Browsing all articles tagged with billion
Jun
1

Banks In The Dark Over $15 Billion of Promised Rosneft M&A business

Banks that assist Russian oil company Rosneft finance its $55 billion buyout of rival have been left waiting for their payback a share in $15 billion in asset sales projected to follow the deal.

State oil company Rosneft’s takeover of this year aimed to generate a major oil group producing more oil than however it also tightened the Russian government’s grip on the country’s energy sector.

The asset sales promised by Rosneft Chief Executive Igor Sechin would offload less-profitable businesses to turn the company into the major oil player the CEO has stated he wants it to be. The delay demonstrate Rosneft has a lot on its plate integrating and that the sales are on the back burner.

Rosneft had dangled the juicy divestment mandates at the banks in exchange for a $29.8 billion loan the largest in Russia’s history on good terms, all the lending banks are waiting. We thought asset sales and refinancing bonds would kick start straight following the closing.

Rosneft’s slow motion is annoying the banks as they would earn fat fees from advising the oil giant on the asset sales this year, which would assist boost M&A revenues in an otherwise arid deal making landscape.

M&A activity across all sectors is losing 7 percent in Europe, Africa and Middle East since January partly due to the impact of the euro zone crisis on business confidence.

Banks that uphold big balance sheets throughout the financial crisis have been hoping to use this muscle to win lucrative M&A advisory business from competitor which had to shrink partly to meet tough European capital rules.

Banks frequently use their balance sheets to offer cheap loans to corporate clients to secure higher margin business such as share or bond issues or M&A work.

Big balance sheets helped Deutsche Bank and Barclays to achieve number 2 and 3 rankings in M&A league tables previous year, challenging US rival Goldman Sachs which had the top slot.

May
4

Job Market Resilience Eases Growth Concerns

Employment rose at a quicker pace than expected in April and hiring was much stronger than formerly thought in the prior two months, a sign of flexibility that should help the economy absorb the blow from belt tightening in Washington.

Labor Department said on Friday,non-farm payrolls increased by 165,000 jobs previous month and the unemployment rate dropped to 7.5 percent, the lowest level since December 2008. The job counts for February and March were revised up by a net 114,000.

Scott Anderson, chief economist at Bank of the West in San Francisco said that this boosts the case that the US economy will be able to survive the joint headwinds of sequestration and a deepening recession in Europe.

Investors on Wall Street cheered the statistics, which beat economists’ expectations for a 145,000 jobs advance and a steady 7.6 percent reading on the unemployment rate.

US stocks rallied, with the Dow Jones industrial average and the Standard & Poor’s 500 index closing at record highs. The US dollar vaulted to a one week high against the yen, however Treasury debt prices tumbled.

Payrolls climbed by 138,000 jobs in March, 50,000 more than formerly reported, and job growth for February was revised up by 64,000 to 332,000, the largest growth since May 2010.

However the gains previous month were far below the 206,000 jobs per month average of the first quarter, the newest evidence the economy is cooling even if not as rapidly as earlier feared.

Construction employment dropped for the first time since May and manufacturing payrolls were flat. The length of the average workweek pulled off a nine  month high and a gauge of the overall work effort knock down.

Economists pin the slowdown mainly on higher taxes that took hold at the start of the year and $85 billion in federal government spending cuts known as the sequester, that went into effect at the start of March. Economies overseas have also weakened cutting into US export growth.

However the US economy grew at a 2.5 percent annual pace in the first quarter, statistics on construction spending, retail sales and trade suggested it ended the period with less speed.

Apr
20

Paulson’s Advantage Fund Hurt by Fall in Gold

Hedge fund billionaire John Paulson’s best-known fund losing 2.4 percent in April, mostly due to the sharp sell-off in precious metal. The Paulson & Co Advantage fund is making money for the year however just barely with a 1.3 percent addition.

Gold is one of the worst performing assets this year following rising mightily following the financial crisis. The precious metal has dropped 17 percent this year including a 13 percent fall in April alone.

The fund’s significant holdings in numerous gold mining stocks, including a bet on AngloGold Ashanti Ltd, which is losing 40 percent this year, have considerably cut into the Advantage fund’s returns.

The sharp fall appears to have caught a number of hedge fund managers like Paulson by surprise. Coming week he intends to update his clients regarding all of his funds, including a fund dedicated specially to investing in gold.

Shares of companies tied to the performance of yellow metal, including the SPDR Gold Trust the largest gold exchange traded fund also have plunged sharply. Financial information firm Markit said this year investors have pulled $10 billion out of the precious metal ETF as of Wednesday.

The fund manager, lionized following a big bet against the overheated housing market in 2007 that made golds for his investors, has floundered trying to replicate the success in recent years.

Paulson, who has made money on bullion up until this year, has long held firm to the view that inflation will ultimately rebound, making yellow metal a prudent hedge. However in the wake of the selloff the firm has sustained losses in the hundreds of millions of US dollars in several funds that invest in yellow metal.

Assets at his firm have slumped to $18 billion down from $38 billion in early 2011 due to redemptions and poor performance. Over the past two years the Advantage fund and a leveraged version of the fund have posted some of the most horrible numbers in the $2.2 trillion hedge fund industry.

At the end of the first quarter, the Advantage policy, which includes the two funds and managed accounts had almost $4.6 billion in assets.

Apr
17

Bank of America Profit Misses Estimate as Revenue Collapse

Bank of America Corp reported a lower than expected first quarter profit and its revenue knock down, sending the No. 2 US bank’s shares down 3 percent earlier than the bell on Wednesday.

Net income quadrupled to $2.62 billion or 20 cents per share from $653 million or 3 cents per share a year earlier as expenses fall and the bank set aside less money to cover bad loans.

However total adjusted revenue knock down 8.4 percent to $23.85 billion, partly due to lower revenue from trading in fixed mortgages and income securities.

Revenue from the fixed income, commodities and currency markets knock down $829 million to $3.3 billion.

BofA shares slump 3 percent before the bell to $11.90.

Income in the year earlier period were affected by a host of one-time items including a $4.8 billion charge related to the value of its debt.

Net income in the Global Banking division chop down to $1.34 billion from $1.57 billion because net income in the Global Markets arm dropped to $1.4 billion excluding items from $1.7 billion.

Brian Moynihan, Chief Executive has made progress in building capital and settling mortgage related lawsuits since taking over in January 2010. The bank stated on Wednesday it had settled a mortgage backed securities class action lawsuit related to its nationwide unit for $500 million.

However Moynihan is under pressure to show that the bank can create higher earnings at a time of low interest rates, volatile economic conditions and stricter regulations.

BofA, the last of the big four US banks to report outcome has vowed to cut $8 billion in expenses by mid 2015 and has stated it could reduce expenses in its division that handles delinquent mortgages by $1 billion by the end of 2013.

The bank stated on Wednesday it expects to save almost $1.5 billion in costs per quarter, by the fourth quarter of 2013, representing 75 percent of the quarterly target. Total expenses knock down 5.2 percent to $18.15 billion in the first quarter.

Apr
13

Euro zone finance ministers Back 10 billion Euro Cyprus Bailout

Euro zone finance ministers backed a 10 billion euro bailout for Cyprus on Friday and the European Commission stated it would try to assist the island’s economy grow again with enhanced use of EU structural funds.

The ministerial support opens the way for numerous euro zone countries, including Finland and Germany to seek approval for the three year bailout in national parliaments, so that loan agreement with Nicosia can be signed by April 24.

The first tranche of the credit 9 billion of which will come from the euro zone and 1 billion from the International Monetary Fund will flow to Nicosia in mid-May.

The euro zone loans will have an average maturity of 15 years and highest maturity of 20 years.

The euro zone ministers said in a statement, The Euro group consider that the necessary elements are now in place to launch the relevant national procedures required for the formal support of the ESM financial assistance capability agreement for an amount of up to 10 billion euro’s, subject to IMF’s contribution.

To wrap its financing requirements over three years, Cyprus itself will have to come up with 13 billion euro’s of its own, with the mass of that sum coming from the closure of its Laiki bank and the reform of the Bank of Cyprus.

Olli Rehn told a news in conference that the amount that Cyprus would require to contribute on its own had been estimated a month ago at about 7 billion however the two sums were not directly alike, EU Economic and Monetary Affairs Commissioner.

If you seem at these two figures of 17 billion and the 23 billion for program financing, they are not strictly comparable as the construction of the first and second, or final package are different.

Mar
30

President Barack Obama Touts Infrastructure In Florida Tour Focused on Economy

President Barack Obama walked into the mouth of a huge tunnel in Miami on Friday to emphasizing proposals to enhanced investment in US infrastructure, a move designed to demonstrate a leader still focused on the economy in the midst of broader policy battles in Washington.

in the past, Obama stated that he wanted to develop a national infrastructure bank and capitalize it with $10 billion. The plan is to pull in private sector funding and select projects based on merit.

He would also generate America Fast Forward Bonds that would facilitate local governments and state attract money for infrastructure projects. These would be direct subsidy bonds in which the issuer would obtain a 28 percent subsidy of the borrowing cost as a way of attracting a wider set of investors.

In addition, Obama would add $4 billion to support two programs that are used to provide funding for infrastructure projects like the Miami tunnel.

It is  not clear that how far the proposals will go in Congress. Republicans are unwilling to support what they consider government stimulus spending following a much criticized $787 billion stimulus plan that Obama managed to push through Congress in 2009.

Since his January inauguration and his re-election in November, Obama has steered a policy push focused principally on passing both immigration reform and tightening the control measures.

But, his State of the Union address in February included a sequence of measures to enhanced the economy and the Florida trip fleshed out some of those ideas.

Alan Krueger, Obama’s chief economist stated that the traveling with the president on Air Force One that the three main suggestion outlined by Obama would cost some $21 billion however that cuts would be made elsewhere to avoid rising the deficit.

Obama’s fiscal 2014 budget proposal will be released on April 10, would spell out how they are paid for, all of the proposals need congressional approval.

While Obama will not run for re-election another time, Florida is still significant for him and his fellow Democrats. The political swing state backed the president in 2012 and will be essential to determining whether a Republican recaptures or whether a Democrat holds on to the White House it in 2016.

Mar
30

New York Assembly Approved Budget On Time Third Year In A Row

New York’s Assembly approved the state’s $135 billion budget for fiscal year 2013-2014 on Thursday just earlier than midnight, the third budget in a row to be delivered on time in a state recognized for regularly being late.

Officials hurried to sign off on the legislation during a week that was interrupt with religious holidays and have succeeded in attaining the job done ahead of the start of the state’s fiscal year on April 1.

Getting the budget completed on time may not sound like much to be proud, however it is being touted as a achievement in a state where seasoned budget watchers remind over a decade of tardiness when budgets would sometimes run into late summer.

Andrew Cuomo, State Governor stated that although three on time budgets in a row should not sound like much and in New York state this is the very first time it has happened in approximately 30 years. Year following year the budgets became a flash point for the chaos and dysfunction of state government.

The Assembly’s 13 hour session broke up just earlier than midnight on Thursday and trait extended debate over a stack of failed adjustments. They included one that attempt to torpedo a tax incentive broadly seen as a way to attract.

A Republican adjustment’s to restore $90 million in funding for the developmentally disabled failed however there were impassioned pleas to revisit the concern on both sides.

The money was cut as Washington Congressional committee stated that New York state was over billing the federal government for Medicaid funds for centers that treat public with developmental disabilities. That led to the state cutting $1.1 billion from the budget proposal in February.

While a package the budget holds spending growth under 2 percent, lift the least wage incrementally to $9 an hour by the end of 2015, extend superior tax rates for millionaires and tax breaks for the middle class that were to expire during coming year.

It also boost state funding for schools by $1 billion and creates a tax rebate program that will deliver $350 checks to a million middle income peoples with children right prior to state elections in 2014.

Mar
29

Bank of Cyprus Controls To Previous Month, Minister Says

Bank of Cyprus conceded on Thursday that firmed capital controls would remain in force greater than expected as the island’s banks reopened for the first time following the government was forced to believe a hashed EU rescue package to prevent bankruptcy.

Cypriots lined up peacefully to withdraw partial amounts of cash, however there was no symbol of a run on deposits, as had been frightened.

Banks were shut for almost two weeks as the government discussed a 10 billion euro which is equal to $13 billion international bailout, the first in Euro zone to enforced losses on bank depositors.

Ioannis Kasoulides, Foreign Minister stated curbs on money arrangements imposed following the bailout would be phased out over regarding a month.

A number of restrictions will be lifted and steadily, most likely over a period of about a month according to the estimation of the central bank, the limits will be fully lifted.

Government primarily stated the controls would remain in place for a week subject to reassess. Economists say they will prove hard to boost as long as the economy is in crisis.

A lot of money had already missing electronically. Statistics published by the Central Bank of Cyprus illustrate that savers from other euro zone countries withdrew 18 percent of their deposits from the suffering island in February, as talk of a tax on bank accounts added ground. Overall private sector bank deposits in Cyprus knock down by 2.2 percent to 46.4 billion euros previous month, following a similar slump in January.

To assist the Cyprus banks conditions the crisis, the ECB flew in 5 billion euros which is equals to $6.4 billion in cash overnight from Frankfurt.

Government said it had appointed a board to investigate the banking meltdown and look into assert of junior bondholders.

Constantinos Petrides, under secretary to the Cypriot president said that it will have a broad mandate. It will investigate criminal, political and civil responsibilities.

Mar
28

Bank of Cyprus Re-opens it’s Banks Under Tight Restrictions

Banks were closed approximately two weeks ago because the government discuss a 10 billion euro which is equal to $13 billion bailout package, the first in Europe’s single currency zone to entail losses on bank depositors.

Bank employees turned up for job early in Nicosia as cash was delivered by armored trucks. At a branch of the second greatest lender, in central Nicosia the Popular Bank of Cyprus, workers were being briefed prior to opening at noon (1000 GMT).

Establishment said that the emergency rules forced to limit extraction and prevent a bank run will be temporary, however economists said that they will be difficult to boost as long as the economy is in crisis.

In Nicosia there was relief that the banks were reopening however some apprehension regarding what might happen.

Cyprus central bank source said that on Wednesday, container trucks full of cash pulled up inside the compound of the central bank in the capital Nicosia to organize for the reopening.

While in all countries that use the euro, Cyprus’s central bank supplies currency for its banks from the European Central Bank in Frankfurt. Administrator’s promised that enough funds will be on hand to cover demand. The ECB did not remarked on reports it had sent extra cash to the island.

A Finance Ministry ruling imposes strict controls limiting cash withdrawals to no more than 300 euros per day and prohibition the cashing of cheques.

The island’s central bank will review all commercial transactions about 5,000 euros and inspect transactions about 200,000 euros on an individual basis. People exit form Cyprus can take only 1,000 euros with them. An former draft of the decree had put the figure at 3,000.

Mar
27

Two Democrats ask Fed, OCC for Conference On Foreclosure Resolution

Two Democratic officials on Monday stepped up their analysis of how supervisor’s handled a botched reconsider of precedent home mortgage foreclosures, asked for a conference with regulatory officials because they seek further information regarding the reviews.

The Office of the Comptroller of the Currency and the Federal Reserve reached conclusions that worth about $9.3 billion with 13 banks former this year to end case-by-case reviews of whether they had wrongly detained homes.

Elizabeth Warren, Senator of Massachusetts who sits on the banking committee, and Elijah Cummings, Representative of Maryland who is the top Democrat on the House Oversight Committee invite regulators for more information in January regarding the reviews following the resolutions were announced.

The officials stated the public needed to recognize more regarding the process in order to trust it.

They are Unsatisfied with the reply they received from the OCC and the Fed on Friday, the pair on Monday required further information and a personal briefing on the significance of their requests.

Some officials wrote that the illegal activity should not be protected by regulators as if it constitutes trade secrets or proprietary information. They persist to believe transparency is critical around the procedure of the review and settlement processes.

The agreement proved contentious as they ended reviews that had already cost the banks some $2 billion however had not yet resulted in any relief to consumers. Banks including JPMorgan Chase & Co, Bank of America Corp and Wells Fargos were part of the reviews.

The organizations have provided slight information regarding what those reviews produced and how the experts who performed the reviews were monitored.

Ben Bernanke the Fed Chairman and Thomas Curry the Comptroller of the Currency stated in their letter on Friday that the OCC and the Fed plan to make further information public, such as the findings of reviews and the costs linked with them.