Last Thursday, the Belgian, Luxembourg and French government agreed on a plan to help out Dexia. The governments agreed on giving Dexia a yearlong guarantee on their new loans and deposits. Because of this plan, the shares of Dexia gained a lot today after a difficult period.
Our Prime Minister, Yves Leterme, said today that this guaranty give a lot of assurance to the investors. The investors don’t have to worry anymore about the liquidity of Dexia.
According to French Finance Minister Christine Lagarde, this plan shows us that the governments wouldn’t allow banks to go bankrupt, when these are so crucial to the financial system. Dexia will not be split up like Fortis, just a few days ago.
There are still some things unclear. For example, neither Dexia or the governments want to tell us how high the guaranty could go and how much each state will carry. For now the guaranty lasts till October 31, 2009, but the guarantee can be renewed for one year.
It is the first time for three European states to join and to make up a guarantee plan for a bank. Britain, Spain and Ireland also came together to guarantee their banking sector during the financial crisis. The three governments also decided to point out a new CEO for Dexia, because they were unhappy with the current situation. Pierre Mariani, is now the new CEO of Dexia and Jean-Luc Dehaene is the new chairman of Dexia.
It seems that the governments really do their best to maintain the position of the banks. I think this is a really good thing, because now the investors will have a lot more confidence. And as it already showed today, this has had a really good effect on the value of the shares of Dexia.
The only question I ask myself is: Where does the government takes the money from to build up this guarantee? Last week they already invested a lot of money into Fortis and also Dexia. I hope that the government can keep the promise she has made to the investors.
Source: CNN.com : Dexia shares soar on government pledge
http://edition.cnn.com/2008/BUSINESS/10/09/belgium.dexia.guarantee.ap/index.html
donderdag 9 oktober 2008
European markets surge
I watched a video about an overview on the European markets today, 9 October 2008.
Carter Evans, the news reporter, gives comments on the European markets. He sais that the European stocks opened higher today but around noon there is more disorder.
The reason because the European stocks opened higher is because of the positive news about the European Central Bank that reduced their banc lending rate.
IBM did what was expect. They made a net profit of 2,36 billion dollar, the reaction on the market was positive, they made a profit of 20 percent.
Dexia raised with 25 percent because the governments of France, Belgium and Luxembourg said they will support the Dexia Group when they are in trouble. The individual shareholder is relieved and that was tangible on the Belgian market.
Iceland took over their biggest bank: Kaupthing. This is already the third bank that the government took over in Iceland, a few weeks ago they already controlled Glitnir and Landsbanki. For Iceland the financial market is the most important market in Iceland, before the financial crisis they had a “financial boom” in Iceland.
According to me it's very important that the shareholders will be relieved. Only when there is no disorder the markets will repair themselves. That’s why the European government is so important. They have to make decisions to repair the markets. So they have to create some rest on the markets. They reduced their banc lending rate and this is a very important and good step. I hope we sit on the bottom and the markets can repair themselves.
Source: video from CNN: http://money.cnn.com/video/#/video/news/2008/10/09/news.nyse7.100908.cnnmoney
Title: European markets surge
Carter Evans, the news reporter, gives comments on the European markets. He sais that the European stocks opened higher today but around noon there is more disorder.
The reason because the European stocks opened higher is because of the positive news about the European Central Bank that reduced their banc lending rate.
IBM did what was expect. They made a net profit of 2,36 billion dollar, the reaction on the market was positive, they made a profit of 20 percent.
Dexia raised with 25 percent because the governments of France, Belgium and Luxembourg said they will support the Dexia Group when they are in trouble. The individual shareholder is relieved and that was tangible on the Belgian market.
Iceland took over their biggest bank: Kaupthing. This is already the third bank that the government took over in Iceland, a few weeks ago they already controlled Glitnir and Landsbanki. For Iceland the financial market is the most important market in Iceland, before the financial crisis they had a “financial boom” in Iceland.
According to me it's very important that the shareholders will be relieved. Only when there is no disorder the markets will repair themselves. That’s why the European government is so important. They have to make decisions to repair the markets. So they have to create some rest on the markets. They reduced their banc lending rate and this is a very important and good step. I hope we sit on the bottom and the markets can repair themselves.
Source: video from CNN: http://money.cnn.com/video/#/video/news/2008/10/09/news.nyse7.100908.cnnmoney
Title: European markets surge
Who’s buying the banks?
Banks are offering continuously new shares. Many people have lost a lot of money in this financial crises. Funds both home and foreign are also suffering because they had invested in banks. Now the big question is, are there still buyers who are interested in new bank shares?
The answer is yes. This year banks, insurance companies, etc. have sold new shares for the amount of 228 billion dollar. Remarkably is the fact that 68 of the biggest banks in the world sold on their own for 128 billion dollars of new shares. For 20 of those banks it’s didn’t remained to one time of capital raising.
Joe Morford, bank analyst at RBC Capital Markets, thinks a lot of other banks will have to raise their capital. Otherwise they would not survive this crises.
A negative point for the banks could be the fear investors have at the moment. Investors are very cautious to invest in the financial market. So the sale of bank shares could stagnate and the capital raising could fail.
In my opinion, the capitals raising of banks are necessary. But people won’t continue buying their shares. Many people have lost a lot of their saving money and they are anxious to take another risk. Maybe funds will continue buying bank shares in hope the financial crises soon will be over. In the meantime banks have to survive and they must hope the crises will end soon so they could regain the confidence of private investors and funds.
source: http://www.forbes.com/wallstreet/2008/10/08/banking-capital-stocks-biz-wall-cx_lm_1008banks.html
The answer is yes. This year banks, insurance companies, etc. have sold new shares for the amount of 228 billion dollar. Remarkably is the fact that 68 of the biggest banks in the world sold on their own for 128 billion dollars of new shares. For 20 of those banks it’s didn’t remained to one time of capital raising.
Joe Morford, bank analyst at RBC Capital Markets, thinks a lot of other banks will have to raise their capital. Otherwise they would not survive this crises.
A negative point for the banks could be the fear investors have at the moment. Investors are very cautious to invest in the financial market. So the sale of bank shares could stagnate and the capital raising could fail.
In my opinion, the capitals raising of banks are necessary. But people won’t continue buying their shares. Many people have lost a lot of their saving money and they are anxious to take another risk. Maybe funds will continue buying bank shares in hope the financial crises soon will be over. In the meantime banks have to survive and they must hope the crises will end soon so they could regain the confidence of private investors and funds.
source: http://www.forbes.com/wallstreet/2008/10/08/banking-capital-stocks-biz-wall-cx_lm_1008banks.html
Banks are collapsing, but cash is still king
Last month was a very negative month for the financial sector, not to say a disaster. First there was the failure of Lehman. Then the rescues of the European banks by their governments. Although these are very serious situations, this crisis is just the worst one of the past 20 years.
Sometimes there is a company that rises on the stock market, but most of the other businesses are impacted by the financial crisis, even though they are not related to the banks. Examples are Vodafone, Unilever, GlaxoSmithKline and many more.
According to Anthony Bolton, fund manager, now is the time to invest in stocks. He explains by saying that “volatility in stock markets is natural”. It’s normal that the stock prices go up and down. He also said that, in the past, several major falls were followed by even bigger increases.
As longer as the crisis continues, the more severe the damage will be on the general economy. Experts say that a recession is inevitable, but they don’t know how long it will last.
There is also positive news. Oil prices, in general, are still on the same level of the past summer. Secondly, the government bonds. They are taking advantage of the crisis. Because the government guarantee the safety, this is very attractive for investors. In a few months time, they could make a nice profit. The gold prices also increased.
Source: The guardian - Banks are collapsing, but cash is still king.
http://www.guardian.co.uk/money/2008/oct/05/investments.shares.stocks
Sometimes there is a company that rises on the stock market, but most of the other businesses are impacted by the financial crisis, even though they are not related to the banks. Examples are Vodafone, Unilever, GlaxoSmithKline and many more.
According to Anthony Bolton, fund manager, now is the time to invest in stocks. He explains by saying that “volatility in stock markets is natural”. It’s normal that the stock prices go up and down. He also said that, in the past, several major falls were followed by even bigger increases.
As longer as the crisis continues, the more severe the damage will be on the general economy. Experts say that a recession is inevitable, but they don’t know how long it will last.
There is also positive news. Oil prices, in general, are still on the same level of the past summer. Secondly, the government bonds. They are taking advantage of the crisis. Because the government guarantee the safety, this is very attractive for investors. In a few months time, they could make a nice profit. The gold prices also increased.
If I had enough money, I would definitely buy stocks now. Because I also believe that now is the right moment to do so. The prices are all very low, so they have to rise again. I am not saying that this will happen immediately, but in a year from now they will have risen. I think I would hesitate to buy stocks from companies in the financial sector, because I don’t think the crisis is completely over yet. But companies like Unilever, Vodafone and GSK would be on my list. They are impacted by the crisis, but should recover rather quickly.
I am not surprised that the government bonds do good businesses. Especially when the interest percentage is high (about 7 %) and the government guarantees the safety.
I am not surprised that the government bonds do good businesses. Especially when the interest percentage is high (about 7 %) and the government guarantees the safety.
Source: The guardian - Banks are collapsing, but cash is still king.
http://www.guardian.co.uk/money/2008/oct/05/investments.shares.stocks
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