Forex Analysis Charts – all major currencies.
My interview as a judge before the upcoming Asian Awards.
* BANK RECAPS: Germany wants bank recapitalization deal by early 2012 (Welt).
* US: Treasury Secretary Timothy Geithner will tell lawmakers that the European financial crisis is increasing risks to global growth, according to testimony prepared for delivery tomorrow.
* DEUTSCHE BOERSE: The company received a document of more than 130 pages on Wednesday outlining the European Union’s specific concerns over the German exchange’s $9 billion deal to buy its U.S.-based counterpart.
* SIEMENS: Enterprise Communications Inc, a provider of communications equipment and software to corporations, is seeing demand stabilize after a severe collapse in orders earlier this year, according to the company’s chief executive officer. Siemens owns 49 percent in the company.
* EADS: The company’s Airbus unit said it may help customers with aircraft financing if the euro debt crisis makes it necessary as concerns grow about European banks’ ability to fund increasing plane orders.
* SMA SOLAR: The company’s CEO told German business daily Handelsblatt he did not rule out the global photovoltaic market could stagnate next year.
* PORSCHE, VOLKSWAGEN: The companies’ synergies may be higher than EU700m a year when merger completed: Handelsblatt
* RWE: Gazprom making headway in negotiations for Gazprom to enter German power market: Sueddeutsche
* ENI: Reuters reporting that Eni’s operations manager in Libya has said the company’s Elephant field (33.3% Eni) in Libya is “in ruins” and that the company cannot promise the field will start before the end of the year. However, the article also states an Eni spokeswoman in Italy later said the group had no information of any serious damage to the field.
* TOTAL: The company’s Zaedyus oil field in French Guiana and its Aquio deposit in Bolivia each hold at least 500 million barrels of oil or equivalents, Denis Palluat de Besset, head of the company’s Brazilian unit, said at an event in Rio de Janeiro.
* ROYAL DUTCH SHELL: Total SA and Royal Dutch Shell Plc plan to start drilling a second well at the BM-S-54 block in Brazil’s southeastern Santos Basin within “weeks,” Denis Palluat Besset, head of Total’s Brazil unit, said in Rio de Janeiro today.
* VINCI: The construction company said it won a 237 million-euro contract to build a hospital complex in New Caledonia beginning in January.
* UPGRADES: Occidental, Talisman (JPM). FirstRand (HSBC). Erste (Citi). EasyJet, RyanAir (CS). TUI (MS). Thales (GS).
* DOWNGRADES: Teleperformance (UBS). Dynergy (Macquarie). Next (Barcap). Mistras (Robert Baird). Dexia (Natixis). Exxon, Chevron (JPM). Campari (SocGen).
* CORP DIARY: Aer Lingus Analyst Day, ASOS Plc AGM, Compass Group Q4 Pre-close Trading Statement, H & M Q3 Results, ICAP plc FY Trading Statement, London Stock Exchange Pre-close Statement, Renault SA AGM, Ryanair AGM, SEB AGM Home
* MACRO DIARY: UK – Halifax House Price (8:00). GE – Factory Orders (11:00). BoE Rates (12:00). ECB Rates (12:45). US – Initial Jobless Claims (13:30), Continuing Claims (13:30). Speakers: Trichet (13:30), Fed’s Fisher (16:00).
Italian downgrade good, because pushes yields on Italian debt up – and ironically makes it more attractive by downgrade. Ie at AA who wants 5% from Italian debt? But at 7% – AA2 – you’re interested to hold it – especially Japanese. When next round of Italian debt issuance clears – suddenly people optimistic. Counters QE – which proves there was too much QE and it wasn’t understood by Bankers because they don’t think like traders.
Just a reminder that if you or your organisation were thinking of sending candidates to attend the Foundation Course, that the early bird booking discount – a saving of £100 – finishes on 12 October.
The course itself will start on 26 October 2011 and runs for 6 weeks, culminating in an optional exam in December. Full details attached.
We would be grateful if those of you who have already completed the the Diploma could pass these details on to your training department or any interested colleagues.
Society of Technical Analysts
Tel: 0845 003 9549
Tel: +44 (0)20 7125 0038
Fax: +44 (0)20 7900 2585
This was one of the issues at the Inaugural Lecture of the Kings’ College, London India Institute headed by the accomplished Sunil Khilani. To understand this issue to understand the Indian corporate and an economic saviour for Britain.
Indian companies invest in the UK because they have no shortage of cheap capital (for the first time in decades) and talented management with global experience. They have in British company’s assets something they can acquire cheaply. You can buy a British company on the FTSE 100 for ten times its annual profits. That is cheaper than virtually any time in the past 30years. In these ‘distressed’ foreign assets they have companies that are not only cheap, but also with strong brands – that intangible asset you can acquire and sweat and exploit and with which you can create wealth. And finally you have a domestic Indian economy wanting these brands (eg Jaguars made in Britain with British cache) or through acquiring a British company – access and free movement into the EU – a $14tr economy – 10 times the size of India.
Indian companies – especially family owned ones – don’t risk acquisitions oversees for ego gratification. Because it is their own money. Bankers may – with other people’s money – but Indian companies tend to run their own family name and money.
Neither do they invest in the UK to hedge the risk of Indian growth diminishing – if business were that good at diversification and planning – we would not have economic cycles – and the best hedge is diversification – so you would do it domestically first not internationally – and not when recessions tend to be global – and if Indian growth drops – you can bet Western growth would be even worse in such a world.
So how do we get out of this mess and what is the role of India? All three major UK political parties have had their party conferences and all three have differing views. Should we increase our public debt to pay for public projects to give people jobs who will then use the money to buy things they don’t need? Or do we cut the deficit and risk increasing even greater unemployment and lower growth?
My thoughts are clear and were expressed on the BBC and they are right. First, unemployment is under 10%. That is still not good if you are unemployed – but it helps to know the facts before you become too scared to even leave the house in case the sky falls on your head. 10% is not excessively economically or historically high. Second, chasing growth by creating more debt, than the growth the debt will create is as stupid as trying to remove water from the Titanic with a colander.
Third, even with no growth, the EU would still produce $14trillion of good and services. So we should in this environment stop trying to burden ourselves with more debt for 1% growth.
Fourth, the problem is not interest rates, or lack of quantative easing. Clearly. Obviously. The low level of interest rates can’t go lower and the economy is in a state. The problem is one of certainty and tax. Look, who has money to spend? Not governments and not consumers. So clearly the government increasing debt it can’t afford to make consumers spend when they are indebted does not make sense. Instead the focus should be on companies – who do have money. We know they have money because of their earnings. Reduce corporate tax rates (if you are going to have budget deficit – have it because money went to the efficient parts of the economy – those making a return – than those using it to pay down credit card bills). Further – provide certainty – by stating 2 year economic tax rates. This allows business investment decisions to be made. Stop scaring business by telling us how ineffective Europeans are at making collective decisions – we know.
Incidentally the prestigious India Institute is set to be a thought leader in understanding India and they are offering an MA in Modern India. Well worth visiting their lectures: firstname.lastname@example.org
* GREECE: Eurozone finance ministers gave a clear indication they were preparing to paper over Greece’s failure to hit international lenders’ mandated budget targets for 2011, saying they would now evaluate Athens’ performance based on goals that combine both this year’s and next year’s finances (FT).
* HSBC: the co will consider selling regional units of its non-life insurance assets business separately, Bloomberg reports, citing three people familiar with the matter.
* BP: the co’s 110,000 barrel-a-day Castellon oil refinery in Spain had a “small” fire at a furnace yesterday, a company spokesman said (BBG).
* GDF SUEZ: the co completed the sale of its G6 Rete Gas unit in Italy to a group including Axa Private Equity, Enel Distribution and F2i infrastructure fund, valued at €772m.
* SANOFI: the co’s Genzyme unit is unable to meet patient demand for the Fabrazyme drug for Fabry’s disease, the company said in a statement. Cerezyme supply should begin to improve in February, the company added.
* UPGRADES: Tesco (UBS). Linde, Johnson Matthey (HSBC). Henderson (Numis). Ericsson (Citi). BHP Billiton (CS). Fraport (Exane).
* DOWNGRADES: Ashmore, Dexia, Kaba (UBS). Danone (JPM). Anglo American, Lonmin (CS). Mediaset, Man Group, Yara (MS). GDF Suez, Umicore (HSBC). Vinci, Ferrovial (Exane). * CORP. DIARY: AXA AGM, Gecina AGM, Wolseley (UBS).
* MACRO DIARY: UK – PMI Construction (09:30). EC – PPI (10:00). US – Factory Orders (15:00). Speakers: Fed’s Raskin (14:00). Trichet (14:00). Bernanke (15:00). Merkel (17:00).