Browsing all articles tagged with Share
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.

Apr
30

Precious metal Down 1 percent; ETF holdings hit lowest Since Sept 2009

Precious metal fell 1 percent on Tuesday, falling into negative territory following some early bargain hunting, however daily outflows from exchange traded funds highlighted investor’s lack of confidence in the gold.

Tim Riddell, head of ANZ Global Markets Research, Asia said that from a technical point of view, while the rebound has been relatively solid it appears to be a more sustained correction of the drop that we saw from late March rather than a turn in trend.

Although yellow metal’s appeal as a hedge against inflation may be burnished by hopes the US Federal Reserve will continue its bond buying programme, flowing stock markets could tempt investors to ditch gold and shift to equities.

Actually what we need to see is a series of closes above $1,505 to take the pressure off, he added that a fall below $1,435 could trigger a favored technical pullback to $1,300 and potentially even as deep as $1,245.

US gold for June delivery gave up early increases and stood at $1,461.10, down $6.30.

US gold futures and Cash dropped to almost $1,321 on April 16, their lowest in more than two years, after a fall below $1,500 led to a sell-off which stunned investors, and encouraged them to slash holdings of exchange-traded funds.

Precious metal fell $14.18 per ounce to $1,461.61 by 0617 GMT.  It had increased slightly on Monday on expectations the Fed would keep the pace of its bond buying unchanged at $85 billion a month following less than expected US growth.

The SPDR Gold Trust, the world’s biggest gold backed exchange-traded fund, said its holdings dropped 0.22 percent to 1,080.64 tonnes on Monday from 1,083.05 tonnes on Friday to their lowest since September 2009.

A weak March employment report in the US and other softer signals from the economy seemed to kill off expectations the Fed could taper the pace of bond buying in next months.

Asian shares edged higher on Tuesday, a day after the S&P 500 index ended at an all-time high and as investor risk appetite was bolstered by expectations the European Central Bank and US Federal Reserve the will continue with growth supportive monetary stimulus measures.

The Fed is currently buying longer dated US Treasuries and mortgage backed bonds every month and is expected to vote to keep doing so at the conclusion of a two day policy setting meeting on Wednesday.

Fears that central banks money printing to buy assets will stoke inflation have been a key driver in enhancing gold, which rallied to an 11-month high in October last year subsequently the Fed announced its third round of aggressive economic stimulus.

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.

Mar
29

Gold Knock Down, On Track For 5 Percnet Quarterly Slump

Yellow metal marked lower on Friday, on way to end the quarter with a loss of almost 5 percent, because the euro continued to weak and a rally in equities increased appetite for riskier assets. Shares climbed up in Asia and the gold’s safe haven appeal waned following banks in debt ridden Cyprus reopened on Thursday without rooting a huge run on deposits despite a contentious bailout that taxed huge depositors. Doubts regarding the fiscal stability of the euro zone had sent precious metal prices to a 1 month high previous week.

Kaname Gokon, general manager at Okato Shoji Co’s research section said that looking ahead, bullion is expected to stay in the current range of $1,590 and $1,605 per ounce, referring to coming week’s trading range.

However there is probability that those who have bought TOCOM futures on a weaker yen may start closing their long positions if a market focus is altering to a stronger dollar, which is negative to yellow metal.

Precious gold knock down $1.18 per ounce to $1,594.99 by 0332 GMT in particularly thin trade as many markets in Asia were closed for Good Friday. Prices were losing 4.7 percent for the first quarter its second consecutive quarterly loss.

US gold futures were not-traded. However the most active contract on Tokyo Commodity Exchange, In February strike a low of 4,842 yen a gram its lowest in three weeks, on position squaring on the previous business day of the fiscal year.

Gold future for June delivery knock down $11.50 per ounce or 0.7%, to settle at $1,595.70 per ounce on the Comex division of the New York Mercantile Exchange.