Thursday, 27 October 2011

Update: Europe seals grand deal to contain debt crisis

BRUSSELS - European leaders clinched on Thursday a grand deal to pull the eurozone from the brink, convincing banks to take big losses on Greek debt while massively boosting a rescue fund to one trillion euros.

Banks accepted a 50-per cent writedown on their Greek bonds to reduce the country's debt mountain by 100 billion euros after hours of tough negotiations at a summit that ran from Wednesday evening to early Thursday morning.

French President Nicolas Sarkozy said after almost 10 hours of talks that the decisions were 'a major step forward to put in place powerful firewalls to prevent the crisis from spilling over to other countries of the eurozone.'

Leaders came to their second summit in days amid global and market demands for a 'comprehensive package' and fears the crisis could trigger world recession.

Also agreed in a four-point package of measures was an agreement for banks to beef up their capital buffers to absorb losses on Greek bonds, as well as pledges to tighten economic governance and fiscal discipline.

'The situation was evolving into a systemic concern threatening the eurozone as a whole. This threat has to be contained,' said EU president Herman Van Rompuy.

Negotiations with the banks appeared close to collapse at one point after Sarkozy and German Chancellor Angela Merkel broke off from the summit to hold direct talks with the head of the banking lobby, Charles Dallara of the Institute of International Finance.

The banks in past weeks had agreed to take a 21-per cent 'haircut' on Greek bond-holdings as part of a second bailout for Athens agreed at a July summit, but the economic situation since has deteriorated due to recession.

The lenders had raised their offer to 40 per cent but governments insisted on a 50-per cent 'haircut' to slice a big chunk off Greece's 350-billion-euro debt.

Amid fears of a possible bank meltdown, European leaders also agreed to recapitalise banks.

'We made good progress on the bank recapitalisation, that wasn't watered down, it now has been agreed,' said British Prime Minister David Cameron at the close of a quick summit of the European Union's 27 leaders that preceded long talks into the wee hours of the 17-nation eurozone.

The European Banking Authority said banks would need 106 billion euros to fulfill the requirements by June 2012.

After bailouts of Greece, Ireland and Portugal, eurozone leaders agreed to boost between four- and fivefold the firepower of their 440-billion-euro rescue fund to protect bigger economies in danger, such as Italy and Spain.

The fund, the main weapon against the crisis, has already been used to rescue Portugal and Ireland, and would be tapped in a new Greek bailout. But it would be too small for Italy and Spain, the eurozone's third and fourth biggest economies.

Under the plan, the eurozone would use clever financial footwork to 'leverage' up the European Financial Stability Facility (EFSF) to one trillion euros without increasing guarantees provided by governments.

With fears of contagion hitting Italy, Prime Minister Silvio Berlusconi came to the summit with a detailed list of pledges to cut his country's 1.9-trillion-euro debt.

Mr Van Rompuy said leaders welcomed the vows but called on Rome to 'abide' by its commitments.

With the world on tenterhooks, emerging powers China and Russia waded in with offers to help Europe safeguard the global economy by offering to contribute to the rescue fund.

The development came as global powers, from the United States to Japan and China, pressed European leaders to come up with a lasting solution to the debt crisis before a G20 summit in France on Nov 3 and 4. -- AFP
Source: Business Times Breaking News

Friday, 21 October 2011

CNBC- The EU Summit — A Roadmap

Here's a simplified schedule of the EU Summit this weekend — and Wednesday:

1) Tomorrow-Saturday: Eurogroup finance ministers meet

2) Saturday: Chancellor Merkel and President Sarkozy meet

3) Sunday: EU leaders meet. It appears no agreement will be formally announced, but leaders will huddle to discuss the "agreement in depth." Get that?

4) Wednesday: Call it Summit 2, a "definitive agreement" on bank recapitalization, the EFSF will be announced. That, according to a joint statement by Sarkozy and Merkel that was issued this afternoon.

DJ MARKET TALK:Keppel +1.6%; CS Tips Possible US$4.4B Petrobras Orders

21 Oct 2011 15:14

DJ MARKET TALK:Keppel +1.6%; CS Tips Possible US$4.4B Petrobras Orders

0713 GMT [Dow Jones] Keppel Corp. (BN4.SG) remains a top performer Friday, +1.6% at S$8.92, as analysts laud the rigbuilder's 3Q results. Credit Suisse notes the consensus-smashing net profit figure of S$406 million was driven by the OM division, where operating margins increased to 26.0% vs 24.2% in 2Q11. It says "management attributed the strong margins to improved execution as well as higher-priced contracts signed in 2007-08." On Keppel's view that it will be able to secure "a fair share" of Petrobras orders in its ongoing 21-rig tender, the house says "Keppel remains well positioned to win up to US$4.4 billion of orders through its bid for six rigs." It adds management's view that tighter credit conditions had yet to impact customers "is in line with our view that there is limited risk of order cancellations, given more favourable terms for new contracts." CS keeps its Outperform call with a raised S$12.40 target, from S$11.60 "trading at 2011E P/E of 10.6X and P/B of 2.0X, Keppel is our top pick within the Singapore O&M sector." (

Thursday, 20 October 2011

WSJ : US Stocks Pare Loss After Merkel-Sarkozy Statement

NEW YORK (Dow Jones)--U.S. stocks pared their early loss in whippy trading Thursday that was driven by European sovereign-debt worries, driving higher after the leaders of France and Germany said that a key bailout plan would be approved by next Wednesday at the latest.

The Dow Jones Industrial Average was up 19 points, or 0.2%, to 11524 at 1:20 p.m. EDT, while the Standard & Poor's 500-stock index added 4 points, or 0.4%, to 1214. The Nasdaq Composite fell 4 points, or 0.2%, to 2600.

After declining midsession following reports that Sunday's planned meeting of euro-zone officials could be postponed because of disagreements on how to deploy cash in the continent's bailout fund, stocks flitted into positive territory after French President Nicolas Sarkozy and German Chancellor Angela Merkel issued a joint statement calling for immediate talks with the private sector over Greek debt. They said that the continent's leaders would have a plan in place by Wednesday at latest

DJ UPDATE: Keppel Corp 3rd-Quarter Net S$406.1 Mln; Above Expectations

DJ UPDATE: Keppel Corp 3rd-Quarter Net S$406.1 Mln; Above Expectations

20 Oct 2011 18:36

DJ UPDATE: Keppel Corp 3rd-Quarter Net S$406.1 Mln; Above Expectations

-- Keppel Corp third-quarter net profit rises 33.3% from a year earlier, beating analyst expectations

-- Net profit rises due to higher contributions from Offshore & Marine and Property divisions

-- Keppel's offshore & marine unit secures record $8.7 billion worth of orders so far in 2011

-- Keppel CEO hopes to secure "a fair share" of Petrobras orders

Tuesday, 11 October 2011

STi should rally til end of month to 2900 when Merkel/Sarkozy unveil their "comprehensive plan to solve the eurozone's two-year-old sovereign debt crisis by end of month" . However expect some hiccups along the way - downward reactions at 2785 and 2815.

see post below for Monday 10 oct  ...
" leaders of France and Germany pledged to unveil a comprehensive plan to solve the euro zone's two-year-old sovereign debt crisis by the end of the month. "

.. in the meantime , shorts are getting squeezed hard  ... only  just one week ago,  many hedge funds were caught in a shorting feeding frenzy, betting on and trying to induce a lehman x 10-type meltdown & contagion for europe  ..  they could be beating a hasty retreat by now ..

Monday, 10 October 2011

Reuters : Stocks, euro inch up on debt deal hopes - Asian shares and the euro edged up on Monday after the leaders of France and Germany pledged to unveil a comprehensive plan to solve the euro zone's two-year-old sovereign debt crisis by the end of the month.

(Reuters) - Asian shares and the euro edged up on Monday after the leaders of France and Germany pledged to unveil a comprehensive plan to solve the euro zone's two-year-old sovereign debt crisis by the end of the month.

European policymakers have been under pressure from volatile financial markets, amid fears that the crisis is heading inexorably toward a default by Greece -- and perhaps others -- that could unleash turmoil in the banking system.

German Chancellor Angela Merkel and French President Nicolas Sarkozy said after talks in Berlin on Sunday that their goal was to come up with a sustainable answer for Greece's woes, agree how to recapitalise European banks and present a plan for accelerating economic coordination in the euro zone by a G20 summit in Cannes on November 3-4.

Thursday, 6 October 2011

Reuters - Stocks rise on hopes for bank support steps

(Reuters) - World stocks rose for a second day Thursday while government bonds fell as expectations grew policymakers would take steps to support European banks, under threat from the impact of a possible Greek default.

German Chancellor Angela Merkel said Wednesday Berlin was ready to recapitalize its banks if needed, adding to pledges by European finance ministers to safeguard banks in the face of mounting concerns about a Greek default.

STi has hit our downswing target of 2520 , may now upswing to 2900.

Wednesday, 5 October 2011

FT : EU Ministers Look at Bank Aid Plans

Published: Tuesday, 4 Oct 2011 | 4:49 PM ET

By: Peter Spiegel and Alex Barker in Luxembourg, Financial Times

European Union finance ministers are examining ways of co-ordinating recapitalizations of financial institutions after they agreed that additional measures were urgently needed to shore up the region’s banks.
Although the details of the plan are still under discussion, officials said EU ministers meeting in Luxembourg had concluded that they had not done enough to convince financial markets that Europe’s banks could withstand the current debt crisis.

Saturday, 1 October 2011

CNBC - Greece: This cannot end well

Taxi drivers protest outside the Greek Parliament in the center of Athens as the government struggles to cut spending and raise taxes.