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Subprime: a many-headed Hydra

Yesterday, the ECB (European Central Bank) provided an unprecedented €95bn into the region’s credit markets, to maintain liquidity. Otherwise, firms would have had problems paying their bills, and employees might not have been paid their wages. This is serious stuff, and it was followed by the US Fed providing $24bn into US markets, and the […]

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ICI and Akzo (2)

It seems from the media comment that Akzo is likely to announce an agreed bid for ICI tomorrow (in order to meet Friday’s Takeover Panel deadline) of around £6.70 plus the dividend. Will this be the end of the story? The share price suggests not, trading at c£6.30 as I write, some 7% below the […]

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Interesting Quotes

Normally a 275 point fall on Wall Street, and a 600 point fall in Hong Kong, would make for some headlines. But this time, the media coverage has been very muted. Presumably everybody thinks it will be another ’9 day wonder’, and believes with Chuck Prince of Citigroup that one simply has to keep ‘dancing’. […]

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NINJA turtles ride again

The head of Germany’s financial regulator is warning that US subprime mortgage problems may be about to lead to the worst banking crisis since 1931. Yesterday, WTI crude broke through its 1980’s highs to hit a new all-time record price of $78.77/bbl, and looks poised to push on past $80/bbl. And adding to the sense […]

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Turning base quality loans into gold

Alchemists once claimed the ability to turn base metal into gold. More recently, some bankers seem to have been claiming a similar genius, via the magic catalyst of securitisation. These bankers no longer perform their traditional role of lending on a prudent basis to good quality borrowers in the personal or corporate sector. Instead, they […]

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Greed and Fear

Bill Gross runs PIMCO, the world’s largest government bond managers with assets of nearly $700bn. In a new commentary, he pulls no punches about what he sees as the ‘gluttony’ of the super-rich amongst the private equity and hedge fund elite. He also takes aim at the lenders who, in his view, have been ‘too […]

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A tale of two outlooks

If you read the financial pages of your newspaper, everything sounds rosy. But if you turn to the news section, its all gloom. Both views can’t continue to exist alongside each other for ever. Whichever scenario comes out on top, will have major implications for the chemical industry. My own view is that this week’s […]

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Stress-testing the global financial system

Yesterday’s “swings in financial derivative prices were so extreme that they implied scenarios in which the core of the global liquidity system suffers a serious assault”, according to JP Morgan, the investment bank. Watch out, if current US sub-prime mortgage problems turn into a more general “flight from risk”.

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Chemical company valuations

The prices paid for Petkim and for Lustran reflect two very different perspectives on the current market:

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ICI and Akzo

ICI has experience of fighting off unwelcome acquisitions. And Akzo may find itself in a difficult position if ICI wins again. Unless this bid, like Hanson’s in 1991, marks the ‘top’ in the currrent M&A cycle.

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