Money Matters: Firstline Securities Blog
The Weekly Report: Energy in 2012 | Beware the Ides of March
6 February 2012
In this, our last instalment on Energy in 2012, we will examine the risks that Europe’s sovereign debt crisis pose to global energy markets, using a little imagery from the movie “300” and other Greek history or mythology. Europe’s situation is more likely to impact on global energy prices than Iran: the sovereign debt crisis there is a fact, while military conflict with Iran is still quite removed from inevitability.
While the news of the European fiscal compact is certainly encouraging (ignoring the fact it only took them 16 meetings in 2 years), there are still a number of scenarios that could rattle energy markets in the short term, including further sovereign downgrades as well as defaults. The markets are focusing on the fiscal compact, but eventually will have to refocus its attention on the Greek debt negotiations, which aren’t going so well.
Greece is the country most likely to default—in fact, it is almost a certainty. It isn’t a question of if, but when, and how. Greece has proven to be a veritable Trojan Horse for the European Union, and particularly its currency and collective creditworthiness. Read more…
In T&T: CAL goes to London in June
3 February 2012
CAL looks for ‘life in London’ again…has to tend with competition from British Airways and Virgin Atlantic. Kingston (Jamaica) – London service likely to resume by 2013.
Caribbean Airlines Limited (CAL) will resume services to the United Kingdom on June 15. According to a senior airline official, the planned daily service to London, Gatwick will be operated by a B-767 aircraft, two of which are being leased from Chilean airline Lan Chile. The aircraft are expected in Trinidad sometime in March.
The spokesman said the airline regarded the restart of the London service as particularly important since this year marks the 50th anniversary of a Trinidad and Tobago carrier operating flights to London from Trinidad and Tobago. Read more…
In the U.S.: Stock futures rise slightly ahead of payrolls data
3 February 2012
Unemployment continues to lag behind other signs of growth in the U.S…economy still seen to have “advanced pretty far, pretty quickly.”
The government’s payrolls report, due at 8:30 a.m. EST is expected to show 150,000 jobs were added in January, down from 200,000 in December, which benefited from holiday hiring.
Economists expect the data to show that a trend of growth remains intact, while the unemployment rate is seen holding steady at a near three-year low of 8.5 percent. Read more…
In Europe: Spain Coaxes Banks to Merge to Purge Losses
3 February 2012
With public debt to GDP figures of 67%, Spanish gov’t forces banks to ‘relieve themselves’ of losses…”years of denial” coming to an end.
Spain’s new government gave banks an extra year to recognize losses if they agree to merge, as it tries to overhaul the financial industry crippled by the collapse of the nation’s property boom four years ago.
Economy Minister Luis de Guindos said late yesterday that banks have a year to make 50 billion euros ($66 billion) of provisions against real-estate assets. If they agree by the end of May to merge, they get a further 12 months to take the charges and can tap the state’s bank-bailout facility for funds. Read more…
In T&T: Vacancies leading to high food prices
2 February 2012
Customs inefficiencies the main driver of core inflation? Expensive food prices attributed to “long delays to clear goods from Customs, security costs due to the general crime situation.”
A NUMBER of vacancies for public health officers and Customs officers are part of the reason for the country’s high food prices, Prices Council chairperson Wendy Lee Yuen said yesterday.
She said the council was “alarmed” at the number of vacancies, noting that the human resource area was important in increasing efficiency at these agencies.
Lee Yuen also said many senior staff members in Government agencies were in acting positions where authoritative decisions were at times put aside or denied because they did not want to “rock the boat”. Read more…
In the U.S.: Stock Futures Little Changed Before Data
2 February 2012
Markets likely to sound off on a fairly flat note… ‘stickiness’ in unemployment figures probable.
U.S. stock-index futures were little changed, erasing earlier gains, before a report that may show initial claims for jobless benefits in the world’s largest economy fell.
Qualcomm (QCOM) Inc., the world’s biggest maker of mobile-phone chips, climbed 6.1 percent in early New York trading after raising its sales and profit forecasts for this quarter and the year. Las Vegas Sands Corp. (LVS) lost 1.9 percent even after profit excluding some items matched analyst estimates. Read more…
In Europe: China Weighs Contributing to EU Stability Fund
2 February 2012
A helping hand, or a ‘gentle’ nudge in the right direction? China’s considerable trade with Europe provides impetus for assistance.
China supports European efforts to stabilize the euro and is looking into how it can help resolve the region’s debt crisis, Chinese Premier Wen Jiabao said at a briefing with German Chancellor Angela Merkel.
Wen said solving the European debt crisis is “urgent,” and called for greater international cooperation. “China is also considering more participation” in those efforts via the European Financial Stability Facility and the European Stabilization Mechanism, he said. Read more…
In T&T: FIU working to stop T&T money laundering
1 February 2012
Intended crackdown on money laundering as dollar- value of Suspicious Activity Reports (SARs) tripled in 2011.
Trinidad and Tobago’s Financial Intelligence Unit (FIU) has submitted 16 cases to law enforcement agencies for investigation. Two of the cases were closed by the Financial Investigations Bureau (FIB) of the Trinidad and Tobago Police Service as “no further action could be taken.” This information was disclosed in the FIU’s 2011 annual report. In 2011, the number of suspicious activity reports (SAR) increased to 303 from 111 in 2010. Seventy-one of those cases were closed in 2011 while 219 are cited as “ongoing analysis.” Read more…
In the U.S.: Facebook to file $5 billion IPO Wednesday: IFR
1 February 2012
The mother of all IPOs? USD 5.0bn only a preliminary target, some warn of “second dotcom bubble.”
Facebook is expected to submit paperwork to regulators on Wednesday morning for a $5 billion initial public offering and has selected Morgan Stanley and four other bookrunners to handle the mega-IPO, sources close to the deal told IFR.
The company founded by Mark Zuckerberg in a Harvard dorm room in 2004 picked Morgan Stanley to take the coveted “lead left” role in what is expected to be the largest IPO ever to emerge from Silicon Valley. Read more…
In Europe: Stocks Gain Before U.S. Factory Data
1 February 2012
One day up, one day down…you should be used to this by now. European markets buoyed by positive data from U.S., U.K.
European stocks rose, U.S. equity index futures advanced and German bunds fell before a report that may show American manufacturing expanding at the fastest pace since June. U.K. 10-year gilts weakened as a British factory gauge rose to an eight-month high.
The Stoxx Europe 600 Index climbed 1.4 percent at 11:44 a.m. in London. Futures on the Dow Jones Industrial Average added 0.7 percent, indicating the U.S. gauge will snap the longest losing streak since August. The yield on German 10-year bunds rose five basis points, ending a five-day decline, while the equivalent maturity Portuguese yield slid 90 basis points to 15.5 percent after the government sold bills. Gilt yields rose five basis points to 2.02 percent. Read more…
