China’s central bank Friday raised the share of deposits banks must hold on
reserve in hopes of clamping down on the money supply. It was the bank’s second such move in less than five weeks. The tightening comes as China has been experiencing massive loa
Once again, Beijing’s efforts to cool their red hot economy are causing a sell-off on Wall Street. For the second time in a month, China said it would require banks to increase reserve levels thereby curtailing lending. …
Within minutes of the White Houses announcing the so-called “Volcker Rule,” Wall Street was working to shoot down the framework for reform. The banks’ main bone of contention is the stipulation that limits proprietary trading. In truth, most of
(Stocks were lower Friday morning as a rise in China’s
deposit-reserve ratio reignited concerns about how commodities might be
affected by tightening in China, according to the WSJ. The Dow was hovering around the 10,000 mark.) From The Business Insider
As the economy sputters and Americans battle 10% unemployment, President Obama is taking aim at Wall Street. Specifically, trading operations within banks that make huge bets on the global market. Who are these money makers who made and lost billions duri
The deals are back, or at least recovering from last year’s depressed levels, but where will the deals and dealmakers come from next? According to these Reuters stories published in just the last two weeks, the wheeling and dealing looks widespread over both sectors and regions.
Deal Hotspots:
Mining M&A expected to pick up pace this year
Air security firms likely to boost sales, deals
HMO deals seen heating up, but reform a wildcard
US staffing sector set for year of M&A
Private equity takes aim at freight logistics
Small US defense firms back on M&A radar
Online gamers set for consolidation wave in 2010
Market strength tempts India back into M&A fray
Tech turns to security for next wave of dealmaking
Buyout funds see Indonesia as next Asia stop for deals
Foreign banks again hear the call of China
Highlights from this week’s Thomson Reuters Investment Banking Scorecard:
” ENERGY & POWER M&A MORE THAN DOUBLES
The proposed acquisition of Allegheny Energy by Ohio-based electric utility First Energy Corp, in a transaction valued at $8.9 billion, brings the volume of mergers in the energy & power sector to $50.4 billion, more than double the volume of announced deals in the sector last year at this time.
Deal activity in the oil & gas and power sub-sectors account for nearly 88% of activity in the sector this year. Targets in the United States account for 52% of activity this year, with Brazil and France accounting for 19% and 12%, respectively.
“ASIA PACIFIC DRIVES 66% OF IPO ACTIVITY
Global initial public offerings total $15.9 billion for year-to-date 2010, a marked increase over the first six weeks of 2009. Asia Pacific issuers account for 66% of overall IPO activity, bolstered by nearly $9.2 billion in new listings from Chinese companies.
Offerings from the materials, financials, energy & power, and high technology sectors comprise 70% of total IPO volume this year.
“PRIVATE EQUITY BACKS 11% OF EUROPEAN M&A
Private equity-backed M&A in Europe totals $4.2 billion for year-to-date 2010, accounting for 11% of total European M&A activity and 55% of worldwide private equity-backed transactions. The $1.5 billion buyout of UK-based retailer Pets at Home by KKR ranks as the largest private equity deal this year.
The volume of European mergers and acquisitions totals $36.7 billion for year-to-date 2010, a 10% decrease from last time this year and the slowest start for European dealmaking since 2002.”
BM&FBovespa, the world’s third-largest exchange operator by market value, aims to raise its stake in CME Group to 5 percent, making it among the top three shareholders in the fast-moving market maker. Given Brazil’s huge presence in global commodities markets, it’s not hard to see why the country’s main exchange would want to increase its exposure to the top U.S. commodities trading entity. BM&FBovespa said it will invest $175 million over 10 years in a new trading platform with CME. But shares in CME, the world’s largest exchange operator by market cap, fell in early trading, although they later recovered to rise moderately. Hardly the reaction one would expect on news that a hungry, strategic buyer is more than doubling its stake.
It is possible regulatory concerns weighed on the stock. Cross border mergers that include potential technology transfer are natural fodder for antitrust boffins. But Bovespa is likely in for the long haul, as it has more to gain from taking a position in CME than the other biggest shareholders, Blackrock and Fidelity.
As far as the timing goes, CME which already has a 5 percent stake in BM&FBovespa, said only a couple days ago it would buy the bulk of Dow Indexes, showing it is not afraid of moving on big-name deals. The stock is nearly 20 percent down from a year high hit in early January, possibly underscoring the case for Bovespa to move at bargain prices.
The companies also agreed to develop new technologies for high-speed trading platforms for stocks, derivatives, currencies, and government and corporate bonds. What exactly Brazil brings to the development table is not immediately clear. More likely, it hopes to leverage big bags of commodities trading. It has seen a boom in trading volumes since it began offering in August 2008 direct market access for investors looking to implement algorithmic and high-frequency strategies. So for Bovespa, as well as its trading clients, timing is everything.