Business & Financial News

Wall Street should end the year 2012 on a moderate gain, despite the risks posed by the debt crisis in the euro area in global activity and a U.S. growth likely to remain sluggish, according to a Reuters poll published Thursday.

Analysts surveyed are however optimistic about the economy of the United States and many are in stock price ratios of estimated earnings (PER) historically low a supporting factor for the rating.

All concerned, however, the debt crisis in Europe, who falter world stock markets in recent months.

The Standard & Poor's 500 benchmark for fund managers, should finish next year on an increase of 7.5% to 1340 points, compared to the closing of nearly 1.

UniCredit announced Monday a capital increase of EUR 7.5 billion, having unveiled a heavy loss in the third quarter.

Italy's largest bank reported a net loss of 10.641 billion euros, depreciation included in the third quarter.

Its impairment of goodwill stand at 9.6 billion.

Its capital adequacy ratio stood at 8.74% hard at the end of September.

UniCredit said that after the issuance of securities, expected to close in the first quarter of 2012, core tier 1 ratio will increase to 10.35% according to Basel II banking standards.

European shares move in a disorganized Tuesday, investors playing the caution on the eve of an EU summit which many hope it will bring a muscular response to the debt crisis that has shaken the region for two years now.

In Paris the CAC 40 index yields 0.20% to 3213.19 points to 13.30.

At the same time, London was up 0.29% and 1.32% Frankfurt wins.

After two sessions of gains, the markets are showing signs of slowing, traders citing concerns about the vote of the German parliament Wednesday prior to the expansion of bailout funds in the euro area, as well as the implementation by Italy austerity measures demanded by its European partners.

The energy values, however, argue the market.The Stoxx European oil and gas sector gaining 1.5%, driven notably by better than expected results from BP, which estimates that its production is about to rise.

In the banking sector, Deutsche Bank, UBS and Swedbank grew respectively by 1.46%, 4.66% and 2.42% after all beaten the consensus in the third quarter despite the difficult economic conditions.

Action Air France-KLM gives 2.6% as a result of information from the radio BFM Business that the airline may soon issue a warning on its results.

STMicroelectronics acknowledges since opening the biggest drop of the CAC 40, yielding almost 7% after announcing a decline in sales in the third quarter in a context of deteriorating market for semiconductors and uncertainty general economic conditions.

The euro, which has entered Monday a six-week peak against the greenback, still rising beyond $ 1.39 on hopes of convincing the top end of Wednesday.

On the eve of crucial European summit must agree on strengthening the EFSF, rumors are going well. The scenario of the report shook the stock markets. The trading floor in Frankfurt

According to information from the daily Die Welt, Germany could request that the date of the scheduled EU summit be postponed Sunday. Significant differences remain in effect for the implementation, especially the status of the EFSF "reinforced". A European diplomat had already emphasized this point of contention with the AFP in the morning.

The silence of Angela Merkel and Nicolas Sarkozy after their meeting Wednesday Express is not a good sign according to some analysts.

The summit, originally scheduled October 17, has already been postponed once.But several senior sources directly involved in the preparation and organization of the EU summit on Sunday, said on Thursday told Reuters not be aware of any proposed postponement of the meeting.

Another fear of the markets, they are trying to learn more about a paper on the EFSF, obtained by news agencies and that the European fund would be used as a last resort to recapitalize banks after the stress shareholders, private investors and governments.

Markets nervous

In this waiting period, nervousness is being felt in markets. Losses CAC40 who had reduced to just 0.5% to double and even more since the French values ​​now fall -1.35% to 15h.

European markets were down -1.1% on average (such as Madrid and Milan), but Frankfurt falls of -1.5%.

Wall Street opened in fall Monday after two weeks of gains, weighed down by a statement by the German Finance Minister Wolfgang Schäuble that the next EU summit will not produce a definitive solution to the debt crisis.

In early trade, the Dow yielded 0.59% (56 points) at 11,575 points.The Standard & Poor's, wider, fell by 0.62% (7.5 points) to 1217 points while the Nasdaq composite lost 0.64% (17 points) in 2650.

Germany warned Monday against the dream "unrealistic" to see the European Summit of 23 October Sunday settle the debt crisis in the euro area, keeping the pressure on banks to grant a discount over important Greek debt.

Wall Street was completed Friday a second consecutive week of gains, seeing the S & P 500 gaining over 8% on the hope of curbing the euro area's debt crisis and the global economy avoid a recession.

But a barometer of manufacturing activity in New York Monday revived fears about the U.S. economy.

The Empire State index of the Federal Reserve of New York stood at -8.48 in October, its fifth consecutive month in negative territory, while the market expected a slightly less marked contraction (-4.00) from -8.82 in September.

Industrial production has in turn increased by 0.2% in September, as expected, the manufacturing sector offsetting a decline in the utilities.

Citigroup gained 1.2% at the opening after reporting a profit increase in the third quarter.The bank has indeed had to be provisioned are less clear for its losses from toxic assets, while benefiting from an accounting gain that banks can reap when financial markets are turbulent.

Wells Fargo lost 5.6% after posting a profit rise in third quarter but have just missed the consensus of analysts.

Finance ministers and central bank governors of the G20 agreed Saturday to impose a surcharge mandatory capital up to 2.5% of their capital for systemically important banks, to be set up gradually from 2016.

According to the statement issued after a two-day meeting in Paris, they endorsed the device in the sense proposed by the Financial Stability Board (FSB), ignoring calls from financial wishing a review of it these or additional time for implement.

Overload, which can be between 1% and 2.5%, will apply to all institutions, by their size, would be of overall risk to the financial system in case of failure.

Would be affected banks like Goldman Sachs, HSBC, Deutsche Bank, JPMorgan Chase but also the largest French banks: BNP Paribas, Societe Generale and Credit Agricole.

"Now that we have agreed on the framework for these institutions, we urge the FSC to define how to extend this system without delay to all systemically important financial institutions," we read in the statement.

The aim is that these banks have enough capital to get through the turbulence of markets so that states are not forced to wear to their rescue when the next crisis.

This overload should be finally adopted at the next G20 summit on 3 and 4 November in Cannes, at which the names of the banks concerned will be announced.

It is one of a set of provisions on the financial sector ministers and central bank governors have adopted Saturday.

AGREEMENT "TEST BANKS"

Among these include the use by supervisory authorities in the sector of "common tools" to liquidate banks in trouble, writing "wills" by major banks to facilitate their dismantling in case of difficulties or strengthening the monitoring of such institutions.

The CSF, which coordinates the work on financial regulation for the G20, has already defined the criteria implemented in a systemic overload.He identified 28 banks that could be subject, but a source close to the G20, it was reported that the number will be between 29 and 50.

The CEO of JPMorgan Chase, Jamie Dimon, the device has already denounced as "anti-American", while the banks concerned will apply in addition to the new prudential framework called Basel III will require them to hold capital "hard" to at least 7% of their commitments.

The CSB has received other support from the G20 for his work on the definition of "shadow banking system" to a regulation of it, with a view to prevent risk activities will migrate banks to other parts of the financial sector such as money market funds or special entities.

Regarding the regulation of commodity markets, one of the priorities of the Presidency of the G20, Paris could not succeed in setting limits on positions that investors can hold.

The statement calls for implementation by the end of 2012 recommendations of IOSCO, the umbrella organization for national supervisors of markets, derivative markets of raw materials that do not provide for such limits.

The Belgian, French and Luxembourg governments reaffirmed at the end of a meeting held in Brussels this Sunday afternoon in solidarity in the search for a solution that ensures the future of Franco-Belgian bank Dexia.

In a statement released by the office of Belgian Prime Minister Yves Leterme, they say, give their full support to the proposals of management of the banking group, which will be presented at a Board of Directors scheduled at 15:00 in Brussels.

"The proposed solution, which is also the result of intense consultations with all relevant partners, will be presented to the Board of Directors of Dexia which is responsible for approving the proposals," said Yves Leterme.

The activities of the Franco-Belgian bank, first bank in size in Europe to be a victim of the crisis of sovereign debt in the euro zone could be split and the most risky assets confined to a separate structure.

An official with the International Monetary Fund said Wednesday that if any institution could buy bonds Spanish and Italian, along with the European Financial Stability Fund (EFSF) prior to distance himself a little later with this idea.

Antonio Borges, Director of the IMF's European Department, said at a news conference that the IMF "might even invest with the European Financial Stability Facility (EFSF).We would definitely ready to play this role. "

Greater involvement of the IMF in attempts to resolve the debt crisis in the euro area could reassure some investors who feel it is out of control.

"The investments we would do in Spain or Italy would be based on the certainty that these countries are on track, they are solvent and to take all necessary measures," said Antonio Borges.

"Because the EFSF now has the opportunity to invest in secondary markets, we could invest with him, to support the debt markets in Italy and Spain with an additional element of credibility," he said.

Later, Antonio Borges, issued a statement saying he wanted to "clarify some comments earlier held" by saying that the IMF could act directly on the bond markets.

"The IMF can only offer our resources to countries, it can not be used to intervene directly in the bond markets. We do no involvement in the market with the EFSF," said he.

The EFSF, with 440 billion euros, is seen as not sufficiently abundant in case of worsening of the crisis.And European officials are already thinking about increasing its response capacity through leverage.

ECB must remain active in the bond market-BORGES

At the press conference before his release correcting his remarks, Antonio Borges had said he wanted to wait for the ratification of the new powers of EFSF before further action by the IMF.

The IMF could go further and invest directly in bonds in Italy and Spain and for this he will have to create an investment vehicle specific, had said Antonio Borges.

He also felt that the European Central Bank should remain active in the bond market to help stabilize it, even after strengthening the powers of the European Financial Stability Fund, the EFSF.

ECB buys government bonds Spain and Italy on the secondary market since August to prevent the cost of borrowing in these countries do not rise to prohibitive levels.

The ECB considers that this action is somehow an extension of its monetary policy decisions.But many economists believe the central bank in the euro zone will no longer intervene in the market when the EFSF will feature its new powers including the purchase of debt on the secondary market.

"The ECB has a very important role to play in restoring market stability in Europe," said the director of the IMF's European department, Antonio Borges, at a press conference. "It is not possible to have a monetary union with the debt markets of extraordinary instability, as is the case today."

It is not, says the IMF, the spendthrifts save states, but to smooth out market fluctuations."A steady market intervention to stabilize the conditions would be most appropriate," said Antonio Borges.

Governments in the euro area might consider a way to make such operations more acceptable to the ECB, whose statutes forbid it to fund government.

"If that means give the ECB some degree of support from finance ministries across Europe, in order to provide additional comfort to make it easier, we would certainly very happy to see that happen, "said Antonio Borges.

"There are several ways to do so. This could simply be guaranteed by several ministries of finance, this could be the EFSF, there are many possibilities.The most important thing is to make it easier for the ECB to stabilize a presence in the markets, "he added.

The three main French banks have made a spectacular recovery on the stock market Wednesday afternoon, unconfirmed rumors recapitalization that gave a boost to their titles.

As they signed in mid-day the worst stock market performance of European banking sector, BNP Paribas, Credit Agricole and Societe Generale took up to 3:45 p.m., respectively, 1.95%, 0.52% and 0.79% while the European banking index fell by 0.13%.

"We feel that the market is abuzz with rumors and there is nothing really solid.I think the market will come back (back), "said one trader told Reuters.

A spokeswoman for BNP Paribas has denied rumors the new recapitalization.

"In the words of (the president) Michel Pébereau yesterday we currently have no need to be recapitalized," she said, noting that his bank had just signed one of his best performances in history in terms of results .

French banks were attacked in the morning, some operators are worrying about their access to liquidity despite the increase in denials.

The climate has become particularly burdensome for banks in recent weeks hexagonal where announcements of measures to promote the return of market confidence have been ineffective.

The German group Siemens has withdrawn funds early July of Société Générale as a result of under-performance of an investment, but the news was interpreted by some as indicative of the financial health of the bank.

Similarly, the decision by Standard & Poor's to lower the sovereign rating of Italy, although it was expected by the markets, also helped fuel the fears of contagion from the crisis of debt in the euro area.

European shares ended down Thursday after three sessions in a row to rebound in the wake of Wall Street, where the departure of Executive Steve Jobs of Apple weighs on the coast.

The CAC 40 index finished down 0.65% at 3,119 points, after gaining 1.6% up in volumes that have accelerated shortly after the opening of Wall Street to finish at a level of 102% of their average last three months.

Other European stock markets, London has lost 1.44% and 0.25% Milan. Victims of several rumors, including one referring to a general ban on short sales in Germany denied by Berlin, Frankfurt fell 1.71%.The pan-European Euro Stoxx 50 index yielded 0.98% after opening up 0.6%.

On Wall Street, the S & P 500, Dow Jones and Nasdaq lost 1.1 to 1.2% at 6:17 p.m..

"The market plays to be afraid before Bernanke's speech tomorrow.The question is whether the Fed chairman will have the means to announce something solid while the United States are in a liquidity trap, "said Yves Marc, seller actions at Global Equities.

ADJUSTMENT SHOULD CONTINUE TO BACK

As for values, the bank (0.58%), the only growing sector, have benefited from the investment of $ 5 billion (3.5 billion) of Berkshire Hathaway in Bank of America.

This investment could be the harbinger of a more massive return of investors to the market this autumn, says Fabrice Cousté, CEO of CMC Markets France.

In Paris, Crédit Agricole jumped 4.81%, moving up and the top 40 increases in the ACC after publishing quarterly results better than expected, loads of Greece finally being advanced by less important.

"The adjustment of the markets continues and it seems likely that this adjustment continues in the fall," warned in a note Philippe Mimran, head of securities at managements UFG-LFP.

"The bond markets have clearly voted for a depressed economy, with real rates marginally positive German and American frankly negative," he adds.

The downturn in equity markets was also reflected in the yields of bonds rated.The performance of the 10-year German Bund dropped below the 2.2% to 2.179% against 2.188% yesterday.

That of the French OAT with the same maturity has returned around 2.86% after flirting with 2.95% in session, following the announcement of measures to improve public finances by the Prime Minister, François Fillon.