We need to find a fairer way of providing Goods and Services to the rest of the people on Earth.Cryptocurrencies and/or Gold Standard of money....maybe the answer to fight hyperinflation caused by too much printing of paper/fiat currencies by Governments and Central Banks all over the World. (https://nomorefiatmoneyplease.blogspot.com)
Gold rises as Fed minutes suggest little rush to increase rates
Gold advanced after minutes of the Federal Reserve's last meeting hinted that the central bank won't rush to raise US interest rates.
ST PHOTO: KEVIN LIM
[SINGAPORE] Gold advanced after minutes of the Federal Reserve's last meeting hinted that the central bank won't rush to raise US interest rates.
Bullion for immediate delivery increased as much as 0.3 per cent to US$1,142 an ounce and was at US$1,140.30 at 8:55 am in Singapore, according to Bloomberg generic pricing. Prices jumped to US$1,153.75 in intraday trading on Wednesday, the highest since Sept 25 and are heading for a weekly gain.
While Fed officials noted the US economy continued to improve, the committee decided to wait for additional data confirming the outlook for growth, the minutes showed. ABN Amro Bank NV raised its year-end gold estimate by 10 per cent to US$1,100 an ounce on expectations that the Fed will delay its first rate hike since 2006 to next year. Odds of a Fed liftoff in 2015 have fallen below 40 per cent, futures data show.
Fed inaction is positive for prices as higher rates would curb the allure of assets like gold which don't pay interest.
Ferrari said to push for US$12.4b valuation in IPO
Ferrari's coveted status as a maker of cars for the super rich is helping push up its value in an initial public offering to as much as 11 billion euros (S$17.4 billion), according to people familiar with the matter.
PHOTO: REUTERS
[MILAN] Ferrari's coveted status as a maker of cars for the super rich is helping push up its value in an initial public offering to as much as 11 billion euros (S$17.4 billion), according to people familiar with the matter.
Based on talks with possible investors, Ferrari could be valued from just under 10 billion euros to 11 billion euros when owner Fiat Chrysler Automobiles NV sells a 10 per cent stake in the division on the New York Stock Exchange, according to the people, who asked not to be identified because the arrangements are private.
An IPO price range will be published in an updated filing as early as Friday, and presentations to possible buyers are slated for next week, said the people. The valuation may change amid market volatility since Volkswagen AG's diesel-testing scandal emerged last month, they said.
Fiat Chrysler Chief Executive Officer Sergio Marchionne, who's also Ferrari's chairman, has insisted for months that the brand should be valued as a luxury-goods maker, such as clothiers Prada SpA or Hermes International SCA, and not as an auto manufacturer. Those companies trade at over 20 times operating profit, more than twice the average valuation of carmakers.
"A luxury multiple is justified due to Ferrari's capital intensity, profit margins at scaled unit production, operating leverage and price inelasticity," said Adam Wyden, founder of ADW Capital Partners LP, who owns Fiat Chrysler shares. Ferrari may be valued in a range of 12 to 14 times expected 2015 earnings before interest, taxes, depreciation and amortization, one of the people said. Ferrari, which will be listed in New York under the ticker FRRI, posted adjusted Ebitda last year of 693 million euros after generating a margin of 25 per cent of sales. Profit rose 8.9 per cent in the first half of 2015. Representatives for Fiat Chrysler and Ferrari declined to comment.
Ferrari, which has made a point of restricting sales to preserve its models' high-end reputation, is set to push the boundaries of its exclusivity with plans to increase production of cars such as the 235,000-euro 488 Spider convertible to 9,000 cars in 2019 from about 7,200 vehicles last year, according to a Sept 22 filing. The carmaker had previously set its limit at about 7,000 cars a year.
"Ferrari is a legend" because of the value of the brand and its track record on profitability, said Lapo Elkann who, along with his brother, Fiat Chairman John Elkann, is part of the Agnelli family that controls the auto manufacturer. At Ferrari, "you don't sell a car, you sell a dream," he said in an interview in Milan.
UBS Group AG, Bank of America Corp's Merrill Lynch, Banco Santander SA, Mediobanca SpA and JPMorgan Chase & Co are advising on the IPO.
Hong Kong, Shanghai stocks open higher after Fed minutes
People walk past a panel displaying figures of China stock indexes and Hang Seng Index at the financial Central district in Hong Kong, China Sept 2, 2015.
PHOTO: REUTERS
[HONG KONG] Hong Kong and Shanghai stocks rose after opening Friday, tracking rallies in New York and Europe, after minutes from the Federal Reserve's latest policy meeting hinted interest rates could be kept at record lows for some time.
The benchmark Hang Seng Index gained 1.17 per cent, or 261.03 points, to 22,615.94 soon after opening.
And in Shanghai, the benchmark composite index added 0.10 per cent, or 3.28 points, to 3,146.64, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, eased 0.08 per cent, or 1.44 points, to 1,783.95.
Macquarie share sale takes capital raisings to most in six years
Office workers walk past a Macquarie Bank sign in the lobby of the bank's offices in Sydney, Australia on Tuesday, Nov 16, 2004.
PHOTO: BLOOMBERG
[SYDNEY] Macquarie Group Ltd has raised the most capital this year since 2009 after agreeing to buy Australia & New Zealand Banking Group Ltd's car dealer finance business.
Macquarie said Friday it raised A$400 million (S$407 million) in a share sale to institutions, pricing it at A$80 per share, to help pay for the acquisition. The offering comes on top of the A$670 million raised in March for the purchase of an aircraft portfolio and brings total proceeds this year to the highest since it amassed A$1.2 billion in six years, data compiled by Bloomberg show.
Its shares climbed 3.5 per cent to A$80.60, on course for its highest close in two months, at 10:34 am in Sydney.
The company's two acquisitions this year are emblematic of Macquarie Chief Executive Officer Nicholas Moore's focus on stable businesses to shelter the firm from the volatility of investment banking. While targeting businesses from mortgage lending to leasing has saddled the bank with higher capital requirements, it's put Macquarie on course for record full-year profit and driven its shares up 38 per cent this year.
"Acquisitions and capital raising are a sign of confidence," said Paul Xiradis, Ausbil Investment Management Ltd.'s chief executive officer, who oversees about US$8 billion including Macquarie shares. "While the deals may be capital intensive, they are businesses Macquarie is well entrenched in. It is also being done at a time the bank's profit is rising dramatically." On Thursday, the investment bank forecast profit in the six months ended Sept 30 to grow 55 per cent from a year earlier, boosting the estimate from 40 per cent previously amid higher performance fees. The firm is forecast to post record full-year net income of A$1.94 billion, according to the mean estimate of nine analysts surveyed by Bloomberg.
Macquarie said Thursday it needs A$800 million in initial capital for the purchase of ANZ Bank's Esanda unit and also plans to offer stock to shareholders after it announces its first-half results later this month.
Acquiring Esanda will give Macquarie A$7.8 billion in additional loans, taking its total motor-vehicle finance portfolio to about A$17 billion and adding 10 Australian cents per share to earnings in the first full year after the acquisition, it said. The loans comprise point-of-sale finance, funding for showroom stock and other Esanda-branded finance offered to car dealers.
"The planned transaction continues a shift in Macquarie Bank's business profile toward longer-dated and more capital- intensive assets," Ilya Serov, a senior credit officer at Moody's Investors Service, said in a statement.
While the bank reported surplus capital of A$2.4 billion as of June 30, the company preferred to maintain a buffer, CEO Moore said on a media call Thursday, as he signaled a willingness to raise more funds for acquisitions. Macquarie last sold shares in March to help finance the US$4 billion purchase of 90 passenger planes from AWAS Aviation Capital Ltd.
"With normal organic growth, we probably generate enough capital to support our business," Mr Moore said. "When we are going to take on a significant acquisition, we would look to raise capital."
Credit Suisse set to launch "substantial" capital raising: FT
Swiss bank Credit Suisse plans to tap investors for a "substantial" capital raising to fund a restructuring of the bank under new Chief Executive Tidjane Thiam, the Financial Times said on Thursday.
PHOTO: REUTERS
[ZURICH] Swiss bank Credit Suisse plans to tap investors for a "substantial" capital raising to fund a restructuring of the bank under new Chief Executive Tidjane Thiam, the Financial Times said on Thursday.
Since taking charge of Credit Suisse in July, Thiam has signalled a desire to focus on banking for the world's wealthy, particularly in Asia, amid talk of a need to raise cash to improve its capital position.
The FT, citing people briefed on the plan, did not specify how much Thiam will try to raise when he unveils the plan on Oct 21, but it pointed to a Goldman Sachs poll showing 91 per cent of investors expect Credit Suisse to raise more than 5 billion Swiss francs (S$7.2 billion) in new equity.
Credit Suisse said in a statement the bank was still evaluating strategic options for the bank as well as its capital usage and requirements, and that it would present the results of the review on Oct 21. "The overwhelming majority expects a size (of a cash call) above 5 billion francs, which is a lot if it doesn't come along with a convincing new strategic concept," said Kepler Cheuvreux analyst Dirk Becker, who has a 'reduce' rating on the stock.
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Fresh capital would help the bank withstand expected losses from a restructuring, the FT said. It would also help Credit Suisse meet tougher capital targets which are expected to be outlined by Switzerland in the coming months.
Credit Suisse investors have previously told Reuters they would support a rights issue by Thiam, the well respected former boss of UK insurer Prudential.
Although such a move would be dilutive for shareholders, it should end concerns about its capital strength and provide Thiam with cash to expand.
Credit Suisse's common equity ratio was 10.3 per cent at the end of June, well below UBS's 14.4 per cent and the average of 13 per cent for Europe's biggest 24 banks.
The cash would not be used to fund a takeover of Swiss private bank Julius Baer, a combination that has been rumoured for several months. The FT said Thiam had made it clear inside the bank he did not see the logic behind the move.
Thiam will look to trim costs through investment in technology as well as cut down on division bosses and install regional heads across business lines.
Along with a stronger focus on wealth management instead of investment banking, Thiam also wants to establish a substantial asset management operation within the bank, the FT reported.
Thiam could also cut less profitable units like its US broker-dealer unit.
Credit Suisse shares fell as much as 4.9 per cent after the report and closed down 3.6 per cent, underperforming a 0.6 per cent decline by Europe's banking index.
Bank of England quizzing UK banks over commodities exposure: source
The Bank of England has asked British banks to report their exposure to commodities and ensure they are mitigating risks effectively, a source familiar with the situation said on Thursday.
PHOTO: REUTERS
[LONDON] The Bank of England has asked British banks to report their exposure to commodities and ensure they are mitigating risks effectively, a source familiar with the situation said on Thursday.
Prices for oil and other commodities have fallen sharply in recent months, and earlier on Thursday the Financial Times reported the BoE move had been triggered by the sharp fall in the shares of commodities and mining company Glencore. "This is something being done in the course of normal supervision," the source said, adding that the request had been made by the Prudential Regulation Authority, the arm of the BoE in charge of day-to-day bank regulation. "It is not asking (banks) to take any particular action and it has not been prompted by any particular concern about the commodity sector. The PRA is making sure the firms understand the risks they are exposed to and mitigating them accordingly." Shares in Glencore dropped by 30 per cent on Sept 28, before recovering in subsequent days after the firm mooted sales of some of its units to reduce its US$30 billion debt pile.
Two of its rivals, the privately-held Vitol and Trafigura, earlier this week raised over US$10 billion in finance, which they said showed bankers understood the sector better than bond or equity dealers.
Copper, iron ore and crude oil prices have tumbled by 16 to 25 per cent in 2015, putting pressure on miners to turn a profit.
