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July 29 (Reuters) – Turkey’s Central Bank, which on Thursday raised its foreign currency reserve requirement to 10 percent from a previous 9.5 percent, said the measure would drain $719.6 million liquidity from the market.
The move is part of the central bank’s unwinding of financial-crisis induced measures intended to ease liquidity pressures. Turkey’s forex reserve requirements stood at 11 percent in December 2008.
(Reporting by Alexandra Hudson)
Owners of commercial buildings in the U.S. could save more than $41 billion a year in energy costs, if all currently existing commercial space were placed in a decade-long energy efficiency retrofit program requiring an annual investment of about $22.5 billion, according to a new report by Pike Research.
The report by the cleantech market intelligence firm acknowledges that while the figures are impressive, they reflect the market potential for energy efficiency retrofits — rather than the actual market, which under current conditions is a fraction of the potential.
“The building retrofit industry faces a number of key challenges,” Pike Managing Director Clint Wheelock said in a statement accompanying the release of the report. “The current financial crisis has had a significant dampening effect on property owners’ investments in their properties. Financing for such projects is scarce, and the limited investment in building efficiency is not keeping pace with the growing national demand for energy.”
Private commercial buildings present the largest untapped opportunity for energy efficiency retrofits and account for nearly all existing commercial space, the research firm noted. In contrast, federal non-industrial buildings comprise less than 3 percent of existing commercial space, but major retrofits in federal facilities and other institutional buildings are far more likely to receive funding than projects outside the sector.
The Pike study, “Energy Efficiency Retrofits for Commercial and Public Buildings,” examines market drivers, barriers and scenarios that could contribute to the market reaching its potential — and those that would impede it if left unaddressed.
The report said:
“If the goal of the energy retrofit industry is to spend a little money on efficiency, while total national demand for energy continues to grow, then present policy is functioning well. However, if the goal is to reduce the total demand for energy in buildings over time, by the 50 percent or more needed to address international competitiveness, global warming, and energy independence, then present energy policy needs a substantial retrofit.
If code policy, design tools, financial incentives, and regulations focus on energy efficiency at the following intervention points [as identified by nonprofit research organization Architecture 2030], the incremental cost of efficiency will be very small:
* ‘Building design – schematic design, material and building systems selection
* Existing building purchases
* Leasing/tenant improvements
* Building renovation cycles
* Rebuilding (after a natural disaster)’
Programs that do not recognize these intervention points or take advantage of them face unnecessary obstacles, costs, and potential failure. A national carbon trading system could have a major effect on the retrofit market. If national carbon-emissions legislation addressed energy use in commercial buildings with a combination of high energy prices and reinvested incentives, then the market for energy efficiency retrofits (and for educating the workers in this market) would explode with activity.”
The executive summary of report is available for free download from Pike Research. The full report is available for a fee.
Image of 300 West Sixth Street, named one of BOMA’s Outstanding Buildings for 2010, courtesy of the Thomas Property Group.
BOSTON, MA, Jul 29 (MARKET WIRE) —
A majority of women think that wealth managers could do a better job of
serving them, and nearly a quarter of them say that there is a
“significant need for improvement,” according to a new global study by
The Boston Consulting Group.
The findings — released today in a White Paper titled “Leveling the
Playing Field: Upgrading the Wealth Management Experience for Women” –
are based on a survey of 500 women as well as more than 70 interviews
with private-banking specialists and wealthy women around the world.
The fact that women, as a group, are overlooked or undervalued belies
their significance as wealth management clients. According to the study:
– Women controlled an estimated 27 percent, or about $20 trillion, of
the world’s wealth in 2009(1)
– The percentages were highest in North America (33 percent), Australia
and New Zealand (31 percent), and Asia (29 percent, ex Japan), and
much lower in Latin America (18 percent), Japan (14 percent), and
Africa (11 percent)
– In Europe, the percentage was higher in Western Europe (26 percent)
than in Russia (21 percent) and Eastern Europe (19 percent, ex Russia)
While the share of wealth controlled by women has changed only
gradually over time, the amount of women-controlled wealth has been on a
rollercoaster ride since the start of the financial crisis, mirroring the
overall movement in global assets under management (AuM). After falling
sharply in 2008, it soared by 16 percent in 2009, to $20.2 trillion. It
grew by nearly 30 percent in Asia (ex Japan) and by 24 percent in
Australia and New Zealand. In other regions, it increased by anywhere
from 13 to 18 percent, except in Japan, where it grew by only 2 percent.
BCG projects that the amount of wealth controlled by women will grow at
an average annual rate of 8 percent from year-end 2009 through 2014,
slightly above the 7 percent rate from year-end 2004 through 2009.
Emerging markets are expected to lead the growth over the next several
years.
An Uneven Playing Field
According to the survey, conducted in early 2010, 55 percent of
respondents said that wealth managers could do a better job of meeting
the advisory needs of women; 24 percent said that private banks could
significantly improve how they serve women.
“The dissatisfaction stems from the unshakable perception that men get
more attention, better advice, and sometimes even better terms and
deals,” said Peter Damisch, a BCG partner and a coauthor of the study.
“We heard this sense of subordination time and again in our interviews.”
The problems that cause women to feel like second-class clients are
deep-seated. They stem from experiences in the advisory process as well
as the communication style of private banks and relationship managers
(RMs).
– Many women said that their RMs assume that they have a low risk
tolerance and thus provide only a narrow range of investment solutions
– Some said that they were given “dumbed down” versions of the standard
offering
– Several said that their advisors do not take them seriously, which
made for off-putting and sometimes humiliating interactions
The problems are compounded by the superficial strategies that some
wealth managers use to target women. “Some of the most common approaches
revolve around products, pitches, or promotions that can easily come
across as patronizing or contrived,” said Monish Kumar, a BCG senior
partner and a coauthor of the study. “They can alienate the very people
they’re meant to attract.”
Wealth managers need to understand that there are material differences
between men and women clients. Women, for example, often seek holistic
advice to fulfill long-term goals. Most want their banking relationships
grounded in empathy and personalized advice, while men tend to view their
banking relationships through a business-oriented lens.
“These generalizations should not be taken as holy writ,” cautioned Anna
Zakrzewski, a BCG principal and a coauthor of the study, “but they do
shed some light on why so many private banks — despite targeting other
groups of clients, such as doctors or lawyers — still have a service gap
between male and female clients.
“For example, many women feel that their advisors focus too much on
short-term results and disregard their long-term goals, which often
revolve around major milestones in a woman’s life, such as the birth of a
child. This is in part a function of incentive systems and company
cultures that are focused on near-term performance, but it is also a
shortcut and a symptom of superficial advisor-client relationships.”
Upgrading the Client Experience for Women
Wealth managers can attract new clients and reinforce relationships by
fine-tuning, rather than reinventing, their approach. “Most banks will
find that the problems are less about what they provide for women, in
terms of products, and more about how they deliver their service,” Kumar
said.
Wealth managers can put their RMs in a better position to initiate or
strengthen relationships simply by calling attention to areas where women
generally feel undervalued or overlooked. More ambitious wealth managers
can develop robust training programs and incentive systems to ensure that
they are serving women effectively.
Most important, wealth managers should recognize that the necessary
changes are likely to be subtle rather than sweeping. “As critical as it
is for wealth managers to improve how they serve women, it is equally
important that they understand the cost of artless overtures,” Damisch
noted. “Overreacting to the problem with graceless ‘solutions’ will do
more harm than good.”
To receive a copy of the paper or arrange an interview with one of the
authors, please contact Eric Gregoire at +1 617 850 3783 or
gregoire.eric@bcg.com.
(1) Figures are based on wealth owned by clients with at least $250,000
in investable assets, which include cash deposits, money market funds,
listed securities held directly or indirectly through management
investments, and onshore and offshore assets.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm
and the world’s leading advisor on business strategy. We partner with
clients in all sectors and regions to identify their highest-value
opportunities, address their most critical challenges, and transform
their businesses. Our customized approach combines deep insight into the
dynamics of companies and markets with close collaboration at all levels
of the client organization. This ensures that our clients achieve
sustainable competitive advantage, build more capable organizations, and
secure lasting results. Founded in 1963, BCG is a private company with 69
offices in 40 countries. For more information, please visit www.bcg.com.
The Boston Consulting Group
Eric Gregoire
Global Media Relations Manager
Tel +1 617 850 3783
Fax +1 617 850 3701
gregoire.eric@bcg.com
Copyright 2010, Market Wire, All rights reserved.
July 27 (Reuters) – Polish Bank Millennium BIGW.WA reported a six-fold net profit rise for the first half, touch above expectations, thanks to improving revenue and lower bad loan provisions on the back of a better economic environment.
The bank, which is controlled by Portugal’s Millennium bcp (BCP.LS), said on Tuesday it earned 138 million zlotys ($43.9 million) compared to 21 million in the same period of last year, when it was one of the hardest hit Polish lenders by the financial crisis.
Analysts expected a net profit of 134 million zlotys. Millennium did not break out a second-quarter figure. (Reporting by Chris Borowski)
(Reuters) – The economy is not likely to slip back into recession but letting tax cuts for the wealthiest Americans expire is necessary to show commitment to cutting budget deficits, Treasury Secretary Timothy Geithner said on Sunday.
In appearances on several Sunday talk shows, Geithner said only 2 to 3 percent of Americans — those making $250,000 or more a year — will be affected when tax cuts enacted under former President George W. Bush end on schedule this year.
Republicans want to extend the tax cuts and Democrats are divided but Geithner said reductions for top earners should end.
“We think that’s the responsible thing to do because we need to make sure we can show the world that (we’re) willing as a country now to start to make some progress bringing down our long-term deficits,” he said on ABC’s “This Week” program.
Geithner played down fears that a slow-paced recovery might slide into a double-dip recession. He told NBC’s “Meet the Press” he did not expect that to happen, although recovery from the deep recession that followed the 2008-2009 financial crisis will be prolonged.
STRENGTHENING, BUT SLOWLY
“I think the most likely thing is you’ll see an economy that gradually strengthens over the next year or two, you’ll see job growth start to come back, investments expanding … but we’ve got a long way to go still,” Geithner said.
The Obama administration has said it wants to keep tax cuts in place for Americans earning less than $250,000 a year. Some Republicans say letting any of the tax cuts expire is effectively a tax hike that may hurt recovery.
Geithner disagreed, saying it was more important to aim tax cuts at lower-earning Americans and businesses.
“Just letting those tax cuts that only go to 2 percent to 3 percent of Americans, the highest-earning Americans in the country, expire I do not believe it will have a negative effect on growth,” he said on ABC.
Geithner said the Obama administration wants Congress to agree on measures to help small businesses, traditionally the main job-creating engine. He said there were signs “critical” private sector hiring was strengthening.
“We want to see it happen at a faster pace but I think most people understand that … this was a deep crisis,” he said. “It’s going to take time to repair that damage, take time to grow out of this.”
He said the overhaul of U.S. financial rules signed into law last week by President Barack Obama should bolster confidence in the economy by giving consumers new protections and the government more powers to restrain bank risk-taking.
Geithner said no reforms can ward off all future crises but can mitigate the harm. If the reforms that are now law, including powers to wind down troubled financial firms, had been in place before the crisis, the damage to jobs and fortunes would have been less, he said.
On NBC, Geithner said there is work ahead to repair the housing finance system that contributed to the crisis and led to putting mortgage finance giants Fannie Mae and Freddie Mac into government conservatorship.
HOUSING REFORM STILL AN ISSUE
“We have to bring to Fannie and Freddie, to the GSEs (government-sponsored enterprises) and to the broader housing finance market a better set of policies to make sure we can deliver affordable financing … without leaving the economy vulnerable to this kind of crisis,” he said.
Geithner said some type of government guarantee to make sure people have the ability to borrow to finance a house even may be necessary but said Fannie and Freddie will not be preserved in their current forms.
“We’re going to have to bring fundamental change to that market but I think there’s going to be a good case for taking a look at preserving or putting in place a carefully designed guarantee so homeowners have the ability borrow … even in a very difficult recession,” he said.
Geithner said it was encouraging China recently ended a peg between its yuan currency and the dollar, which should help correct a trade relationship that enables China to rack up huge surpluses while the United States and others record soaring trade deficits.
“What matters to us and to all of China’s trading partners is that they let that currency appreciate,” he said. “What matters to us is how fast and how far they let it go.”
(Editing by John O’Callaghan)
WASHINGTON, July 25 (Reuters) – The U.S. economy is not likely to slip back into recession but letting tax cuts for the wealthiest Americans expire is necessary to show commitment to cutting budget deficits, Treasury Secretary Timothy Geithner said on Sunday.
In appearances on several Sunday talk shows, Geithner said only 2 to 3 percent of Americans — those making $250,000 or more a year — will be affected when tax cuts enacted under former President George W. Bush end on schedule this year.
Republicans want to extend the tax cuts and Democrats are divided but Geithner said reductions for top earners should end.
“We think that’s the responsible thing to do because we need to make sure we can show the world that (we’re) willing as a country now to start to make some progress bringing down our long-term deficits,” he said on ABC’s “This Week” program.
Geithner played down fears that a slow-paced recovery might slide into a double-dip recession. He told NBC’s “Meet the Press” he did not expect that to happen, although recovery from the deep recession that followed the 2008-2009 financial crisis will be prolonged.
STRENGTHENING, BUT SLOWLY
“I think the most likely thing is you’ll see an economy that gradually strengthens over the next year or two, you’ll see job growth start to come back, investments expanding … but we’ve got a long way to go still,” Geithner said.
The Obama administration has said it wants to keep tax cuts in place for Americans earning less than $250,000 a year. Some Republicans say letting any of the tax cuts expire is effectively a tax hike that may hurt recovery.
Geithner disagreed, saying it was more important to aim tax cuts at lower-earning Americans and businesses.
“Just letting those tax cuts that only go to 2 percent to 3 percent of Americans, the highest-earning Americans in the country, expire I do not believe it will have a negative effect on growth,” he said on ABC.
Geithner said the Obama administration wants Congress to agree on measures to help small businesses, traditionally the main job-creating engine. He said there were signs “critical” private sector hiring was strengthening.
“We want to see it happen at a faster pace but I think most people understand that … this was a deep crisis,” he said. “It’s going to take time to repair that damage, take time to grow out of this.”
He said the overhaul of U.S. financial rules signed into law last week by President Barack Obama should bolster confidence in the economy by giving consumers new protections and the government more powers to restrain bank risk-taking.
Geithner said no reforms can ward off all future crises but can mitigate the harm. If the reforms that are now law, including powers to wind down troubled financial firms, had been in place before the crisis, the damage to jobs and fortunes would have been less, he said.
On NBC, Geithner said there is work ahead to repair the housing finance system that contributed to the crisis and led to putting mortgage finance giants Fannie Mae and Freddie Mac into government conservatorship.
HOUSING REFORM STILL AN ISSUE
“We have to bring to Fannie and Freddie, to the GSEs (government-sponsored enterprises) and to the broader housing finance market a better set of policies to make sure we can deliver affordable financing … without leaving the economy vulnerable to this kind of crisis,” he said.
Geithner said some type of government guarantee to make sure people have the ability to borrow to finance a house even may be necessary but said Fannie and Freddie will not be preserved in their current forms.
“We’re going to have to bring fundamental change to that market but I think there’s going to be a good case for taking a look at preserving or putting in place a carefully designed guarantee so homeowners have the ability borrow … even in a very difficult recession,” he said.
Geithner said it was encouraging China recently ended a peg between its yuan currency and the dollar, which should help correct a trade relationship that enables China to rack up huge surpluses while the United States and others record soaring trade deficits.
“What matters to us and to all of China’s trading partners is that they let that currency appreciate,” he said. “What matters to us is how fast and how far they let it go.” (Editing by John O’Callaghan)
July 25 (Reuters) – The simplest way to regulate the global banking system is to limit the size of bank balance sheets, former Credit Suisse (CSGN.VX) and Dresdner Bank board member Leonhard Fischer told German weekly Welt am Sonntag.
The financial crisis revealed some banks were too big for one national regulator to rescue, Fischer told the Sunday paper.
“All the complex approaches to bank regulation have failed. We have never had as much regulation as today. The upshot is that banks hire a couple lawyers more to circumvent the rules,” Fischer was quoted as saying.
“For me it’s about size. I would limit the size of balance sheets.”
Fischer acknowledged the size limit is an imperfect solution, adding one should not be deterred by the argument that smaller banks would mean fewer loans for the real economy.
Fischer quit Credit Suisse in March 2007 to join RHJ (RHJI.BR) International, a vehicle for private equity firm Ripplewood Holdings. (Reporting by Edward Taylor; editing by Karen Foster)
July 23 (Reuters) – The U.S. Treasury department said on Friday it will sell another 1.5 billion Citigroup Inc (C.N) common shares as it whittles down a 27 percent stake acquired during the financial crisis.
Treasury said it sold 2.6 billion Citigroup shares in two previous sales and received about $10.5 billion. It still owns 5.1 billion shares and intends to keep selling them “in an orderly fashion.” (Reporting by Glenn Somerville; editing by Jeffrey Benkoe)
Nyrstar NV today announced that it has acquired the Contonga and Pucarrajo polymetallic
mines in Peru for approximately US$23 million, in line with the Company’s strategy to
selectively pursue opportunities in mining.
The Contonga and Pucarrajo mines comprise approximately 4,900 hectares of mining
concessions, located 500 kilometres north of Lima in the Ancash region, which is well
known for its significant zinc, lead, silver, gold and copper deposits. The Contonga
mine is located adjacent to the world-class Antamina mine, one of the world’s largest
copper-zinc mines.
The Contonga mine is an underground zinc-lead-copper-silver mine with more than 100
years of operating history, and is currently processing approximately 660 tonnes per day
of ore. The Pucarrajo mine is an underground zinc-lead-silver mine which has been in
operation for more than 30 years, and has a capacity of approximately 1,100 tonnes per
day of ore. Operations at the Pucarrajo mine have been suspended since June 2009 due to
cash constraints as a result of the financial crisis.
Nyrstar intends to ramp-up both operations to a combined capacity of more than 2,000
tonnes per day of ore by the end of 2012, resulting in annual production of
approximately 40,000 tonnes of zinc in concentrate, 4,000 tonnes of lead in concentrate,
1,000 tonnes of copper in concentrate and 1.5 million troy ounces of silver. The
ramped-up operations are expected to operate with C1 cash costs[1] of less than US$1000
per tonne of payable zinc due to significant by-product credits.
Leveraging Nyrstar’s existing operating presence in Peru, the Contonga and Pucarrajo
mines will be managed in conjunction with the Coricancha mine by a single experienced
management team, and will utilise the shared services of Nyrstar’s Lima office.
Similar to Nyrstar’s Coricancha mine, exploration at the Contonga and Pucarrajo mines by
previous owners has been limited. Accordingly, Nyrstar intends to undertake a modern
exploration program that is expected to significantly increase mineral reserves and
resources.
Commenting on the acquisition, Roland Junck, chief executive officer of Nyrstar, stated:
“The acquisition of the Contonga and Pucarrajo mines allows us to continue to pursue our
upstream integration into metals where we have existing expertise and proven capability,
whilst leveraging the operational benefits of managing our assets in clusters.
The Contonga and Pucarrajo mines are very competitive on the cost curve due to strong
by-product credits, and will take our capacity for zinc metal production from own
concentrates to approximately 25% by 2012. We continue to actively explore opportunities
to deliver on our strategy.”
As part of the acquisition Nyrstar will also assume debts of approximately US$16 million
associated with the operations. Part of the purchase price (US$5 million) will be held
in an escrow account for 12 months as security for the vendor’s obligations in relation
to customary representations and warranties relating to the acquisition.
Reserves and Resources
The following is a summary of the most recent reserve and resource statements for the
Contonga and Pucarrajo mines.
Contonga Reserves and Resources, 2009
Resource Class Tonnes (kt) Zn (%) Pb (%) Cu (%) Ag (oz/t)
Proven Reserves 1,494 4.67 1.71 0.47 2.93
Probable Reserves 405 4.55 1.34 0.66 2.91
Total Reserves 1,899 4.64 1.63 0.51 2.93
Measured Resource 1,639 5.15 1.78 0.58 3.01
Indicated Resource 430 4.94 1.47 0.72 3.12
Inferred Resource 1,020 4.79 0.99 0.89 2.32
Total Resource 3,089 5.00 1.47 0.70 2.80
Pucarrajo Reserves and Resources, 2009
Resource Class Tonnes (kt) Zn (%) Pb (%) Cu (%) Ag (oz/t)
Proven Reserves 182 8.22 0.83 – 2.32
Probable Reserves 158 8.23 0.79 – 2.24
Total Reserves 340 8.23 0.81 – 2.29
Measured Resource 199 7.98 0.77 – 2.16
Indicated Resource 1,116 7.45 0.57 – 1.69
Inferred Resource 715 7.51 0.76 – 2.00
Total Resource 2,030 7.52 0.66 – 1.85
[1] C1 cash costs are the net direct cash costs incurred from mining through to refined
metal (including operating costs, treatment charges, concentrate freight costs), less
by-product credits
About Nyrstar
The partner of choice in essential resources for the development of a changing world.
Nyrstar is a leading global multi-metals’ business, producing significant quantities of
zinc and lead as well as other products (including silver, gold and copper). Nyrstar is
listed on NYSE Euronext Brussels under the symbol NYR. For further information visit the
Nyrstar website, www.nyrstar.com http://www.nyrstar.com/ .
Contacts
Michael Morley
Director Legal and
External Affairs
T: +44 20 7408 8120
michael.morley@nyrstar.com mailto:michael.morley@nyrstar.com
Investors
Chris James
Group Manager,
Investor Relations
T: +44 20 7408 8161
M: +44 7912 269 497
chris.james@nyrstar.com mailto:chris.james@nyrstar.com
Media
Geert Lambrechts
Communications Advisor
T: +32 14 449 646
M: +32 473 637 892
geert.lambrechts@nyrstar.com mailto:geert.lambrechts@nyrstar.com
(Reuters) – Retail banks are making less profit on average from customers since the financial crisis as price-sensitive consumers shop around and become more demanding, according to a report released on Monday.
The study by consultancy Accenture found that nearly half of top global retail banks had seen the average profit from customers fall between 5 and 15 percent. A further 11 percent said they had seen bigger declines.
Of the 46 executives interviewed for the study, more than half said customer loyalty had decreased. Most expected the lack of customer loyalty to continue in the long term.
“Consumers (are) more skeptical of their bank brands, more price conscious, and more willing to move away from institutions that provide poor service,” said co-author Noel Gordon, global managing director of Accenture’s banking industry practice.
“For the banks, traditional profit-recovery strategies — rate and fee increases, conventional cross-selling and organic growth — will not readily fix the problem,” he said.
(Reporting by Kenneth Grierson, editing by Will Waterman)
July 19 (Reuters) – Retail banks are making less profit on average from customers since the financial crisis as price-sensitive consumers shop around and become more demanding, according to a report released on Monday.
The study by consultancy Accenture found that nearly half of top global retail banks had seen the average profit from customers fall between 5 and 15 percent. A further 11 percent said they had seen bigger declines.
Of the 46 executives interviewed for the study, more than half said customer loyalty had decreased. Most expected the lack of customer loyalty to continue in the long term.
“Consumers (are) more sceptical of their bank brands, more price conscious, and more willing to move away from institutions that provide poor service,” said co-author Noel Gordon, global managing director of Accenture’s banking industry practice.
“For the banks, traditional profit-recovery strategies — rate and fee increases, conventional cross-selling and organic growth — will not readily fix the problem,” he said. (Reporting by Kenneth Grierson, editing by Will Waterman)
AMSTERDAM, July 18 (Reuters) – Gravis Capital Partners, which is set to create Britain’s first listed infrastructure fund focused on providing debt to projects, said it would successfully complete its initial public offering (IPO).
“We are very confident that we will comfortably exceed the minimum 35 million pounds ($53.7 million) we said we would accept, by how much I don’t know, but we will be closing successfully on Monday,” Gravis Managing Partner Stephen Ellis told Reuters.
Gravis is due to close the books on July 19 on a London IPO targeting 50 million pounds for its infrastructure fund to invest in subordinated debt of projects under the UK private finance initiative (PFI), such as schools and hospitals.
Demand for infrastructure debt funds soared after the onset of the financial crisis, as developers, keen to put less equity into projects, turned to lenders other than banks for, often mezzanine, debt for their infrastructure financing needs. [ID:nLDE61L1FF]
Gravis launched an unlisted retail infrastructure fund in June 2009, offering investors willing to commit at least 25,000 pounds a long-term, fixed, net annual rate of return of 8 percent, with subscriptions and redemptions on a monthly basis.
“A lot of people simply could not invest in something that was not London listed. It is very difficult to achieve additional liquidity when the underlying investments are by their nature relatively illiquid,” Ellis said.
HIGHER RETURNS
Gravis is set to become the fourth infrastructure fund listed in London, joining 3i Infrastructure (3IN.L), HSBC Infrastructure (HICL.L) and International Public Partnerships (INPP.L), which make mostly equity investments in projects.
“Because we are investing in debt and not infrastructure project companies, we are by definition more secure because we are higher up the capital structure. So it is an interesting proposition to be offering a higher yield at a lower risk,” Ellis said.
The three existing infrastructure funds average a yield of between 5.25 and 5.75 percent, whereas the Gravis listed fund is targeting dividend payments of 8 percent annually on each ordinary share, he added. “The other listed funds have to acquire an asset, drive down costs, introduce efficiencies and then they will get at some point a higher yield. We have a different model, we just enter a straightforward loan relationship right away,” Ellis said.
Rather than list its existing infrastructure fund, Gravis is publicly placing a new feeder fund at a price of one pound per ordinary share. The feeder fund, GCP Infrastructure Investments Limited, will then invest its capital in the unlisted fund.
The British government’s cuts on public works spending, including the PFI schools building programme, will have little impact on the fund, which focuses on the refinancing of existing projects rather than the financing of new ones, Ellis said.
As PFI contracts are linked to inflation, the fund also stands to benefit should investors become more concerned about the rate of price rises, he added.
Oriel Securities is acting as financial adviser and bookrunner on the IPO. (Editing by David Holmes) ($1=.6519 Pound)
July 15 (Reuters) – Bank Dhofar BDOF.OM, Oman’s second-largest bank by market value, saw quarterly net profit rise 16 percent on Thursday but the results fell short of analysts forecasts.
Second-quarter net profit rose to 8.9 million rials ($23.12 million) from 7.7 million rials in the second quarter of 2009, according to Reuters calculations. The lender posted a profit of 8.8 million rials for the first-quarter of the year.
Analysts had forecast net profit of 9.1 million rials for the second quarter, according to a Reuters survey. [ID:nLDE6661BX]
For the six months ended June 30, the bank’s profits rose 25 percent to 17.7 million rials, it said in a statement. Customer deposits for the first half of the year rose 15.1 percent, while loans and advances grew 6.8 percent.
Omani banks have so far reported strong growth in quarterly earnings as asset quality improves and lenders book lower provisions as they recover from the impact of the financial crisis.
On Wednesday, Oman’s largest bank by market value, Bank Muscat BMAO.OM reported an 87-percent jump in second-quarter profit, while National Bank of Oman NBO.OM said second-quarter profit rose 21 percent. [ID:nLDE66305D]
(Writing by Dinesh Nair; Editing by Amran Abocar)
July 14 (Reuters) – Smaller banks that got U.S. government bailout money are likely to run into trouble repaying it and may become vulnerable to takeovers as a result, a congressional watchdog agency warned on Wednesday.
In its latest critique of the Treasury Department’s handling of the Troubled Asset Relief Program, or TARP, the Congressional Oversight Panel said smaller banks face far more difficulty than their big Wall Street counterparts in exiting the bailout program.
Treasury pumped about $205 billion of taxpayers’ money into more than 700 banks through the Capital Purchase Program (CPP) that was created under TARP, aiming to stabilize them amid the financial crisis that struck in full force in autumn 2008.
Most of the money went to 17 big banks, with assets over $100 billion, that emerged from the crisis relatively well.
“Most of these large CPP banks have already repaid taxpayers, and many are now reporting record profits,” the panel’s report said. But many of the 690 smaller banks that got help are “are now struggling to meet their obligation to taxpayers.”
Many smaller banks already are having difficulty raising capital necessary for repayment of their bailout funds, and by 2013 they face the prospect of having to pay higher charges for the bailout money that they received, the report said.
In a telephone conference call, panel chairman Elizabeth Warren said it was ironic that the government’s bailout program seemed to be offering its greatest benefit to big Wall Street banks when it was intended to stabilize the whole industry.
“TARP was not intended as a bailout for Wall Street, it was intended to provide benefit for the whole economy,” she said.
Banks that got bailout funds must pay a dividend to the government of 5 percent on preferred stock that they issued in return for the money, which is redeemed when they repay the funds. But that dividend rises to 9 percent in 2013.
“If they are unable to access new capital by the time the dividend rate increases, more small banks may become trapped, with no way either to escape the CPP or to repay their required dividends,” the panel report said.
That might leave small banks as takeover targets, or force them to collapse.
“Consolidation or failure may be appropriate for some weak and poorly managed banks, but it would be unfortunate if well-run institutions were forced onto this path solely because of the CPP,” the report said, adding that the effect of the bailout on smaller banks may be to weaken them.
The report warned that “the number of small banks that were once deemed healthy but that cannot make their dividend payment and repay their TARP obligations may grow,” adding the end effect will be to pinch lending and dampen the recovery.
“One in seven small banks in the CPP has already missed a dividend payment, and fewer than 10 percent of CPP-recipient small banks have repaid taxpayers,” the report said.
In response to questions, Warren expressed doubt that an Obama administration proposal for creating a $30 billion fund to boost capital at small banks, and so induce more lending, would offset the strains that smaller banks are already feeling.
“We are trying to wave a flag about a problem that’s already serious and is very likely to get worse,” Warren said, particularly because many smaller banks have significant exposure to commercial real estate markets where lenders are defaulting in growing numbers.
The panel suggests that Treasury consider setting up a workout team to help smaller banks negotiate deals to raise capital and move quickly to exercise its shareholder rights, like appointing board members at banks where dividend payments have been missed to try to ensure taxpayers are repaid. (Reporting by Glenn Somerville, editing by Leslie Adler)
DAEJEON, South Korea, July 12 (Reuters) – Asia has emerged as a global economic powerhouse but is faced with policy challenges from rising capital inflows and needs to watch out for possible shocks from Europe, the IMF’s chief said on Monday.
Managing Director Dominique Strauss-Kahn admitted to mistakes the International Monetary Fund made in helping several Asian countries overcome the 1997-1998 financial crisis but said its efforts eventually paid off by making the region more sound.
Strauss-Kahn also said during a conference, co-hosted by the IMF and the South Korean government, that it was working on ways to enhance or redesign its existing lending facilities and that details would be available by November.
“We may have made mistakes. Who doesn’t?,” he said during the conference in the central South Korean city of Daejeon. “We have learned how big the danger of volatile capital flows is and how big those capital flows may be.”
At the same conference, South Korean Finance Minister Yoon Jeung-hyun urged the IMF to take steps to help prevent another financial crisis, repeating the country’s call for a strengthened network of financial safety nets.
“I belive the IMF has an important contribution to make, by proposing and enacting concrete and realistic measures to strengthen financial safety nets around the globe,” Yoon said.
Yoon said efforts from developing countries were not sufficient to withstand external shocks on increases in volume and high volatility of capital flows.
Strauss-Kahn also acknowledged the argument that the IMF’s prescriptions offered in return for rescuing Asia’s emerging economies of South Korea, Thailand and Indonesia during the 1990s crisis could have been better structured.
“We have learned also that we need to focus conditionality on the real problems, not having a long list of conditions that may have little to do with the problems at stake,” he said at the conference on Asia’s growing role in the global economy.
He warned of remaining downward risks mainly involving the fiscal crisis in Europe.
“Obviously Europe is today with low growth and some risks of crisis on the fiscal side, which means that policymakers need to remain attuned to negative shocks including capital inflows,” he said.
He repeated his previous view that the U.S. dollar will remain the world’s major reserve currency for a long time, saying it will take a long time before alternatives such as the IMF’s special drawing rights (SDRs) emerge as a reserve money. (Additional reporting by Cheon Jong-woo; Editing by Muralikumar Anantharaman)
Wisconsin (Reuters) – U.S. President Barack Obama launched a broad attack against Republican lawmakers on Wednesday, calling them out of touch with ordinary Americans for opposing Wall Street reform and siding with Big Oil.
Democrats on Capitol Hill are battling to send a landmark overhaul of U.S. financial regulation to Obama’s desk in the coming days to be signed into law.
Obama used a campaign-style speech in Wisconsin to defend his record on the economy and stress that he understands people are hurting under the weight of a U.S. jobless rate of 9.7 percent.
“We can return to the failed economic policies of the past, or we can keep building a stronger future. We can go backward, or we can keep moving forward.”
The president, whose Democratic Party faces potentially large losses in November 2 congressional elections, accused Republicans of leading the country into the recession and said they have opposed his policies aimed at fixing the economy.
And he singled out the Republican leader of the House of Representatives, John Boehner, for telling the Pittsburgh Tribune-Review that the financial regulation overhaul moving through Congress was so extensive that it “is like killing an ant with a nuclear weapon.”
“He can’t be that out of touch with the struggles of the American families,” Obama said of Boehner. “And if he is, he has to come here to Racine and ask people if they think the financial crisis was an ant,” Obama said, speaking two days before the release of closely-watched monthly jobs data.
Unemployment in Racine was 14.2 percent in May, well above the state-wide rate. At the national level, U.S. unemployment is forecast to edge up to 9.8 percent in June as the economy shed an expected 110,000 jobs, analysts polled by Reuters say.
JOBLESSNESS
Some Republicans key to the Wall Street measure becoming law are holding back support although they are expected to eventually approve the bill, which would set up a new consumer-protection bureau and force banks to reduce risky trades and investments.
Obama is seeking to marshal public anger over Wall Street, which many Americans blame for the 2008 financial crisis, to boost his reform agenda in an election year. In Racine, he also promoted his policies to lift the economy.
“The economy is headed in the right direction. But I know that for a lot of Americans — for Racine and many other communities — it’s not headed there fast enough,” he said.
Stubbornly high jobless levels are denting the president’s popularity and could sap his Democratic Party’s power on Capitol Hill in November mid-term congressional elections.
Republicans told Obama to concentrate on fixing the nation’s problems.
“The President should be focused on solving the problems of the American people — stopping the leaking oil and cleaning up the Gulf, scrapping his job-killing agenda, repealing and replacing ObamaCare — instead of my choice of metaphors,” Boehner said in a statement.
Republicans last week blocked a Democratic plan in the Senate to provide additional aid to jobless workers, businesses and cash-strapped states.
Obama said opposing the reform shows Republicans were siding with big banks and Big Oil.
“There are some folks in the other party who are also against raising the limit on what companies like BP have to pay for the environmental disasters they cause,” said Obama.
“The top Republican on the energy committee even had the nerve to apologize to BP for the fact that we made them set up this fund. Apologize to BP! He actually called the fund ‘a tragedy’,” Obama said.
(Writing by Alister Bull, editing by Philip Barbara)
The reforms are part of a broader regulatory overhaul meant to prevent a repeat of the 2007-09 financial crisis that tipped the economy into a deep recession and triggered massive taxpayer bailouts of big banks.
Lawmakers from the U.S. House of Representatives and Senate have melded versions of regulatory reform and are expected to send a bill to President Barack Obama to sign into law before the July 4 holiday.
Following is a look at provisions that affect the Federal Reserve:
CONSUMER PROTECTION
An independent Bureau of Consumer Financial Protection would be set up within the Fed. It would be funded by the Fed, although it could turn to Congress if it saw the need for funding. The agency would have power to write and enforce consumer protection rules. The Fed would not be able to intervene in actions of the bureau or review or delay its rules.
SYSTEMIC RISK REGULATION
The Fed would be part of an inter-agency Financial Stability Oversight Council chaired by the secretary of the Treasury to watch for dangers that could roil the wider financial system, giving the Fed some powers to take action. The Fed could be put in charge of supervising large non-bank financial firms the council deems systemically risky. It would be able to break up those firms to guard against risks.
EMERGENCY LENDING
The Fed could no longer use its emergency lending authority to help a specific company, as it did during the crisis with Bear Stearns and American International Group. Instead, it would have to create a lending facility open to firms of a certain type, as it did with Wall Street investment banks and commercial paper markets.
AUDITS AND DISCLOSURE
The Fed’s emergency lending during the 2007-09 crisis would be subject to a congressional audit, as would any future special emergency lending. The Fed would be required to make public information about borrowing at emergency facilities a year after each facility closes.
Borrowing at the Fed’s discount window and transactions at its open market desk would be made public after a two-year lag. Both of those facilities, whose operations are part of the Fed’s ongoing activities, would be subject to congressional audit.
GOVERNANCE
The president would name a Fed vice chairman for supervision. Bankers supervised by the Fed who serve on the boards of directors of the 12 regional Fed banks would lose the ability to vote for the presidents of those regional Fed banks. Lawmakers agreed to an audit of Fed system governance by the Government Accountability Office.
(For stories on Fed policy, please double-click on)
MANAMA, June 27 (Reuters) – Bahrain-based United Gulf Bank UGBB.BH (UGB), the investment banking unit of Kuwait Projects Co (KPRO.KW) (KIPCO), said on Sunday it has sold its stake in Tunis International to Burgan Bank (BURG.KW) for $120 million.
UGB said in a statement to Bahrain’s stock exchange that it made a profit of $49 million before expenses from the sale. The bank had acquired a 77 percent stake in Tunis International in 1997, according to its website.
Kuwaiti investment firms have been badly hit by the financial crisis and some have said they would sell down international assets, but KIPCO has posted modest profits throughout 2009.
UGB, which has $2.3 billion in assets, held investor meetings in February to potentially issue a bond which it had to postpone due to weak market conditions at the time, according to market sources. [ID:nLDE61A18V] (Reporting by Frederik Richter; Editing by Dinesh Nair)
TOKYO, June 25 (Reuters) – Japan’s Nikkei average extended falls on Friday for its biggest weekly loss in a month, closing below a key support level in what market players said could signal still more drops to come.
Fresh signs of weakness in U.S. consumer spending that have raised concerns about the outlook for corporate earnings sparked much of the selling.
The Nikkei shed 1.9 percent on Friday and 2.6 percent for the week to close below its 25-day moving average, a proxy for a one-month moving average that is keenly watched in Japan.
Support lies near a six-month low hit this month around 9,400. But on weekly charts, the Nikkei’s 13-week moving average has crossed below the 26-week moving average — a formation known as a “death cross.”
“The feeling in the market really isn’t very good right now, and if we don’t get something encouraging out of the G20 summit we could see more falls next week,” said Noritsugu Hirakawa, a strategist at Okasan Securities.
“With the G20 summit going on it’s very hard to buy, and the yen’s gains are adding some downward pressure.”
Leaders of the Group of Eight and Group of 20 rich and developing nations meet in Canada June 25 to 27 to discuss how to plot the world’s emergence from the worst financial crisis since the Great Depression. [ID:nN18322198]
Shares of Mizuho Financial Group (8411.T) hit a seven-month low after sources told Reuters the bank will decide on Friday to sell up to 6 billion new shares in a planned global offering, increasing the total number of shares outstanding by up to 38 percent. [ID:nTOE65O032]
The benchmark Nikkei .N225 shed 190.86 points to 9,737.48, its lowest close in two weeks. The broader Topix slipped 1.4 percent to 867.30.
“Investors had been aware that the speed of a recovery in the economy is rather slow but believed earnings are on a solid footing, but concerns are now emerging about the outlook for corporate earnings,” said Kenichi Hirano, operating officer at Tachibana Securities.
The technical picture has darkened for the Nikkei, with its MACD turning downwards after a sustained rise. Its slow stochastic, which gives near-term signals on market trends, shows the drop may yet have further to go as well.
The S&P 500 fell on Thursday for a fourth straight day, losing nearly 4 percent over the four sessions, with retailers among the biggest decliners a day after discouraging outlooks from Bed Bath & Beyond (BBBY.O) and athletic apparel maker Nike Inc (NKE.N) [ID:nN23235380]
FOREIGN SELLING
On Friday, orders for Japanese stocks placed through 10 foreign securities houses before the start of trade showed net selling for a fourth straight day, although market players said foreign investor activity appeared to have ebbed later.
“I think a lot of foreign investors have closed their positions as the quarter-end nears,” said Okasan’s Hirakawa.
Shares of blue-chip exporters fell to drag down the broader market, with several major names hit by brokerage downgrades.
Shares of Canon (7751.T) lost 4.5 percent to 3,530 yen after Credit Suisse cut its rating on the stock to “underperform” from “neutral.”
The brokerage also cut its rating on Tokyo Electron (8035.T) to “neutral” from “outperform” and lowered the target price, saying the order recovery cycle for 2010-11 semiconductor capex is likely approaching a peak. Tokyo Electron lost 5.6 percent.
Large Japanese banks gained in early trade after a Financial Times report that the Basel Committee is set to relax its proposals on how much capital banks must set aside to protect against future financial crises, but by afternoon had reversed course. [ID:nLDE65N2C1]
Mitsubishi UFJ Financial Group (8306.T) lost 0.5 percent to 419 yen and Sumitomo Mitsui Financial Group (8316.T) shed 0.7 percent to 2,658 yen. Mizuho lost 1.3 percent to 153 yen.
Mizuho had registered with regulators last month to raise up to 800 billion yen in a global offering of new shares to prepare for stricter capital requirements, but had not made an official decision to go ahead with the offering. [ID:nTOE64D069]
Trade picked up on the Tokyo exchange’s first section, with 1.9 billion shares changing hands, the highest volume in two weeks. Declining shares outnumbered advancing ones by nearly 4 to 1.
June 24 (Reuters) – Danish resistance to swapping Denmark’s crown currency for the euro is stronger than ever, a new opinion poll for Danske Bank (DANSKE.CO) showed on Thursday.
The “No” camp’s lead grew to 11.3 percentage points in June, Danske Bank said, adding that there was little chance of a Danish vote on the euro this side of the next general elections due to be held before the end of November 2011.
Opposition to the euro increased to 54.6 percent in June from 47.4 percent in a similar poll in March.
“This is the largest ‘No’ lead since we launched our EMU poll in 1999,” the bank said in a research note to clients.
Danes rejected the euro in a referendum in 2000, instead pegging the crown to the single European currency within a narrow band EURDKK=. The financial crisis brought a brief groundswell of support for the euro, but that has now vanished.
Looking solely at those who were certain how they would vote, the ‘No’ side had an even more solid lead.
Only 32.1 percent of Danes polled were certain they would vote “Yes”, while 47.8 percent were certain ‘No’ voters — a difference of 15.7 percentage points, Danske Bank said.
“Comparing the results against our last survey in March 2010, the most noticeable shift is in the number of certain ‘No’ voters,” it said.
Furthermore, the Danish central bank’s interest rate cuts have narrowed the official interest rate spread to the euro zone to just 5 basis points over the past year.
“This makes the cost of not being a euro member appear considerably less than it did just 1.5 years ago, when the rate spread briefly rose to 175 bps,” Danske Bank said.
It remains uncertain when Danes might vote again on adopting the euro, Danske Bank said, adding that a referendum would be no easy matter politically for the current centre-right government which favours the euro.
It said there was a big risk that a vote would go against the government, and it noted that the government’s majority in parliament depends on the support of the Danish People’s Party, which opposes the euro.
“Therefore, the government will probably not call a referendum until after the next general election, which is due to take place by November 2011,” Danske Bank said.
Another opinion poll earlier this month by TNS Gallup found that only 36.3 percent would vote for the euro in a referendum while 54.8 percent would vote against, and 8.9 percent in the survey had no opinion [ID:nLDE65F0CI]. (Reporting by John Acher, editing by Mike Peacock)
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