sectors retreated while the Global X FTSE Greece exchange traded fund K GREK which tracks the Athens stock market fell 20 percent In Europe the blue chip Euro STOXX 50 index STOXX50E had suffered its biggest one day fall since 2011 There is no mechanism to be ejected from the European Union This has never happened before said Brian Battle director of trading at Performance Trust Capital Partners in Chicago When you don t know what could happen you sell You get on the sidelines While the Greek economy is small and most U S corporations have limited direct exposure investors are concerned about the fallout across Europe if Greece exits the euro zone A snap Reuters poll of economists and traders found a median 45 percent probability that Greece would leave the euro zone Chinese stocks had closed sharply lower after a volatile day of trading despite surprise monetary easing by the central bank On top of this U S territory Puerto Rico faces a restructuring of its 73 billion debt burden The Dow Jones industrial average DJI fell 350 33 points or 1 95 percent to 17 596 35 the S P 500 SPX lost 43 85 points or 2 09 percent to 2 057 64 and the Nasdaq Composite IXIC dropped 122 04 points or 2 4 percent to 4 958 47 The CBOE Volatility index VIX a measure of the premium traders are willing to pay for protection against a drop in the S P 500 jumped 34 5 percent to 18 86 its highest level in almost five months Financials SPSY was the worst S P sector with a 2 44 percent decline U S banks have an exposure to 12 7 billion of Greek debt JPMorgan Chase N JPM down 2 5 percent was the biggest drag on the S P financial sector followed by Wells Fargo N WFC down 2 4 percent Goldman Sachs N GS weighed the most on the Dow with a 2 6 percent decline Assured Guaranty N AGO fell 13 3 percent and MBIA Inc N MBI fell more than 23 4 percent after BTIG downgraded the insurers on concerns over Puerto Rico s debts Declining issues outnumbered advancing ones on the NYSE by 2 874 to 282 for a 10 19 to 1 ratio on the downside on the Nasdaq 2 469 issues fell and 367 advanced for a 6 73 to 1 ratio favoring decliners The benchmark S P 500 index was posting 2 new 52 week highs and 25 new lows the Nasdaq Composite was recording 48 new highs and 126 new lows
About 7 3 billion shares changed hands on U S exchanges compared with the 6 3 billion average for the month to date according to data from BATS Global Markets | 6/29/2015 |
GS | Hong Kong issues red alert against South Korea travel due to MERS | By Ju min Park and James Pomfret SEOUL HONG KONG Reuters Hong Kong issued a red alert advisory on Tuesday against non essential travel to South Korea where eight new cases of Middle East Respiratory Syndrome MERS were reported bringing the total to 95 with seven fatalities The number of new South Korean cases was a sharp drop from 23 on Monday but the number of schools closed grew to 2 208 including 20 universities At this stage to issue a clear message is something the Hong Kong government thinks is necessary Hong Kong s number two official Carrie Lam told reporters just before the travel warning was posted A red alert the second highest outbound travel advisory on a three point scale is defined as a significant threat according to the Hong Kong government and means people should adjust travel plans and avoid non essential travel On Monday Hong Kong upgraded its response to the outbreak in South Korea to serious Nam Kyung pil governor of Gyeonggi province which surrounds the South Korean capital Seoul said 32 of its large general hospitals have joined the campaign to fight the outbreak by offering to take in anyone who is showing MERS symptoms We are fighting two wars The war against the disease and the war against fear Nam said The head of the Korean Hospital Association who accompanied the country s deputy prime minister on a visit on Tuesday to a Daejeon hospital where MERS patients were being treated criticized the government for poor communication The hospitals that did not receive information on patients have been wounded deeply Park Sang geun said during an open meeting It was only on Sunday that South Korean officials released the names of all the health facilities where MERS victims had been treated or visited which now number 35 TOURISTS CANCEL TRIPS The World Health Organization WHO began work on a joint mission with South Korean doctors and officials to review the country s response and analyze the virus The WHO has not recommended any curb on travel but thousands of tourists have canceled plans to visit South Korea The Travel Industry Council of Hong Kong has canceled all tours to South Korea that were scheduled to set off between now and June 30 excluding cruises with 10 000 to 12 000 travelers to be affected the city s public broadcaster reported South Korea s response has been aggressive and is getting better a WHO specialist Peter Ben Embarek said in Geneva adding it should still not be surprising if there were a few cases of infection coming outside of hospitals South Korean President Park Geun hye has called for an all out national effort to eradicate the outbreak which has been spreading since a 68 year old businessman brought it home from a Middle East trip last month All subsequent infections in South Korea have occurred in healthcare facilities and been traced to the original patient South Korea has the second highest number of infections after Saudi Arabia according to data from the European Center for Disease Prevention and Control The seventh reported MERS death in South Korea was a 68 year old woman who had an existing heart ailment and had been in the emergency room of a Seoul hospital where a number of previous confirmed cases had been traced South Korea s central bank is now expected to cut interest rates on Thursday in a preemptive move to dampen the economic impact of the MERS outbreak according to a Reuters poll of analysts released on Tuesday On Tuesday Goldman Sachs NYSE GS downgraded the 2015 GDP growth forecast for South Korea to 2 8 percent from a previous estimate of 3 3 percent It said 0 2 percentage points of this reduction could be ascribed to the MERS outbreak The Chinese territory of Macau required masks for people entering local healthcare facilities as a precaution against MERS and advised residents to avoid travel to South Korea unless absolutely necessary Singapore said it would start screening body temperatures of passengers arriving from South Korea from late Tuesday Taiwanese health authorities issued a travel alert to cover all of South Korea late on Tuesday widening its caution on travel to the country Earlier Taiwan had issued its travel alert only for Seoul while putting the rest of the country on a less serious watch level Some 2 892 people who may have had contact with MERS patients have been put under quarantine some in hospitals but most at home Authorities are using mobile phones to track people who violate quarantine
South Korea s new cases bring the total of MERS cases globally to 1 244 based on World Health Organization WHO data with at least 446 related deaths | 6/9/2015 |
GS | Tokio Marine to buy HCC Insurance for 7 5 billion | By Taiga Uranaka TOKYO Reuters Tokio Marine Holdings Inc T 8766 said on Wednesday it had agreed to buy U S specialty insurer HCC Insurance Holdings Inc N HCC for 7 5 billion in what would be the biggest M A deal this year by a Japanese company Tokio Marine Japan s largest insurer by market value expects to complete its biggest ever acquisition between October and December it said in a statement With insurers among the most acquisitive Japanese companies Tokio Marine alone has spent more than 8 billion on international deals since 2008 including U S insurers Philadelphia Consolidated for 4 7 billion in 2008 and Delphi Financial for 2 7 billion in 2012 Driven by a need to diversify geographical exposure to natural disasters Tokio Marine President Tsuyoshi Nagano told Reuters earlier this month that his firm was still scouring markets around the world for acquisitions He added however that rising prices had made it more cautious in the Asia Pacific region Tokio Marine on Wednesday said buying HCC will boost the proportion of overseas profit to 46 percent of its total from 38 percent projected for the current financial year Japan s outbound M As hit an annual record of 83 2 billion in 2012 but deal volumes have since dropped in part due to a decline in the yen Thomson Reuters data showed Before Tokio Marine s announcement Japan s outbound M As stood at 38 5 billion so far this year up 15 percent on the same period last year The biggest deal had been Japan Post Holdings Co Ltd s IPO JAPP T A 6 5 billion 5 billion acquisition of Australian freight and logistics firm Toll Holdings Ltd The Bank of Japan s easy money stimulus policies have spurred record profit at Japanese companies but sluggish business demand at home has prompted them to look abroad for growth especially to the United States even though the weaker yen makes such acquisitions more expensive HIGH PRICE FOR GOOD DEAL Tokio Marine said it would pay 78 a share or 1 9 times HCC s book value as of March 31 representing a 35 8 percent premium to the U S company s average share price over the past month The price is high but U S financial companies share prices are already traded at a premium and on top of which we have to pay premium for acquiring control of the company Nagano told a news conference We have to pay money otherwise we cannot find a good partner HCC based in Houston Texas has 2500 employees and had 458 million in net profit on revenue of 2 7 billion in 2014 Nagano said Tokio Marine will not issue new shares to fund the acquisition and that it would use cash on hand and secure debt instead The insurer said it would be able to greatly diversify its business portfolio through HCC which runs a bevy of specialty lines of insurance including accident and health and directors and officers liability
Credit Suisse SIX CSGN and Evercore acted as financial advisers to Tokio Marine while Goldman Sachs NYSE GS advised HCC the U S company said in a separate statement | 6/10/2015 |
GS | European stocks steady to lower in cautious trade Dax dips 0 06 | Investing com European stocks were steady to lower on Wednesday as investors remained cautious amid ongoing concerns over a potential Greek default and markets awaited the release final euro zone inflation data and the Federal Reserve s monthly policy statement later in the day
During European morning trade the EURO STOXX 50 fell 0 22 France s CAC 40 slipped 0 25 while Germany s DAX 30 dipped 0 06
European equities gained ground on Wednesday even as concerns over the approaching deadline for Greece s repayments to the International Monetary Fund persisted
Europe wants Greece to make spending cuts worth 2 billion in order to secure a deal that will unlock additional funds before its bailout expires at the end of June and it must repay 1 6 billion to the IMF
A default by Greece could lead to the country s exit from the euro area
Financial stocks were broadly higher as French lender Societe Generale PARIS SOGN edged up 0 10 while Germany s Commerzbank XETRA CBKG and Deutsche Bank XETRA DBKGn added 0 15 and 0 28
Among peripheral lenders Italy s Unicredit MILAN CRDI and Intesa Sanpaolo MILAN ISP rose 0 25 and 0 26 respectively while Spanish banks BBVA MADRID BBVA and Banco Santander MADRID SAN edged up 0 10 and 0 13
Elsewhere Telecom Italia MILAN TLIT SpA rsurged 3 62 amid reports France s Vivendi PARIS VIV SA may increase its stake in the Italian company to as much as 15
Remy Cointreau PARIS RCOP added to gains as shares soared 7 09 after the French distiller reported full year operating profit that exceeded analysts estimates
In London FTSE 100 eased 0 01 as investors eyed upcoming U K employment data as well as the Bank of England s monetary policy statement
Financial stocks were mostly lower as HSBC Holdings LONDON HSBA slipped 0 15 and Barclays LONDON BARC fell 0 27 while the Royal Bank of Scotland LONDON RBS shed 0 23 Lloyds Banking LONDON LLOY overperformed with shares advancing 0 48
Mining stocks were also broadly lower on the commodity heavy index Shares in Bhp Billiton LONDON BLT slid 0 27 and Glencore Xstrata LONDON GLEN dropped 0 58 while rivals Rio Tinti and Fresnillo LONDON FRES retreated 0 78 and 0 86 respectively
Meanwhile Persimmon LONDON PSN led gains on the index with shares rallying 1 51 after Goldman Sachs NYSE GS reiterated its neutral rating on the stock
In the U S equity markets pointed to a higher open The Dow Jones Industrial Average futures pointed to a 0 24 increase S P 500 futures signaled a 0 21 gain while the Nasdaq 100 futures indicated a 0 16 rise | 6/17/2015 |
GS | U S hedge fund steps up campaign against 8 billion Samsung asset shake up | By Se Young Lee SEOUL Reuters U S hedge fund Elliott ramped up a campaign to block a proposed 8 billion merger of two Samsung KS 005930 Group firms on Thursday laying out its case online a day before a court hearing on a deal seen key to a leadership succession in the family run conglomerate Escalating what is already a rare case of shareholder activism in South Korea the fund put online a 27 page paper detailing why shareholders in construction firm Samsung C T Corp should reject the all stock takeover offer from sister company Cheil Industries Inc Elliott has already said it believes Cheil s offer is too low and its opposition could galvanize other investors On Friday a South Korean court will hear the fund s injunctions which seek to block a July 17 C T shareholder vote on the merger as well as C T s attempt to sway the vote in the deal s favor by selling shares to ally KCC Corp They are trying to show they have a strategy that could benefit not only Samsung C T shareholders but also investors in other Samsung companies said Kim Sang jo economics professor at Hansung University referring to Elliott s online document The merger is critical for Samsung Group s restructuring which is aimed at cementing a generational leadership succession at South Korea s biggest and most influential chaebol The deal would combine various stakes in the group held into a firm controlled by the children of founder family patriarch Lee Kun hee who remains hospitalized since a May 2014 heart attack Some institutional and local retail investors also say the deal undervalues C T and plan to vote against it in the July meeting Samsung Group needs the support of least two thirds of the votes cast at the C T shareholder meeting for the deal to proceed In an apparent concession to Elliott Samsung C T said on Thursday its shareholders would vote on the fund s proposal to allow for non cash dividends at the July 17 meeting In a statement Elliott said it supported the conglomerate s restructuring needs but said the group should properly recognize Samsung C T s value C T said on Thursday it was committed to moving ahead with the merger to maximize shareholder value The company has hired Goldman Sachs NYSE GS and Credit Suisse SIX CSGN as advisors on the deal and its top executives have met investors to win support
Cheil said in a separate filing that South Korea s antitrust regulator has approved the firm s takeover of Samsung C T clearing a regulatory hurdle | 6/18/2015 |
GS | Fed may hike just once in 2015 as Yellen strikes less certain tone | By Ann Saphir and Jonathan Spicer SAN FRANCISCO WASHINGTON Reuters The question of how quickly the Federal Reserve should raise rates is dividing normally like minded policymakers at the U S central bank pitting those who favor two hikes this year against a growing number of those who want to stop at just one That shift and the very real possibility that Fed Chair Janet Yellen may be one of the five who now prefer a single rate hike in 2015 rather than among an equal number who prefer two is bolstering the view that the Fed may not deliver until late in the year The Fed has kept interest rates near zero since December 2008 and on Wednesday unanimously voted to keep them there Behind that unanimity rages a debate over how long that state of affairs should last While we cannot be certain our best guess is that Fed Chair Yellen now anticipates only one increase this year an important shift in the committee s center of gravity Goldman Sachs NYSE GS economists Jan Hatzius and Zach Pandl wrote in a note advising clients they now expect the Fed to wait until December to raise rates from September previously If Yellen is in the one hike camp she is the decider and the other governors will likely vote in deference to the chair said Kevin Logan chief U S economist at HSBC Securities which also expects the Fed to hike rates only once this year in December New forecasts from the Fed s 17 policymakers released after the central bank s policy setting meeting this week suggest four officials who in March recommended two rate hikes this year now want only one Although the Fed does not identify whose forecast is whose an examination of recent comments by Fed officials strongly suggests at least two of those who prefer two rate hikes are on the Fed s powerful five member Board while at least two shifted to a one rate hike view That s notable because the Fed governors typically vote as a block standing with the chair An unexpectedly weak first quarter may have caused a few officials to blink putting data in coming months particularly on job creation and inflation newly front and center Those eyeing a hike this year will be looking for a continuation of blowout data that saw the U S economy create 280 000 jobs in May Logan and other economists said that dovish speeches earlier this month by governors Lael Brainard and Daniel Tarullo suggest one or both made the move to supporting just one rate hike in 2015 The influential head of the New York Fed William Dudley also sounded cautious tones in a speech this month so he could have jumped ship too Some economists believe the fourth official to newly join the one hike camp was Atlanta Fed President Dennis Lockhart who has said he would like to see more evidence of economic momentum before supporting a rate hike But to other economists the argument that it is Yellen is more compelling In a news conference following the Fed s meeting Yellen described a labor market that in her view is still cyclically weak and said that while we could certainly see data that would justify a rate increase this year there are no guarantees Contrast that with her comment in May that if the economy continues to improve as I expect I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy The forecasts released on Wednesday showed a third set of five policymakers preferring three rate hikes this year but these are likely all presidents of regional Fed banks who are not typically part of the decision making core at the central bank economists parsing the so called dot chart say Two other policymakers both Fed bank presidents prefer no rate hikes this year
The forecasts continue to suggest that the center of the committee is still pulling for two hikes this year But uncertainty is very high said Diane Swonk chief economist at Mesirow Financial in Chicago The threshold on liftoff is low but the decision to raise rates a second time is very high | 6/18/2015 |
GS | Oil rises on Greek deal hopes | By Ron Bousso
LONDON Reuters Oil prices rose toward 64 a barrel on Monday joining stronger financial markets on speculation that European Union leaders could avert a Greek bankruptcy
Global stocks the euro and peripheral euro zone bonds all rose on Monday lifted by a wave of optimism that Greece and its international creditors will strike a last minute deal that will see Athens avert default
Brent crude for August delivery was up 53 cents at 63 55 a barrel by 7 30 a m EDT after falling nearly 2 per cent on Friday over worries about a potential Greek debt default
Front month U S crude was 40 cents higher at 60 01 a barrel
Prices rebounded from early lows after the EU s positive response to Greek Prime Minister Alexis Tsipras s latest proposals to try to resolve the country s debt crisis ahead of a meeting of European leaders on Monday evening in Brussels
Hopes that agreement could be reached in the debt dispute with Greece at today s EU summit are lending buoyancy to oil prices as the new week begins Commerzbank XETRA CBKG analysts said in a note to clients
But a crude oil overhang particularly in the Atlantic basin is limiting gains
Around 10 million barrels of unsold crude mainly from Nigeria are held in offshore storage despite strong summer demand Morgan Stanley NYSE MS said in a research note on Monday potentially creating a negative outlook for oil in the second half of the year
If there are this many challenged cargoes in this strong demand environment we worry about the outlook for physical oil this fall autumn when crude runs and gasoline demand fall seasonally the note said
High domestic U S oil production which has held up at around 9 6 million barrels a day the highest level since the early 1970s continued to weigh on oil prices
U S oil producers added a rig each in the key Permian and Bakken shale basins last week fuelling worries over high domestic oil output even as the total number of active U S rigs fell last week data on Friday showed
Although U S oil production was expected to decline slightly between the second and third quarters of 2015 output
would continue to grow in 2016 by 150 000 barrels per day at the current rig count Goldman Sachs NYSE GS said in a note | 6/22/2015 |
GS | Zach Pandl to return to Goldman as senior economist source | NEW YORK Reuters Goldman Sachs N GS has hired Zach Pandl as senior economist marking a return to the Wall Street investment bank after spending less than three years at Columbia Threadneedle a source familiar with the matter said on Tuesday He will be based in New York and report to chief economist Jan Hatzius said the source who declined to be identified because he was not authorized to speak about the matter Pandl was a senior economist at New York based Goldman from March 2011 to August 2012 Prior to that he was an economist at Nomura Securities International and Lehman Brothers At Columbia Threadneedle in Minneapolis he had been a portfolio manager and head of sovereign fixed income research
A Goldman spokeswoman declined to comment | 6/2/2015 |
GS | Software maker Evolent Health s IPO priced at 17 share underwriter | Reuters Evolent Health Inc s initial public offering has been priced at 17 per share an underwriter told Reuters late on Thursday valuing the healthcare software maker at about 950 million The company s IPO raised about 195 5 million at that price which was above its expected range of 14 16 The Arlington Virginia based company which is selling all the class A shares in the offering raised the offering size to 11 5 million shares from 10 million Evolent which ranks 12th on Forbes list of America s Most Promising Companies makes software for hospitals that are transitioning to new fee systems in which doctors are paid for keeping patients healthy rather than for treating them once they get sick Evolent was founded in 2011 by its top two investors the University of Pittsburgh Medical Center and healthcare research firm Advisory Board Co Shares of Evolent which is 6 percent owned by the growth arm of private equity firm TPG are expected to begin trading on Friday under the symbol EVH on the New York Stock Exchange JPMorgan NYSE JPM Goldman Sachs NYSE GS and Wells Fargo NYSE WFC Securities are among the major underwriters for the IPO | 6/4/2015 |
GS | Financial software maker SunGard files for IPO | Reuters SunGard a financial software maker filed with U S regulators on Thursday for an initial public offering of its common stock Pennsylvania based SunGard is also exploring an outright sale with Fidelity National Information Services Inc among the companies that have shown interest according to a person familiar with the matter who asked not to be identified discussing it publicly Representatives for Fidelity National Information Services were not immediately available for comment outside regular U S business hours SunGard which has more than 15 000 customers mainly provides trading and investment management software to financial firms SunGard was acquired for 11 4 billion in 2005 by Silver Lake Partners LP SILAK UL TPG Capital LP Bain Capital LLC Blackstone NYSE BX Group LP Goldman Sachs NYSE GS Capital Partners LP KKR Co LP and Providence Equity Partners Inc One of the largest leveraged buyouts that preceded the 2008 financial crisis SunGard is one of the longest held investments in private equity history SunGard had hired investment banks for an IPO that could value the company at up to 10 billion including debt Reuters reported last month citing sources The filing included a nominal fundraising target of about 100 million JP Morgan Barclays LONDON BARC and Goldman Sachs are among the underwriters to the IPO the company said SunGard reported a 1 7 percent rise in revenue to 2 8 billion for the year ended Dec 31 The company posted a net loss of 222 million compared with a profit of 62 million a year earlier The filing did not reveal how many shares the company planned to sell or the exchange it plans to list on The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees The final size of the IPO could be different | 6/4/2015 |
GS | Lenovo parent Legend gets HK approval for up to 2 billion IPO sources | BEIJING Reuters Legend Holdings Corp parent of computer maker Lenovo Group Ltd has won approval from Hong Kong s stock exchange for an initial public offering worth about 2 billion people with direct knowledge of the plans said on Friday This would be the largest IPO in the city since property developer Dalian Wanda Commercial Properties Co Ltd raised 4 04 billion in December and comes amid a boom in capital markets activity Companies have raised 41 billion from share sales in Hong Kong so far this year double the amount from the same period in 2014 with the bulk of the issuance coming not from IPOs but from Shanghai listed brokerages tapping investors to fund their lending businesses Legend got the go ahead from the listing committee of the exchange and will start gauging investors interest for the IPO on Monday one of the sources said The company will start taking orders for the deal in a roadshow starting the week after next The sources declined to be named because the exchange s decision is not yet public Legend did not immediately respond to a Reuters request for comment on the IPO approval Legend is the parent of Hong Kong listed Lenovo the world s biggest personal computer maker It also owns Chinese property developer Raycom Real Estate private equity firm Hony Capital and venture capital firm Legend Capital China International Capital Corp and UBS AG were hired as joint sponsors for the IPO with Goldman Sachs NYSE GS and Morgan Stanley NYSE MS helping to underwrite the deal the sources said | 6/5/2015 |
GS | Deutsche shares jump after management purge | By Thomas Atkins FRANKFURT Reuters The appointment of John Cryan as chief executive of Deutsche Bank DE DBKGn sent shares in Germany s largest lender up 8 percent on Monday as investors judged the Briton a more credible contender than his two ousted predecessors to revive its fortunes Cryan faces one of the most difficult jobs in global finance as he aims to move Deutsche Bank beyond the raft of regulatory and legal probes that have bedeviled the bank under its current management and execute a strategic overhaul Cryan takes over from Anshu Jain and Juergen Fitschen Deutsche s co chief executives who announced their resignations on Sunday just over a month after unveiling a cost cutting drive designed to arrest the bank s sub par performance Investor scepticism with the turnaround plan due to a lack of detail and a poor record on meeting targets together with staff disquiet at the prospect of thousands of job cuts heaped pressure on the duo At the bank s annual shareholder meeting two weeks ago 39 percent of the capital represented voted against the management board and some investors called for Jain and Fitschen to go Deutsche Bank has pledged to give more detail on its strategic revamp at the end of next month and some investors were hopeful that Cryan who helped steer Swiss bank UBS VX UBSN through the financial crisis would be able to take more radical action than Jain a former investment banker who wanted Deutsche Bank to be Europe s answer to Goldman Sachs NYSE GS We believe Mr Cryan will be able to review the size and scale of the investment bank with a much harsher lens than Mr Jain said Stuart Graham analyst at Autonomous The execution risk is higher than normal at Deutsche but so too is the investor unhappiness We therefore expect the shares to out perform at least for the next few months on the back of this cathartic management change Europe s banking elite has been roiled by the financial crisis and its aftermath as new regulations and a slew of scandals eat into profits Standard Chartered L STAN and Credit Suisse VX CSGN both have new chief executives taking over this summer but of those trio Cryan faces the most formidable challenge After sticking with an expensive universal banking model during the crisis Deutsche Bank is now playing catch up with rivals in axing unprofitable business lines to boost earnings and shore up its balance sheet Deutsche s Strategy 2020 involves shrinking parts of its investment bank and selling off its Postbank retail unit Jain and Fitschen had originally favored a more radical plan to get rid of Deutsche s entire retail business and become a pure investment bank and wealth manager but they dropped it due to regulatory hurdles and opposition from Berlin supervisor concerns and one trade union The restructuring plan unveiled in April is meant to boost cost savings by an annual 3 5 billion euros by 2020 and drive a return on tangible equity a key measure of profitability of at least 10 percent in the same period But the strategy was the less radical of two options considered by Deutsche s board and investors viewed it as unambitious Previously the bank had targeted a return on equity of 12 percent for 2015
Jain will step down at the end of this month while Fitschen will leave after Deutsche Bank s annual shareholder meeting in May meaning Cryan a former chief financial officer at UBS will be the sole CEO | 6/8/2015 |
GS | With tough words for Wall St O Malley launches White House bid | By Amanda Becker BALTIMORE Maryland Reuters Former Maryland Governor Martin O Malley blasted social injustice and Wall Street excesses as he launched a White House bid on Saturday casting himself as a younger more liberal alternative to Democratic Party frontrunner Hillary Clinton Powerful wealthy special interests here at home have used our government to create in our own country an economy that is leaving a majority of our people behind said O Malley opening his 2016 presidential campaign with a rally at a waterfront park in downtown Baltimore O Malley who has aggressively courted his party s liberal wing began his political career in Baltimore first as a member of city council and then as mayor Decrying big banks as having been behind the financial crisis of 2008 O Malley singled out Goldman Sachs NYSE GS for particular criticism He said Goldman Sachs CEO Lloyd Blankfein recently told his employees that he d be just fine with either Republican Jeb Bush or Hillary Clinton as president after the November 2016 election Well I ve got news for the bullies of Wall Street O Malley said The presidency is not a crown to be passed back and forth by you between two royal families Hillary Clinton is the wife of former President Bill Clinton while Jeb Bush who has not yet formally announced his candidacy but is already considered a leading contender among Republican hopefuls is son and brother of former Presidents George H W Bush and George W Bush Signs at O Malley s rally promised he would provide new leadership but in fact he faces an uphill battle against former secretary of state Clinton who consistently tops opinion polls to be the party s nominee and who enjoys national name recognition Beth Whitmer a 62 year old Baltimore resident who called herself a social liberal said she felt she knows Clinton s stances better than O Malley s I would ve liked it to have been a little fuller she said of the speech O Malley now goes on to campaign in Iowa and New Hampshire the states holding the earliest party nominating contests O Malley 52 joins a short list of candidates for the Democratic nomination Alongside Clinton 67 only Vermont s independent Senator Bernie Sanders has entered the race and he is viewed as having a marginal shot at success So far eight Republicans are officially competing for their party s nomination with more likely candidates waiting in the wings Welcome to the race Gov O Malley Looking forward to discussing strong families and communities H Clinton tweeted soon after the rally CAMPAIGN LAUNCH IN TROUBLED CITY O Malley launched his campaign at an uneasy time for Baltimore which was rocked by riots last month over the death of Freddie Gray a young black man from injuries sustained while in police custody Many residents have said the former mayor s zero tolerance crime policies led to increased police brutality O Malley cast the violence in economic terms saying rioting was not only about race not only about policing in America Conditions of extreme and growing poverty create conditions for extreme violence he said Progressive Change Campaign Committee a group trying to push Democratic candidates to the left praised his speech saying he was so far the only candidate to be outspoken about accountability for Wall Street bankers who committed crimes and crashed our economy O Malley honed his liberal credentials over two four year terms as governor of a state with a long history of voting for Democratic presidential nominees He signed legislation that raised Maryland s minimum wage repealed the death penalty for future offenders legalized same sex marriage and granted in state tuition rates for undocumented immigrants attending Maryland s universities He was born in Washington D C and raised there and in Maryland He attended the Catholic University of America in Washington and received his law degree from the University of Maryland He lives in Maryland with his wife a judge and their four children
This story corrects Hillary Clinton s age to 67 in paragraph 11 | 5/30/2015 |
GS | Oil falls as OPEC production stays high dollar rises | By Christopher Johnson LONDON Reuters Crude oil prices dropped on Monday as the dollar rose and on expectations that OPEC production would remain high stoking worries of oversupply despite declining U S rig operations The Organization of the Petroleum Exporting Countries OPEC pumped at a two and a half year high of 31 22 million barrels of oil per day bpd in May a Reuters monthly survey showed OPEC O The 12 member cartel meets in Vienna on Friday but is expected to maintain its current production policy keeping the world oil market amply supplied for the foreseeable future Front month Brent crude fell 1 00 a barrel to a low of 64 56 before recovering to around 65 30 by 1345 GMT U S light crude was down 10 cents at 60 20 a barrel OPEC continues to produce well above target and also well above demand for its oil said Carsten Fritsch senior oil analyst at Commerzbank XETRA CBKG in Frankfurt The dollar DXY gained 0 3 percent against a basket of currencies on Monday making oil more expensive to holders of other currencies The euro fell after Greece missed a self imposed Sunday deadline for reaching an agreement with its lenders to unlock aid keeping alive fears of a debt default and potential Greek exit from the euro zone FRX Crude oil jumped almost 5 percent on Friday its biggest rally in a month as a larger than anticipated fall in U S oil rigs in operation sent markets upwards But analysts said U S oil production remained on track for year on year growth despite the recent falls in rig activity The drop in the U S oil rig count resumed last week with 13 rigs idled Despite this decline we believe that should WTI prices remain near 60 U S producers will ramp up activity given improved returns with costs down by at least 20 percent and producers increasingly comfortable at the current costs revenue funding mix Goldman Sachs NYSE GS said in a note to clients The bank said it expected U S oil production growth of 155 000 bpd in the fourth quarter of this year compared with the same period in 2014 Morgan Stanley NYSE MS said oil prices could fall in the second half of 2015 although a return to this year s low was unlikely
We have growing concerns about crude fundamentals and prices in 2015 and 2016 after the quick recovery since January The market appears complacent about rising OPEC production and upcoming Iran discussions both of which could more than offset U S declines Morgan Stanley said in a note | 6/1/2015 |
GS | Cautious consumers cast doubt on U S growth outlook | By Lucia Mutikani WASHINGTON Reuters U S consumer spending growth unexpectedly stalled in April as households cut back on purchases of automobiles and continued to boost savings suggesting the economy was struggling to gain momentum early in the second quarter But after a slump in economic growth in the first quarter there are signs of a rebound with other reports on Monday showing manufacturing activity picked up in May for the first time in seven months and construction spending surged in April to a near 6 1 2 year high Still sluggish consumer spending growth this year and muted inflation pressures suggest the Federal Reserve may not raise interest rates until later this year The Commerce Department said April s unchanged reading in consumer spending growth compared with analysts forecasts for a 0 2 percent rise and followed a 0 5 percent increase in March Consumer spending which accounts for more than two thirds of U S economic activity was also curbed by weak demand for utilities such as electricity and natural gas as temperatures warmed up The core personal consumption price index PCE the Federal Reserve s preferred inflation gauge edged up 0 1 percent in the 12 months to April the smallest gain since October 2009 after rising 0 3 percent in March Excluding food and energy the core PCE price index increased 1 2 percent from a year ago after being up 1 3 percent in March MANUFACTURING AND CONSTRUCTION GROWING In a separate report the Institute for Supply Management said its national factory activity index rose to 52 8 last month from 51 5 in April The index had been declining since November as manufacturing battled a strong U S dollar and deep spending cuts in the energy sector in response to a plunge in crude oil prices in the past year A reading above 50 indicates expansion in the manufacturing sector which accounts for about 12 percent of the U S economy The index which was also restrained by labor disruptions at the West Coast ports was boosted by a surge in new orders and factory employment The construction and manufacturing data cast a bit of sunshine on an otherwise cloudy day for economic data We need to see more of a rebound in growth before the Fed pulls the trigger on interest rates said Diane Swonk chief economist at Mesirow Financial in Chicago However another survey from financial data firm Markit showed factory activity improved toward the end of May After transitory weakness in the first quarter the manufacturing outlook has improved But the dollar and lower oil prices continue to be a drag on some select industries said John Silvia chief economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina The U S dollar firmed against major currencies on Monday while yields on U S government bonds rose U S stocks ended modestly higher In other data published Monday the Commerce Department said construction spending jumped 2 2 percent to an annual rate of 1 0 trillion the highest level since November 2008 The percent increase was the largest since May 2012 and reflected broad gains in both private and public outlays GROWTH FORECASTS RAISED Gross domestic product contracted at a 0 7 percent annual rate in the first three months of the year But given that a confluence of temporary factors conspired to depress the output figure in the first quarter including a problem with the model the government uses to smooth seasonal fluctuations the decline in GDP likely overstates the economy s weakness and more recent data has lead some analysts to raise their economic growth forecasts Forecasting firm Macroeconomic Advisers on Monday raised its second quarter GDP growth estimate by four tenths of a percentage point to a 2 0 percent rate on the construction report Morgan Stanley NYSE MS lifted its estimate to a 2 1 percent rate from a 1 6 percent pace while Goldman Sachs NYSE GS bumped up its estimate by one tenth of a point to a 2 5 percent rate The manufacturing and construction reports on Monday combined with data on business spending plans employment and housing in recent weeks suggested some momentum in the economy even though consumer spending and industrial production have been soft The weakness in consumer spending is puzzling some analysts given that wages are rising and households accumulated hefty savings from cheaper gasoline Most likely Americans are using their pump price savings to pay down debt increase the money they put aside and for dining out said Chris Christopher an economist at IHS Global Insight in Lexington Massachusetts In April personal income rose 0 4 percent and the saving rate increased to 5 6 percent from 5 2 percent in March according to the Commerce Dept on Monday | 6/1/2015 |
GS | European stocks little changed before German data Draghi Dax up 0 01 | Investing com European stocks were little changed on Friday as concerns over a possible Greek default persisted and as markets eyed the release of upcoming German data as well as comments by European Central Bank President Mario Draghi
During European morning trade the EURO STOXX 50 dipped 0 05 France s CAC 40 eased 0 04 while Germany s DAX 30 eased up 0 01
European equities remained under pressure as late night negotiations between Greek French and German government leaders ended without any sign of a breakthrough that will unlock bailout funds
Greece is due to make a 305 million payment to the International Monetary Fund on June 5 but will default if a deal is not reached by then
Sentiment had strengthened briefly after data on Thursday showed that the preliminary reading of the French composite purchasing managers index rose to 51 0 up from 50 6 in April
But activity in Germany the euro area s largest economy slowed to a five month low while the preliminary euro zone composite PMI slid to a three month low of 53 4
Financial stocks were mixed as Societe Generale PARIS SOGN tumbled 1 08 and BNP Paribas PARIS BNPP edged up 0 11 in France while Germany s Commerzbank XETRA CBKG and Deutsche Bank XETRA DBKGn lost 0 26 and 1 85
Among peripheral lenders Italy s Intesa Sanpaolo MILAN ISP and Unicredit MILAN CRDI added 0 12 and 0 24 respectively while Spanish banks Banco Santander MADRID SAN and BBVA MADRID BBVA slipped 0 10 and 0 19
Elsewhere shares in Compagnie Financiere Richemont SA SIX CFR plummeted 3 34 after the group reported an unexpected fall in April sales
In London FTSE 100 gained 0 45 led by Vodafone NASDAQ VOD up 3 59 after Goldman Sachs Group NYSE GS Plc said the phone company is more likely to sell than buy assets
Mining stocks were also higher on the commodity heavy index Shares in Fresnillo LONDON FRES rose 0 39 and Glencore Xstrata LONDON GLEN climbed 0 58 while rivals Rio Tinto LONDON RIO and Bhp Billiton LONDON BLT advanced 0 57 and 0 89 respectively
In the financial sector stocks were mostly mixed Lloyds Banking LONDON LLOY added 0 10 and HSBC Holdings LONDON HSBA gained 0 80 while Barclays LONDON BARC inched down 0 04 and the Royal Bank of Scotland LONDON RBS saw shares slip 0 17
In the U S equity markets pointed to a steady to higher open The Dow Jones Industrial Average futures pointed to a 0 05 uptick S P 500 futures signaled a 0 10 rise while the Nasdaq 100 futures indicated a 0 05 gain
Later in the day the Ifo Institute was to report on German business climate while the U S was to release a report on consumer inflation | 5/22/2015 |
GS | Oil drops below 65 on U S shale outlook dollar | By Alex Lawler LONDON Reuters Oil fell below 65 a barrel on Tuesday pressured by the possibility that U S shale oil producers could increase drilling activity and by a stronger dollar U S drillers cut the number of rigs by just one last week data showed on Friday and Goldman Sachs NYSE GS said prices were at a level that would spur activity The dollar could rally further Morgan Stanley NYSE MS said adding to a growing list of headwinds crude faces that include rising OPEC supply Brent crude was down 75 cents at 64 77 a barrel at 1245 GMT while U S crude also known as WTI was 75 cents lower at 58 97 The main factor weighing on prices is the significantly appreciating U S dollar said Carsten Fritsch analyst at Commerzbank XETRA CBKG What is more the decline in drilling activity in the U S that has been ongoing for 23 weeks appears to have stopped More drilling in the United States would lessen the prospect of a tighter oil market in coming months one of the factors that have helped Brent rise from a near six year low close to 45 in January We believe that should West Texas Intermediate prices remain near 60 a barrel U S producers will ramp up activity given improved returns Goldman said in a report A stronger dollar makes dollar priced commodities more expensive for buyers using other currencies and tends to weigh on oil prices The dollar hit a one month high against a basket of major currencies on Tuesday The USD downward correction is complete Morgan Stanley said in a report A stronger dollar would only reinforce our near term concerns for oil prices especially Brent Brent collapsed from 115 in June 2014 due to ample supplies in a decline that deepened after OPEC last November dropped its policy of cutting output to support prices in a bid to slow higher cost competing supply sources such as U S shale Taking turns in dominating sentiment since then are concerns about ample supplies currently and the prospect of a tighter market ahead as supply growth from higher cost producers slows
The Organization of the Petroleum Exporting Countries gathers on June 5 On Sunday Iran said OPEC was unlikely to change its production ceiling at the meeting | 5/26/2015 |
GS | Crude plunges to monthly lows as stronger dollar offsets Iraqi concerns | Investing com Crude futures plummeted sharply on Tuesday reaching its lowest levels in the month of May amid a stronger dollar and geopolitical concerns in the Middle East
On the New York Mercantile Exchange WTI crude for July delivery plunged 1 66 or 2 78 to 58 03 a barrel Earlier Texas Light Sweet futures dipped to an intraday low of 57 72 its lowest level since April 29 when it fell to 56 54 The sell off on Tuesday marked just the second time in May that WTI crude dropped below 58 a barrel
On the Intercontinental Exchange ICE brent crude for July delivery experienced a similar decline Brent futures fell to an intraday low of 63 29 before slightly rebounding to 63 73 down 1 79 or 2 73 on the session Brent dropped to the lowest level since April 23 when it stood at 62 22
The spread between the U S and international benchmarks of crude rose to 5 70 slightly above Friday s level of 5 65
In a note to investors Goldman Sachs NYSE GS said U S output could increase in the coming months if crude prices stabilize Last week crude production nationwide dwindled to 9 262 million barrels per day amid a slowdown in Alaska
We believe that should West Texas Intermediate prices remain near 60 a barrel U S producers will ramp up activity given improved returns Goldman Sachs said in a report
The dollar soared to its highest level in a month amid a wave of promising economic data EUR USD fell nearly 1 to 1 0873 dropping below 1 09 for the first time in a month Crude prices typically move lower when the euro depreciates against the dollar
While U S durable goods orders fell slightly by 0 5 in April the decline was less sharp than a projected 0 6 loss by analysts The figure was tamped down by a 4 decline in commercial airlines and 3 4 dip in computer orders
A reading of core orders however which excludes volatile bookings of airplane and auto orders rose by 0 5 last month above expectations of a 0 4 gain Last month s rebound could be attributed solely to a surge in airplane orders after transportation procurements spiked by 15 2 In March the core reading fell by 0 2 month to month and by nearly 2 on a yearly basis
The U S Department of Commerce also said in a monthly report that new home sales in April rose 6 8 to a seasonally adjusted 517 000 The gains fell in line with analysts forecasts of a 485 000 to 540 000 increase for the month
Separately consumer confidence showed signs of stabilizing moving to 95 4 for the month of May up 0 2 from a previous reading last month Analysts expected The Conference Board s monthly Consumer Confidence Index to tick down by 0 1 to 95 1 Dollar denominated commodities such as crude become more expensive when the dollar appreciates
In Iraq there were reports of ongoing fighting and airstrikes in the Anbar province west and south of the city of Ramadi which was seized by fighters from the Islamic State early last week In December crude output in Iraq spiked at a record 4 million barrels per day a month earlier significantly above a previous high of 3 56 million barrels in 1979 Iranian officials meanwhile indicated on Sunday they are unlikely to change its output ceiling when OPEC meets next on June 5 If economic sanctions are lifted against Iran this summer it has been forecasted that Iranian exports could increase to 1 7 million bpd in a 12 month span adding to the glut of supply in the global market
Energy traders await Wednesday s weekly U S inventory report for further indications on supply levels in the market Last week the Energy Information Administration EIA said commercial crude stockpiles fell by 2 7 million barrels for the week ending May 15 above estimates of a 2 1 million draw It marked the third consecutive week of weekly declines easing concerns of oversupply | 5/26/2015 |
GS | NYMEX crude gains slightly in Asia ahead of API data from U S | Investing com Crude oil prices rose slightly on Wednesday with industry data ahead of U S stockpiles last week and geopolitical tension keeping the tone firm despite ample supplies The American Petroleum Institute will release figures on refined products and crude in U S stockpiles last week data delayed a day because of a public holiday On Thursday the U S Department of Energy will release its own more closely watched figures On the New York Mercantile Exchange WTI crude for July delivery rose 0 09 to 58 44 a barrel Overnight crude futures plummeted sharply on Tuesday reaching its lowest levels in the month of May amid a stronger dollar and geopolitical concerns in the Middle East On the Intercontinental Exchange ICE Brent crude for July delivery fell 63 73 a barrel down 1 79 or 2 73 on the session Tuesday In a note to investors Goldman Sachs NYSE NYSE GS said U S output could increase in the coming months if crude prices stabilize Last week crude production nationwide dwindled to 9 262 million barrels per day amid a slowdown in Alaska We believe that should West Texas Intermediate prices remain near 60 a barrel U S producers will ramp up activity given improved returns Goldman Sachs said in a report While U S durable goods orders fell slightly by 0 5 in April the decline was less sharp than a projected 0 6 loss by analysts The figure was tamped down by a 4 decline in commercial airlines and 3 4 dip in computer orders A reading of core orders however which excludes volatile bookings of airplane and auto orders rose by 0 5 last month above expectations of a 0 4 gain Last month s rebound could be attributed solely to a surge in airplane orders after transportation procurements spiked by 15 2 In March the core reading fell by 0 2 month to month and by nearly 2 on a yearly basis The U S Department of Commerce also said in a monthly report that new home sales in April rose 6 8 to a seasonally adjusted 517 000 The gains fell in line with analysts forecasts of a 485 000 to 540 000 increase for the month Separately consumer confidence showed signs of stabilizing moving to 95 4 for the month of May up 0 2 from a previous reading last month Analysts expected The Conference Board s monthly Consumer Confidence Index to tick down by 0 1 to 95 1 Dollar denominated commodities such as crude become more expensive when the dollar appreciates In Iraq there were reports of ongoing fighting and airstrikes in the Anbar province west and south of the city of Ramadi which was seized by fighters from the Islamic State early last week In December crude output in Iraq spiked at a record 4 million barrels per day a month earlier significantly above a previous high of 3 56 million barrels in 1979 Iranian officials meanwhile indicated on Sunday they are unlikely to change its output ceiling when OPEC meets next on June 5 If economic sanctions are lifted against Iran this summer it has been forecasted that Iranian exports could increase to 1 7 million bpd in a 12 month span adding to the glut of supply in the global market | 5/26/2015 |
GS | Goldman Sachs cuts crude price forecasts for the next five years | Reuters Goldman Sachs NYSE GS slashed its crude oil price forecasts for 2016 to 2020 citing improved U S shale efficiency meeting global oil demand coupled with unimpeded OPEC productivity
However the U S investment bank in a note published on Saturday raised its view of the average 2015 Brent price to 58 per barrel from its earlier forecast of 52 and lifted its outlook for the average WTI price to 52 per barrel from 48
The bank assumes a 5 per barrel Brent WTI spread through 2016 2020 consistent with transportation economics
On May 12 the U S investment bank had cautioned that the recent rally in oil prices was premature and a sequential weakening of prices was required for the rebalancing of the market to resume
Oil prices have recovered this year after sharp falls prior to 2015 Benchmark Brent crude oil futures has rallied about 12 percent since the beginning of the year and are up by about 40 percent from their 2015 low
To view a list of the forecast changes click here | 5/18/2015 |
GS | Women s apparel retailer Ascena to buy Ann Inc for 2 15 billion | Reuters Ascena Retail Group Inc which runs Dressbarn and Lane Bryant women s clothing stores said it agreed to buy rival Ann Inc owner of LOFT and Ann Taylor for 2 15 billion Ann which like Ascena targets women in the 20 to 40 age group has been hit hard by increasing competition from fast fashion chains and a pullback in discretionary spending Reuters reported in August last year the company which has been under pressure from certain shareholders to sell itself had tapped JP Morgan to explore a sale Ascena said it would offer 47 per share 37 34 in cash and 0 68 in stock for each Ann share Ann s shares rose nearly 21 5 percent to 47 05 in premarket trading The stock has been trading above the offer price on Monday indicating some investors were hoping for an increased bid or a rival offer Ascena s shares were up 7 7 percent at 15 30 The transaction gives Ann best known for its women s suits and office wear an enterprise value of about 2 billion Ascena said in a statement Ann s shareholders hedge funds Engine Capital LP and Red Alder LLC had in August asked the company to consider selling itself while its largest investor Golden Gate Capital LLC has said the stock was undervalued Ann s same store sales have fallen in three of the past four quarters The company s problems have been compounded by disruptions at West Coast ports which has hit sales and led to higher costs in the past two quarters Ascena said it expects the deal to be significantly accretive to earnings in the first year after the deal closes and to boost profit by more than 20 percent after that The deal is expected to close in the second half of 2015 Up to Friday s close Ann s shares have fallen 3 percent since Aug 26 when Reuters reported the company was mulling a sale
Guggenheim Securities and Goldman Sachs NYSE GS are advising Ascena while JP Morgan is advising Ann Ascena s legal adviser is Proskauer Rose LLP while Ann s is Wachtell Lipton Rosen Katz | 5/18/2015 |
GS | Oil lower after Goldman Sachs cuts price forecasts | Investing com Crude oil turned lower on Monday after Goldman Sachs NYSE GS cut its long term price forecasts on concerns over the high supply outlook offsetting concerns over escalating geopolitical tensions in the Middle East On the New York Mercantile Exchange crude oil for July delivery was down 0 21 to 60 44 a barrel off session highs of 61 7
Brent crude for July delivery the global benchmark was down 0 65 to 66 4 a barrel on the ICE Futures exchange in London
Goldman cut its oil price forecasts for 2016 to 2020 saying that improved U S shale efficiency and production from OPEC will be more than adequate to meet future demand
The announcement came after the investment bank warned last week that the recent rally in oil prices was premature
U S oil prices have staged a recent rally after dropping more than half from June to January amid expectations that U S output has peaked
But global oil production is still outpacing demand following a boom in U S shale production and after OPEC s decision last year not to cut production
On Monday Reuters reported that Iran s Deputy Oil Minister Rokneddin Javadi said OPEC was unlikely to cut output at its meeting on June 5
He also said he was hopeful that Iran s oil exports would return to pre sanctions levels of around 2 million barrels per day within three months once a deal on limiting the country s nuclear program is reached
Oil prices had moved higher earlier Monday amid concerns over supply disruptions after Islamic State militants seized control of the city of Ramadi in western Iraq over the weekend
Meanwhile Saudi led air strikes in Yemen resumed after a ceasefire expired on Sunday night fuelling concerns over growing turmoil in the region | 5/18/2015 |
GS | Crude drops slightly amid turmoil in Middle East resurgent dollar | Investing com Crude futures fell mildly on Monday retreating from higher levels earlier in the session as modest gains from the turmoil in the Middle East failed to offset a resurgent dollar
On the New York Mercantile Exchange WTI crude for July delivery lost 0 30 or 0 50 to 60 23 a barrel Earlier on Monday Texas Light Sweet futures peaked at a session high of 61 70 before investors pared the gains in U S morning trading as the dollar moved to its highest level in three weeks
In Iraq approximately 3 000 Shi iite milita fighters mobilized at a site near Ramadi after the Western Iraqi city was taken over by the Islamic State over the weekend Meanwhile U S led warplanes conducted more than 15 airstrikes near the capital of the Anbar Province at the request of Iraqi Security Forces a coalition spokesman told Reuters Islamic militants reportedly killed up to 500 people and forced 8 000 others to flee from the city in their biggest victory in more than a year the Associated Press reported
In December crude output in Iraq spiked at a record 4 million barrels per day a month earlier significantly above a previous high of 3 56 million barrels in 1979 Weeks later Iraqi oil minister Adel Abdel Mahd announced a deal with a Kurdistan regional agency that helped boost exports from an oil field in northern Iraq from 375 000 bpd over the first three months of the year to 600 000 bpd in April Under the deal a pipeline network exported oil from the Kurdistan region to the Turkish Mediterranean port of Ceyhan
Elsewhere Saudi led airstrikes resumed in Yemen after a five day cease fire last week which enabled impoverished Yemeni citizens to receive much needed shipments of food and medicine A militia of Shiite led Iranian backed Houthi rebels has been bombarded by Saudi Arabian airstrikes since late March when a Houthi advance forced Yemen president Abed Rabbo Mansour Hadi to flee the country by sea
Energy traders are sensitive to any geopolitical instability involving Saudi Arabia the world s largest crude exporter
On the Intercontinental Exchange ICE brent crude for July fell 0 51 or 0 76 to 66 30 paring earlier gains when it reached a session high of 67 86 Over the weekend Goldman Sachs NYSE GS wrote in a note to investors that it expects brent to trade at 55 by 2020 below its current level by more than 10 a barrel
The spread between the international and U S benchmarks of crude stood at 6 07 below Friday s level of 6 26
The U S Dollar Index which measures the strength of the greenback versus a basket of six other major currencies gained 0 73 or 0 78 to reach a three week high at 94 02
While WTI crude futures are up nearly 25 since April 1 they are still down by more than 44 over the last 52 weeks when they stood at a sliver above 102 a barrel | 5/18/2015 |
GS | Oil prices slip on dollar rally ample supply | By Christopher Johnson LONDON Reuters Brent crude oil fell below 66 a barrel on Tuesday as the dollar strengthened and on evidence of ample supplies of Middle Eastern oil despite wars in northern Iraq Syria and Yemen The dollar rose to almost a one week high against a basket of currencies recovering from a four month low and making oil and other commodities more expensive for consumers in non dollar economies FRX Crude rallied on Monday on worries Middle Eastern oil supplies could hit by escalating fighting in the region but data suggest production from the Gulf is increasing The oil market is generally oversupplied with high Saudi exports and OPEC is unlikely to cut production said Tamas Varga oil analyst at London brokerage PVM Oil Associates The dollar is also weighing on the market he added Brent for July fell 1 30 to a low of 64 97 a barrel before recovering to around 65 05 by 1355 GMT U S light crude oil was down 1 10 at 58 33 a barrel Saudi Arabia s crude exports hit their highest in almost a decade in March official data showed on Monday as the top oil exporter increased output to record levels The kingdom shipped 7 898 million barrels per day bpd of crude in March up from 7 350 million bpd in February Joint Organisations Data Initiative JODI data showed Oil Minister Ali al Naimi has said Saudi Arabia pumped 10 3 million bpd of crude in March above its previous record production of 10 2 million bpd in August 2013 Goldman Sachs NYSE GS analysts forecast on Tuesday that U S crude would fall back to the low seen earlier this year close to 45 weighed down by both hydrocarbon and capital surpluses We forecast prices will retrace to their lows by October Goldman Sachs said in a report Analysts said investors were less worried over the risks to Middle East oil supplies from fighting in Iraq where Shi ite militiamen have been deployed to battle Islamic State which seized the city of Ramadi Saudi led forces have resumed military operations in Yemen after a ceasefire despite appeals by the United Nations for time to allow humanitarian supplies into the country Fears that fighting in Iraq and Yemen could hamper the oil supply have clearly given way to a more sober appraisal said Carsten Fritsch analyst at Commerzbank XETRA CBKG
Such concerns are exaggerated In actual fact the oil supply from the region has continued to grow | 5/19/2015 |
GS | Goldman s 5 Year Aluminum Gambit | By
For the last five years every beer guzzler in America paid a tiny surcharge to some of the nation s largest banks According to manufacturers practices at warehouses owned by Goldman Sachs NYSE GS and other financial institutions inflated the price of aluminum used in beer cans and thousands of other goods costing consumers as much as 3 billion a year as one MillerCoors executive estimated Now drinkers can belch a sigh of relief Aluminum markups are falling as quickly as they once rose When prices were still climbing in 2013 searing investigations into the aluminum trade by the Huffington Post and New York Times led to lawsuits regulatory inquiries and a lengthy Senate report The lenders had helped create a system in which forklifts shuffled aluminum back and forth between warehouses driving up prices By the end of 2014 Goldman and JPMorgan Chase NYSE JPM and Co had exited the warehouse business as the London Metal Exchange LME which sets benchmark aluminum prices pursued reforms With new rules in effect since February and banks out of the business aluminum surcharges have plummeted The Midwest premium a central component of aluminium pricing that reflects the cost of storage and shipping has fallen 58 percent from its February peak says Morningstar metals analyst Andrew Lane The overall price manufacturers pay for aluminum has dipped to roughly 2 085 per metric ton from 2 327 at the start of the year They ve close to round tripped it says Lloyd O Carroll an analyst at Northcoast Research Analysts point to two factors for the surprising plunge in the Midwest premium from its unusually high peak new policies at metals warehouses and the winding down of speculation on aluminum by commodities traders Aluminum was used as an investment vehicle says Lane That created some artificial demand that drove up premiums Industry players who cried foul over bank practices feel vindicated The recent market activity lends credence to our case says Garrett Wotkyns an attorney for flashlight maker Mag Instrument and other purchasers His clients have accused Goldman JPMorgan and European commodities dealer Glencore LONDON GLEN Plc of a price fixing conspiracy Banks dispute the allegations Lawyers for Goldman and JPMorgan have pointed out that all in aluminum prices the base price the metal plus the additional Midwest premium fell over the period in question and that there was no factual basis for price fixing claims In response to queries a Goldman representative pointed to a white paper that argued that prices paid by purchasers reflects supply and demand fundamentals Queues in warehouses do not impact the all in price consumers pay for delivered physical aluminum the white paper says A Merry Go Round Of Metal After the financial crisis major U S banks moved heavily into commodities trading In 2010 Goldman Sachs bought Metro International Trade Services a Detroit warehousing company that in 2014 stored 85 percent of the LME traded aluminum in the U S It was a strategic acquisition The recession had produced a glut of cheap aluminum creating market conditions that essentially guaranteed profits for any firm that could pay to stockpile aluminum and sell it on the futures market for high prices O Carroll says commodities dealers leapt at the opportunity There were a lot of cutthroat battles among traders he says as stockpiles of aluminum exploded In Detroit LME aluminum hoards grew from 52 000 metric tons in 2008 to 1 5 million metric tons in 2014 Per LME rules Goldman did not own any of the aluminum itself But the lender put itself in the very center of aluminum trade inking deals with other players that incentivized them to store with Metro Purchasers complained that the inducements lure d metal away from the physical market and led to distortions in the aluminum markets Goldman argued that the incentives had little effect on premiums which continued to rise even after the bank says Metro stopped paying incentives in November 2013 Other traders ultimately placed and canceled orders at Metro facilities not Goldman Still financial regulators took notice issuing subpoenas to companies that traded financial products based on the price of aluminum even as they stored vast amounts of the metal Complaints from manufacturers soared as wait times for delivery stretched to months and premiums edged up Queues in Detroit lengthened from around 40 days when Goldman bought Metro to a peak of more than 600 days helping drive the Midwest premium up more than 300 percent Goldman s trading activities and business arrangements helped inflate the queues according to a 2014 Senate subcommittee report As the Times expos revealed aluminum would leave one Metro warehouse only to be shuttled to a different Metro warehouse Metro clients were paid to pull their supply from a queue at one facility and join a queue at another keeping both rents and wait times high A former delivery worker called it a merry go round of metal In 2011 an independent consultant recommended that the LME require warehouses to ship out more aluminum on a daily basis than they take in But LME members were resistant In 2013 Goldman told federal regulators that warehouse owners were incentivized to maximize inventory by shipping aluminum out at the slowest rate possible Because the LME was jointly owned by its members committees that shaped LME policy included the very banks profiting from the delays Goldman and JPMorgan together owned more than one fifth of the exchange before it was sold to a Hong Kong company in December 2012 A Return To Normal After a lengthy legal scrum with Russian aluminum giant Rusal which benefited from the logjams the exchange has finally acted on the 2011 recommendation to make warehouses push more aluminum out the door every day than they take in The effect on aluminum premiums has been dramatic The decline has happened much more quickly than we anticipated says Lane Some observers have puzzled over exactly how the maneuvers benefited financial firms U S District Judge Katherine Forrest dismissed some of the antitrust lawsuits filed against the banks by major aluminum purchasers Though the court agreed that trading practices inflated aluminum premiums the strategies didn t rise to the level of a price fixing conspiracy Frankly put the economics of the alleged conspiracy as pled do not work Forrest wrote in a dismissal Other lawsuits are ongoing Lawyers for Goldman and JPMorgan have argued that the banks were simply acting in their own best interest They acquired warehouses during a time when aluminum storage was especially lucrative and pushed to maximize their market share With demand for aluminum now rising that window has closed The banks would argue that they took advantage of an arbitrage opportunity says Lane who estimates that banks saw an overall 7 percent return on aluminum positions There was really no upshot for anyone else other than the banks involved | 5/7/2015 |
GS | Monsanto Syngenta hire U S banks to advise on possible takeover sources | By Pamela Barbaglia and Arno Schuetze LONDON FRANKFURT Reuters Agricultural companies Monsanto N MON and Syngenta VX SYNN are working with investment banks on a takeover deal that would create an industry behemoth with combined sales of more than 31 billion three sources familiar with the matter said Swiss crop chemicals maker Syngenta is working with Goldman Sachs N GS to assess the merits of a sale to the world s largest seeds company Monsanto which is being advised by Morgan Stanley N MS the sources said Rumors of talks between the two companies gained momentum at the end of April sending shares in Syngenta to a record high of 351 Swiss francs on May 4 before easing amid a broad decline in equity markets Spokesmen at Monsanto Syngenta Goldman Sachs and Morgan Stanley declined to comment Monsanto made an initial offer to buy Syngenta for about 45 billion Bloomberg reported citing people familiar with the matter U S based Monsanto offered about 450 Swiss francs 487 59 per share representing a premium of 35 percent to Syngenta s closing price on Thursday Bloomberg reported Basel based Syngenta rejected the offer though left it open for Monsanto to make another offer or start talks Bloomberg reported Monsanto which initially approached Syngenta last year has long been interested in its Swiss rival and the potential to base itself in Switzerland and benefit from lower taxes one of the sources told Reuters Following attempts by the U S Treasury to clamp down on such moves known as tax inversion Monsanto may have to buy Syngenta in a cash rather than stock transaction and would be unable to redomicile in Switzerland an industry source said The St Louis based group however might struggle to finance such a deal which could cost up to 40 billion and may need to find a partner to take on Syngenta s U S seeds business before launching a takeover bid another person familiar with industry said Monsanto foresees strong benefits from a takeover of Syngenta which makes heavy research and development R D investments in crop technology to increase the average productivity of crops such as corn soybeans sugar cane and cereals Monsanto meanwhile is focused on conventional and biotech seeds and last year raised its R D spending to 1 7 billion from 1 5 billion in 2013 There is a clear strategic logic to a deal one of the industry sources said Syngenta is the only available target in crop protection It s no wonder Monsanto continues to circle the company A deal would come as prospects for genetically modified GM crops are improving in the European Union after a change in its legislation unlocked a stalled approval process Monsanto owns the only GM product approved for cultivation in the EU a modified maize Despite the two companies cultural affinity a merger may be challenged by antitrust regulators primarily in North America where the two groups are already seen as market leaders in the seeds industry Syngenta would need to go through a portfolio clean up and carve out its U S corn and soybean businesses said a banker close to other potential bidders weighing their options hoping to derail a deal that would reshape the industry RIVAL SUITORS German chemicals company BASF DE BASFn and U S petrochemicals group Dow Chemical N DOW could be among possible bidders for all or parts of Syngenta one of the sources said He mentioned Chinese state owned firm China National Chemical Corp ChemChina as another possible buyer with strong appetite to bulk up its European presence though Syngenta may be reluctant to cede control to an Asian rival No one wants to make the first move the source said Everyone is waiting to see the level of the first bid before reacting Syngenta has not been open for any deal another source said They are a proud Swiss company They see themselves as market leader and wouldn t agree to anything without a fight Spokesmen at BASF and Dow Chemical declined to comment while representatives of ChemChina were not immediately available for comment
Syngenta which was formed in 2000 by the merger of Novartis Agribusiness and Zeneca Agrochemicals also competes with Bayer CropScience NS BAYE and DuPont NYSE DD Pioneer | 5/8/2015 |
GS | Syngenta rejects 45 billion Monsanto takeover offer | By Katharina Bart and Pamela Barbaglia ZURICH LONDON Reuters Agrochemicals firm Syngenta on Friday rejected a 45 billion takeover offer from Monsanto saying the offer undervalued the Swiss firm and did not fully take into account regulatory risks Sources had told Reuters overnight that the two agricultural companies were working with investment banks on a takeover deal that would create an industry behemoth with combined sales of more than 31 billion But on Friday Syngenta said its board had unanimously rejected a 45 percent cash offer by Monsanto that would value Syngenta at 449 Swiss francs 486 35 per share The offer fundamentally undervalues Syngenta s prospects and underestimates the significant execution risks including regulatory and public scrutiny at multiple levels in many countries Syngenta said in a statement Syngenta shares rose 17 percent to 390 Swiss francs by 0715 GMT on Friday after the bid approach was confirmed Swiss company Syngenta had been working with Goldman Sachs NYSE GS to assess the merits of a sale to the world s largest seeds company Monsanto which is being advised by Morgan Stanley NYSE MS the sources had earlier told Reuters Rumors of talks between the two companies gained pace at the end of April sending shares in Syngenta to a record high of 351 Swiss francs on May 4 Monsanto which initially approached Syngenta last year has long been interested in its Swiss rival and the potential to base itself in Switzerland and benefit from lower taxes one of the sources told Reuters Following attempts by the U S Treasury to clamp down on such moves known as tax inversion Monsanto may have to buy Syngenta in a cash rather than stock transaction and would be unable to redomicile in Switzerland an industry source said RIVAL BIDDERS Monsanto foresees strong benefits from a takeover of Syngenta which makes heavy research and development R D investments in crop technology to increase the average productivity of crops such as corn soybeans sugar cane and cereals Monsanto meanwhile is focused on conventional and biotech seeds and last year raised its R D spending to 1 7 billion from 1 5 billion in 2013 There is a clear strategic logic to a deal one of the industry sources said Syngenta is the only available target in crop protection It s no wonder Monsanto continues to circle the company A deal would come as prospects for genetically modified GM crops are improving in the European Union after a change in its legislation unlocked a stalled approval process Monsanto owns the only GM product approved for cultivation in the EU a modified maize Despite the two companies cultural affinity a merger may be challenged by antitrust regulators primarily in North America where the two groups are already seen as market leaders in the seeds industry German chemicals company BASF and U S petrochemicals group Dow Chemical could be among possible bidders for all or parts of Syngenta one of the sources said He mentioned Chinese state owned firm China National Chemical Corp ChemChina as another possible buyer with strong appetite to bulk up its European presence though Syngenta may be reluctant to cede control to an Asian rival Spokesmen at BASF and Dow Chemical declined to comment while representatives of ChemChina were not immediately available for comment
Syngenta which was formed in 2000 by the merger of Novartis Agribusiness and Zeneca Agrochemicals also competes with Bayer CropScience and DuPont NYSE DD Pioneer | 5/8/2015 |
GS | Goldman Sachs ordered to pay 80 million plus interest in 2006 case | Reuters Goldman Sachs NYSE GS Inc has been ordered to pay 80 million plus interest to the National Australia Bank for breaches associated with the sale of mortgage linked securities according to a court filing
The May 7 decision that came from an arbitration panel under the Financial Industry Regulatory Authority granted NAB s request for compensation and also awarded interest at a 3 percent annual rate since December 2006
The marketing materials on which the NAB relied for creating a collateralized debt obligation called Hudson Mezzanine Funding 2006 1 masked Goldman Sachs s significant conflict of interest with its clients the panel found
The NAB had argued for 230 million in total damages including 80 million in compensatory damages and interest of 60 million
The case number is 12 04099 | 5/11/2015 |
GS | Why Ted Cruz is wowing some of Wall Street s money men | By Emily Flitter NEW YORK Reuters Presidential candidate Ted Cruz a Tea Party favorite and leading figure in the 2013 government shutdown that rattled investors isn t the kind of politician who usually wins a lot of friends among Wall Street campaign donors The freshman Republican senator from Texas has none of the moderate tendencies that financiers often prefer in presidential candidates Cruz relishes his image as an anti establishment figure and boasts of his aversion to compromise He has vowed to abolish the Internal Revenue Service and repeal President Barack Obama s signature healthcare plan commonly known as Obamacare Despite the uncompromising rhetoric Cruz is winning praise from some potential Wall Street donors including bankers and hedge fund managers who told Reuters there is more to him than the conservative firebrand of the campaign trail He has been courting financiers in their homes in New York and Greenwich Connecticut they said But the praise does not appear to be translating into cash donations at least so far Some potential donors on Wall Street said they had doubts about whether Cruz can win the 2016 election when he would likely face off against Hillary Clinton A spokesman for Cruz said his campaign was happy with its initial fundraising effort and believed that the senator appealed to a wide range of people Financiers who have met with Cruz said he demonstrated a firm grasp of specific policy issues and was able to discuss them at length and offer specific ideas of his own without dodging tough questions or resorting to rhetorical flourishes This is one reason why he is seen as a stronger candidate than some other favorites of the small government Tea Party movement such as Michele Bachmann who ran a failed bid for president in 2012 He s probably the smartest person running said Thomas Peterffy the billionaire founder of Interactive Brokers Even though personally I do not believe that abortion is something that should be prohibited and I do not believe we should not care about the environment nevertheless I think Ted has the qualities he definitely has a shot Cruz has said state governments should be able to set their own limits on abortions and that he does not see evidence that global warming is occurring CRUZ SURPRISES POTENTIAL DONORS Peterffy who spent 8 million on TV ads in 2012 urging Americans to vote Obama out of office or face creeping socialism said he had not yet made up his mind about which Republican to support in the 2016 race He said his decision is going to be based on whom he deems electable But he added that he expected either Ted Cruz or Florida Senator Marco Rubio to become president within the next 20 years One Boston based lawyer who advises clients mostly multi millionaires and just one billionaire on political donations said each one of his clients had met with Cruz and half of them had come away praising the senator as smart and compelling in a one on one setting Based on Cruz s reputation as a right wing flame thrower the lawyer who did not want to be identified by name said he had not expected any of his clients to like the candidate I m surprised about the half that came away impressed he said But his clients are not alone Others who have met Cruz in private settings say he comes across as a brainy politician whose most hardline statements seem like popularity seeking varnish that will eventually be scraped away When I saw him he was completely sober he was having serious policy discussions said one hedge fund CFO who declined to be named He said he was not normally inclined to get involved in politics and had to be dragged to a house party in Greenwich at which Cruz had appeared alongside John Boehner the top Republican in the U S House of Representatives He s a real person He s smart he knows issues that s just not true of a lot of politicians the CFO said TRANSLATING PRAISE INTO CASH It s not yet clear though whether Cruz can translate the receptiveness of a powerful community outside of his base of conservative activists into more financial support Robert Mercer the billionaire founder of the hedge fund Renaissance Technologies last month contributed a large portion of the 31 million donated in one week to a consortium of pro Cruz political action committees called Keep the Promise But other mega donors who have met with Cruz and said they liked him including the billionaire casino magnate Sheldon Adelson have held off donating to him over concerns about his electability Strong showings in the early primary states of New Hampshire Iowa and South Carolina will be key to winning more donors strategists say New Hampshire strategist Dave Carney pointed to Cruz s strength in a series of straw polls in South Carolina in April he won in four important counties as evidence that his campaign has legs To win in New Hampshire Cruz needs to focus on meeting voters in person and will have to win over moderate and independent voters in addition to conservative activists He has abilities as a retail politician to listen and be sincere and authentic Carney said adding that while Cruz may use different language his message has to remain consistent to be taken seriously Cruz has establishment credentials that set him apart from other populist Republicans such as Mike Huckabee who won the Iowa caucus in 2008 but lost the party presidential nomination to Senator John McCain and Bachmann who won a straw poll vote in the early voting state of Iowa in 2011 only to see her presidential campaign later lose momentum Cruz a former official in President George W Bush s administration holds degrees from Princeton University and Harvard Law School His wife who worked in the Bush White House has taken unpaid leave from Goldman Sachs NYSE GS in Houston where she is a managing director overseeing a wealth management unit Some investors said his braininess and establishment credentials won t be enough for Cruz unless he pulls back from some of his more hardline positions Ted Cruz has been to my house with his wife said Andy Sabin a metals trader and refinery owner in Easthampton New York who gives not only to political causes but to environmental conservation efforts as well I said some time in the next four or five cycles you will be president but you ve got to come to the center Sabin is leaning toward supporting former Florida Governor Jeb Bush who has positioned himself as a moderate able to appeal to a cross section of Republican voters T Boone Pickens the Texan hedge fund tycoon called Cruz a serious guy in an interview with Reuters But he too was throwing his support behind Bush he said on the sidelines of the Skybridge Alternatives Conference known as SALT in Texas Anthony Scaramucci who organized the hedge fund conference and is founder of the hedge fund SkyBridge Capital said he didn t think Cruz had quite broken through to Wall Street Ted is super smart and touches a nerve in the heartland where people are unhappy with the way things are going Scaramucci said But it will be very difficult for him to garner establishment money | 5/14/2015 |
GS | Pimco equities chief Maisonneuve leaving firm as funds close | By Jennifer Ablan and David Gaffen Reuters Pimco s global equities Chief Investment Officer Virginie Maisonneuve is leaving after less than a year and a half as the bond investment giant narrows its stock investing focus it said on Thursday The firm said it would liquidate two Pimco equity strategies Emerging Markets which Maisonneuve oversaw and Pathfinder which is managed by Anne Gudefin and involves purchasing stocks trading at significant discounts to intrinsic value Chief Executive Officer Douglas Hodge said in a statement that the equity business would remain an important part of the firm s investing but would concentrate on areas more fully aligned with our capabilities and clients needs Hodge said Pimco would continue to manage dividend and long short strategies and expand the firm s enhanced equities strategies including those in collaboration with its subadvisor Robert Arnott s firm Research Affiliates LLC Arnott s bread and butter smart beta or fundamental indexation strategy systematically selecting weighting and rebalancing portfolio holdings on the basis of characteristics other than market capitalization has been hugely successful Pimco which had 1 59 trillion in assets under management on March 31 said it would not fill Maisonneuve s position In recent years Pimco has tried to diversify its investor base to include those buying equity products and even tapped former Goldman Sachs NYSE GS banker Neel Kashkari who ran the U S government s 700 billion Troubled Asset Relief Program to direct an expansion into new markets including stocks But the latest high profile departure for Pimco which has become synonymous with the U S debt markets is yet another blow for the Newport Beach California firm You don t think of Pimco when it comes to equity investing said David Schawel vice president and portfolio manager of Square 1 Financial They ve been attempting this for years In September Bill Gross co founder of Pacific Investment Management Co left his post as chief investment officer and joined mutual fund management firm Janus Capital Group Inc a move that followed record outflows from Pimco s flagship portfolio and his clash with other top executives His departure came just eight months after his top deputy Mohamed El Erian stepped down They remain primarily known as a bond shop and assets in their bond funds have declined as investors were concerned with leadership changes and periods of underperformance said Todd Rosenbluth director of ETF Mutual Fund Research at S P Capital IQ Pimco s active and enhanced equities business has more than 50 billion in assets under management Maisonneuve will direct the transition but in light of these changes she has decided to leave the firm after a transition period Hodge said Portfolio managers and analysts associated with the two Pimco equity strategies also will leave the firm Pimco brought in Maisonneuve in January 2014 as one of six deputy chief investment officers
This story has been refiled to fix formatting in paragraph 2 | 5/14/2015 |
GS | Exclusive Deutsche s radical revamp foiled by ECB stress test | By Thomas Atkins and Kathrin Jones FRANKFURT Reuters A radical plan for Deutsche Bank DE DBKGn to become a pure investment bank and corporate lender was dropped after stress tests demanded by the European Central Bank concluded the model would not withstand a severe financial crisis sources said Deutsche Bank Germany s biggest lender has spent much of this year looking at ways of reconfiguring its business to boost returns and had narrowed the choice to two possible models The bank s co chief executives Anshu Jain and Juergen Fitschen originally favored shedding its entire retail business and becoming Europe s answer to Goldman Sachs N GS sources familiar with internal discussions told Reuters But they and other decision makers later changed their view in the wake of the stress tests and a raft of demands by trade unions and political interests in Berlin The bank instead chose a less ambitious solution selling only its Postbank retail arm cutting investment bank assets and investing more in equities trading and wealth management During Deutsche Bank s strategic review the ECB directly responsible for supervising the lender since the euro zone centralized banking oversight last year asked it to test different structures to see if they could withstand a crisis Stripped of its retail arm s rich seam of deposits the proposal codenamed Model 5 during the process failed because its funding dried up and its cost of capital rose in the stressed scenario the sources familiar with the process said The result was that Model 5 which was already opposed by a trade union fearing mass layoffs and politicians who instinctively disliked the idea of Germany s flagship bank abandoning its retail customers was no longer viable The ECB declined to comment This left Deutsche Bank with no option but to present a less radical plan coded Model 2 to its investors on Monday after getting supervisory board approval for it on Friday Postbank will be sold via a stock market listing and Deutsche will cut around 150 billion euros in investment bank assets Bank insiders said following the decision that they believed Model 5 would have gained more acceptance from investors who wanted to see Deutsche abandon its expensive universal model offering everything from home loans to complex derivatives while rivals such as UBS VX UBSN specialize But the inherent risks which were revealed as a result of carrying out the ECB s tests showed it to be not resilient enough to survive a hard market downturn sources said Jain in announcing the new plan said regulators played a large role in shaping it A lot of our caution when we think of our future stems from what we think the future shape of regulation situation will look like he told journalists Deutsche s share price slid nearly 6 percent on Monday after Model 2 was unveiled under its official title Strategy 2020 Part of the drop was due to investor frustration at the lack of information on the pace of restructuring costs and targets Deutsche was forced to rush out Strategy 2020 after leaks and has promised to provide more details in the next 90 days Those within Deutsche in favor of the more radical Model 5 depicted a bank dragged down by its sprawling retail operations which include some 700 branches flying the blue Deutsche Bank banner some 1 100 branches under the yellow flag of Postbank and some 800 more abroad in countries such as Italy and Spain That they argued bloated the group s balance sheet and forced it to set aside billions of euros in capital to meet regulatory demands while making little profit in the overbanked German market sources familiar with the bank s internal discussions told Reuters on condition of anonymity Despite their preference for Model 5 getting it done would have been high risk for Jain and Fitschen as it would have involved fully merging Postbank with Deutsche s own retail brand and bringing the combined entity to market The breakup would have been the more courageous model but it would have taken up so much bandwidth said one person close to the talks And the integration of Postbank into Deutsche Bank didn t work in the past years Why was it going to be different this time Trade unions representing Postbank preferred a spin off because that would protect the most jobs Regulator Bafin said a complete retail exit was undesirable because retail banking made Deutsche safer by diversifying its income Ratings agencies said retail made the group more robust than a standalone investment bank
Berlin also played a big role supporting a strong international German bank to serve the country s exporters Jain and Fitschen met with German Finance Minister Wolfgang Schaeuble on Monday evening to reassure him | 4/27/2015 |
GS | Former Goldman banker acquitted of all charges in rape case | By Edward Krudy
RIVERHEAD New York Reuters A former Goldman Sachs NYSE GS banker was found not guilty on Wednesday of charges that he raped an Irish student at his rental home while vacationing in Long Island in the summer of 2013
After a three week trial Judge Barbara Kahn acquitted Jason Lee 38 of the most serious charge of rape at a Suffolk county court in Riverhead New York The charge carried a maximum sentence of 25 years in prison
Kahn also acquitted Lee of the lesser charges of sexual misconduct and assault in the third degree which each carry a maximum of a year in prison
Kahn said the prosecution had not met the burden of proof beyond a reasonable doubt Kahn also noted that the alleged victim s brother did not testify at the trial even though he was present on the evening in question
Lee a former managing director at Goldman did not testify at his trial and waived the right to a jury opting instead for a bench trial in front of Kahn
After the verdict Lee left the courtroom stone faced flanked by his lawyers and did not respond to questions from the press He got into a black Jeep Patriot that was waiting outside the courthouse and left immediately
He had been accused of barging into a bathroom and raping the woman who was 20 years old at the time after a night of drinking at a local night spot His lawyers argued throughout the nearly three week trial that the encounter in his 32 000 per month luxury Hamptons vacation rental was consensual
These were false accusations and we are deeply troubled that it went this far Edward Burke one of Lee s lawyers told reporters
Suffolk County District Attorney Thomas Spota said the prosecution had made every effort to contact the alleged victim s brother but he chose not to testify at the trial He said he thought the prosecution had proved its case nonetheless
I can t account for the judge s thinking Spota said We disagree
On Tuesday defense attorney Andrew Lankler said in his closing statement that prosecutors failed to prove beyond a reasonable doubt that sex was not consensual and that key points of the prosecution s case were inconsistent
The prosecutor Assistant District Attorney Kerriann Kelly said inconsistencies concerned peripheral details and that Lee s actions subsequent to the alleged attack had clearly shown consciousness of guilt | 4/29/2015 |
GS | Bitcoin brokerage Circle gets 50 million investment | Reuters Bitcoin brokerage Circle Internet Financial Inc said it closed a 50 million investment round led by Goldman Sachs NYSE GS and IDG Capital Partners The company also said it will start giving customers the ability to hold send and receive U S dollars Circle a startup founded in 2013 by Brightcove Inc founder Jeremy Allaire and Sean Neville allows customers to hold transfer and receive the digital currency Bitcoin The company said if its users choose to keep dollars instead of bitcoin in their accounts they can pay any person or merchant who accepts bitcoin without ever holding bitcoin themselves Circle will handle instant conversion from dollars to bitcoins and vice versa The feature will be initially available to select customers and the company will offer it to more users every week Goldman Sachs and China based IDG Capital were joined by all of Circle s existing investors | 4/29/2015 |
GS | UK Tax Authority Faces Legal Challenge Over HSBC Stance | By
Reuters A campaign group has begun a legal process that could lead to Britain s tax authority facing a judicial review over its failure to take a tougher line with people alleged to have used accounts with an HSBC LONDON HSBA unit in Switzerland to evade tax The February leak of documents on thousands of Swiss bank accounts has caused embarrassment for business people and politicians across the world and left HSBC facing scrutiny from lawmakers and law enforcers in Europe and the Americas Rights group Avaaz said in a statement on Friday that it had written to Her Majesty s Revenue Customs HMRC asking why it offered Britons named in the leaked records the opportunity to escape prosecution by bringing money onshore via a tax amnesty If Avaaz is unhappy with the response it can apply to the High Court for a judicial review on whether HMRC s actions were lawful Avaaz is represented by law firm Leigh Day which represented campaign group UK Uncut in its action for a judicial review of a tax deal HMRC cut with Goldman Sachs NYSE GS A High Court judge ruled in that case that HMRC had acted lawfully but the revelation of details of the negotiations between the two sides was embarrassing for both HMRC said it had acted effectively on the HSBC data and will strongly contest any action HSBC declined to comment | 5/1/2015 |
GS | Rocket backed Foodpanda raises 100 million in round led by Goldman | FRANKFURT Reuters Foodpanda an online takeaway delivery service backed by tech investor Rocket Internet said on Friday it had received 100 million in a financing round led by a Goldman Sachs NYSE GS hedge fund Goldman Sachs Investment Partners will take a seat on Foodpanda s advisory board Existing investors including Rocket also took part in the round The Berlin based company has raised more than 310 million since it was set up in 2012 Foodpanda is part of the Global Online Takeaway Delivery group created earlier this year by Rocket which said in March it had increased its position in Foodpanda to take a majority stake of 52 percent in the company Foodpanda offers takeaway delivery services to local restaurants in 40 countries and has been acquiring rivals in a range of emerging markets over the past year including India Mexico Russia Brazil eastern Europe and southeast Asia It said it plans to use the new funding to improve customer service in the existing markets where it operates Foodpanda says it ranks as market leader in its business category in 32 of these 40 countries including India and Russia | 5/1/2015 |
GS | NY jury finds ex Goldman programer Aleynikov guilty of code theft | By Tom Brown NEW YORK Reuters A jury on Friday convicted a former Goldman Sachs Group Inc N GS programer of stealing the investment bank s high frequency trading code The jury said it had reached a split decision finding Sergey Aleynikov guilty on only one count of stealing secret scientific material from Goldman They were unable to reach a verdict on another similar count and acquitted Aleynikov on a count of unlawful duplication Aleynikov s lawyer Kevin Marino said earlier that his client faced between 1 1 2 years and 4 years if found guilty on any of the three counts Marino indicated in court on Friday he would appeal if the judge did not throw out the verdict Prosecutors had charged Aleynikov a dual citizen of Russia and the United States with stealing the computer code as he prepared to leave Goldman for a high frequency trading startup in Chicago The conviction came two days after the judge overseeing the case removed two jurors after a conflict between the two marred deliberations The judge said on Wednesday that letting 10 jurors proceed not 12 amounted to uncharted territory but Marino said that his client agreed to the smaller jury Aleynikov 45 one of the key figures in Michael Lewis s bestselling book Flash Boys was first arrested by federal agents in 2009 and previously tried and convicted in federal court An appeals court threw out the conviction in 2012 saying the anti espionage law did not apply and setting Aleynikov free after about a year Roughly six months later Manhattan District Attorney Cyrus Vance revived the case in state court and charged Aleynikov in August 2012 with unlawful duplication of computer related material Throughout the state case Marino did not dispute that his client copied code from Goldman s high frequency trading software for his own use in June 2009 However he said prosecutors failed to prove that Aleynikov had broken the state laws under which he was charged He said there was no evidence that Aleynikov took anything of value from Goldman by copying the code New York Assistant District Attorney Daniel Holmes countered in his closing argument that the case was as simple as a man taking something that he had no right to take It remains unclear what prompted the bizarre dispute on Tuesday between the two discharged jurors A female juror had accused her male colleague of trying to poison her food and on Tuesday Marino mentioned that the conflict may have involved an avocado sandwich The case is People v Aleynikov New York State Supreme Court New York County No 04447 2012 | 5/1/2015 |
GS | Goldman Sachs must face 120 million suit over mortgage securities court | By Daniel Wiessner Reuters New York s top state court on Thursday revived a bond insurer s 120 million lawsuit claiming Goldman Sachs Group Inc N GS lied about a pool of securities backed by subprime mortgages during the period leading up the financial crisis The New York Court of Appeals in a 5 2 decision said the suit by ACA Financial Guaranty Corp should move forward because the insurer had raised issues about the role of billionaire John Paulson s hedge fund in a collateralized debt obligation called Abacus ACA Financial said Goldman had deceived it into believing hedge fund Paulson Co was a long investor in Abacus when it knew Paulson was betting the underlying mortgages would fail ACA says it lost approximately 900 million on the deal when the subprime mortgage market collapsed Under state law a fraud case may only proceed if the plaintiff can show it justifiably relied on representations made by the defendant A mid level appeals court in 2013 said ACA Financial was a sophisticated company that could have done its own research including asking Paulson directly about its role in Abacus The Court of Appeals disagreed saying ACA Financial specifically asked Goldman about Paulson s participation in the transaction and received assurances it was a long investor The court sent the case back to a lower appeals court to consider other issues before the suit proceeds in a state trial court in Manhattan Goldman spokesman Michael DuVally said the firm was disappointed with the decision but confident that these contrived claims will fail ACA Financial CEO Steven Berkowitz said in a statement that the company was pleased with the decision In dissent Court of Appeals Judges Susan Read and Sheila Abdus Salaam said ACA Financial could have asked more questions and requested a written assurance from Goldman Instead ACA merely relied on what it says Goldman told it without actually checking the source Read wrote In 2010 Goldman agreed to pay 550 million to settle claims by the U S Securities and Exchange Commission that it misled investors in Abacus though it did not admit wrongdoing ACA Financial in 2013 amended its suit to add Paulson Co as a defendant The hedge fund moved in state court in Manhattan to dismiss the claims and the case was stayed pending the appeal decided Thursday
The case is ACA Financial Guaranty Corp v Goldman Sachs Co New York State Court of Appeals No 49 | 5/7/2015 |
GS | De Blasio tells Rolling Stone New Yorkers don t appreciate him | NEW YORK Reuters Mayor Bill de Blasio said New Yorkers don t appreciate his very special accomplishments since he took office in January 2014 and criticized the actions of his predecessors and even President Barack Obama according to a Rolling Stone interview De Blasio who has fulfilled a campaign promise to establish universal pre Kindergarten education and is pressing forward with other reform programs was quoted as saying out of towners see his administration more clearly than his own constituents A lot of people outside New York City understand what happened in the first year of New York City better than people in New York City de Blasio said in the interview published online on Wednesday But I m convinced something very special happened here When asked to comment on the interview de Blasio s spokesperson Peter Kadushin said on Thursday that New Yorkers care about issues such as universal pre K declining crime bringing the police and community closer together and combating income inequality While big picture successes can sometimes be overshadowed by short term headlines it is these important priorities for New Yorkers that should be the focus Kadushin said In the interview the liberal Democrat leveled plenty of criticism at other political leaders including former Mayor Michael Bloomberg who he said maintained Wall Street friendships at the expense of poorer New Yorkers I mean for God s sake when there was a critical op ed in The New York Times about Goldman Sachs NYSE GS he went to Goldman and gave a pep talk to the employees de Blasio said When a struggling school was having troubles in East New York he didn t go there and give a pep talk When it comes to New York City mayors patting themselves on the back de Blasio said Rudy Giuliani is legendary The mayor said Giuliani unfairly soaked up credit for making the city more livable even though the crime rate dropped sharply during the former prosecutor s tenure I agree that he was good at selling himself and a lot of media over accepted his version of the story de Blasio told Rolling Stone As far as Obama the mayor gave him qualified credit for the Affordable Care Act Obamacare de Blasio said is one of the few things in the last decade that has tangibly addressed the income inequality crisis Still the mayor told the magazine the progressive economic vision that I adhere to was not front and center in President Obama s vision | 5/7/2015 |
GS | Banks first quarter trading revenue prompts cautious optimism | By Anjuli Davies and Jamie McGeever LONDON Reuters Trading revenue from the world s biggest banks showed signs of recovery in the first quarter as financial market volatility boosted dealing room profits after years of attrition Though income has been only modestly higher than the same period last year the numbers have prompted cautious optimism from analysts holding out hope for a return to trading returns last seen before the 2007 08 financial crisis Earnings so far from the five leading U S banks and Credit Suisse SIX CSGN in Europe show that revenue from fixed income currencies and commodities FICC almost doubled from the previous quarter to 17 1 billion Quarter on quarter improvement was to be expected given that the first three months of the year are typically the strongest for investment banks as cash is put to work However analysts have been encouraged by FICC numbers that were flat year on year FICC accounts for about half investment banks revenues Total revenue at the U S quintet and Credit Suisse from FICC equities and investment banking fees was 34 98 billion up a modest 5 9 percent from the same period last year according to Christopher Wheeler U S banks analyst at Atlantic Equities FICC is showing some signs of life but that is because rates are back commodities are back and there s been more volatility surrounding events like the Swiss franc cap This is positive given the dull FICC markets in recent years Wheeler said The first quarter has been notable for the Swiss National Bank s removal of its cap on the Swiss franc the European Central Bank s trillion euro bond buying quantitative easing QE program speculation over U S interest rates and a rollercoaster ride for oil prices VOLATILITY BOOST This has created the type of price fluctuation and market volatility that traders thrive on offsetting the seemingly perennial downward pressures on trading revenue from tighter regulation dwindling liquidity and increased automation in financial market trading FICC revenue at the top 10 global banks has risen year on year only once since 2009 and is down about 50 percent overall since then data from industry analytics firm Coalition shows In that light this year s first quarter stagnation has been greeted by some as a welcome development With higher volatility and continued support from euro zone QE we believe that the investment banking earnings cycle is at a turning point Citi analysts wrote in a note on Tuesday The big winners have been Morgan Stanley NYSE MS and Goldman Sachs NYSE GS with revenue up 15 percent and 10 percent respectively year on year while Citi registered a fall of 11 percent Atlantic Equities analyst Wheeler said Credit Suisse the first big European bank to report first quarter results on Tuesday posted FICC revenue up 8 percent year on year Barclays LONDON BARC HSBC LONDON HSBA and UBS will all report by May 6 Revenue from other banking activities also showed signs of life Equities income was up 23 percent while advisory and capital markets revenue gained 11 percent a Reuters analysis of results at the big five U S banks shows Global M A deals this year had topped 1 trillion by April 8 the earliest the threshold has been reached since 2007 according to financial data provider Dealogic Low rates have translated into a surge in mergers and an increase in currency trading both big money makers for investment banks BlackRock s Global Chief Investment Strategist Russ Koesterich said
We see the favorable environment for this sector continuing and would remain overweight in large global financial firms | 4/21/2015 |
GS | NBA s Atlanta Hawks to be sold to businessman Ressler | By Rich McKay ATLANTA Reuters The NBA s Atlanta Hawks are set to be sold to a group led by businessman Tony Ressler the team announced on Wednesday in a deal precipitated by the release last year of a racially charged email by the team s current owner The deal which must be approved by the NBA Board of Governors comes after the team s majority owner Bruce Levenson put it on the market after an email he sent to team officials complaining of black fans driving down white attendance at games became public Terms of the deal which includes operation of Philips Arena where the team plays were not made public But the sale price was reported by news outlets as between 730 million and 850 million We are honored and thrilled to have been chosen to become the new stewards of the Hawks Ressler said in a statement He is the co founder of Ares Management LP an investment firm Former NBA All Star Grant Hill and Spanx founder Sara Blakely are among the minority shareholders in Ressler s ownership group The sale if approved will mark the end of a saga that began with the publication last September of a 2012 email from Levenson in which he said the team s ticket sales were lagging because its black fan base was keeping whites away from games The comments came to light as the NBA was embroiled in a scandal over recordings of then Los Angeles Clippers owner Donald Sterling making racist comments to a female friend Levenson had emerged as a major Sterling critic The Hawks general manager Danny Ferry has also been on indefinite leave since last September after making racially insensitive remarks during a conference call After Levenson s email became public he quickly handed control of the team over to its chief executive officer Steve Koonin The NBA in January approved plans to sell the franchise and it was announced the team would remain in Atlanta Atlanta Mayor Kasim Reed s office declined to comment on word of the deal Ressler co founder of Ares Management LP an investment firm was a finalist to purchase the Clippers last spring The Hawks are in the first round of the NBA playoffs after finishing first in the Eastern Conference Goldman Sachs Co NYSE GS and Inner Circle Sports advised Atlanta Hawks on the deal | 4/22/2015 |
GS | Goldman Sachs Asset Management to buy Pacific Life business | NEW YORK Reuters Goldman Sachs Group Inc s N GS Asset Management plans to acquire the Pacific Global Advisors solutions business from Pacific Life Insurance Co the company said on Thursday
The business provides investment and risk management services to institutional investors and has assets under supervision of more than 18 billion Terms of the deal were not disclosed | 4/23/2015 |
GS | Christie s wife quits Wall Street job amid speculation he will seek White House | Reuters Mary Pat Christie the wife of New Jersey Governor Chris Christie resigned from her Wall Street job his spokesman confirmed as her husband contemplates a run for the White House in 2016 Her resignation from New York based Angelo Gordon Co which manages hedge funds and alternative investments is perhaps the clearest sign yet that Christie is likely to officially announce that he will be a Republican 2016 presidential candidate Mrs Christie has decided to take a hiatus from her work in the finance world to spend more time with her family and young children said Kevin Roberts a spokesman for the governor in an emailed statement Citing anonymous sources Fox Business Network reported on Friday that earlier this week Mary Pat Christie told officials at Angelo Gordon where she was a managing director that she would resign as her husband neared a campaign announcement FOX Business Network reported Governor Christie has made some of the pre campaign appearances usual for presidential contenders seeking to woo voters early He showed up in New Hampshire in an effort to recapture the spotlight there as his approval rating at home hit a new low with New Jersey voters But he did not appear on Friday in Iowa with conservative Christians hosting other Republican White House hopefuls Heidi Cruz the wife of declared Republican candidate Ted Cruz worked at Wall Street powerhouse Goldman Sachs NYSE GS until taking unpaid leave last month
This version of the story corrects description of Angelo Gordon in paragraph 2 to show it is a manager of hedge funds and alternative investments not a hedge fund | 4/24/2015 |
GS | Deutsche Bank first quarter profit falls by half as legal charges bite | By Thomas Atkins FRANKFURT Reuters Deutsche Bank s DE DBKGn earnings fell by half in the first quarter a greater than expected drop as hefty legal charges eroded gains in investment banking revenue while it prepares to unveil details of a strategic overhaul Quarterly net profit sank to 559 million euros 608 million versus a year ago despite a 24 percent rise in revenue driven primarily by an increase in client trading activity Group revenue rose to a near record 10 4 billion euros Almost half came from the investment bank but its pre tax contribution fell by more than half due to litigation and regulatory expenses and currency swings the bank said on Sunday Deutsche has so far positioned itself as Europe s last man standing in investment banking even though it has made cuts in certain business lines That strategy bore fruit in quarterly revenue figures with the contributions from its debt trading business rising 9 percent versus a year ago and from its small but growing equities trading division by 31 percent Deutsche on Friday announced a new strategic plan including the sale of its Postbank DE DPBGn retail chain and additional paring back in investment banking Details are to be unveiled on Monday Big trading banks such as Deutsche received a boost in fee income in the first quarter after the Swiss National Bank scrapped a cap on the franc the European Central Bank announced its quantitative easing program and the U S Federal Reserve took steps to tighten monetary policy Rival Morgan Stanley N MS for example posted its most profitable quarter since the financial crisis with a 60 percent rise in net profit compared with a 41 percent rise at Goldman Sachs N GS European rivals such as UBS VX UBSN and Barclays L BARC have taken an axe to trading desks while Deutsche has kept its dealing divisions Already in the previous quarter trading revenue at Deutsche had risen 20 percent bucking declines at Goldman Sachs and Morgan Stanley LEGAL COSTS A 1 5 billion euro charge to fortify the bank s legal reserves depleted in the wake of a 2 5 billion legal settlement for alleged rate rigging bit into its bottom line Signaling that more pain is in store Germany s flagship bank raised contingent liabilities or legal costs that it deems possible but unlikely by half to 3 2 billion euros saying it was now able for the first time to estimate costs of certain risks At Deutsche Bank s retail franchise which will shrink with the planned disposal of Postbank revenue increased by 1 percent on the year a slower pace than other operating divisions Analysts had expected net income to drop 40 percent to 655 million euros for the quarter according to a poll of five brokers The results published three days earlier than originally scheduled come at a tumultuous time for its co chief executives Juergen Fitschen and Anshu Jain U S and British regulators fined Deutsche a record 2 5 billion on Thursday for trying to manipulate benchmark interest rates The bank has said that neither Jain who was running the investment bank at the center of the scandal nor other management board members were found to have been involved or aware of the trader misconduct Fitschen meanwhile will stand trial on Tuesday in Munich over allegations that he and other former executives worked to precipitate the collapse of the Kirch media empire in order to generate bountiful advisory fees to restructure the group Fitschen has said publicly that he neither lied nor deceived in the Kirch case
Deutsche Bank has paid over 9 billion euros in fines and settlements since 2012 with analysts pointing to around 4 billion more expected in 2015 | 4/26/2015 |
GS | Goldman Sachs up 1 2 after Q1 earnings crush expectations | Investing com Goldman Sachs NYSE GS posted better than expected first quarter earnings results ahead of Thursday s opening bell sending shares higher in the pre market
The largest U S investment bank said earnings per share came in at 5 94 in the first three months of 2015 easily surpassing expectations for earnings of 4 26 per share
The firm s first quarter revenue totaled 10 62 billion beating estimates for revenue of 9 31 billion
Investment Banking produced net revenues of 1 91 billion which is the highest quarterly performance since 2007
Net revenues in Fixed Income Currency and Commodities Client Execution were 3 13 billion for the first quarter of 2015 10 higher than the first quarter of 2014 due to significantly higher net revenues in currencies and interest rate products
We are pleased with our results this quarter and the fact that all of our major businesses contributed said Lloyd C Blankfein Chairman and Chief Executive Officer
Given more normalized markets and higher levels of client activity we remain encouraged about the prospects for continued growth he added
Shares of Goldman Sachs were up 1 2 in pre market trade at 203 50 from Wednesday s closing price of 201 10
Meanwhile U S stock futures pointed to a modestly lower open The Dow futures pointed to a decline of 0 35 the S P 500 futures shed 0 45 while the Nasdaq 100 futures shed 0 45 | 4/16/2015 |
GS | Citi posts highest quarterly profit in eight years as costs plunge | By David Henry and Anil D Silva Reuters Citigroup Inc N C reported its highest quarterly profit in nearly eight years as costs plunged showing that the bank s efforts to streamline its business are beginning to pay off Citi has been slowly getting its house in order by cutting costs and simplifying its structure The bank has been selling retail operations in a number of countries shrinking its U S branch network and getting rid of non core businesses Citi s operating expenses fell 10 percent to 10 88 billion in the first quarter ended March 31 as it spent less on employee compensation and advertising and marketing Legal and restructuring costs plunged to 403 million from 1 16 billion Shares of the third biggest U S bank by assets rose 1 5 percent to 54 in early trading on Thursday Revenue from investment banking which is part of Citi s institutional clients group rose 14 percent to about 1 20 billion However overall revenue in the institutional clients group fell 1 percent to 9 03 billion dragged down by fixed income trading Revenue in its global consumer banking business fell 2 percent to 8 66 billion While some businesses faced revenue headwinds we grew loans and deposits in our core businesses and gained wallet share among our target clients Chief Executive Mike Corbat said in a statement The bank has exited or is exiting consumer businesses in countries including Japan Turkey Czech Republic and Hungary Corbat aims to use Citi s streamlined structure to return more capital to shareholders He made progress toward that goal in March when the Federal Reserve approved his plans to raise dividends and buy back shares Citi s return on assets was 1 05 percent higher than Corbat s target of at least 0 9 percent for the year The bank s tier 1 common equity capital ratio rose to 11 percent from 10 6 percent in the fourth quarter as it used 1 2 billion of deferred tax assets Citi put a lot of legal and restructuring costs behind it in the fourth quarter recording charges of 3 5 billion Adjusted net income rose 16 percent to 4 82 billion or 1 52 per share in the first quarter beating average analyst estimate of 1 39 per share according to Thomson Reuters I B E S Adjusted revenue fell 2 percent to 19 81 billion
Fixed income trading revenue fell 11 percent to 3 48 billion In contrast Goldman Sachs Group Inc N GS and JPMorgan Chase Co N JPM reported higher revenue from fixed income trading | 4/16/2015 |
GS | Clinton to name former financial regulator as CFO Bloomberg | WASHINGTON Reuters Democrat Hillary Clinton plans to name Gary Gensler a former financial regulator who pushed for stricter oversight of Wall Street as the chief financial officer for her presidential campaign Bloomberg reported on Thursday Clinton blasted executive pay and tax rates for hedge fund managers this week on the first stop of her campaign rollout in Iowa to highlight her promise to help Americans struggling toward economic recovery Bloomberg cited in its report an unnamed Democrat familiar with the decision Gensler whose five year term as the chairman of the Commodity Futures Trading Commission ended in January 2014 came to embody President Barack Obama s push for Wall Street reforms in the trillion dollar derivatives market A one time Goldman Sachs NYSE GS swaps trader he transformed the watchdog from a relatively sleepy agriculture focused regulator to a powerful overseer of Wall Street He proved a polarizing figure with his aggressive interpretation of swaps reforms after the financial crisis irritating both Wall Street and international counterparts There is something wrong when hedge fund managers pay lower tax rates than nurses or the truckers that I saw on I 80 as I was driving here over the last two days Clinton said in Monticello Iowa on Tuesday Clinton considered the front runner for the Democratic presidential nomination next year announced her candidacy last Sunday Reuters could not immediately reach Gensler for comment | 4/16/2015 |
GS | Exclusive SunGard to explore possible 10 billion sale sources | By Liana B Baker Greg Roumeliotis and Mike Stone Reuters Financial technology company SunGard Data Systems Inc is preparing to appoint financial advisers to explore a sale that could value it at as much as 10 billion including debt people familiar with the matter said on Friday SunGard has asked investment banks vying for advisory mandates to prepare for interviews as early as next week the people said The company plans to simultaneously explore an outright sale as well as a potential initial public offering the people added Private equity owned SunGard decided to explore a sale after it was approached by at least one other company about a potential takeover one of the people added The identity of that company could not be immediately learned The sources asked not to be identified because the deliberations are confidential A SunGard spokesman did not immediately respond to a request for comment One of the largest leveraged buyouts that preceded the 2008 financial crisis SunGard is one of the longest held investments in private equity history Its owners have struggled to boost the company s value to the point where they can cash out and make a decent return SunGard was acquired for 11 4 billion in 2005 by Silver Lake Partners LP TPG Capital LP Bain Capital LLC Blackstone Group LP Goldman Sachs NYSE GS Capital Partners LP KKR Co LP and Providence Equity Partners Inc But since the buyout the firms have taken money from SunGard In 2012 for example they paid themselves 720 million with their first dividend from the company Based in Wayne Pennsylvania SunGard provides software and processing services for financial firms and also serves the education and public sectors Last year it spun off its disaster recovery unit which represented about a third of its revenue Annual revenue at SunGard increased last year by 2 percent to 2 8 billion As of Dec 31 total debt was 4 7 billion and cash was 447 million Adjusted earnings before interest taxes depreciation and amortization was flat last year at 765 million | 4/18/2015 |
GS | Supreme Court rejects Rajat Gupta s insider trading appeal | WASHINGTON Reuters The Supreme Court on Monday left intact the insider trading conviction of former Goldman Sachs Group Inc N GS director Rajat Gupta
The court rejected Gupta s appeal of a March 2014 ruling by the New York based 2nd U S Circuit Court of Appeals that had upheld the conviction | 4/20/2015 |
GS | Morgan Stanley posts highest profit since financial crisis | By Anil D Silva and Avik Das Reuters Wall Street investment bank Morgan Stanley NYSE MS reported its most profitable quarter since the financial crisis on Monday boosted by higher revenue from trading bonds and equities The bank s trading business like those of its main rivals got a boost in the quarter after the Swiss central bank scrapped a cap on the franc the European Central Bank announced its quantitative easing program and the U S Federal Reserve took steps toward tightening monetary policy Global stocks also generally performed strongly Morgan Stanley capped a mostly strong quarter for the big U S banks with its 60 percent rise in net profit followed by Goldman Sachs Group Inc NYSE GS whose profit jumped 41 percent We did not dial up risk to generate these earnings Chief Executive James Gorman said on a call to discuss what he described as the bank s strongest quarter in many years Morgan Stanley is focusing less on bond markets and more on managing money for the rich as a way to free up capital and meet stricter regulatory rules imposed since the financial crisis Net income applicable to the bank s common shareholders rose to 2 31 billion or 1 18 per share in the quarter from 1 45 billion or 74 cents per share a year earlier It was the bank s most profitable quarter since the second quarter of 2007 according to Thomson Reuters data HIGHEST PROFIT SINCE 2007 Morgan Stanley s shares were up 0 4 percent at 36 91 in early trading after being up as much as about 2 6 percent before the opening bell The bank achieved an adjusted average return on equity of 10 1 percent above the 10 percent minimum set by Gorman as the bank focuses more on returns than revenue Excluding items the Morgan Stanley reported earnings of 1 14 per share Adjusted earnings according to calculations by Thomson Reuters I B E S worked out to 85 cents per share On that basis analysts had expected per share earnings of 78 cents Net revenue excluding items rose 10 3 percent to 9 78 billion beating the average estimate of 9 17 billion Revenue from wealth management rose 6 2 percent to 3 83 billion accounting for 39 percent of total revenue Pre tax income from the business rose 24 6 percent to 855 million for a margin of 22 percent within the expected year end range Adjusted revenue from equities sales and trading rose by a third to 2 27 billion a strong performance but not enough to beat Goldman Sachs Group Inc s 2 32 billion Excluding special items revenue from trading fixed income securities and currencies FIC rose 15 percent to 1 90 billion the highest in three years Goldman and JPMorgan Chase Co NYSE JPM also reported higher revenue from the business The wealth unit s contribution to revenue jumped to nearly 45 percent last year from less than 20 percent in 2006 In the same period FIC revenue fell to about 12 percent of revenue from more than a third
Expenses for compensation and benefits rose 5 percent in the quarter | 4/20/2015 |
GS | Testimony kicks off in ex Goldman programmer code theft trial | By Brendan Pierson Reuters The trial of a former Goldman Sachs Group Inc NYSE GS computer programmer accused of stealing code from the investment bank got underway Wednesday with testimony from Goldman technology employee Joseph Yanagisawa Sergey Aleynikov a dual citizen of Russia and the United States is charged by state prosecutors with stealing computer code as he prepared to leave Goldman for a high frequency trading startup in Chicago The defense has argued that the case should be barred by double jeopardy given a previous federal trial conviction and dismissal Aleynikov s lawyers also argue that what he did was not illegal Yanagisawa is one of the people who spoke with federal agents who first investigated Aleynikov He testified Wednesday about the security of Goldman s computer systems Testimony is expected to continue on Thursday in the case which inspired Michael Lewis best selling book Flash Boys Aleynikov 45 first arrested by federal agents in 2009 was already tried and convicted in federal court An appeals court threw out the conviction in 2012 saying the anti espionage law did not apply and setting him free after about a year About six months later Manhattan District Attorney Cyrus Vance revived the case in state court and charged him in August 2012 with unlawful duplication of computer related material Aleynikov faces 1 1 2 years to four years in prison if convicted on state charges His first sentence was eight years
The case is People v Aleynikov New York State Supreme Court New York County No 04447 2012 | 4/9/2015 |
GS | EUR USD moves back toward parity ending the week down more than 3 | Investing com The U S dollar resumed its steady ascent against the euro on Friday amid optimistic economic data as the pair continued its move back toward parity
EUR USD dove 0 0059 or 0 55 to slip under 1 06 at 1 059 its lowest level since Mar 18 On that date the pair gained more than 2 after relatively dovish comments from Federal Reserve chair Janet Yellen on slow GDP and wage growth fueled speculation that a looming interest rate hike could be delayed
EUR USD plunged to a daily low of 1 0568 in European afternoon trading before paring some of its losses during the U S morning trading session
The pair likely gained support at 1 05 the low on Mar 13 and resistance at 1 12 the high from Mar 2 Earlier this week the euro moved above 1 10 against the dollar for the first time since Mar 25 following a disappointing U S monthly jobs report for the month of March
It has declined sharply since then and finished the week down more than 3 4 down against its U S counterpart For the year as a whole the pair is down roughly 12 as the start of a 60 million a month quantitative easing program coincided with expectations that the Fed appeared ready to raise rates
Although Yellen s comments last month may have slowed the dollar s appreciation many analysts believe that parity is inevitable Last month analysts from Goldman Sachs NYSE GS said they expect the euro to reach 0 95 against the dollar by March 2016 and to continue downward to 0 80 by the end of 2017
The U S Bureau of Labor Statistics BLS said on Friday that U S import prices fell 0 3 in March marking the eighth consecutive monthly decline More critically prices for domestic imports fell 10 5 on a year over year basis from March 2014 representing the steepest decline since 2009
A stronger dollar is considered to be a key factor in pulling down import prices The U S Dollar Index which measures the strength of the greenback versus a basket of six other major currencies ticked upward 0 43 on Friday to 99 68 The index is approximately 20 higher since last year at this time
Next week investors will await the release of the BLS Consumer Price Index for the month of February on Friday In January the CPI U for All Urban Consumers fell by 0 7 on a seasonally adjusted basis and 0 1 over the last year marking the first 12 month negative change since October 2009 The CPI is the most widely used monthly indicator of inflation Other key reports on U S manufacturing and industrial production will be released early next week
Also the European Central Bank is expected to make key rate and monetary policy decisions at a Governing Council meeting on Wednesday ECB president Mario Draghi is expected to make his first public comments on the euro zone s bond buying program at a press conference following the meeting
Yields on U S 10 Year Treasuries fell slightly by 0 009 to 1 949 while yields on German 10 Year bunds ticked down 0 01 to 0 16 | 4/11/2015 |
GS | British Hotel Chain Travelodge To Be Sold For 1 4B Report | By
The owners of the British budget hotel chain Travelodge are considering a sale of the company that could value it at over 1 billion pounds 1 4 billion according to a report by the Times The sale is likely to take place in the next nine to 12 months the newspaper reported citing people familiar with the matter
The report of the possible floatation comes three years after the hotel chain s current owners Goldman Sachs NYSE GS Avenue Capital and GoldenTree Asset Management took control of Travelodge from Dubai International Capital
Travelodge is one of U K s largest hotel chains and also operates in the U S Canada Australia and Ireland In 2012 as part of a massive financial restructuring that reduced its debt to 329 million pounds 480 6 million from 635 million pounds 927 million the company s ownership was passed from Dubai International Capital to its current owners | 4/13/2015 |
GS | Exclusive U S Senate Banking panel launches new investigative team | By Sarah N Lynch WASHINGTON Reuters The U S Senate Banking Committee has set up an investigative team in recent weeks that will probe issues ranging from financial regulation to insurance fraud part of a drive by its new chairman to beef up the panel s oversight function Senate Banking Chairman Richard Shelby who took the top post this year after Republicans gained control of the Senate had pushed for the committee to establish an investigation team throughout the 2007 2009 financial crisis while the panel was controlled by Democrats I have long believed that the Banking Committee should be able to conduct its own vigorous oversight Shelby said in a statement to Reuters Senior Republican Senators such as Charles Grassley of Iowa have often pushed for congressional committees to devote resources to hire investigators noting that investigative efforts can often have has much of an impact on policy as drafting legislation Grassley has long hired investigators for various committees he has chaired and also kept investigators on staff when he was in the minority He has been vocal in spearheading numerous probes with prominent targets including the botched anti gun trafficking program along the U S Mexico border known as Operation Fast and Furious For the banking committee s new team one potential target said a Republican Senate aide is a regulatory panel created as part of the sweeping Dodd Frank Wall Street reform law that has the power to designate companies as systemically risky a designation that incurs greater oversight The committee known as the Financial Stability Oversight Council is chaired by Treasury Secretary Jack Lew and has been unpopular with some conservatives In addition the Senate Banking Committee investigators are already looking into charges of fraud related to Hurricane Sandy flood insurance claims The three person team the first such operation for the committee in at least eight years includes one former Senate Select Committee on Intelligence staffer and two staffers who worked for financial services and oversight panels in the U S House of Representatives the Republican committee aide told Reuters In addition Senate Banking Committee Ranking Member Sherrod Brown is also separately hiring a new investigator to work for the Democrats a Democratic committee aide said Although the committee under former Democratic Chairman Chris Dodd was responsible for writing the Dodd Frank law after the crisis the panel did not conduct any formal investigations or hire staff to probe the issues Most of the in depth probes into the crisis were conducted by another Senate panel the Permanent Subcommittee on Investigations PSI which produced major reports exploring the roles that firms like Goldman Sachs NYSE GS and credit raters like Standard Poor s played as the U S economy plunged into a crisis Bob Roach who was a chief investigator at the PSI will serve as the Democrats new investigator starting next Monday the Democratic aide said Shelby who served as ranking member of the banking committee during Dodd s tenure was unhappy at the time at the lack of a deep dive into the causes of the crisis the Republican committee aide said The aide added that Shelby had previously planned to launch an investigative team when he was chairman of the committee in 2006 but Republicans lost the majority in the Senate before he had a chance to set one up Brown in a statement to Reuters said he agrees that more oversight should be conducted I look forward to working with Chairman Shelby Brown said The Senate Banking Committee has jurisdiction over a wide range of financial market issues relating to banks stock brokers exchanges insurers asset managers and mortgage services It also oversees aspects of foreign trade housing federal monetary policy and matters related to government backed flood insurance The new investigative team which became fully staffed earlier this month does not have subpoena power but the findings from its informal investigations could potentially prompt the banking committee to decide to issue subpoenas or authorize full blown probes the Republican aide said HURRICANE SANDY PROBE The early stage Hurricane Sandy flood probe was kicked off after New York and New Jersey homeowners alleged in a lawsuit that engineering firms doctored reports so that the insurance companies could deny payments to water damage victims in those states The New York and New Jersey attorneys general along with the Department of Homeland Security Inspector General are also conducting criminal probes into the matter a spokesman for the Federal Emergency Management Agency said William Chip Merlin an attorney who represents hundreds of Hurricane Sandy victims said he welcomes the scrutiny by the Senate Banking Committee which had been requested by several lawmakers including Banking Committee Democrats Charles Schumer of New York and Robert Menendez of New Jersey It is about time There ought to be some transparency about what is going on he said One topic that may be of interest to the committee s new investigators is the FSOC s relationship with the Financial Stability Board an international regulatory arm of the Group of 20 leading economies
Republicans including Shelby have openly questioned whether the FSOC s decisions to designate financial institutions as systemically risky may have been influenced in part by the FSB | 4/14/2015 |
GS | U S oil futures turn higher ahead of API supply report | Investing com U S oil futures shook off earlier weakness to trade higher on Tuesday as market participants looked ahead to weekly information on U S oil supplies due later in the day to gauge the strength of demand in the world s largest oil consumer
On the New York Mercantile Exchange crude oil for May delivery tacked on 53 cents or 1 02 to trade at 52 67 a barrel during U S morning hours Prices touched an intraday low of 51 19 earlier
The American Petroleum Institute will release its inventories report later in the day while Wednesday s government report could show crude stockpiles rose by 2 9 million barrels in the week ended April 3
A day earlier New York traded oil futures shot up 3 00 or 6 11 to close at 52 14 amid speculation an ongoing collapse in rigs drilling for oil in the U S will result in lower production
Nymex prices received a further boost after industry research group Genscape reported a surprise drop in supplies at Cushing Oklahoma a key storage hub and the delivery point for U S oil futures
Despite Monday s gains Wall Street investment bank Goldman Sachs NYSE GS said in a report Tuesday that prices will need to remain low in coming months to achieve a slowdown in U S output growth
We therefore reiterate our forecast for prices to remain low in 2015 with an only gradual recovery into year end it said
Elsewhere on the ICE Futures Exchange in London Brent oil for May delivery inched up 20 cents or 0 35 to trade at 58 33 a barrel
On Monday London traded Brent surged 3 17 or 5 77 to settle at 58 12 as investors assessed the impact of last week s Iranian nuclear deal on global supplies
Market experts largely estimated that a ramp up in Iranian crude exports could take several months after Western powers negotiated a tentative nuclear deal with Tehran last week
Brent prices found further support after Saudi Arabia raised prices for crude sales to Asia signaling better demand in the region
Meanwhile the spread between the Brent and the WTI crude contracts stood at 5 66 a barrel compared to 5 98 by close of trade on Monday | 4/7/2015 |
GS | Crude oil futures surge building on Monday s significant gains | Investing com WTI crude oil futures rose by nearly 3 5 on Tuesday amid a stronger dollar and dwindling supply as prices reached a seven week high
On the New York Mercantile Exchange WTI crude oil for May delivery gained 1 82 to a session high of 53 96 a barrel in U S afternoon trading before falling back slightly to 53 88 up 3 33 The upward movement built upon Monday s gains when crude futures shot up by more than 6 following the preliminary accord reached in the Iranian Nuclear Deal and a disappointing U S jobs report on Friday At one point on Tuesday crude futures moved above 53 46 a barrel its highest level since Feb 17
On the Intercontinental Exchange ICE brent crude for May delivery gained 0 94 or 1 62 to 59 06 a barrel Brent crude futures rose steadily on Tuesday from its level of 57 08 in European morning trading The spread between the international and U S domestic benchmarks fell to 5 18 below Monday s level of 6 04
On Monday Genscape Inc a global provider of energy information for financial and commodity markets said that supply levels at the Cushing Oil Hub in Oklahoma rose by only 169 000 for the week ending April 3 By comparison inventories at Cushing grew 2 629 million barrels for the week ending Mar 27 one week after an increase of 1 911 million Last month the Energy Information Administration EIA reported that supply levels in the U S for crude storage had reached 62 of capacity
Since last June prices for crude futures have plunged roughly 50 after moving above 100 a barrel during the summer months Analysts believe that prices could plummet even further if U S crude storage reaches capacity a development that would force producers to slow output In March the EIA revised its estimate for 2015 U S crude production to 9 3 million barrels per day its fastest rate in 30 years
The estimates come ahead of the American Petroleum Institute s weekly inventory data on Tuesday and the EIA s report on Wednesday concerning weekly supply levels
A bearish outlook on short term crude prices from Goldman Sachs NYSE GS however softened Tuesday s gains In a note to investors the bank indicated that it is unlikely that crude futures could reach 65 a barrel in 2016 if production levels remain constant
Prices need to remain low in coming months to achieve a sufficient and sustainable slowdown in U S production growth Goldman said in the note
Meanwhile international prices also rallied as delegates from Iran met with Chinese leaders in Beijing China Iran s largest oil client has purchased roughly half of Iran s oil exports since 2012 Iran currently has approximately 30 million barrels of oil in offshore reserves ready for export according to the EIA
Iranian oil exports are expected to surge after Western powers temporarily suspended economic and financial sanctions last week If Iran increases oil exports substantially over the next year the EIA said annual average growth could increase by 500 000 barrels per day in production in 2016 | 4/7/2015 |
GS | NYMEX crude falls sharply in Asia as API data shows 12 2 mln b build | Investing com Crude futures dropped sharply in early Asia on Wednesday water industry data showed a solid build in U S crude stocks Industry data from the American Petroleum Institute showed a 12 2 million build in crude stocks last week while distillates rose by 331 000 barrels and gasoline by 2 7 million barrels The data comes ahead of more closely watched figures from the Department of Energy On the New York Mercantile Exchange WTI crude oil for May delivery slumped 2 05 to 52 886 a barrel Overnight WTI crude oil futures rose by nearly 3 5 on Tuesday amid a stronger dollar and dwindling supply as prices reached a seven week high On the Intercontinental Exchange ICE brent crude for May delivery gained 0 94 or 1 62 to 59 06 a barrel on Tuesday On Monday Genscape Inc a global provider of energy information for financial and commodity markets said that supply levels at the Cushing Oil Hub in Oklahoma rose by only 169 000 for the week ending April 3 By comparison inventories at Cushing grew 2 629 million barrels for the week ending Mar 27 one week after an increase of 1 911 million Last month the Energy Information Administration EIA reported that supply levels in the U S for crude storage had reached 62 of capacity Since last June prices for crude futures have plunged roughly 50 after moving above 100 a barrel during the summer months Analysts believe that prices could plummet even further if U S crude storage reaches capacity a development that would force producers to slow output In March the EIA revised its estimate for 2015 U S crude production to 9 3 million barrels per day its fastest rate in 30 years A bearish outlook on short term crude prices from Goldman Sachs NYSE NYSE GS however softened Tuesday s gains In a note to investors the bank indicated that it is unlikely that crude futures could reach 65 a barrel in 2016 if production levels remain constant Prices need to remain low in coming months to achieve a sufficient and sustainable slowdown in U S production growth Goldman said in the note Meanwhile international prices also rallied as delegates from Iran met with Chinese leaders in Beijing China Iran s largest oil client has purchased roughly half of Iran s oil exports since 2012 Iran currently has approximately 30 million barrels of oil in offshore reserves ready for export according to the EIA Iranian oil exports are expected to surge after Western powers temporarily suspended economic and financial sanctions last week If Iran increases oil exports substantially over the next year the EIA said annual average growth could increase by 500 000 barrels per day in production in 2016 | 4/7/2015 |
GS | EUR USD moves slightly higher amid soft U S jobs data Greek concerns | Investing com The euro moved slightly higher against the dollar on Wednesday following the release of weaker than expected U S employment and manufacturing data
The modest gains however were softened by continuing drama in Greece as the nation s sovereign debt crisis weighed on the euro The euro retreated in U S afternoon trading after Goldman Sachs NYSE GS released an ominous note to investors on the ramifications of a potential Greek default if the nation leaves the European Union
EUR USD fell to 1 0759 in U S afternoon trading from a daily high of 1 0794 hours earlier The pair still inched up 0 24 for the session
The euro s rally against the dollar came one day after it fell nearly 1 on Tuesday to 1 0733 its largest daily loss since Mar 19 The currency pair also reached its lowest level on Tuesday since Mar 20 when relatively dovish comments from Federal Reserve chair Janet Yellen spurred a brief rally in the euro
EUR USD likely received support at 1 05 its low from Mar 11 and resistance at 1 14 its high from mid February
The pair moved mildly higher on Wednesday from 1 0744 to 1 076 following the release of ADP s National Employment Report a monthly report that measures the change in total non farm private employment on a seasonally adjusted basis Last month the U S Private Sector added 189 000 jobs for the month of March far below economists forecasts of the addition of 225 000 according to ADP The subdued private sector job growth marked its lowest increase since January 2014
The report comes ahead of Friday s highly anticipated U S jobs report from the Bureau of Labor Statistics BLS which will be released while commodity markets remain closed for Good Friday On Mar 6 when the BLS reported that unemployment nationwide declined to 5 5 for the previous month the euro slid roughly 2 to 1 08 amid speculation that an interest rate hike from the Federal Reserve could be imminent
Greece meanwhile is reportedly running out of time to secure critical aid from its euro zone creditors that could be vital to stave off bankruptcy Earlier this week the creditors rejected Greece s latest proposal of reforms deeming the austerity measures a list of ideas rather than a concrete plan
As negotiations near a standstill investors continue to withdraw funds from Greek banks at a high rate Households pulled out 8 8 billion from banks throughout the country in January and an additional 5 4 billion a month later Goldman told investors Corporations meanwhile withdrew 3 3 bil in January before taking out 1 9 bil during the month of February
We think these developments are more important than the market is giving them credit for Goldman Sachs strategist Robin Brooks wrote in the investors note
Yields on Greek 10 Year bonds rose 0 18 to 11 81 on Wednesday while yields on the German 10 Year bunds rose 0 002 to 0 174
In the U S yields on U S 10 Year Treasuries plunged 0 075 to 1 859 while yields on U S 30 Year Treasuries fell 0 077 to 2 466 | 4/1/2015 |
GS | Etsy IPO expected to be priced at 14 16 share | This March 31 story corrects descriptor of Tiger Global Management to investment firm from hedge fund in paragraph 3 Reuters Etsy Inc which operates a website that sells handmade goods and craft supplies said its initial public offering was expected to be priced at 14 16 per share The offering of 16 66 million common shares is expected to raise about 266 65 million at the top end of the expected range valuing Etsy at about 1 78 billion The company which has 1 4 million active sellers and 19 8 million active buyers as of December counts venture capital firm Accel Partners Index Ventures Union Square Ventures and investment firm Tiger Global Management as its major investors Accel Partners stake would drop to 22 4 percent from 27 percent after the offering while investor Union Square s stake would drop to 12 6 percent from 15 2 percent Brooklyn New York based Etsy is offering 13 33 million shares the company said in a regulatory filing on Tuesday Etsy which has 29 million items listed on its website charges a 20 cent listing fee for each item and a 3 5 percent fee for each completed sale It also earns from its advertising platform payment processing and shipping labels Etsy employed 685 people as of December and reported gross merchandise sales of 1 93 billion in 2014 The company led by former Yahoo NASDAQ YHOO Inc executive Chad Dickerson said net loss widened to 15 24 million in 2014 from 796 000 a year earlier Revenue rose 56 4 percent to 195 59 million Goldman Sachs Co NYSE GS Morgan Stanley NYSE MS and Allen Co LLC are underwriting the IPO | 4/1/2015 |
GS | U S jobless data boosts labor market picture trade deficit narrows | By Lucia Mutikani WASHINGTON Reuters The number of Americans filing new claims for unemployment benefits unexpectedly fell last week suggesting the labor market continues to expand at a solid clip even as economic growth has stalled Sustained labor market strength supports views that the sharp slowdown in activity is probably temporary A host of factors ranging from bad weather to a strong dollar sucked momentum from the economy in the first quarter While the economy has decelerated the fundamentals remain strong and the labor market points to a pick up in overall activity in the second quarter said Joe Brusuelas chief economist at McGladrey in New York Initial claims for state unemployment benefits dropped 20 000 to a seasonally adjusted 268 000 for the week ended March 28 the lowest level since January the Labor Department said on Thursday Economists had forecast claims at 285 000 The four week moving average of claims considered a better measure of labor market trends as it irons out week to week volatility fell 14 750 to 285 500 The bullish labor market tone was also underscored by signs that more people are coming off the unemployment benefits rolls The number of people still receiving benefits after an initial week of aid fell 88 000 to 2 33 million in the week ended March 21 the lowest reading since December 2000 The strong labor market together with an anticipated acceleration in consumer spending signaled by a surge in auto sales last month should keep the Federal Reserve on track to start raising interest rates this year The U S central bank has kept its short term interest rate near zero since December 2008 Prices for U S Treasury debt fell while stocks on Wall Street rose The dollar slipped against a basket of currencies While the claims data has no bearing on Friday s March employment report as it falls outside the survey period it should help allay fears of a long lasting moderation in growth Nonfarm payrolls likely increased 245 000 last month with the unemployment rate holding steady at a more than 6 1 2 year low of 5 5 percent according to a Reuters survey of economists The economy which has been hampered by weaker global demand and a now settled labor dispute at the West Coast ports as well as a strong dollar and a harsh winter also got a boost from an unexpected rise in factory orders in February RAYS OF HOPE In a separate report the Commerce Department said new orders for manufactured goods increased 0 2 percent ending six straight months of declines Orders excluding transportation rose 0 8 percent the biggest gain in eight months Downbeat first quarter growth estimates got a lift from a second report from the Commerce Department showing the trade deficit narrowed 16 9 percent to 35 4 billion in February the smallest since October 2009 When adjusted for inflation the deficit narrowed to 50 8 billion in February from 54 6 billion the prior month Goldman Sachs NYSE GS raised its first quarter growth forecast by three tenths of a percentage point to a 1 0 percent rate while forecasting firm Macroeconomic Advisers lifted its estimate to a 1 2 percent rate from 0 9 percent The economy grew at a 2 2 percent rate in the fourth quarter The buoyant dollar and sluggish global demand combined with better domestic consumption suggest the smaller trade deficit is probably temporary We will be looking for imports to pick up in the coming months as consumer spending gains some momentum in the midst of rising employment levels said Anthony Karydakis chief economic strategist at Miller Tabak in New York The West Coast ports dispute appears to have slowed the flow of imports and exports In February imports tumbled 4 4 percent to their lowest level since April 2011 Imports of petroleum products were the lowest since September 2004 with the average import price for crude oil at a near six year low Exports fell 1 6 percent to their lowest level since October 2012 Exports to Canada and Mexico the main U S trading partners fell in February Exports to China tumbled 8 9 percent while those to the European Union were unchanged
With imports from China plunging 18 1 percent the politically sensitive U S China trade deficit dived 21 2 percent to 22 5 billion | 4/2/2015 |
GS | Investment banking fees fall 8 percent in weakest first quarter since 2012 | By Amrutha Gayathri Reuters Global investment banking fees fell 8 percent to 20 billion in the first quarter the poorest start to the year since 2012 hurt by weak deal activity in Europe Asia Pacific and Japan Fees for deals done fell 28 percent in Japan 14 percent in Europe and 18 percent in Asia Pacific according to data compiled by Thomson Reuters and Freeman Consulting The North American investment banking market remained stable with fees little changed at 11 5 billion JPMorgan Chase Co NYSE JPM topped the global investment banking league table in the quarter with 1 49 billion in fees Goldman Sachs Group Inc NYSE GS was second with 1 48 billion Morgan Stanley NYSE MS and Citigroup Inc NYSE C were the biggest gainers among the top 10 banks in fees earned while Credit Suisse SIX CSGN Group AG s fees dropped 23 percent Investment banking activity in the financial healthcare and energy and power sectors generated 54 percent of the global fee pool during the quarter Fees from deal making in the healthcare sector jumped 24 percent with Goldman commanding 14 percent of all fees booked in the sector Equity capital markets underwriting fees fell 2 percent to 5 3 billion dragged down by a 36 percent drop in fees from initial public offerings Fees from debt capital markets underwriting rose 4 percent to 6 3 billion while mergers and acquisition advisory fees fell slightly to 5 5 billion
Investment banking fees generated by financial sponsors and their portfolio companies dropped 30 percent to 2 5 billion Blackstone Group LP s investment banking fees rose 79 percent to 168 million | 4/2/2015 |
GS | Oil prices fall Iran China to discuss supplies | By Henning Gloystein and Florence Tan SINGAPORE Reuters Brent crude prices fell almost 1 a barrel on Tuesday with an Iranian delegation in Beijing this week to push for more oil sales Oil markets were also pressured as Goldman Sachs N GS said prices needed to remain low for months to achieve a slowdown in U S output growth China is Iran s largest trade partner and also its largest oil client having bought roughly half of Iran s total crude exports since 2012 when sanctions against Iran were tightened Brent May crude had dropped almost 1 to 57 26 a barrel by 0700 GMT U S May crude was down 50 cents at 51 64 a barrel Goldman said in a research note it expected U S crude inventories to top out in April and subsequently draw down at 350 000 barrels per day during May September when demand for fuel to power cars and air conditioners is at its greatest Still the bank said it saw little upside for its 40 a barrel forecast over the next three months as inventories would likely rise again by October pressuring prices into 2016 Prices need to remain low in coming months to achieve a sufficient and sustainable slowdown in U S production growth the bank said adding that the U S production outlook for 2016 makes its forecast for 65 a barrel oil next year look too high On Monday energy information group Genscape said its data showed Cushing stocks rose by only 169 000 barrels in the week to April 3 The American Petroleum Institute will release its weekly oil inventories data on Tuesday at 1630 EDT 2030 GMT while the Energy Information Administration will publish its data on Wednesday at 1030 EDT U S commercial stocks were seen extending their record build for the 13th consecutive week while gasoline inventories likely continued to drop a Reuters survey showed EIA S Yet West Texas Intermediate may get another boost as refineries return from maintenance and take more crude to prepare for peak summer fuel demand said Ric Spooner chief analyst at CMC Markets in Sydney
A lot of people are waiting to see some improvement in the supply demand balance and we re getting closer to the time when it might happen Spooner said | 4/7/2015 |
GS | U S oil futures give back 1 after rallying 6 on Monday | Investing com West Texas Intermediate oil futures gave back some of the previous session s strong gains on Tuesday as market participants looked ahead to fresh weekly information on U S stockpiles of crude and refined products to gauge the strength of demand in the world s largest oil consumer
On the New York Mercantile Exchange crude oil for May delivery declined 57 cents or 1 1 to trade at 51 57 a barrel during European morning hours
The American Petroleum Institute will release its inventories report later in the day while Wednesday s government report could show crude stockpiles rose by 2 9 million barrels in the week ended April 3
Total U S crude oil inventories stood at 471 4 million barrels as of March 27 the most in at least 80 years
A day earlier New York traded oil futures shot up 3 00 or 6 11 to close at 52 14 amid speculation an ongoing collapse in rigs drilling for oil in the U S will result in lower production
Nymex prices received a further boost after industry research group Genscape reported a surprise drop in supplies at Cushing Oklahoma a key storage hub and the delivery point for U S oil futures
Despite Monday s gains Wall Street investment bank Goldman Sachs NYSE GS said in a report Tuesday that prices will need to remain low in coming months to achieve a slowdown in U S output growth
We therefore reiterate our forecast for prices to remain low in 2015 with an only gradual recovery into year end it said
Elsewhere on the ICE Futures Exchange in London Brent oil for May delivery slumped 67 cents or 1 15 to trade at 57 45 a barrel
On Monday London traded Brent surged 3 17 or 5 77 to settle at 58 12 as investors assessed the impact of last week s Iranian nuclear deal on global supplies
Market experts largely estimated that a ramp up in Iranian crude exports could take several months after Western powers negotiated a tentative nuclear deal with Tehran last week
Brent prices found further support after Saudi Arabia raised prices for crude sales to Asia signaling better demand in the region
Meanwhile the spread between the Brent and the WTI crude contracts stood at 5 88 a barrel compared to 5 98 by close of trade on Monday | 4/7/2015 |
GS | Informatica to be taken private by Permira Advisers and CPPIB | Reuters Enterprise software provider Informatica Corp said it would be taken private by an consortium comprising Permira Advisers Ltd and Canada Pension Plan Investment Board CPPIB for about 5 3 billion Informatica shareholders will get 48 75 per share in cash the company said The company s shares closed at 44 22 on Thursday Informatica s shares rose 4 percent to 45 83 on the Nasdaq on Monday after Reuters reported that both Permira and CPPIB and a partnership of Thoma Bravo LLC and Ontario Teachers Pension Plan had submitted bids for the company Redwood City California based Informatica helps companies connect software and enterprise applications and store data It competes in the integration software market with Tibco which was taken private for 4 3 billion in December by buyout firm Vista Equity Partners Informatica s revenue rose 10 5 percent in 2014 to 1 05 billion while its pre tax income jumped 21 percent to 170 3 million Activist hedge fund Elliott Management Corp disclosed an 8 percent stake in Informatica in January and said in a regulatory filing that it was speaking to the company about ways to maximize shareholder value The deal is the largest leveraged buyout so far this year Qatalyst Partners was Informatica s financial adviser and Wilson Sonsini Goodrich Rosati was legal counsel BofA Merrill Lynch Goldman Sachs Co NYSE GS Macquarie Capital and Union Square Advisors LLC were financial advisers to the Permira funds and CPPIB | 4/7/2015 |
GS | SEC accuses financier Lynn Tilton of defrauding investors | By Sarah N Lynch WASHINGTON Reuters U S regulators on Monday accused flamboyant New York financier Lynn Tilton and her advisory business of defrauding investors by hiding the poor performance of assets underlying three collateralized loan obligation funds The Securities and Exchange Commission said Tilton and several of her Patriarch Partners firms were able to collect almost 200 million in fees by not properly valuing the assets in the funds through the methodology described to investors Known for her flashy outfits and colorful language Tilton has portrayed herself as a hard charging female executive in a field dominated by men The former investment banker for Morgan Stanley N MS and Goldman Sachs Group Inc N GS has referred to herself as the turnaround queen because of her penchant for buying distressed assets and rejuvenating them Tilton plans to fight the SEC s charges in the agency s in house court a Patriarch spokeswoman said In an administrative hearing SEC enforcement lawyers and the defense counsel present their case before an agency judge The losing party can appeal the decision first to the five member commission and ultimately to a federal appeals court We are disappointed that the SEC has chosen to bring an enforcement action that is ill founded and at odds with Patriarch s investment strategy which was consistently disclosed since the inception of the funds the Patriarch spokeswoman said According to the SEC s lawsuit Tilton 55 and several of her Patriarch Partners investment fund companies misled investors in the three Zohar collateralized debt obligation funds The SEC said the Zohar funds raised 2 5 billion from investors and used the money to make loans to distressed companies The companies however failed to perform well and did not make some or all of the interest payments back to the funds over several years In fact the SEC said internal Patriarch emails it obtained in the probe showed Tilton directed how much interest each company had to pay and in some cases the amounts she demanded did not match those due on the loans The SEC said she failed to use the valuation method described to investors masking the poor performance and boosting her firm s compensation by nearly 200 million The agency also accused the firm of filing false financial reports The complaint does not specify how much in penalties could be at stake in the case Tilton breached her fiduciary duty to her clients SEC Enforcement Director Andrew Ceresney told reporters Monday Tilton is one of the more high profile asset managers targeted by the SEC in recent years The media often quoted her as a valuation expert during the financial crisis Later however she clashed with Forbes after it published a series of articles raising questions about her business and accusing her of fraud
According to SEC public records Patriarch Partners which is known for investing in troubled companies in manufacturing and heavy industry reported assets under management of about 5 3 billion as of Feb 28 2014 | 3/30/2015 |
GS | Australia s MYOB says to raise up to 636 million in IPO | SYDNEY Reuters Australian accounting software maker MYOB Ltd said it plans to raise up to A 833 8 million 635 69 million in an initial public offering which is expected to be one of the country s biggest listings this year The Melbourne based owner of software used by 1 2 million businesses said in a listing prospectus on Tuesday that it planned to sell up to 277 2 million of a total of up to 633 4 million shares for between A 3 and A 4 while its current controlling shareholder private equity firm Bain Capital would keep the rest The sale would give the company a market capitalization of up to A 2 3 billion MYOB said more than double the A 1 2 billion that Bain paid when it bought it from Australian buyout group Archer Capital in 2011 Archer took previously listed MYOB private in 2009 The purpose of the sale is to pay down debt let management shareholders cash in their investments broaden the company s investor base and boost its profile the prospectus said Bain had until recently considered a trade sale for its first Australian exit and its decision to list MYOB confirms its faith in Australian equities which have risen 9 percent so far in 2015 despite sharp declines in the resources sector and a growing national deficit Australia in 2014 had its biggest ever year for new listings with 15 billion raised in IPOs as company owners including private equity firms focused on a buoyant share market for offloading assets But IPO activity has been subdued so far in 2015 echoing investors caution as vendors wait to see if unfavorable macroeconomic factors like slowing Chinese growth sliding commodity prices and an imminent U S rate hike hit the broader economy While likely to be a marquee deal for Australia this year the MYOB listing will be far smaller than last year s biggest IPO the A 5 7 billion sale of health insurer Medibank Private Ltd MYOB said Bain was keeping its 57 percent stake under escrow without giving further details Citigroup NYSE C Global Markets Australia Pty Ltd Goldman Sachs Australia Pty Ltd GS UL Merrill Lynch Equities Australia Ltd and UBS AG were joint lead managers on the offer while Australian firm Reunion Capital was financial adviser They will conduct a bookbuild on April 29 before listing starts on May 4 1 1 3116 Australian dollars | 3/31/2015 |
GS | Crude falls more than 2 as deadline extension considered in Iran talks | Investing com Crude oil futures plunged by more than 2 in afternoon trading hours as the White House sent indications that negotiations with Iran on its nuclear program could extend beyond a deadline previously set for late Tuesday evening
While briefing reporters on the negotiations on Tuesday afternoon White House press secretary Josh Earnest said the United States is not opposed to continue talks with Iran as long as they are productive The comments came as the sides reportedly moved closer to reaching the framework of a preliminary political accord aimed at limiting Iran s capabilities enough to keep a nuclear bomb out of reach
Severe economic sanctions against Iran over the last three years have limited the nation s oil exports to roughly a million barrels per day The easing of sanctions could saturate global oil markets with a glut of Iranian oil which could further depress crude prices
On the New York Mercantile Exchange WTI Crude for May delivery plummeted 2 22 to 47 62 a barrel WTI crude wavered between a daily low of 47 32 in European afternoon trading to a high of 48 56 following Earnest s briefing
On the Intercontinental Exchange ICE brent crude for May delivery dropped by 2 26 to 55 04 a barrel Crude oil futures have dipped by more than 7 over the last three days
Iran holds the world s fourth highest level of crude oil reserves according to the Energy Information Administration EIA a supply level of 157 billion barrels that amounts to approximately 10 of total global crude storage The rigid sanctions in turn have boosted Iranian oil supply Iran reportedly has hoarded 30 million barrels of oil on its fleet of offshore supertankers Reuters reported last week
Intense fighting in Yemen meanwhile continued to weigh on energy prices On Monday Saudi Arabian led airstrikes killed 29 people including women and children The attacks came as the Saudi Arabian navy imposed a blockade on a number of ports throughout the country
Oil prices surged late last week amid concerns that the closure of a strategically located strait connecting the Red Sea with the Gulf of Aden could limit exports out of the area The concerns eased after analysts from Goldman Sachs NYSE GS told investors that the critical oil chokepoint could still be reached through an alternative route if the Bab el Mandeb strait is shut down
Oil prices are sensitive to any risky geopolitical news involving Saudi Arabia the world s largest exporter of oil
A spike in oil production in Saudi Arabia in March helped boost Opec s oil supply to its highest level since October Opec reported that total output for March increased to 30 63 million barrels per day up from a revised figure of 30 07 in February Increased demand in Saudi oil exports from Asian customers as well as improved weather in Iraq helped fuel the production increase
In Nigeria president Goodluck Jonathan conceded defeat to Muhammadu Buhari a former military leader and former Nigerian minister of petroleum affairs in the 1970s Plunging oil prices over the last nine months have crippled the economy of Africa s top oil producer | 3/31/2015 |
GS | NYMEX crude oil gains in Asia as API data shows product drawdowns | Investing com Crude oil prices gained in early Asia on Wednesday as U S industry data on oil inventories showed solid draw downs in refined products and investors awaited further word on a possible deal between Western powers and Iran on its nuclear program U S crude oil stocks rose by 5 2 million barrels last week according to data from the American Petroleum Institute while distillate supplies fell 18 000 barrels and gasoline inventories dipped 4 1 million barrels The data is a guide to more closely watched igures for the same period due from the U S Department of Energy later Wednesday On the New York Mercantile Exchange WTI Crude for May delivery rose 0 37 to 47 75 a barrel
Ahead comes a busy start to the second quarter with Australia releasing the AI Group Manufacturing Index for March is at 0930 Sydney time 2230 GMT In February the index gave back 3 6 points just when it looked set to capture the 50 0 mark In Japan the first quarter Tankan business survey is due at 0850 Tokyo time 2350 GMT The diffusion index DI for sentiment among major manufacturers is expected at plus 16 in March up from plus 12 in December for the first rise in two quarters Then comes February building approvals data at 1130 0030 GMT Expectation is for a 4 0 month on month fall after a 7 9 gain in January The RBA s March Commodity Price Index is due at 1630 0530 GMT which showed a 2 7 month on month fall in February and 20 6 in year on year terms In China the March CFLP manufacturing and services PMI at 0900 local time 0100 GMT with a dip to 49 7 expected from February s 49 9 Then the HSBC LONDON HSBA LONDON HSBA final PMI is due at 0945 0145 GMT with 49 3 expected Investors were shaken by the flash reading showing a surprising fall to 49 2 from February s final 50 7 with slack domestic demand taking the blame Overnight crude oil futures plunged by more than 2 in afternoon trading hours as the White House sent indications that negotiations with Iran on its nuclear program could extend beyond a deadline previously set for late Tuesday evening While briefing reporters on the negotiations on Tuesday afternoon White House press secretary Josh Earnest said the United States is not opposed to continue talks with Iran as long as they are productive The comments came as the sides reportedly moved closer to reaching the framework of a preliminary political accord aimed at limiting Iran s capabilities enough to keep a nuclear bomb out of reach Severe economic sanctions against Iran over the last three years have limited the nation s oil exports to roughly a million barrels per day The easing of sanctions could saturate global oil markets with a glut of Iranian oil which could further depress crude prices On the Intercontinental Exchange ICE brent crude for May delivery dropped by 2 26 to 55 04 a barrel on Tuesday Crude oil futures have dipped by more than 7 over the last three days Iran holds the world s fourth highest level of crude oil reserves according to the Energy Information Administration EIA a supply level of 157 billion barrels that amounts to approximately 10 of total global crude storage The rigid sanctions in turn have boosted Iranian oil supply Iran reportedly has hoarded 30 million barrels of oil on its fleet of offshore supertankers Reuters reported last week Intense fighting in Yemen meanwhile continued to weigh on energy prices On Monday Saudi Arabian led airstrikes killed 29 people including women and children The attacks came as the Saudi Arabian navy imposed a blockade on a number of ports throughout the country Oil prices surged late last week amid concerns that the closure of a strategically located strait connecting the Red Sea with the Gulf of Aden could limit exports out of the area The concerns eased after analysts from Goldman Sachs NYSE NYSE GS told investors that the critical oil chokepoint could still be reached through an alternative route if the Bab el Mandeb strait is shut down Oil prices are sensitive to any risky geopolitical news involving Saudi Arabia the world s largest exporter of oil A spike in oil production in Saudi Arabia in March helped boost Opec s oil supply to its highest level since October Opec reported that total output for March increased to 30 63 million barrels per day up from a revised figure of 30 07 in February Increased demand in Saudi oil exports from Asian customers as well as improved weather in Iraq helped fuel the production increase In Nigeria president Goodluck Jonathan conceded defeat to Muhammadu Buhari a former military leader and former Nigerian minister of petroleum affairs in the 1970s Plunging oil prices over the last nine months have crippled the economy of Africa s top oil producer | 3/31/2015 |
GS | NYMEX crude falls in Asia after better than expected HSBC China PMI | Investing com Crude oil prices fell in Asia on Wednesday despite U S industry data on oil inventories that showed solid draw downs in refined products and a better than expected manufacturing survey from HSBC LONDON HSBA on China U S crude oil stocks rose by 5 2 million barrels last week according to data from the American Petroleum Institute while distillate supplies fell 18 000 barrels and gasoline inventories dipped 4 1 million barrels The data is a guide to more closely watched igures for the same period due from the U S Department of Energy later Wednesday On the New York Mercantile Exchange WTI Crude for May delivery fell 0 49 to 47 37 a barrel reversing early gains A busy start to the second quarter with Australia releasing the AI Group Manufacturing Index for March that showed a 0 9 point gain to 46 3 In February the index gave back 3 6 points just when it looked set to capture the 50 0 mark Manufacturing is getting a boost from a fall in the exchange rate but headwinds continue from other directions preventing the index from rising into expansion In the latest month manufacturers noted the further drop in mining construction the progressive closure of motor vehicle assembly and subdued local business investment in equipment In Japan the first quarter Tankan business survey showed plus 15 below the expected at plus 16 but up from plus 12 in December for the first rise in two quarters Australia February building approvals fell 3 2 month on month less than the 4 0 month on month fall expected after a 7 9 gain in January Later the RBA s March Commodity Price Index is due at 1630 0530 GMT which showed a 2 7 month on month fall in February and 20 6 in year on year terms In China the March CFLP manufacturing and services PMI rose to 50 1 better than the dip to 49 7 expected and up from February s 49 9 The HSBC final PMI for March clocked in at 49 6 better than the 49 3 expected Investors were shaken by the flash reading showing a surprising fall to 49 2 from February s final 50 7 with slack domestic demand taking the blame Overnight crude oil futures plunged by more than 2 in afternoon trading hours as the White House sent indications that negotiations with Iran on its nuclear program could extend beyond a deadline previously set for late Tuesday evening While briefing reporters on the negotiations on Tuesday afternoon White House press secretary Josh Earnest said the United States is not opposed to continue talks with Iran as long as they are productive The comments came as the sides reportedly moved closer to reaching the framework of a preliminary political accord aimed at limiting Iran s capabilities enough to keep a nuclear bomb out of reach Severe economic sanctions against Iran over the last three years have limited the nation s oil exports to roughly a million barrels per day The easing of sanctions could saturate global oil markets with a glut of Iranian oil which could further depress crude prices On the Intercontinental Exchange ICE Brent crude for May delivery dropped by 2 26 to 55 04 a barrel on Tuesday Crude oil futures have dipped by more than 7 over the last three days Iran holds the world s fourth highest level of crude oil reserves according to the Energy Information Administration EIA a supply level of 157 billion barrels that amounts to approximately 10 of total global crude storage The rigid sanctions in turn have boosted Iranian oil supply Iran reportedly has hoarded 30 million barrels of oil on its fleet of offshore supertankers Reuters reported last week Intense fighting in Yemen meanwhile continued to weigh on energy prices On Monday Saudi Arabian led airstrikes killed 29 people including women and children The attacks came as the Saudi Arabian navy imposed a blockade on a number of ports throughout the country Oil prices surged late last week amid concerns that the closure of a strategically located strait connecting the Red Sea with the Gulf of Aden could limit exports out of the area The concerns eased after analysts from Goldman Sachs NYSE NYSE NYSE GS told investors that the critical oil chokepoint could still be reached through an alternative route if the Bab el Mandeb strait is shut down Oil prices are sensitive to any risky geopolitical news involving Saudi Arabia the world s largest exporter of oil A spike in oil production in Saudi Arabia in March helped boost Opec s oil supply to its highest level since October Opec reported that total output for March increased to 30 63 million barrels per day up from a revised figure of 30 07 in February Increased demand in Saudi oil exports from Asian customers as well as improved weather in Iraq helped fuel the production increase In Nigeria president Goodluck Jonathan conceded defeat to Muhammadu Buhari a former military leader and former Nigerian minister of petroleum affairs in the 1970s Plunging oil prices over the last nine months have crippled the economy of Africa s top oil producer | 3/31/2015 |
GS | Ex Goldman programmer faces second U S trial on code theft charges | By Brendan Pierson NEW YORK Reuters A former Goldman Sachs Group Inc N GS computer programmer charged with stealing code from the investment bank is scheduled to go on trial on Wednesday the second time in five years he will be in front of a jury for essentially the same accusations The trial for Sergey Aleynikov 45 is scheduled to take place in Manhattan state court over a 2009 episode in which Goldman says he stole the computer code as he prepared to leave for a high frequency trading startup Aleynikov s case inspired Flash Boys Michael Lewis best selling book last year about high frequency trading Aleynikov went to prison after his first trial when a jury in federal court convicted him of violating a corporate espionage law An appeals court threw out the conviction saying the anti espionage law did not apply and setting him free after about a year The U S Constitution generally bars prosecuting someone twice for the same crime a concept known as double jeopardy but the prohibition is not absolute A Manhattan state judge ruled in 2013 that New York prosecutors could pursue Aleynikov even though the earlier case brought by federal prosecutors collapsed State Supreme Court Justice Ronald Zweibel ruled that the federal and state charges were different and he said that the federal case was dismissed because the indictment rather than the evidence was inadequate Aleynikov faces 1 1 2 to four years in prison if convicted a second time His sentence after the first trial was eight years The computer programmer moved to the United States from Russia in 1990 and remains a dual citizen He joined Goldman in 2007 The startup he was planning to join was Teza Technologies in Chicago About six months after the federal appeals court set Aleynikov free Manhattan District Attorney Cyrus Vance revived the case in state court and charged him in August 2012 with unlawful use of secret scientific material and unlawful duplication of computer related material Aleynikov scored a victory last June when Zweibel ruled that prosecutors cannot use a laptop and other evidence the Federal Bureau of Investigation obtained for the federal case Kevin Marino Aleynikov s lawyer said he would raise the double jeopardy issue on appeal if Aleynikov is convicted Mr Aleynikov has now waited two and one half years to fight these charges Marino said He is very anxious to finally begin presenting his defense on Wednesday Vance s office declined to comment
The case is People v Aleynikov New York State Supreme Court New York County No 60353 2012 | 4/1/2015 |
GS | StanChart senior executive Shankar quits in latest management change | By Steve Slater LONDON Reuters Asia focused bank Standard Chartered Plc L STAN said senior executive Viswanathan Shankar had quit and announced a number of management changes in another reshuffle as it seeks to turn around its fortunes Shankar has resigned as chief executive of Europe Middle East Africa and Americas and will now look at setting up a private equity firm Standard Chartered said on Wednesday The 57 year old who was one of four executives on the board will step down at the end of April after 13 years at the bank Standard Chartered also said Jonathan Paul will replace Mark Dowie as head of financial markets and Sumit Dayal will take over as head of corporate finance both based in Singapore Dowie has run financial markets since 2011 and been acting head of corporate finance for a year He will become vice chairman of clients and products moving back to London Paul has 25 years experience at financial firms including Deutsche Bank DE DBKGn and Goldman Sachs N GS He founded hedge fund Ardmore Park Capital in 2008 and more recently also advised asset management firms Dayal has been at Standard Chartered for 11 years including as head of leveraged finance and equity capital markets The new appointments are the latest in a string of changes at Standard Chartered after two years of falling profits raised concerns it had lost its way Former JPMorgan N JPM investment bank boss Bill Winters will take over as chief executive in June replacing Peter Sands after investors pushed for change Chairman John Peace will leave next year A trio of senior managers left last year and in February the bank said Jaspal Bindra CEO of its Asia business and three long standing directors were stepping down
Standard Chartered s London listed shares were up 0 4 percent at 5 10 a m ET | 4/1/2015 |
GS | Goldman economist says Fed hike likely late 2015 or early 2016 | STONE MOUNTAIN Ga Reuters Goldman Sachs N GS Economist Jan Hatzius said on Wednesday he believed the Federal Reserve will likely raise interest rates late this year or early next year given the amount of slack still present in the labor market Hatzius speaking on a panel here at an Atlanta Federal Reserve Bank event said his view on the timing reflected a significant amount of slack still in the labor market and weak wage growth My own view is that it s not yet time Certainly not high time yet Hatzius said adding that Goldman s forecast for the first hike is for September My opinion in terms of when monetary policy ought to be tightened is very late this year or early next year | 4/1/2015 |
GS | European Stocks Head For Year s Biggest Weekly Fall | By
Reuters European shares were heading for their biggest weekly fall of the year on Friday as a second week of gains for oil prices and periphery euro zone bond yields brought to a halt a two month bonanza for the region s equity markets Trading on the day was choppy with oil dropping back after Thursday s spike and the world s regional share and currency markets mixed as investors assessed the wider global impact of the rising tensions in the Middle East Asian shares dropped overnight but the pan European FTSEurofirst tip toed higher as a 0 2 percent fall for Britain s FTSE was offset by 0 6 and 0 1 percent gains on Germany s DAX and France s CAC 40 They were given help as a rebound by the recently subdued dollar pushed the euro back down towards 1 08 but for the week the FTSEurofirst 300 was down almost 2 percent its worst run since mid December I m not surprised that European shares are fading their gains said Gavin Friend a strategist at National Australia Bank in London who said it was largely down to currency dynamics The dollar is back stronger again today but we seem to have gone through the period where the dollar was rampaging through markets That brought all kinds of U S policymakers out of the woodwork and now we are in more of two way market Crude oil prices were lower due to the dollar s bounce and as investors reassessed the potential impact of the escalating conflict in Yemen where Saudi Arabia and allies carried out air strikes on Iranian backed Houthi rebels on Thursday and Friday U S crude was down 2 3 percent at 50 33 a barrel after jumping 4 5 percent while Brent was 2 percent lower at 58 02 The Saudi led operation has not affected the oil facilities of major Gulf producers but the fear is the conflict could spread and further unsettle the Middle East and disrupt oil shipments Goldman Sachs NYSE GS however said it expected the Yemen military action but also a potential nuclear deal with Iran that could lead to a loosening of sanctions to have little near term impact on oil supply PERIPHERY YIELDS RISE Much of the run up in European markets has come as the European Central Bank has launched a 1 trillion euro bond buying campaign But with the program already showing signs of lifting the euro zone economy talk is starting to emerge in markets about the bank slowing its buying next year Italy Spain and Portuguese bonds which have been some of the biggest beneficiaries of the ECB s stimulus were heading for a second week of rises in their yields despite mixed fortunes on Friday The dollar s recovery pushed it back up 119 40 yen having hit a five week trough of 118 33 on Thursday while the euro s drop on the day was putting it flat for the week While keeping a close eye on developments in the Arabian Peninsula the markets are also waiting for a speech by Federal Reserve Chair Janet Yellen later in the session Yellen is scheduled to speak on monetary policy and her comments will be closely analyzed after the Fed s dovish outlook last week bruised the dollar Excluding the effect of last year s sales tax increase data released on Friday showed Japan s core consumer price index was flat in February compared with a year ago It was the first time it has not risen in nearly two years and will be disappointing for a government that is seeking to end a long phase of deflation The yen showed little reaction Among the Asian equities indexes in Hong Kong South Korea Malaysia and Thailand suffered light losses Japan s Nikkei handed back earlier gains and slid 1 3 percent Hedge funds and commodity trading advisors are seen taking profits and unwinding their options positions before the first quarter ends said a senior trader at a foreign brokerage in Tokyo | 3/27/2015 |