The wave of increased sales, which covered yesterday the securities markets in Europe and the U.S. broke today and Asian stock exchanges. Although it was expected, the decision by ratings agency Standard & Poor’s to cut the credit rating of Greece and Portugal brought sharp decreases in the indexes and the risk premium on government securities of the two countries jumped sharply. Regional stock measure MSCI Asia Pacific, which brings together public companies from 10 Asian countries plus Australia and New Zealand slid 1.6 percent to 125.20 points today. This is his fourth decline in five trading session, and meanwhile the cost of insurance to protect against the failure of Asian countries reached its highest level since February. Stock prices of raw materials and the euro rate fell because of concerns that the fiscal crisis in Greece will be released in the eurozone. President of the European Central Bank Jean-Claude Trichet will meet with German politicians and the head of the International Monetary Fund Dominique Strauss-Kahn in Berlin today to discuss a possible rescue plan for Greece. All ten industry groups included in the MSCI Asia Pacific, noted a sharp drop as financial companies ran among the losers. Among national indexes in the region most Japanese Nikkei fell 225, which slid 2.6 percent to 10 924.79 points as investors shrugged off a strong 5-percent increase in retail sales in Japan in March.
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The crude oil prices sank sharply in the past day, as the quotations lost nearly 3 per cent. The reason for this was lowering the credit ratings of Greece and Portugal, which led to a serious sell off in global markets. The problems of two European countries came to the U.S., leading to decline in the leading stock indexes in the country yesterday. Exchange in New York on Tuesday with oil contracts in June delivery lost 2.1 percent to 82.44 dollars a barrel. The night of quotations continued to retreat, sinking below 82 dollars a barrel, but this time managed to have stabilized at 82.12 dollars a barrel. The reason for this stabilization has become part of the recovery of lost items of the euro, which rose after a strong decline from yesterday. This morning the single currency is exchanged at 1.3211 dollars per euro after yesterday fell below 1,32 EUR / USD. Yesterday in London, Brent crude from oil fell 1.2 percent to 85.78 dollars a barrel.
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Greek stock market regulator has decided to ban short sales of securities which it may be speculating on falling prices for Greek shares. Decision takes effect today and will be valid until 28th June. The reason for this was the wave of sales that hit Athens Stock Exchange yesterday because of speculation that Greece will not be able to meet payments on its debt. The decision of the international rating agency Standard & Poor’s to lower the rating by three points in Greece quake caused the financial markets yesterday and fell 6 percent main stock index in Athens ASE. Investors had expected such a move because of uncertainties about the rescue plan by the International Monetary Fund for Greece and the euro area and the growing interest on government securities of the party would further hamper the Greek government in its attempts to be financed by issuing government bonds. However, news that the Greek government bond rates have already “junk” led to massive sales of Greek shares Tuesday, which suffered the most financial companies. Shares of Greece’s largest bank National Bank of Greece dropped by 10% and already 45% below their price levels by the end of last year. The ban on short selling is not surprising, given that they contribute to the sharp drop in share prices. They allow market participants who expect the price per share to decline to speculate with it, sell it without first be purchase.
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Two former directors were given suspended sentences Siemens on Tuesday in Munich within a major investigation carried out in recent years led to specific legal charges. One of those sentenced is the highest-ranking former official received punishment far in corruption investigations. We are talking about Michael Kuchenroyter – 55-year-old former finance director at Siemens, where, according to prosecutors long functioned called. “Black boxes” used for bribes to ensure the major international treaties. Kuchenroyter was head of department in the telecommunications division of the group, he receives a sentence of two years and a conditional fine of 60 thousand euros for abuse of trust. Also suspended sentence – a year and a half – is set for Hans-Werner Hartmann, a former accountant and associate of Kuchenroyter. They have participated in the establishment of the system with “black boxes” in 2006. Michael currently lives in Dubai Kuchenroyter, it was found that he concealed the payment of bribes to politicians in Russia and Nigeria. His assistant did was aware of what is happening.
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The crude oil back above the level of 84 dollars a barrel and more expensive for a second day today after data from the American Petroleum Institute yesterday showed that inventories of crude oil in the country fell unexpectedly by 741 thousand barrels last week. Good financial results of several large U.S. companies from financial, technological and consumer sector also supported the positive investor sentiment about economic recovery, which would increase energy demand for raw materials sent Bloomberg. U.S. light crude oil is traded on the New York Petroleum Exchange, more expensive by 0.7 percent to 84.41 dollars a barrel in today’s times of e-commerce. The price of the June oil futures rose 72 cents to finish yesterday’s session at the level of 83.85 dollars a barrel. Oil with delivery in May, whose futures expired yesterday, rose $ 2 to 83.45 dollars a barrel. Meanwhile, the International Petroleum Exchange in London Brent crude supply in June with more expensive by 0.7% to 85.40 dollars a barrel in electronic trading today. The June futures ended yesterday oil session to increase the price of 57 cents, or 0.7 percent, to 84.80 dollars a barrel.
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The board of Directors (BoD) of the Russian oil company Lukoil has recommended the shareholders to decide on dividend payments for 2009 amounted to 52 rubles (USD 1.79) per share, it said in a statement after today’s meeting of the Board. Dividend paid last year (based on financial results for 2008) was the rate of 50 rubles per share. The total amount of the dividend that will distribute Lukoil for this year is expected to be close to 44.23 billion rubles (about 1.52 billion dollars). This amount represents 20.86% of net consolidated profit of the company’s estimated U.S. accounting standard, which is 7.011 billion dollars. Lukoil approved policy provides for distribution of dividends as dividends to be distributed at least 15% of annual net profit.
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The Russian economy out of recession and began to recover, Prime Minister of Russia Vladimir Putin during an extensive report today on the work of the government last year exported to the State Duma, Russian media reported. According to Putin recession ended the Russian economy and now also the conditions for progress are very good. According to the Russian prime minister that does not mean that the country has gone out of crisis but the recession has ended. Putin reasons that make those findings justify its latest data on the development of Russian economy. He stated that preliminary results for first quarter suggest optimism – the growth of industrial production reached 5.8 percent, while real incomes have risen by 7.4 percent. Russian Prime Minister added that it is very likely the official forecast of growth of gross domestic product for 2010 from 3.1% to be exceeded and it reaches about 4%. Putin noted that the key sectors of the real economy and financial system out of the global test and enter into good shape. Putin stressed in his speech that it is necessary to keep the trend from last year to decrease inflation, when it slowed to 8.8 percent (the lowest level of 18 years) for this year is on average 5-6 %.
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News of the investigation against Goldman Sachs, who is suspected of large-scale fraud mortgage securities caused a wave of sales of U.S. and European markets on Friday, which spilled over in Asia today. The Best Mortgages dropped the good results of Asian indexes. The reduced risk appetite of investors not only lower stock prices, but those of raw materials, while the rate rose strongly in the dollar against all major currencies. Analysts said the charges against the investment bank Goldman Sachs will severely undermine the already fragile confidence in financial markets and could lead many investors to leave them. The strong decrease of the Asian indexes today also contribute to the news that the Chinese government continues to restrict investment in real estate. Regional stock measure MSCI Asia Pacific, which oversees securities markets in ten Asian countries plus Australia and New Zealand sank by as much as 2.1 percent to 125.62 points. Today’s decline was its strongest over the past two months. On Friday, Asian markets retreated sharply from its 20-month peak for sales in the residential construction sector and the stock exchanges in Shanghai and Hong Kong.
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The week started with a sharp drop in share price of air-sector and tour operators. Reason is the continuing chaos in European airspace despite the stated willingness of some airports to start work. Shares in German airline Lufthansa sink by nearly 5.5 per cent in early session today in Frankfurt. The main DAX index does move with a fall of 0.4 per cent to 6 157 points. Shares of Easy Jet lost 3.7 percent of its value and those of Ryanair retreated by 3 per cent. The market capitalization of British Airways does sank 6 percent. Against this background, Britain’s FTSE 100 index lost 0.2 per cent. Among the victims is now the French airline Air France-KLM, and as the shares dropped by 8.3 per cent purposes only minutes after the start of the exchange session. About this time the French CAC 40 index lost 0.6 per cent. One of the few companies that issued its forecast for losses from air-crisis is tour-operator TUI Travel. Calculations show that when the company lost around 20 million pounds (30.6 million dollars). Estimates are that each day during which the crisis continues, the more it will cost about 5-6 million pounds.
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Liverpool owners Tom Hicks and George Gillett have confirmed their intention to sell the first division club, reports BBC. The deal will be done under the supervision of the head of British Airways Broutan Martin, which was proposed to occupy the chair of the board of Liverpool. “The club needs new owners who take him to the next level,” said Broutan. Liverpool currently owes £ 237 million. Hicks and Gillett confirmed that it is interested by many potential buyers and that offered to Barclays Capital to be advisor on the transaction. Investment of £ 100 million was requested by two banks – Merrill Lynch and Rothschilds, and the Executive Director of Liverpool Kristian Parslou to satisfy the request by the main creditor of the club Royal Bank of Scotland. Due to the lack of serious investment problems with construction of a new stadium in Stanley Park and the need for a stable transfer budget amount for the club manager Rafael Benitez, the U.S. owners have decided that the best solution is to sell Liverpool, step on their words has the full support of creditors. “Do Liverpool have the last three years has been extremely exciting experience for us and our families. After the club brought up here, now it is time to be absorbed by new owners who can help him develop to the next level, “said a statement from the owners.
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