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Independent News & Media PLC (INM) today announced the results of voting at the Requisitioned Extraordinary General Meeting (EGM) today. Shareholders voting in person or by proxy defeated the two resolutions proposed by a nominee acting on behalf of businessman Denis O’Brien. This was in line with the board’s recommendation.
The motion to remove the company chairman Dr Brian Hillery was defeated by 65% to 34% while the motion to remove one of the board's independent directors was also defeated by 65% to 34%.
Commenting, Brian Hillerysaid: “We are pleased at shareholders’ support at today’s EGM. This is a critical juncture for the company as we seek to restore financial stability on an agreed and consensual basis, in the best interest of all stakeholders.”
Both resolutions were defeated based on a show of hands.
UBS
Bloomberg reports that UBS AG, Switzerland’s largest bank, posted a fourth straight quarterly loss as wealthy clients withdrew funds from the private bank and the company booked a charge to reflect an improvement in its debt.
UBS fell as much as 5.1 percent in Swiss trading after the third-quarter net loss of 564 million Swiss francs ($552 million) exceeded analysts’ estimates. The results included a 1.44 billion-franc accounting charge that reflects rising costs to UBS should it buy back outstanding debt.
Chief Executive Officer Oswald Gruebel, who joined in February, is trying to halt redemptions by rich clients and rebuild the investment bank after more than $50 billion of losses and asset writedowns tied to the financial crisis. He hired former Merrill Lynch & Co. executive Robert J. McCann last month to help stop client withdrawals at the wealth management unit. Outflows totaled 26.6 billion francs in the third quarter.
UK banks
UK government controlled banks Lloyds and RBS are to get a further £31.3bn bailout following negotiations with the British Treasury over their participation in a government program to insure their bad assets, and with the EU over how many assets they should have to divest in return for state aid.
- - see link to story in box below
There is a danger that the UK government will push Lloyds and RBS to sell their assets too soon and not get the full amount for them, Andrew Milligan from Standard Life Investments told CNBC Tuesday. Marshall Gittler from Deutsche Bank Private Wealth Management joined the discussion:
US
The Wall Street Journal reports that pensions for top executives rose an average of 19% in 2008, with more than 200 executives seeing pensions increase more than 50%, according to a Wall Street Journal analysis.
The executive-pension growth stemmed partly from generous pension formulas, which are based on executive pay, according to the filings. Also adding to the pension jumps are arcane techniques that have received little scrutiny, including increases triggered when an executive reaches a certain age or when companies change interest rates used to calculate the pensions.
Executive pensions rose even as the share prices at the companies declined an average of 37% in 2008 and many firms froze employee pensions and suspended retirement-plan contributions
US markets
On Monday, the Dow Jones rose 76.71 points, up 0.8%, at 9789.44
The Nasdaq Composite Index rose 0.2% and the S&P 500 rose 0.7%.
Strong housing and manufacturing data boosted sentiment - - for details see link to Monday afternoon report in Box below.
The Australian central bank raised its key interest rate by 25 basis points for the second straight month Tuesday, as widely expected. Andrew Freris from BNP Paribas Wealth Management told CNBC the central bank would be unlikely to raise rates in December:
Asia
Japan's markets were closed today for a holiday and the MSCI Asia Pacific excluding Japan Index lost 1.6%. The gauge has risen 87%t from a three-month low on March 2nd last.
India’s Sensitive Index dipped 3.1% and the Shanghai Composite Index rose 1.2%.
Australia central bank today raised its benchmark interest rate by a quarter percentage point for the second straight month.
The Reserve Bank raised the overnight cash rate target to 3.5 percent in Sydney today.
Gold is trading at $1,061.80 up $2.20 from Monday's spot price close in New York.
Davy chief economist Rossa white says PMI hints that end of Irish recession is drawing nearer - - "Yesterday's PMI manufacturing reading for Ireland was encouraging. The index rose to 48.0, the highest since February 2008. The index is a reliable coincident guide to GNP. It is now close to the critical 50 mark, dividing growth from recession. We expect it to top 50 by early 2010, based on the new orders readings in recent months. It hints that the recession in the economy overall is nearing an end.
There is little merit in waiting for the GNP numbers (released with a three-month lag) to determine the recession's end. Instead, we will focus on the real-time surveys, retail sales, industrial production, exports and tax returns in the coming months to pinpoint the bottom. The PMI manufacturing index dipped below the 50 mark in December 2007 for the first time. We now know that the economy peaked (in GNP volume seasonally adjusted) in Q3 2007, although it did not really start to slide sharply until Q2 2008. It was Q1 2008 when the PMI averaged below 50. So it is a fair guide to underlying activity, and the advantage is that is almost real-time.
The index has jumped 15 points from the all-time low in February to October's 20-month high. Again, that tallies with what we now know about the economy: the recession was at its harshest back in that quarter (the average PMI for Q1 of just 35.2 has been vindicated by the National Accounts). Both new orders and new exports orders are now barely short of the salient 50 mark. Improved external demand is feeding through, albeit Irish exporters have received no help from foreign currency trends. But we also need to see domestic spending stabilising before the activity bottoms. We remain convinced that personal saving is stabilising and that the economy will return to modest growth early in 2010."
Goodbody analyst Anna Lalor comments: AIB Group; Value, less quoted entities, at the low - - "We have commented over the last week or so on how the perception that the European Commission (EC) is having greater than expected influence on the strategy and business plans of banks in receipt of state aid (backed up by ING and yesterday’s comments from RBS) has been a large driver of the weakness in bank share prices. Part of this may be concerns over EC influence on NAMA valuation (although the Minister for Finance has confirmed that long term economic value is in keeping with the EC’s guidelines), but some of it relates to the EC forcing asset sales, as in the case of ING and, it appears, RBS.
Ironically, given that in theory the sale of AIB’s quoted entities could be perceived to be more likely, the rump value of AIB excluding the quoted value of its holdings in BZWBK and M&T, is at its lowest point ever, closing at a negative €1.6bn, which is €3.2bn lower than BOI’s market cap. While the quoted value of these stakes would not flow through directly to AIB’s market cap were they sold, they would add to the value of the company and reduce the amount of equity capital it would need to raise. We estimate that a sale of M&T (which is included in our post-NAMA estimates) would add over €520m or 40bps to AIB’s equity tier 1 capital, while a sale of BZWBK (which we believe is unlikely, particularly given the low loan to deposit ratio) could add over €1bn to equity capital (or 78bps) alongside an extra 36bps as a result of the reduction in risk weighted assets."
Anna Lalor also comments: Irish Financials; Regulator grants Anglo derogation on capital until April - - "The Financial Regulator announced today that it has granted Anglo Irish Bank a derogation on its capital ratios and mix, as it did prior to the Government’s injection of capital following its interim results for March. The derogation is in place until April 2010, which is probably around the time that Anglo will report its full year results for its new December year end. Anglo is permitted to have a minimum total capital level of 8% (usually set at 9.5% for Anglo), while the derogation has been granted in relation to the following: (i) that tier 1 capital contains at least 50% of total capital; (ii) that core tier 1 capital must be at least 4% of risk weighted assets; (iii) that collective provisions in tier 2 cannot be greater than 1.25% of risk weighted assets ; (iv) to apply a 150% risk weighting to certain Irish CRE loans and; (iv) to deduct €169m from total capital. With the Government having already injected €4bn into Anglo, while core tier 1 capital was also boosted by €1.7bn on the buyback of hybrid capital securities, the current derogation may be due to capital being further eroded by loan losses, while it is also likely that it is in advance of the commencement of the transfer of loans from Anglo to NAMA."
