Reports

World stock markets news summary (US, UK, Europe, Asia) (September 07, 2010)

Contributed by Paddy Power Trader

By Paddy Power Trader

Break-ups not the key, says bank industry. (FT) The government’s Commission should back away from considering a break-up of the country’s most powerful lenders and focus instead on high-street competition, says the chief of the boss that represents Britain’s banking industry. Angela Knight, chief executive of the British Bankers Association, said persisting with an agenda to split big banks into smaller parts based on investment or retail banking would put the UK out of kilter with the rest of the world.

UK News

BRC August Retail Sales Monitor (Aug) Y/Y 1.0% vs. Prev. 0.5% (RTRS) British retail sales growth accelerated last month, helped by clothes sales, but discounting played a part in the improvement and consumers remain reluctant to splash out on expensive items.

British companies expect hiring rates to be static for the rest of the year, with the firms in the public sector expecting to cut headcounts, according to a survey by recruitment firm Manpower. (RTRS) The quarterly survey showed a seasonally adjusted net balance of +1% of firms planning to increase jobs from October to December, matching the rate of the previous three quarters.

US News

Obama in USD 50bln plan for jobs (FT) President Obama has unveiled a plan to spend USD 50bln building roads, railways and airport runways next year in an effort to show that he is tackling the chronic US unemployment problem in the run-up to the November elections.

European News

Europe’s Bank Stress Tests Minimized Debt Risk. (WSJ) Europe’s recent “stress tests” of the strength of major banks understated some lenders’ holdings of potentially risky government debt, a Wall Street Journal analysis shows. An examination of the banks’ disclosures indicates that some banks didn’t provide as comprehensive a picture of their government-debt holdings as regulators claimed. Some banks excluded certain bonds, and many reduced the sums to account for “short” positions they held—facts that neither regulators nor most banks disclosed when the test results were published in late July.

Asian News

Lead 10-year Japanese government bond futures edged higher overnight, drawing support from a dip in Tokyo shares and regaining some ground after sliding to a two-month low the previous day. JGBs were trading at 141.51 (+0.34) at 0643 BST. (RTRS)

Bank of Japan Target Rate (Sep) M/M 0.10% vs. Exp. 0.10% (Prev. 0.10%) (RTRS/Sources) The Bank of Japan held off on loosening monetary policy further on Tuesday but said it will take timely action when necessary, setting the stage for possible easing next month when there is clearer evidence of the strong JPY’s impact on the slowing economy. The BOJ kept the target rate unchanged at 0.10% and the bank loan facility unchanged at JPY 30trl. The BOJ also kept the monthly bond purchase at JPY 1.8trl. It said that the rate decision was unanimous.

Japan’s economic policy minister, Satoshi Arai, said BOJ Governor Shirakawa will join a panel on economic growth set to meet for the first time on September 9. (Sources) He said concern about risks to the US economy is behind the strength of the JPY and weakness in Japanese stocks.

The Bank of Japan should abolish its self-imposed limit in buying long-term government bonds to enhance the administration’s ability to finance stimulus spending, according to ruling party lawmaker Tsutomu Okubo. (Sources)

China’s banking regulator is drafting a plan to require banks to maintain loan-loss reserves of 2.5% of total lending according to an unidentified China Banking Regulatory Commission official. (RTRS) In other news, annual growth in Chinese factory output will slow to 10% in the second half of this year, according to a department head at the Ministry of Industry and Information Technology.

Forex

Reserve Bank of Australia Cash Target (Sep) M/M 4.50% vs. Exp. 4.50% (Prev. 4.50%) (RTRS) Australia’s central bank kept its key cash rate steady at 4.5% on Tuesday, a widely expected decision given past hikes had already worked to cool inflation amid a more uncertain global outlook.

Australian PM Julia Gillard clung onto power, securing support from independent lawmakers to form a minority government after her Labour Party lost its majority at elections last month. Gillard will hold news conference at 0615 GMT. (RTRS)

Swiss Unemployment Rate (Aug) M/M 3.6% vs. Exp. 3.6 (Prev. 3.6%); SA 3.8% vs. Exp. 3.7% (Prev. 3.8%) (Sources)

Commodities

Oil extended losses overnight as the USD strengthened and tropical storm Hermine showed no signs of disrupting crude or refining output around the Gulf of Mexico. WTI crude futures were trading at USD 73.87, down USD 0.73, at 0643 BST. (RTRS)

Tropical Storm Hermine slammed into northeastern Mexico near the Texas border on Monday, dumping heavy rain on a region still recovering from Hurricane Alex’s visit in June. (RTRS)

Company News

British Airways – Union leaders are seeking talks next week during the Trades Union Congress to avert further strikes and break the stalemate in the long-running dispute over co.’s cabin crew. (FT) In other news, co. would be interested in discussing a merger with Qantas Airways, if Australia’s top airline was a willing party, co.’s Chief Executive Willie Walsh said. (RTRS)

UK

Shell – Co. is in exclusive talks with Finnish fuel distributor St1 to sell the oil major’s Swedish refinery, both companies said. (RTRS)

HSBC – Chairman Stephen Green is leaving the bank to become trade minister for the UK government. (British Broadcasting Corp)

Barclays – Co. confirms Bob Diamond to replace John Varley as CEO (Sources)

Glaxo – UK regulators have called for the withdrawal across Europe of co.’s Diabetes drug Avandia, dealing a blow to the pharmaceuticals group in its home market. (FT)

Cable & Wireless Worldwide – Singapore Telecommunications, is unlikely to bid for co. as the company wants to focus on the Asia-Pacific region, Citigroup said. (RTRS)

Invensys – Emerson Electric and ABB could be among potential buyers of the co., according to market sources. (Telegraph)

US

HP – Mark Hurd is to become co-president of software maker Oracle only a month after being forced out as Head of Hewlett-Packard over breaches of the computer maker’s code of conduct. (FT)

Europe

France Telecom – Co. says it has no merger plans with Deutsche Telekom, contrary to what a French union fears is on the cards. (Sources) In other news, the French government is considering raising taxation on revenues from the television and telecommunications industries and particularly on ADSL television and mobile phone packages which include TV. (Les Echos)

Vinci – Co. won EUR 264mln contract in Qatar to design and build an underground car park and the landscaped gardens fronting the Doha Sheraton Hotel. (Sources)

ArcelorMittal – Co. is in talks regarding a mining joint venture with Indiabulls. The joint venture will primarily deal with coal for power projects but the parties could also look into iron ore mining. (Business Standard)

Air-France – Co. traffic declined 1.2% Y/Y with capacity down by 0.9%. (Sources)

Peugeot – Mitsubishi and co. plan to build a compact electric vehicle at the co.’s plant in Spain, according to sources. The two automakers will begin production of the vehicles by 2012 and target the European market. (RTRS)

Air-Liquide – Co. says it has signed a major long term contract with 3Sun, to become the sole supplier of gases and services to the new company. (Sources)

Daimler – Co. will return to paying a dividend for fiscal year 2010, according to co.’s CFO. Analysts estimate that co. will pay out roughly EUR 1.15 per share. (ORF)

Infineon – Co. chief says no buys in pipeline, rules out potential takeover. (Frankfurt Allgemeine Zeitung

Spanish Banks – Spanish banks that were squeezed out of wholesale finance markets in May have returned in force with a series of bond issues since late July and raised more than USD 4bln in the first five days of September alone, according to company announcements and figures from Dealogic, the data provider. (FT) Also, Spanish Finance Minister Salgado said her government may support a levy on banks. (El Economist)

Greek Banks – Talks between Alpha Bank and EFG Eurobank are ongoing but have encountered some ‘cultural differences’ a person familiar with the matter said. (Sources)

Unicredit – Co.’s CEO says did not call Libyans to invest in bank, says decision made independently. Says will ask Libyan investors to prove their investments are separate and says there is no extraordinary board meeting next week on Libyan investors. In addition, says there is no sign for now that Singapore will increase stake or than sovereign funds are interested and says Abu Dhabi Investment Fund has not asked for board seat. Furthermore, co.’s CEO says co. is weighing various options for Pioneer and says many parties are interested. (RTRS)