Tuesday, the governments of Belgium, France and Luxembourg announced, they will invest 9.2 billion dollar in Dexia. After investing in Fortis, this is the second time the Belgian government inject capital into a destitute bank. At closing time on the Brussels stock market Dexia already rose 8.8 percent. So after the drop of 30 percent on Monday, shareholders are regaining confidence in the bank. On the other hand, the capital injection is involving a dilution of the dividend. So the gain less money on their investment. The government’s investment hasn’t solved all Dexia’s problems. Their stock is still low rated and a lot of their shares aren’t available for the free float anymore. Only 29.4 percent. The crises by Dexia has forced the chief executive and chairman of Dexia to resign.
In my opinion the crises is only temporary, the financial markets will recover slowly. The crises in Belgium is not as bad as the crises in America. But the connections between our banks and the American banks have made investors afraid and cautious. After the intervention of the Belgian government, people must have more confidence in Dexia because emptying their saving accounts will only enlarge the problem. I think this is the moment to invest in Dexia or Fortis because their stocks are so low and according to me, they will only raise.
http://www.forbes.com/markets/2008/09/30/dexia-belgium-update-markets-equity-cx_ll_0930markets16.html
Bart
zaterdag 4 oktober 2008
donderdag 2 oktober 2008
Stock market back on its feet after last week's whirlwind
The stock market knew a calm day last week after a very turbulent week. But the investors were still waiting very nervously for more news about the US governments emergency plan to invest $700 billion, to take over the mortgage debts held by banks. The investors are relieved that the US government is taking action, but they are uncertain about how successful the plan will be.
There was also good news for hundreds of workers at Lehman Brothers in London. There were reports that bidders are interested in taking over parts of the Canary Wharf-based investment bank. The administrators of Lehman brothers in London, PricewaterhouseCoopers, are also demanding the return of $8 billion, that was transferred to New York just before the bank’s collapse 2 weeks ago.
But next to the good news, there was also some bad news for the real economy. For example, the asking prices for homes fell one per cent this month. There was also bad news about the fixed rate mortgage rates, these rates could raise by as much as 0.25 per cent this week in a reaction to shocks on the stock market. This could bring a stop to the recent trend of falling rates.
British analysts say that the measures taken by several governments appeared to have stopped the panic and it seems that the stock market is restoring itself. But there are still some factors that haven’t gone away, such as the slowdown in the US and UK economy.
In my opinion it seems that the stock market is restoring after a very difficult and turbulent period. I understand the uncertainty of the investors about the US governments rescue plan. Will the investment be enough to restore the financial market? I think the plan is a good solution on a short term, but it is not a solution that deals with the structural problems. But the plan gives the US government more time to think about a solution that can work on a long term. The good news shows us that the actions, taken by the several governments, are helping the banks to proceed with their activities. But I think it is necessary that the financial world and the governments need to communicate more.
The stock market is restoring but the problems in the real economy aren’t solved yet. I hope that the governments use this moment of rest on the stock market, as an opportunity to look for a solution to help the economy back on its feet.
Source: Daily mail : Stock market back on its feet after last week's whirlwind
http://www.dailymail.co.uk/news/article-1059515/Stock-market-feet-weeks-whirlwind.html
There was also good news for hundreds of workers at Lehman Brothers in London. There were reports that bidders are interested in taking over parts of the Canary Wharf-based investment bank. The administrators of Lehman brothers in London, PricewaterhouseCoopers, are also demanding the return of $8 billion, that was transferred to New York just before the bank’s collapse 2 weeks ago.
But next to the good news, there was also some bad news for the real economy. For example, the asking prices for homes fell one per cent this month. There was also bad news about the fixed rate mortgage rates, these rates could raise by as much as 0.25 per cent this week in a reaction to shocks on the stock market. This could bring a stop to the recent trend of falling rates.
British analysts say that the measures taken by several governments appeared to have stopped the panic and it seems that the stock market is restoring itself. But there are still some factors that haven’t gone away, such as the slowdown in the US and UK economy.
In my opinion it seems that the stock market is restoring after a very difficult and turbulent period. I understand the uncertainty of the investors about the US governments rescue plan. Will the investment be enough to restore the financial market? I think the plan is a good solution on a short term, but it is not a solution that deals with the structural problems. But the plan gives the US government more time to think about a solution that can work on a long term. The good news shows us that the actions, taken by the several governments, are helping the banks to proceed with their activities. But I think it is necessary that the financial world and the governments need to communicate more.
The stock market is restoring but the problems in the real economy aren’t solved yet. I hope that the governments use this moment of rest on the stock market, as an opportunity to look for a solution to help the economy back on its feet.
Source: Daily mail : Stock market back on its feet after last week's whirlwind
http://www.dailymail.co.uk/news/article-1059515/Stock-market-feet-weeks-whirlwind.html
US academics query bank rescue plan
Several university professors all have their own opinion about the rescue plan of the US government. The plan is to invest $700 billion into the banks by buying assets from them. The purpose is to create more clarity in the banking system.
People, who already had shares before the crisis, started to sell these as quickly as they can in order not to lose any more money. According to Professor Jeremy Siegel, this has had more influence than shorting. Shorting is buying equities to sell them afterwards, without really possessing them. Professor Stephen Ryan, on the other hand, blames it to “holding risky assets with too little equity”.
“Will the banking sector become profitable again?” That’s the question where a lot of people would like to have an answer to.Banks will need to look for more investors in order to get extra capital and not keep trusting on their funds. They shouldn’t only search the investors in the own country, but also overseas. For instance in China.
First of all I don’t think that the rescue plan is a bad idea. On the contrary, I think they waited too long to come up with solutions. When the government injects the money into the system, the banks can proceed with their activities and they don’t head towards bankruptcy. Secondly, this is also a good thing for the government itself. They become shareholders. So they receive a voting right and can keep more control. And as soon as the banking sector recovers, the shares will also start to increase, which means profits.
Source: The Financial Times – US academics query banks rescue plan
http://www.ft.com/cms/s/0/d96ec264-8c02-11dd-8a4c-0000779fd18c.html?nclick_check=1
People, who already had shares before the crisis, started to sell these as quickly as they can in order not to lose any more money. According to Professor Jeremy Siegel, this has had more influence than shorting. Shorting is buying equities to sell them afterwards, without really possessing them. Professor Stephen Ryan, on the other hand, blames it to “holding risky assets with too little equity”.
“Will the banking sector become profitable again?” That’s the question where a lot of people would like to have an answer to.Banks will need to look for more investors in order to get extra capital and not keep trusting on their funds. They shouldn’t only search the investors in the own country, but also overseas. For instance in China.
First of all I don’t think that the rescue plan is a bad idea. On the contrary, I think they waited too long to come up with solutions. When the government injects the money into the system, the banks can proceed with their activities and they don’t head towards bankruptcy. Secondly, this is also a good thing for the government itself. They become shareholders. So they receive a voting right and can keep more control. And as soon as the banking sector recovers, the shares will also start to increase, which means profits.
Source: The Financial Times – US academics query banks rescue plan
http://www.ft.com/cms/s/0/d96ec264-8c02-11dd-8a4c-0000779fd18c.html?nclick_check=1
US markets wary over rescue deal
This night the US Senate accepted to support the revised US financial rescue plan.
Thanks to this decision the European stocks have risen in morning trading.
For example the UK’s index raised 73 points and the German index raised with 1 percent. But the Asian stocks finished with mixed feelings, the Nikkei, the Japanese index, lost 1.9 percent. But the index of Hong Kong raised with 1 percent.
But after morning trade France said they want to help the banks who are hit by the crisis.
Thanks to this the shares have fallen. For example the UK’s index lost 1.8 percent and the German index lost 2.5 percent.
The French president wants to talk about an European intervention for banks hit by the crisis, but the EU members are divided. France and Holland wants that Europe helps the banks who are hit by the crisis while Germany and Luxembourg believe a plan is not necessary.
The European investors are hopeful the US House of Representatives will now support the revised rescue plan. Monday the US House of Representatives rejected the first rescue plan off the Republicans, there was a financial support off 700 billion dollars. The Republicans changed a few things in the first rescue plan, they raised the government's guarantee on savings from $100,000 to $250,000, tax breaks to help small businesses,… Now they hope the Democrats are persuaded.
George W. Bush said that the package was "essential to the financial security of every American" but investors are concerned about how this rescue plan can help the global economy.
Also US presidential McCain and Obama said the rescue plan is a good thing.
I think it is good that the US Senate accepted the revised rescue plan, it will bring some rest on the markets. Rest is a good thing on short term but I don’t think this whole crisis is over yet. George W. Bush said that this plan is essential for the American economy, but it’s not only essential for the American economy, it is also essential for the global economy. I hope that after the crisis the European financial market will see how dependent they are from the American financial market and I hope that they will do a lot to be more independent from America. But the most important thing now is that every government will help his financial system to save the money from the savers.
Source: http://newsvote.bbc.co.uk/2/hi/business/7647662.stm
Thanks to this decision the European stocks have risen in morning trading.
For example the UK’s index raised 73 points and the German index raised with 1 percent. But the Asian stocks finished with mixed feelings, the Nikkei, the Japanese index, lost 1.9 percent. But the index of Hong Kong raised with 1 percent.
But after morning trade France said they want to help the banks who are hit by the crisis.
Thanks to this the shares have fallen. For example the UK’s index lost 1.8 percent and the German index lost 2.5 percent.
The French president wants to talk about an European intervention for banks hit by the crisis, but the EU members are divided. France and Holland wants that Europe helps the banks who are hit by the crisis while Germany and Luxembourg believe a plan is not necessary.
The European investors are hopeful the US House of Representatives will now support the revised rescue plan. Monday the US House of Representatives rejected the first rescue plan off the Republicans, there was a financial support off 700 billion dollars. The Republicans changed a few things in the first rescue plan, they raised the government's guarantee on savings from $100,000 to $250,000, tax breaks to help small businesses,… Now they hope the Democrats are persuaded.
George W. Bush said that the package was "essential to the financial security of every American" but investors are concerned about how this rescue plan can help the global economy.
Also US presidential McCain and Obama said the rescue plan is a good thing.
I think it is good that the US Senate accepted the revised rescue plan, it will bring some rest on the markets. Rest is a good thing on short term but I don’t think this whole crisis is over yet. George W. Bush said that this plan is essential for the American economy, but it’s not only essential for the American economy, it is also essential for the global economy. I hope that after the crisis the European financial market will see how dependent they are from the American financial market and I hope that they will do a lot to be more independent from America. But the most important thing now is that every government will help his financial system to save the money from the savers.
Source: http://newsvote.bbc.co.uk/2/hi/business/7647662.stm
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