Posts belonging to Category bonds



Turkey could be the next emerging market to fall into crisis

The Turkish lira has now lost 27% of its value this year

Economists had been expecting the bank to hike rates to fight inflation, which topped 15% in June. Many observers said the unorthodox decision showed that President Recep Tayyip Erdogan, who supports lower interest rates, has increased his influence over the central bank.

http://www.cnn.com

Venezuela’s inflation rate may hit 1,000,000 percent

Hyperinflation in Venezuela

 When the International Monetary Fund predicted this year that hyperinflation in Venezuela could top 13,000 percent, it seemed as if the South American country’s economic outlook could not get any worse.

It just did. With the situation in the country deteriorating faster than expected, the IMF has unveiled a far more severe prognosis, saying that Venezuela’s hyperinflation is poised to reach an annualized rate of 1 million percent by year’s end. That inflation rate is set to catapult socialist Venezuela into a rogue’s gallery of nations that have suffered the worst inflation rates in history.

Venezuela’s “is one of the most severe hyperinflation situations that we’ve known about since the beginning of the 20th century,” said Robert Rennhack, deputy director of the IMF’s Western Hemisphere Department.

http://www.washingtonpost.com

The City of London just suffered a major defeat from the EU over plans for Brexit

Major blow to the UK’s financial services sector

The European Union late last week dealt a major blow to the UK’s financial services sector in the lead up to Brexit, after negotiators rejected the plans for the sector laid out by the British government in Prime Minister Theresa May’s controversial white paper. According to a report from the Financial Times, the EU’s chief negotiator Michel Barnier, last Friday told EU ministers that the financial services elements of May’s Brexit plans could not be accepted as they threatened to rob the bloc’s “decision-making autonomy” when it comes to finance.

The UK, earlier in July, proposed a new relationship between the highly interconnected financial services sectors of the UK and the EU that would involve a system of so-called “equivalence.” Under the plans in the white paper, the government said i t will seek to improve on existing requirements for equivalence of rules between the EU and outside countries.

Equivalence is a framework whereby the EU acknowledges that the legal, regulatory and supervisory regime of a non-EU country is as good as its own, and therefore allows that state access to the financial services sector within the bloc. Countries like Singapore and the USA already use a similar system to trade financial services with the EU.

http://www.businessinsider.com

Looming ‘financial panic’ in China

Chinese stocks are in a bear market

Sentiment on the Chinese economy has taken a turn for the worse. Chinese economic data has started to falter after a period of near-relentless consistency over the past couple of years. Recent months have seen Chinese stocks and the Chinese yuan tumbling.

The benchmark Shanghai Composite Index has fallen over 20% since late January, leaving it in a technical bear market. It currently sits at the lowest level since May 2016, having been at a two-year high earlier in the year. The Chinese yuan has also been hammered, losing over 6% since late March, leaving it at the weakest level since late last year.

https://www.businessinsider.com/

Export-Import Bank vital to U.S. growth

Restoring the U.S. Export-Import Bank’s full lending powers

Restoring the U.S. Export-Import Bank’s full lending powers is vital to the country’s economic growth and to shrinking trade deficits, planemaker Boeing Co (BA.N) said on Wednesday after President Donald Trump nominated Kimberly Reed as the trade bank’s president.

“Restoring the Export-Import Bank to full strength with a Board quorum is the best thing Washington can do right now to grow our economy through exports, shrink our trade deficits, and level the playing field so American workers can win,” Tim Keating, Boeing’s executive vice president of government operations, said in a statement.

https://www.reuters.com/

FED raises rates

“The economy is doing very well”

The Federal Reserve raised interest rates on Wednesday, a move that was widely expected but still marked a milestone in the U.S. central bank’s shift from policies used to battle the 2007-2009 financial crisis and recession.

In raising its benchmark overnight lending rate a quarter of a percentage point to a range of 1.75 percent to 2 percent, the Fed dropped its pledge to keep rates low enough to stimulate the economy “for some time” and signaled it would tolerate inflation above its 2 percent target at least through 2020.

“The economy is doing very well,” Fed Chairman Jerome Powell said in a press conference after the rate-setting Federal Open Market Committee released its unanimous policy statement after the end of a two-day meeting.

Takeda buys Shire for $62 billion

Stock decline nearly 20 percent due to doubts about the deal

After five proposals and more than month of back-and-forth, it looks like this thing is happening. Takeda Pharmaceutical Co Ltd. agreed Tuesday to purchase rare-disease drugmaker Shire Plc for $62 billion. But this blockbuster deal comes with blockbuster risk. Takeda will be paying a steep premium and taking on big debt to acquire a company with uncertain prospects.
Takeda’s desire for geographic and drug diversification led it to overlook a lot of warts. Shire’s hemophilia business provides more than a quarter of its revenue. It faces near-term peril from Roche Holding AG’s recently launched Hemlibra, and long-term threats from potential one-time treatments being developed by companies such as BioMarin Pharmaceutial Inc. that could reduce demand for Shire’s older drugs.

Shire has an attractive pipeline of high-margin rare-disease drug candidates, but its research projects will have to over-deliver in order to compensate for competitive threats to current core business. The substantial research and development cuts that Takeda plans if the deal goes through won’t help.

 https://www.bloomberg.com/

15 companies likely to get bought this year

Morgan Stanley list

Wall Street expects M&A activity to accelerate in 2018, which should create opportunities for investors looking to profit from accompanying stock spikes. After all, when an acquisition offer is made, the company being bought usually sees its share price increase. So the process is simple — identify potential acquisition targets, buy them, and hope a deal gets announced.

The firm Morgan Stanley has developed a model that sorts stocks by acquisition likelihood. The methodology involves calculating the probability that a company will be on the receiving end of at least one tender offer. And in figuring out its list, Morgan Stanley weighs a combination of cohort information and stock-specific fundamentals. Without further ado, here are 15 stocks that the firm says are among the most likely to receive an acquisition offer sometime in the next 12 months:

SpaceX’s Valuation Climbs to $25 Billion

Company authorized raising $507 million on April 5

The value of Elon Musk’s Space Exploration Technologies Corp. keeps reaching new heights.
The rocket maker authorized a $507 million fundraising round on April 5 at a valuation of about $25 billion, according to PitchBook Data. With that increase in SpaceX’s worth, Musk’s fortune would rise about $1.4 billion to $21.3 billion, according to Bloomberg Billionaires Index calculations.
http://www.bloomberg.com/

The Greatest Bubble in History ?

Bank of America “Kills” Bitcoin for 278th Time

The Bitcoin Bubble is popping… this time for real… because Bank of America says so. For the 278th Time.

Bitcoin is not only the king of cryptos but also the king of bubbles. According to Bloomberg, a study by Bank of America Merrill Lynch on the behavior and evolution of Bitcoin’s prices places it as the most significant asset price bubble in history.

The study compares the price trends of bitcoin with other similar phenomena such as the U.S. stock market in 1929 crash in the Stock Markets, the Mississippi Company, and South Sea Company in the 18th century, the behavior of gold pricing, and the famous Dutch Tulip bubble.

http://www.cryptocurrencynews.com/