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Markets 27th February 2012

European equity markets look appetising, but crisis management must improve

LONDON | This year may prove an inflection point, with growth in equity markets in Europe and European smaller companies on attractive valuations leading the way. Fund Manager of TR European Growth Trust PLC Ollie Beckett believes expectations for positive returns from EU equity markets in 2012 have solid ground, notwithstanding the depressive tunnel the euro zone’s economy is currently passing through. But then again, Ollie Beckett is an associate director…

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Markets 27th February 2012

British banks to take part in the European money fair

By Tania Suárez, in Madrid | Next Wednesday takes place the second Long-Term Refinancing Operation (LTRO) by the European Central Bank. The hot spot is the participation of some British banks, such as Lloyds and RBS (according to FT), which didn’t take part in the last liquidity auction thanks to the central bank of the United Kingdom. The end of its QE programme has forced RBS and Lloyd to forecast…

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Markets 27th February 2012

Are Spanish plans to set up a sole market watchdog sound?

By Juan Pedro Marín Arrese, in Madrid | Sector regulators in Spain will melt into a single one, following the government announcement last Friday. Efficiency and savings are portrayed as the main reasons to make the move. While the first one rises a fundamental issue, reducing running costs of existing entities amounts to a trivial one. After all, cutting off expenditure by €4 million per year will not bring much…

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Markets 24th February 2012

LCH.Clearnet punishes Italy’s and Spain’s fiscal adjustments, markets beg to differ

The Spanish minister of Economy Luis de Guindos’ visits to London earlier this month and to Washington on Friday have borne fruit. Yield of 10-year Spanish sovereign bonds have softly fallen back to the 5pc region (it was 5.6pc), while the CDS spread in comparison to German bonds has tighten and is now 316bp from 380pb last week. The Italian 10-year bond has also behaved in a positive way, with…

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Markets 23rd February 2012

LHC.Clearnet cuts down by 10pc the additional margin for Irish bonds

LONDON, MADRID | Ireland and Greece appear this week at the opposite ends of the rainbow. Santander credit research team painted Thursday an optimistic picture in its investors’ note based on the news that LHC.Clearnet has cut down by 10pc the additional margin it requires, which was 25pc, for positions in Irish government bonds cleared through its RepoClear service. A more relaxed market environment has also prompted Ireland to increase asset sales to €3…

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Markets 22nd February 2012

Hungarian bank FHB’s €500mn state aid within EU rules

The European Commission on Wednesday gave the green light to the state rescue operation of Hungarian bank FHB. A recapitalisation of HUF 30 billion (app. €100 million) and a loan under the Hungarian liquidity scheme of approximately HUF 120 billion (approximately €400 million) for the Hungarian bank FHB were put in place in accordance to EU state aid framework, the Commission ruled. After an in-depth investigation, the Commission concluded that the…

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Markets 21st February 2012

Iceland, an example to follow or not? It depends…

By Julia Pastor, in Madrid.- Since last week, Iceland debt is no longer rated as junk bond. Fitch raised the country’s rating by one notch, from BB+ to BBB-. This fact has sparked a significant number of comments about whether the way in which Iceland has managed the economic crisis is a model for other  European countries, particularly the peripherals. It is undeniable that the actions taken by the so far Iceland…

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Markets 21st February 2012

Spanish Treasury seduces investors, yields fall under 1%

By Tania Suárez, in Madrid | The Spanish Treasury keeps reducing the yield of its public auctions and demand keeps increasing: 5.9 times the offer (almost €15bn). Just a few hours after Europe has given the green light to Greece’s rescue package, the Spanish Treasury has sold €2,5bn –the maximum expected, at 3 and 6 months bills, and thus, it has reached the high end of the target range. Specifically, it…

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Markets 21st February 2012

Baring increases exposure to peripheral euro debt

LONDON | Andrew Cole, director at Baring Asset Management announced this week that the investment firm has expanded its purchase programme of Italian debt. Baring believes that European Central Bank interventions in the markets, improving liquidity available to European financial entities, have proven to act as a barrier against higher risk trends. Mr Cole said that euro zone economic forecasts look gloomy this year and will possibly remain weak in 2012,…

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Markets 20th February 2012

FSA fines Santander £1.5mn over poor information, clients didn’t lose out

LONDON | The British financial regulator, the Financial Services Authority (FSA), confirmed Monday that Santander UK was fined £1.5 million for failing to clarify under which circumstances its structured products would be covered by the Financial Services Compensation Scheme (FSCS). The Spanish bank acknowledged that it could have replaced all product literature and training materials more quickly to reflect the FSCS position accurately. The fact that it allowed sales to continue with…