Standard Chartered

Daily Highlights: 6.28.10

  • Asian stocks fluctuate; Japanese banks decline on Mizuho's share-sale plan.
  • Caribbean storms strengthen, may head for oil spill.
  • China sets the exchange rate for the yuan at its highest in five years.
  • China shares fall on concerns Agricultural Bank of China’s IPO might depress market.
  • China, as part of fuel efficiency measure, to shut down small thermal power units totaling 10 million kilowatts in capacity this year.
  • Consumer spending in US probably little changed in May as incomes rose: Survey.
  • Dubai port operator DP World cancels plans for London stock listing until at next year.
  • Group of 20 Nations agree on higher bank capital to avert financial crisis.
  • Romania said it would raise taxes to shore up state finances.

In Advance Of G-20 Meeting, China Announces Dollar Peg To End

In a statement posted on the PBOC's website late last night, the Chinese central bank has announced it will seek a flexible yuan, ending a two-year peg to the dollar. The news comes a week before the G-20 meeting at which the CNY exchange rate was set to be a key issue of debate. On the other hand, as the PBoC noted, With the BOP account moving closer to equilibrium, the basis for large-scale appreciation of the RMB exchange rate does not exist." As such, a large initial move is unlikely to occur, and the bulk of the volatility will likely strike at traded CNY forwards. Either way, this is sure to play major havoc with already extremely volatile EUR, CHF, GBP and JPY pairs.

BP Hiring Four More Banks, Total Tally Now At Seven, Scrambles To Create Underwriting Syndicate

As previously reported, BP has already hired Goldman, Blackstone and Credit Suisse. Now Charlie Gasparino reports that the British firm is apparently in the process of hiring every single investment bank in existence: new banks rumored to be in contract negotiations include Morgan Stanley, HSBC, UBS and Standard Chartered. According to Charlie "they are being asked to somehow guarantee that they would lend money to the company." Another angle is that the firm is preempting any possible hostile takeover, by preventing any competitor firm from hiring any of these banks, which pretty much round out all the megabank firms that have a credible capital markets desk (sorry RBS), and thus make a hostile acquisition problematic. At least so far there has been no taxpayer capital going to BP, so retainer and success fees for the 7 banks, which will likely run into the hundreds of millions, will only be footed by BP's ever angrier shareholders.

asiablues's picture

Famous short seller Jim Chanos characterized China as "Dubai times 1,000, or worse.” While talking his books, Chanos could stand to lose big on his China shorts by basing his view on flawed analogies with the US real estate market.

Check To Obama: Lloyd To Get $100 Million Bonus

Now that's some serious pocket change you can believe in. If correct, Blankfein's 2009 bonus will be over 30% greater than his $68 million take home in 2007, the previous all time record year for Wall Street. Check to you, Mr. President: surely this will merit some more populist rhetoric and even more decisive complete lack of action on your behalf.

Daily Highlights: 12.9.09

  • Asian shares were down Wednesday in the wake of weak US closing, Japan GDP nos.
  • Dubai companies' bonds decline as credit swaps display 33% risk of default.
  • Japan's economy grew 1.3% last quarter, less than initial estimate of 4.8%.
  • China plans to require all the nation’s steel mills to have at least 1M tons of capacity
  • Oil rises above $73 after expected US crude supply drop suggests demand recovery.
  • 3M's 2010 profit forecast meets analysts’ estimates, says recovery is occurring “slowly.”

Dubai Digits

A quick look at debts and creditors for today's most popular Bloomberg search term.

Quantifying External UAE And Dubai Loss Exposure

Bank of America has provided an extended analysis of foreign exposure to Dubai World and Dubai sovereign. As BofAML points out "the basics of the discussion are threefold in our view: who owes how much to whom, when do they pay, and what happens if they do not? As there are no official debt data on both emirates and federal level, we used the outstanding loan and bond information on the SDC debt database and Bloomberg to estimate Dubai and UAE’s debt burden. We estimate that UAE’s total debt amounts to US$184bn as on end 2009, US$88bn of which belongs to Dubai. Abu Dhabi accounts for US$90bn and the other emirates hold the remaining US$5.6bn. Note that the debt service will be higher as our numbers only include the principal payments." The expectation is that Abu Dhabi will bail out Dubai as moral hazard becomes a sovereign issue. We don't think this is too likely: we believe the "saviour" will likely emerge from a bank that has access to the Fed's or the BOE's money printing machine either directly or indirectly as the Bernanke cartel does not care if his policy to bail any and all risk exposure remains domestic or finally has that much deserved and anticipated world tour.

Leo Kolivakis's picture

The Chinese Disconnect?

The big question is how will other nations respond to the symbiotic relationship between the U.S. and China? This week we saw Asian currencies declining on intervention speculation. Will we see intervention in the currency markets? I am not sure, but the current path is unsustainable and will require some sort of intervention as it poses serious risks to the global recovery.

Daily Highlights: 10.5.09

  • Asian stocks mixed as Roubini, US data stoke economic growth concerns.
  • Bank failures rise to 98 as three close in Minnesota, Michigan, Colorado.
  • BOE's Tucker says largest banks pose 'special' risks to financial system.
  • China Central Bank says country's lending heading for 'sustainable level'.
  • Euro rises against the U.S. dollar despite attempts to boost the dollar.
  • G-7 avoids criticism of Dollar, warns against 'disorderly' currency shifts.
  • Global semiconductor sales rose 5% in Aug - 6-straight month of sequential gains.