Business News » financial

Real test for banks will be to raise long-term financial resources

viliyana89 — Sat, 24 Jul 2010 09:26:37 +0000

Since most European banks have moved long-awaited stress tests, they now face even more serious challenge in the coming months, namely – the collection of long-term resource for billions of dollars with which to finance lending. Card is placed on the fragile economic recovery across Europe. Unlike the U.S. the majority of European companies rely on bank financing. If banks fail to attract investors to the bond markets, they will be able to grant long term loans, which businesses to fund their investments. According to the European Central Bank (ECB) bank loans accounted for 70% of debt financing to companies in the euro area, while 80% of loans to U.S. companies raised through capital markets, reported Wall Street Journal. European governments are hoping stress tests that only 7 of 91 banks failed to pass, to reduce concerns about the health of the banking sector in Europe, encouraging investors to buy bonds of credit institutions. So far, banks face problems raising funds from markets, and instead resorted to mass services of the ECB to fund their daily operations. “The real test is whether banks will be financed at a reasonable price from the capital markets to perform their usual function in the economy,” said Gary Jenkins, head of analysis of fixed income instruments at Evolution Securities.
Problems with funding reflected the changed attitude among U.S. money funds, which historically have been a stable source of funding for European banks, says Alastair Ryan, analyst at UBS. Currently, these funds have lost their risk appetite and banks shy away from the Old Continent, partly because of new regulations in the U.S.. Insurance companies, another common source of funding, are about to face higher demands for the holding of bank debt against the looming global regulation. “Overall, financial markets are likely to remain expensive and inaccessible to banks for an extended period of time,” said Ryan. Last month, Bank of England warned that credit institutions in the world (mostly those in Europe) are facing a huge challenge to refinance resource worth 5 trillion. dollars, which is expected to matures over the next three years. Problems are most acute in France, Germany and Italy, where banks annually will have to refinance more debt than they normally issued within a year. According to estimates by the International Monetary Fund (IMF) this year in the euro area mature debts 877 billion in 2011 will be 771 billion and in 2012 to 714 billion. Refinancing of maturing debt is not the only problem facing European banks. New requirements for liquidity offered by international bank regulators require banks to hold more long-term rate (stable) funding, as are deposits and emissions of long-term bonds. This, analysts said, could force banks to raise new funding for the trillions of euros. Natural source of raising funds from banks deposits, which are cheaper than bonds. Therefore, competition for deposits is increasing. This is good for making a deposit, but inflate the cost of financing in the banking sector. Some banks, like the Spanish Banco Santander, is trying to attract deposits in the UK, offering interest rates to 4% – well above competitors, experts share. Recently, some European economists lowered their forecasts for economic growth on the Old Continent this year and next because of problems with bank financing. If, however, stress tests remove pressure on banks, the economic outlook may be better than expected, “said David Mackie, an economist at JP Morgan.

Dubai crisis gave opportunity for China to buy crude oil and gold

viliyana89 — Tue, 01 Dec 2009 08:05:14 +0000

China should take advantage of the shock waves created by the crisis in Dubai to buy gold and oil. Such is the opinion of a senior Chinese official, who cares for the supervision of some of the biggest companies in the Asian country. According to Syaonan Ji, who is chairman of the supervisory board of large companies in the committee for the supervision and administration of state assets (State-Owned Assets Supervision and Administration Commission – SASAC), purchases may be effected by means of foreign exchange reserves of China, transmit Market Watch. “Although it is unclear to what extent the crisis in Dubai will affect local and global economy, it will continue for some time and this may give China investment opportunity to use part of their reserves to buy gold and oil,” said Syaonan today. The Commission, headed Syaonan which is directly subordinate to the State Council of China and is responsible for management of state companies. Therefore, his opinion may be regarded as a signal that such intentions truly are discussed. Commentary is consistent with China’s overall strategy to increase physical stocks of key raw materials such as gold, copper and other commodities.
At present, according Syaonan gold prices and oil prices adjust, which allows for the extraction of profit from the state.

The financial report of 3M better than expected

viliyana89 — Fri, 23 Oct 2009 05:55:32 +0000

The Industrial company 3M Co, which produces over 55 000 different products, reported third-quarter profit that surpassed analysts’ expectations. Net profit for the third quarter of 3M is 957 million dollars or 1.35 dollars per share in earnings per share of 1.41 dollars for the same period last year. If you exclude certain one-off effects, profit of the company is 1.37 dollars per share, the average Wall Street expectations were for earnings of 1.17 dollars per share. 3M sales fell by 5.6 percent annually to 6.2 billion dollars. Since the beginning of the conglomerate in 2008 was shortened 5 800 jobs in order to optimize the cost. 3M’s shares started today’s session of the New York Stock Exchange to rise from 38 cents to 76.33 dollars. Since the beginning of the year they rose by 33 per cent. While 3M raise profit forecasts for the entire 2009 years of 4,5-4,55 dollars per share. The company’s previous forecast was for profit of 4,1-4,3 dollars per share.
Among the plans of the company are spending $ 1 billion for acquisitions within the next 12 months.

Adjustment of U.S. exchanges after reports of GE and Bank of America

viliyana89 — Wed, 21 Oct 2009 06:13:22 +0000

The main stock indexes in the United States fell in early on the last trading session this week, after the financial results of General Electric and Bank of America disappoint investors, and the index of consumer confidence in the University of Michigan unexpectedly decreased. As a result, Dow Jones IA away from the one-year peak, which subdued during yesterday’s session. Two hours after the start of trading the index of the 30 largest companies on the New York Stock Exchange decreased by nearly 1 percent to 9962.9 points. The wider S & P 500 retreated further to 1.1 percent to 1084.2 points while the index of companies by the exchange Nasdaq – Nasdaq Composite, lost 1.3 percent to 2145.5 points. Financial and technology companies are ranked among the top companies in the losers of the session. The loss of the largest in size of its assets to U.S. Bank Bank of America for the third quarter was greater than expected. Investors ignored the good financial results on Google and IBM, and the rise of industrial production by 0.7 percent in September.
Decrease in quotations to help decrease the index of consumer confidence in the University of Michigan to 69.4 points in October from 73.5 points in September. This shows that households remain nervous on the state of the economy.

Incomes in Bulgaria have risen the most in 2008

viliyana89 — Tue, 08 Sep 2009 16:52:05 +0000

The largest growth in wages was recorded in 2008 and average annual gross value is 6288 lv increase in nominal terms was 2.3 times compared with 2000 and 71.2 times compared with 1995, the NSI report released of print publication “Statistical Panorama 2008″. The book analyzed the demographic, social and economic development of the country last year. Have made comparisons with previous years and shows occurring trends and structural changes occurring in the country. The highest growth is the average wage in the activities of the Health and Social Affairs – 3 times, financial intermediation – 2,8 times, “Real estate, renting and business activities” and “Education” – 2.7 times “Public administration and defense and compulsory social insurance – 2.5 times. Household income continued a trend of marked increase in nominal terms over the past 10 – 12 years. Only for the period 1999 – 2008, the total income per person per household increased from 1 502 to 3 502 lv, or 2.3 times.
Real household incomes rose during the same period – by 24.8%. During the years of the new millennium, the highest growth in real income in 2008 compared to 2001 – with 39.7 percent. Compared to 2007 they were higher by 0.4%. In real terms, household income from wages also rise. For the period 1999 – 2008, this source of income in real terms increased by 54.5%. In 2008, the trend of growth and wider use of information and communication technologies in enterprises in Bulgaria. Share companies that have access to the Internet increased by 8% over the previous year 2007. Most significant is the increase in small and medium enterprises (11 and 3%), while larger companies with more than 250 employees decreased slightly by 1% in the provision of Internet access for their employees. Compared to 2007 the proportion of the population has benefited from the limitless opportunities offered by modern computer technology has grown by 6%, 43% of people in Bulgaria have indicated that they used computers in 2008.

Toyota reported a smaller loss than expected

viliyana89 — Tue, 04 Aug 2009 10:59:09 +0000

The Japanese car building company Toyota group reported a loss of 77.8 billion yen (819 million) for the first quarter of financial year which began on April 1. Loss for the first quarter of the new financial year is less than expected and reflects the successful cost reduction. The median forecast was for a loss of 184 billion yen, forward Bloomberg. The reasons for the negative result is the high rate of the yen and a sharp decrease in global sales delivered worldwide agencies. However, Toyota reduced its estimates of losses throughout the financial year ending at the end of March 2010, to 450 billion yen (4.7 billion dollars) compared with initial estimates of 550 billion yen (5.8 billion dollars) .
The company reported positive impact of government bonuses in different countries, which are given when purchasing a new car.

The results of Goldman Sachs extended the smiles of Wall Street

viliyana89 — Wed, 15 Jul 2009 06:23:19 +0000

The Fifth Bank SASH volume of assets announced that profits for the second quarter of 2009 was 3.44 billion dollars or 4.93 dollars a share. That surpassed the expectations of analysts, who expected profit of the investment bank to be about 3.65 dollars a share, forward Bloomberg. For the same period in 2008, which receives money from the state 10 billion dollars, registering a positive financial result amounted to 2.09 billion dollars. The reason for the good result of the company expert nominated by the successful trade transactions on the stock market and a good pass from mediation. This year the company issued new shares with the Ministry of Finance in connection with the loan and obtained good record revenues from its debt transactions. The revenues of the vault for the second three months rose to 13.8 billion dollars compared with revenues of 9.43 billion dollars for the period 2008
Shares of the company since the beginning of the year by the end of trading yesterday grew by 77 percent to 149.44 dollars. Their value is almost three times higher than the bottom of November 20 when it reaches 52 dollars.

Loan euro in Eastern Europe create risks

viliyana89 — Thu, 09 Jul 2009 04:06:41 +0000

The Gold reserves of the European Central Bank, including claims in gold (physical gold, such as bars, coins, ingots, and storing pieces of monetary gold, as balances on accounts with gold) decreased by EUR8.5 billion to EUR232.128 billion during the week ended July 3, according to today’s report of the financial institution. The change primarily reflects the quarterly revaluation adjustments and reserves and selling gold to EUR5.0 million from a central bank in the euro area, indicating the report of the ECB. Foreign exchange reserves showed a net decrease of EUR10.5 billion to EUR206.2 billion for that period. ECB reported an increase of money in circulation in 16 EU member states of the euro by EUR6.6 billion to EUR768.7 billion.
The European Bank announced that the single currency reserves dela in transactions in global financial markets but warned that the granting of loans in euros in Eastern Europe may create risks for both borrowers and banks. According to the financial crisis, the ECB has not breached the dominant role of the U.S. dollar in global financial markets.

Bad loans in The Bank of America are jumping

viliyana89 — Mon, 06 Jul 2009 21:16:17 +0000

The Bank of America, the largest lender in the U.S., is facing 10 percent jump in bad loans to $ 7.6 billion in its balance sheet for the second quarter, according to a report of Credit Suisse, cited by Bloomberg. Bad debts include $ 1.9 billion related to residential mortgages, and approximately 10.4% of credit card loans will be written off, according to the report analyzer Moshe Orenbuh. In the first quarter of 2009, Bank of America credits deleted $ 6.9 billion. Bank of America is first in U.S. assets and deposits will take into account one hundred 32-share profit for the quarter, including $ 5.2 billion profit before tax from the sale of its share in China Construction Bank.
With the exception of those revenues and $ 750 million given to the fund of the Federal deposit insurance corporation, the bank would have lost 15 cents a share, according Orenbuh. Evaluation of Credit Suisse for the shares of Bank of America is “neutral” with a 12-month target price of $ 12.
At the beginning of the session the stock market in New York today, shares of Bank of America become cheaper with 3.40 percent, to 12.21 dollars.