- Lehman Says Cash Position Strong As Investors Fret Over U.S. Banks
- Japan Stocks Fall to Two-Year Low on Bear Stearns Sale, Fed Cut
- UBS bows to pressure over disclosure of losses
- UBS Drops Most in Nine Years on Report of Job Cuts [Possibly as many as
8,000 jobs] - Wall St braced for buy-out loans pain
- Oil, Gold Rise to Records as Dollar Fuels Commodities
- Northern Rock to axe staff and halve loan book
- CME Moves Closer to a Deal for Nymex
- Semiconductor-related sales in January
Lehman Says Cash Position Strong
As Investors Fret Over U.S. Banks – Wall Street Journal
Lehman Brothers Holdings Inc. Monday said the bank’s liquidity position remains strong, as the fire sale of Bear Stearns to J.P. Morgan to prevent bankruptcy increased speculation that other big U.S. brokerages would come under pressure.
"Our liquidity position is and continues to be strong," said Matthew Russell, head of corporate communications for Lehman Brothers Asia Pacific.
His statement came after people familiar with the situation said DBS Group Holdings, Southeast Asia’s biggest bank by market capitalization, has asked several traders not to enter new transactions with Lehman Brothers.
"DBS has sent an internal e-mail saying it would not deal with Lehman Brothers from now on. It said DBS shouldn’t enter into new dealings with Lehman or Bear Stearns," one person said. Another person said that the email didn’t mention anything about closing existing positions with Lehman, which appear to remain in place for now…..
Japan Stocks Fall to Two-Year Low on Bear Stearns Sale, Fed Cut
- Bloomberg
Japan’s stocks plunged to the lowest in more than two years after JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. for $2 a share and the U.S. Federal Reserve cut lending rates to banks at an emergency meeting.
Shinsei Bank Ltd. and Japan Securities Finance Co., which both last week disclosed writedowns on overseas debt, led a plunge in financial shares. Sony Corp. led exporters lower after the yen rose to the highest against the dollar since 1995.
“The $2 price for Bear Stearns tells everything about how bad the operating situation is for brokerages,” said Naoki Fujiwara, chief fund manager in Tokyo at Shinkin Asset Management Co., which manages the equivalent of $5.7 billion. “Investors worry other securities companies are in a similar situation.”
The Nikkei 225 Stock Average sank a third day, losing 454.09, or 3.7 percent, to close at 11,787.51, the lowest since Aug. 8, 2005. The broader Topix index dropped 43.58, or 3.7 percent, to 1,149.65. All 33 industry groups on the benchmark fell……
UBS bows to pressure over disclosure of losses
- Financial Times
UBS suffered a potentially embarrassing blow Friday after bowing to pressure from an activist investor and agreeing to publish details of an inquiry into how it became Europe’s biggest casualty of the US subprime mortgage crisis.
UBS said Friday it had reached agreement with Ethos, an activist investor representing Swiss pension funds, to publish a summary of the investigation by the Swiss Federal Banking Commission (EBK) into how the bank suffered large subprime losses, which are by far the biggest disclosed by any European bank.
The EBK is investigating the circumstances in which UBS made writedowns of $18.4bn last year on its massive portfolio of securities related to US residential mortgages.
Many analysts believe Switzerland’s biggest bank will be forced to take further significant writedowns this year, with some estimating UBS could disclose a further $15bn in losses….
UBS Drops Most in Nine Years on Report of Job Cuts
- Bloomberg
UBS AG, Europe’s biggest bank by assets, fell the most in more than nine years in Swiss trading after a newspaper report that the company may cut as many as 8,000 jobs and propose a new capital increase.
UBS fell as much as 3.04 francs, or 11 percent, to 25.4 francs. If the shares close at this price, it would be the biggest drop since Sept. 30, 1998. UBS was down 5.8 percent at 26.78 francs by 9:26 a.m. in Zurich, bringing losses in the past 12 months to 62 percent.
Zurich-based UBS plans to cut 5 percent to 10 percent of jobs across its different units, Chief Executive Officer Marcel Rohner told the company’s top managers at a meeting in Berlin last week, according to a report in SonntagsZeitung, which cited participants it didn’t identify. The bank may also propose a capital increase at its shareholders meeting in April, it added….
Wall St braced for buy-out loans pain
- Financial Times
Wall Street investment banks are poised for further pain from loans to private equity groups when they start reporting first-quarter results this week.
Goldman Sachs and Morgan Stanley are forecast to write off at least an extra $1bn on their portfolios of loans for leveraged buy-outs, with Lehman Brothers, another provider of buy-out financing, also expected to suffer a big
writedown.Deutsche Bank analysts expect US investment firms and commercial banks to report more than $9bn in additional losses on leveraged loans in the first half of this year.
The writedowns will add to pressure from investors and auditors for other lenders to follow suit. With more than $200bn of loans committed or stuck on banks’ balance sheets, the hit to profits could be substantial…..
Oil, Gold Rise to Records as Dollar Fuels Commodities
- Bloomberg
Crude oil and gold advanced to records as the dollar dropped after the Federal Reserve cut its discount rate at an emergency meeting and JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. as its shares collapsed.
Oil rose as high as $111.80 a barrel and gold advanced to $1,032.70 an ounce as investor confidence in financial assets eroded. The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials is up 20 percent this year on demand for raw materials as the dollar and equities declined.
“Throughout history, the place to be, under duress, is to be in real assets,” Jim Rogers, who predicted the start of the commodities rally in 1999, said in a Bloomberg Television interview from Singapore today. “Everyone listening should get out of the dollar.”…..
Northern Rock to axe staff and halve loan book
- Daily Telegraph
Ron Sandler, boss of newly nationalised Northern Rock, will this week reveal plans to cut between 2,000 and 2,500 jobs as the stricken lender is shrunk in an attempt to repay its £25bn taxpayer loan within three years.
The business plan for the state-owned bank will be submitted to European regulators for clearance on Monday. Mr Sandler will unveil a strategy to scale back mortgage lending while luring in new retail savings in an attempt to make Northern Rock attractive to potential future buyers.
Sources said he will almost halve the £113bn loan book by writing fewer mortgages and, over time, by selling packages of assets like the £2.2bn of equity-release mortgages offloaded to JP Morgan in January.
The business plan will need to comply with strict European competition rules as rivals are concerned that the state guarantee gives Northern Rock an unfair advantage….
CME Moves Closer to a Deal for Nymex
- Wall Street Journal
Chicago Mercantile Exchange operator CME Group Inc. moved closer to an agreement to acquire Nymex Holdings Inc., a $9.3 billion deal that expands the CME into energy trading while underscoring the importance of technology to exchanges.
The deal, set to be announced as soon as this morning, would end more than 135 years of independence for the New York Mercantile Exchange, the oil and gas market owned by Nymex. Boards from both companies met yesterday to vote on the transaction.
The CME purchase would mark the latest union between two exchanges once split by products and geography, but now pushed together by market forces and customer demands for lower costs. Nymex shareholders are expected to receive cash and CME shares worth about $100 share, valuing the company at $9.3 billion.
The combined exchange will have offices in both Chicago and New York, uniting CME’s financial and agricultural products with Nymex’s energy and metals contracts. Nymex’s energy business would stay in Manhattan until at least 2012, though not necessarily at its current location in the Financial District….
Semiconductor-related sales in January
- Mercury News
• Chip sales fell in January. Worldwide sales of semiconductors fell in January by 3.5 percent to $21.5 billion, according to the Semiconductor Industry Association, and were virtually unchanged from January 2007.
• Sales fell broadly. "Virtually all product lines and all geographic markets experienced slightly lower sales in January," said SIA President George Scalise. The biggest regional drop took place in the Americas where sales fell 5.5 percent from the month before.
• Pricing under pressure. Unit shipments of DRAM and NAND flash memory grew in January, but even with healthy demand "a very competitive environment resulted in price pressures for these products which in turn led to continued erosion in average selling prices." Excluding memory products, semiconductor sales were up by 8.1 percent year-over-year.
• Discouraging chip news. On Tuesday Texas Instruments said that its earnings won’t be as high as previously expected, citing disappointing demand for its wireless products. And research firm Gartner reported that chip inventories in the last three months of 2007 hit their highest level in two years….
