Markets

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British SMEs better give up on expectations over bank finance and turn to bonds

LONDON | The capital stress levels that British banks suffer are regarded to be so dire not even a majority stakeholder like the UK’s government feels confident their credit tap should open. A Taskforce set up by the department of Business Innovation and Skills published Friday a report that recommends small and medium-size companies or SMEs to hunt for alternatives. The paper anticipates growth in demand for finance as the economy recovers…


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Bank deleverage to open €700bn finance gap in commercial real estate sector

MADRID | Morgan Stanley published a report that analyses the implications of the banking deleveraging process for the commercial real estate sector in Europe. The bottom line is that it will generate a gap in financing estimated in €400 to €700 billion during the coming years and that this is a structural trend. “We believe that the winners may be the venture capitalists. In our view, Blackstone and Partners Group are well positioned to step in that section of business once banks leave. Financing activity in commercial real estate has an…


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Spanish Treasury: yields still falling despite scuffle with Brussels

By Tania Suárez, in Madrid | The new deficit targets established by Brussels left unmoved the Spanish Treasury issuance performance. It has placed €3,009.29 million in bonds and debentures at lower interests, few days after the Spanish government set up a higher deficit target for 201 and after Brussels mended it to a final 5.3% from an initial 4.4%. Specifically, the Treasury has placed €976.18 million of the €4,031.18 million…


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Chancellor Osborne strains UK’s special relationship with ratings agencies

LONDON | It was inevitable. The UK woke up Thursday saddled by a 50/50 chance of losing the maximum award of its national borrowing capabilities. After all, as Santander analysts poke out of Fitch Ratings’ statement over its outlook downgrade of the triple A, which British sovereign bonds still hold, the growing public debt to GDP ratio is set to approach the edge of the top-gun category. The figures came…


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Madrid’s financial City doubts the Spanish risk premium can fall below 300bp

By Tania Suárez, in Madrid | Even though the Spanish risk premium on Wednesday morning dropped to 328 basis points, financial analysts in Madrid are split up about its evolution. 50% of the analysts consulted by Consenso consider reasonable a fall below 300bp before the end of 2012. Most of them clarify that the risk premium will decrease, but depending on economic developments in the international economic context. Also, some of…


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Threadneedle: healthy demand for equities after liquidity boost in EU, UK, Japan

LONDON | Global asset manager Threadneedle pointed at liquidity operations carried out by most G20 governments as the primordial reason behind the recent rally that the equity sector has experienced. “We see the LTROs, the recent £50bn extension to quantitative easing by the Bank of England and the ¥10trn increase in the Bank of Japan’s asset purchase scheme as activities that boost liquidity and are likely to increase demand for…


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The Greek swap-opera

LONDON | Half an hour before the deadline passed at 20:00 GMT on Friday, the Greek minister for international economic relations Constantine Papadopoulos confidently told Sky News in London that default had been averted. “The indications we have are that the debt swap seems to be going well. Greece will get the necessary bailout as we have now cleared the major hurdle and can look forward to a new beginning,” Papadopoulos explained, although…


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Lose any hope of escaping a stern haircut on Greek debt holdings

By Juan Pedro Marín Arrese, in Madrid | Those hedge funds resisting debt restructuring shouldn’t nurture any hope to save their money. The titles they hold might be governed by international law. But should Greece turn off the tap, counting on CDS to fill the gap might prove a delusion. Credit default guarantors have already warned they will simply fail to respect commitments entered. The ensuing claims might fatten law…


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Mortgage rate swaps have become Bankinter’s nightmare

By Capital Madrid | After thousands of Spaniards marched last week throughout the country under the banner of alleged bank abuses, the hunt continues with legal action against one of the products entities often used during the bubble years: the interest rate swaps, also called ‘clips’. Bankinter recently gained one more adverse sentence, which brought its naughty account to 162. The local court number 8 in Madrid declared the nullity of…


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“Opening the kimono” of the US market-maker activity

NEW YORK | There are more than 20.000 market makers only in the US. Now one of them –a very, very big one, JP Morgan– has broken for the first time a code of silence among investment banks by revealing how much they rakes in as a market-maker. A market-maker quotes bid and offers prices for specific stocks or other securities that it holds. Its aim is to make money by…