Markets

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The two sides of China’s Internet economy

Mid-April the largest Chinese micro blogging service, Weibo, raised $286m in its Nasdaq debut. Within weeks, Alibaba, the largest e-commerce platform in the world is expected to complete probably the biggest IPO in history. These are some of the main players of China’s booming Internet economy, which saw revenues of  600.41 billion Yuan in 2013, and it is expected to reach 1.72315 trillion Yuan in 2017.  But censorship and strict regulations are hindering the growth of the country’s cyber players.

 


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“We at the IMF see hot spots in the U.S. shadow financial system”

WASHINGTON | By Pablo Pardo | Shadow banking in the U.S. doubles in size to the banking system, just the opposite than in Europe. According to the IMF’s number 3, José Viñals, it’s in the shadow financial where there is “a debt that grows very quickly and investors who are underestimating the risk of certain financial assets.” And he adds: “Careful, we’ve heard that song before.”


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Market chatter: Spain gloomy jobless rate, Santander 1Q results and much more

MADRID | By Jaime Santisteban | Spain’s unemployment rate climbed to nearly 26 per cent in 1Q, official data showed Tuesday, despite the positive growth figures the government is proudly showing. Markets are weighing the effects of those numbers on the country’s sluggish recovery, the same day Spanish bank Santander announced an 8% profit increase in 1Q. Spain only accounts for 14% of the entity’s profits, while the UK is already 20%. 


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Market chatter: Pharma romance, Apple historic bond sale and much more

MADRID | By Jaime Santisteban |  M&A is getting really hot: Pfizer and AstraZeneca are forging the largest all-time merger in the pharmaceutical sector for $101bn, an operation that is stirring up investors. Apple turned to the bond market to fund its capital repurchase program again (it did the same one year ago). A 17bn blockbuster corporate bond debt sale that could the 2nd largest in History.


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Former ECB executive: Draghi’s inaction weighing on credit lending

MADRID | By The Corner | For the first time a Spanish bank top executive has openly criticized the impact of the European Central Bank’s inaction on EZ credit lending. Spanish 2nd bank BBVA’s Jose Manuel Gonzalez-Paramo, also a former ECB board member, explained how banks are waiting to see which unconventional measures will Mr Draghi undertake, which is “fundamental for credit,” he said to Reuters on Monday. Some entities are also holding back on new credit plans and selling sovereign debt before the health checks due around October. 

 


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Credit lending: 2 ends of the financial string

MADRID | By Luis Arroyo | Which came first, the chicken or the egg? Does the credit decrease because the demand is weak or because banks don’t offer any? Requirements imposed by banks to lend money (excluding to the public administrations) are aggressive both in real and collateral interest rates. Meanwhile, the possibility that the ECB increased rates would further collapse bank credit.


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Today’s market chatter: Spain’s T-bonds, Microsoft and much more

MADRID | The Corner | Macro figures that Spanish government will send to European Commission next Wednesday will include an upward GDP’s revision of 1.2% and 1.8% for 2014 and 2015, respectively. Spanish Treasury issued €5.5bn of 3, 5 and 10 year-bonds beating expectations. Yields dropped to a record low in the three maturities. Fitch’s will review Spain’s BBB rating with stable outlook on Friday.


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Draghi prepares ground for awaited QE

MADRID | By Ana Fuentes | How much is enough? Mario Draghi announced that the ECB’s Governing Council is unanimously committed to “using both unconventional and conventional instruments to deal effectively with the risks of a too-prolonged period of low inflation.” His most explicit comments came as EZ inflation slowed to 0.5 percent last month, the weakest pace in more than four years, whereas the central bank’s target inflation is at 2%. Excess liquidity in the 18-nation currency bloc financial system has dropped to 92.9 billion euros ($128 billion), the lowest level since December 2011. When will Mr Draghi feel real risks?


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Market chatter: Spain’s Caixabank misses expectations but sees NPL ratio go down

MADRID | By Jaime Santisteban | Caixabank’s net profit dropped by 54.6% to €152M in the first quarter. Analysts highlight the positive impact of integrating Banco de Valencia and Banca Cívica. Spain’s third biggest bank by market value improved its margins and reduced its NPL rate for the first time since the crisis started. 

 


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Stress tests: EU banks start tarting up

MADRID | By Julia Pastor | As the ECB’s crucial examination comes closer, all European entities, from the core to the periphery, have started studying different formulas to show the best capital ratios possible. German banks would imminently issue CoCos, while Italy’s could be about to create a joint bad bank and Spain is to monetize around €40 bn of deferred tax assets. The stress tests’ results will be released at the end of October 2014.