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Markets 14th May 2012

JP Morgan says European equities’ in recovery mode

LONDON | US equities’ outperformance is becoming exhausted and investors should look through the euro smoke for opportunities, JP Morgan advised clients in its latest weekly strategy report. In spite of agreeing in line with consensus, analysts’ recommendation was to open ears to what the arguments might be in support of European equities. Is it time to go overweight Europe?, the investment entity asked in its paper. Although every investor’s favourite regional equity bet…

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Markets 14th May 2012

Large amounts of corporate bonds issued in the first quarter of 2012

By La Caixa research team, in Barcelona | In the last months, activity in the corporate bond markets continued to speed up. During the first few sessions, the combination of the ECB’s extensive liquidity and doubts regarding Greece limited volumes in the primary and secondary markets. But the gradual improvement in the climate regarding sovereign and financial risks at a global level and the flow of good economic data boosted corporate…

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Markets 11th May 2012

The European Investment Bank could be the answer to austerity exhaustation

LONDON | Were the tide changing within the shaken frontiers of the European Monetary Union, austerity-driven core euro nations could do worse than open the European Investment Bank’s window to let some fresh capital aid in. Barclays analysts said Friday in a note to investors that using the EIB to complement budget constrictions would be a feasible option and the probability of this happening is growing: this time it is…

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Markets 11th May 2012

Central banks in a position of wait-and-see

La Caixa research team, in Barcelona | The role played recently by central banks in the current scenario is being decisive. Since 2008, they have demonstrated an extraordinary capacity to take decisions and act in response to the financial shocks occurring. Thanks to this sustained commitment they are achieving, at least in part, their desired goals of relaxing tension in the capital markets and boosting economic activity. As is usual, the…

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Markets 10th May 2012

French, Italian banks’ stocks lead price loss since 2007 with 70pc drop

The aggregate of the main European banking institutions has lost almost half a billion of euros in market value, from €670 billion to just over €200 billion during the last five years. The average drop has been 65 percent. But Italian and French banks have led the fall with a 70 percent of their stock price wiped out in the aftermath of the credit crunch. As readers are well aware,…

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Markets 10th May 2012

Lies, damned lies and BFA accounting

MADRID | Ever since double entry accounting was developed in Middle Age Italy, banks have been able to mask shortcomings till the very verge of their implosion. After all, in every single balance sheet, assets always match liabilities to the last penny. The figures’ real value just becomes a matter of opinion, as recent discomfitures have shown. Lehman Brothers led the way many others have followed. The turn has come now…

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Markets 9th May 2012

How easy is for hedge funds to destabilise financial markets in Spain

By Carlos Díaz Guell, in Madrid | Spain, its public debt as much as its equity markets remain a paradise for investors on short positions who bet demand will go down, while investors interested in the long term just abandon the country because of the lack of reasonable expectations. They are not necessarily evil speculators but simply professionals representing many investors who seek higher returns to their capital and now Spain…

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Markets 9th May 2012

First exchange traded funds to provide targeted exposure on euro debt

LONDON | The exchange traded funds or ETF platform of global investment company BlackRock on Wednesday announced the launch of eight funds that will provide targeted exposure to the sovereign debt of eight euro zone countries. The launch pushes on the expansion of iShares’ fixed income range to meet growing interest in fixed income ETFs, and to satisfy demand for more specific exposures within the asset class, iShares said. iShares…

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Markets 8th May 2012

Greece and the bond maturity guillotine

LONDON/MADRID | On May 15, Greece faces a €436-million bill in maturities of State bonds issued under international law. Will the Hellenic Treasury pay investors back? In Madrid, Afi analysts told clients the probabilities of defaulting in some of the bonds that did not participate in the last debt restructuring deal are extremely high. They mentioned as one the causes the current complexity of Greek politics after an election result that…

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Markets 8th May 2012

Foreign private equity funds feed on Spain’s real estate crisis

MADRID | The severe crisis in Europe and especially in Spain, Italy and Portugal has attracted some of the main actors of the private equity scene. According to Capital Madrid, one of the biggest firms in the sector, Apax Partners, has put its focus on the financial assets accumulated by the Spanish banks and that will shortly be going out for sale. Indeed, the difficult time many Spanish banks go through…