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…
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…
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…
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…
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…
NEW YORK | Restless and suspicious. That is how Wall Street seems to be feeling after France and Greece’s pushback against austerity measures. U.S. stock futures fell on Monday, while Treasuries gained. Investors wonder whether the stimulus advocated will derail bailout deals. And what will happen now that the Sarkozy-Merkel tandem is broken and the Greek parliament will have three new anti-bailout parties represented. This added to the uncertainty created by…
MADRID | Barclays Capital made a realistic yet not Armageddon-like exercise in which the Spanish banking sector would need a recapitalisation equivalent to 6 percent of the country’s GDP, plus an additional 5.4 percent of GDP as an extra-safety calculation. Its analysts threw in 0.9 percent of GDP in Greek liabilities, and 3.5 percent of GDP in administrations’ accumulated debt payments. The scenario considered included yields on 10-year bonds of…
The Purchasing Managers Index provides one of the most reliable hints about a country’s GDP behaviour, so isn’t difficult to agree with all observers that April’s relapse in PMI figures in the euro zone spell loss of momentum in industrial activity. The data are at the lowest level since mid-2009. With no signs of acceleration of the indicators of activity and with early sentiment indexes’ falling in the second quarter of 2012, the risk of the…
MADRID | Bolsas y Mercados Españoles BME, the operator of all stock markets and financial systems in Spain, said Thursday that equity trading volume on the Spanish stock exchange in April had reached €65.75 billion. This is an increase of 7.25% from the previous month but 19% down on the same period in 2011. The trading volume for the first four months totaled €242.70 billion, down 26% from the same period…
The major European markets closed Wednesday in the negative, with losses of -0.93% for London and -0.78% for Frankfurt, while Paris scored +0.42%. But Milan with -2.6% and Madrid suffered the biggest falls. The Spanish stock market dropped 2.55% today and recorded a new annual minimum (6831.9 points) hurt by the slowdown in industrial activity in Europe, weak job creation in the United States and the decline of the banking sector. The hit could have been worse as during the session the index came to be over -3%, that is approaching…