Stocks staged an impressive global rally amid signs of economic improvement, with Treasury Secretary Timothy Geithner talking up the situation. In New York yesterday the Standard & Poor’s 500 Index gained 1.7 per cent after improved factory orders and home re-sales. In Asia markets responded to better-than-expected US auto sales, with the MSCI Asia Pacific Index leaping 4.5 per cent on hopes that the worst of the crisis is over. The FTSE 100 Index was nearly three per cent higher in early trade. Yesterday it rose 0.75 per cent. As the leaders of the worlds’ most powerful nations meet in London there are signs that the global economy is “stabilising”, said Bloomberg.com. After many months of “freefall” there have been improvements recently, with US durable goods orders and home sales rising in February. In China too the picture seems to be improving, after urban investment “surged” 26.5 per cent in the first two months of the year. And German investor confidence in March was at its highest level since July 2007. The challenge is to turn this into “fully-fledged recovery”. House prices rose in March for the first time for 16 months as buyers continued their return to the market, reported the Daily Telegraph. According to building society Nationwide the cost of a UK home rose by 0.9 per cent during the month, pushing the average value back above £150,000. The “surprise” improvement also reduced the annual fall, with the figure moving from a “record” 17.6 per cent in February to 15.7 per cent in March. The group cautioned against reading a bottom in the market into the figures, however. Royal Bank of Scotland is “locked in negotiations” with the Treasury over which assets will be included in the toxic insurance scheme, reported the Guardian. The news comes amid “mounting speculation” that the terms of the deal may be changed. The bank has already warned that the government stake could rise to as high as 95 per cent as a result of the fees it is having to pay. It is thought that RBS is changing some of the assets it wants included, while the government is changing its thinking on some of the terms offered. UK households are repaying “record amounts” of mortgage debt, reversing the trend that saw consumers borrow heavily against their properties, reported the Independent. The change reflects “depressed household confidence” and the lower value of housing stock. The Bank of England said yesterday that households paid off a net £8bn of mortgage debt in the final three months of last year, equivalent to 3.3 per cent of their post-tax income. “As recently as 2006” £13bn was being withdrawn every quarter, equivalent to six per cent or so of disposable income. Swiss Re, one of the world’s biggest reinsurers, announced plans to “slash” 10 per cent of its global workforce, reported the Times. The announcement stoked fears of a “fresh round” of City job losses as the Zurich-based group said that the reduction would occur over the next 12 months. The cuts come as the result of efforts to reduce total costs to the tune of SwFr400m by next year by “streamlining” its global office network. The company has lost 61 per cent of its market value this year and Warren Buffet is injecting SwFr3bn into the group for an equity stake. Sir Tom McKillop, the former Royal Bank of Scotland chairman, is “quitting” the board at BP, reported the Daily Telegraph. In a short statement he said he would “no longer” seek re-election, amid a “chorus of concern” from shareholders after the RBS debacle………… After US auto sales beat forecasts in March, Japanese car shares “surged”, reported Bloomberg.com. Although sales still fell 37 per cent, Nissan stock leapt 21 per cent, Honda jumped 14 per cent and Toyota Motor joined the party with an eight per cent rise………… Hedge funds are “back in the game” after a “dismal” 2008, reported theFinancial Times. Investors are returning to the sector, encouraged by the funds that made money as markets fell. Highbridge Capital Management was a “big winner”, with $1bn of net inflows this year………… The motorway services industry’s reputation took a “step forward” yesterday, with Welcome Break announcing a franchise deal withWaitrose, reported the Times. It agreed to open two stores at its services on the M40 and M25, in an effort to “lure” commuters………… Billionaire financier Allen Stanford has “flatly denied” allegations of an $8bn international fraud and said he has “no money” to hire a lawyer, reported the Guardian. The cricket impressario complained that his assets had been seized “leaving him penniless”………… Postman Pat was “facing up” to a new life yesterday as his parent companyEntertainment Rights fell to Boomerang Media, reported theIndependent. It “lost its battle” to restructure and was bought out with shareholders getting nothing under the deal……...the main headlines..........
Stock leap on economic positives
Economic gloom lifts as G20 meets
House prices stage surprise gain
RBS in talks over toxic assets
Britons pay off their mortgages
Swiss Re to axe 1,000 jobs
...in brief..................
Sir Tom McKillop quits BP board and Postman Pat starts new life
Thursday, 2 April 2009
Posts
