France cuts 2011 growth forecast

20 August 2010 Last updated at 09:48 ET

France has cut its forecast for economic growth next year following a meeting between the president and senior finance ministers.
It now thinks the economy will grow by 2% next year, down from the previous forecast of 2.5%.
This year it will “meet or exceed” 1.4%, the government said.
President Nicolas Sarkozy asked ministers to interrupt their summer holidays to discuss how France is going to cut its deficit.
They met at his official retreat, Fort de Bregancon.
Deficit measures
Afterwards, the president asserted that the reduction of the government deficit in 2011 from a record 8% to 6%, whatever the level of growth, was “a major objective” for the country.
Mr Sarkozy will need to find 100bn euros in savings if he is to slash the deficit from 8% of GDP to the EU limit of 3% by 2013.
Public expenditure would be reduced, the president said. He also repeated his pledge not to increase VAT, income tax or tax on companies.
But he said 10bn euros of tax breaks would be abolished in the autumn.
France’s 1.4% forecast for this year’s growth is in line with that of the International Monetary Fund (IMF). However, for next year the IMF thinks expects the French economy to grow by 1.6% - less than the government’s forecast.
Some economists agree and consider the new 2011 figure optimistic.
“I think it’s still quite ambitious,” said Deutsche Bank’s Gilles Moec, who is forecasting growth for France of nearer 1% next year.
“The current environment is not consistent with such an acceleration in growth,” he said.
“I think they were trying to strike a balance here. They wanted to acknowledge that the previous forecast was too optimistic without having to unveil new measures.”

Q2 2010
Q1 2010
Q4 2009
Q3 2009

Source: Eurostat

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US bank bail-out ‘helped foreign banks’

In the case of the bail-out of American International Group, the troubled insurer which nearly collapsed as a result of its exposure to the risky credit default swap market, the Congressional Oversight Panel on the TARP found that French and German banks were the biggest beneficiaries of the US government’s $70bn capital injection into AIG.

Banks including Societe Generale and Deutsche Bank benefited in part from $105bn of counter-party payments from AIG, payments which would not have been made had the US government not stumped up as much as $182.5bn in total federal aid to stabilise the insurer.
The TARP panel, chaired by Professor Elizabeth Warren, claimed that whereas the US government’s financial rescue was more of a melting pot, other countries focused their efforts more narrowly.
“While the United States attempted to stabilise the system by flooding money into as many banks as possible - including those that had significant overseas operations - most other nations targeted their efforts more narrowly toward institutions that in many cases had no major US operations,” read the report.
Prof Warren is urging the Treasury to set up a database of information to track where the TARP funds actually went, which would be accessible on its website.
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World Cup and warm summer gives retail sales a boost says CBI

Last updated at 4:33 PM on 27th July 2010

Summer spending spree: Retailers have seen robust trading in July

Retail sales in the UK have grown at the fastest pace since 2007 in July, new figures from the Confederation of British Industry have revealed.
The figures have spurred on retailers to give their most upbeat forecast in 6 years about the prospects for August, the CBI added.
The CBI’s monthly distributive trades survey’s reported sales balance jumped to +33 in July from -5 in June, beating analysts’ forecast for a reading of zero, as discounting, the World Cup soccer tournament and warm weather boosted sales.
It was also three times better than retailers themselves had expected. And stores expected sales growth to strengthen further next month, with an expected sales balance for August of +45 — the highest since June 2004.
The pound rose almost a third of a cent against the dollar after the data, as investors reckoned the economy would continue to grow strongly in the third quarter after recording the fastest growth in 4 years between April and June.
“It’s worth being cautious about reading too much into these figures. Still, with GDP, official June retail sales and some of the euro surveys strong the economic mood has been more positive recently,” said George Buckley, economist at Deutsche Bank.

However, the figures had been flattered by a reweighting of the survey to bring it into line with UK and EU statistical standards.
Under the old methodology, the July reported sales balance would have been +21 and August’s expectations balance would have been +33 under the old system.
And analysts warned that a clampdown on government spending and a rise in value added tax at the start of next year could heavily dent consumer demand going forward.
 

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Questor share-tip: Greene King is a hold

But the Suffolk-based pub group was never at grave risk of defaulting on its
loans, and although it did dilute its shares with a rights issue in 2009,
the £200m fundraising was carried out to give Greene King the money to buy
pubs from struggling rivals as well as buying back some debt at a discount.

On Thursday, Greene King, which owns some 2,500 pubs and brews Old Speckled
Hen ale, was on bullish form. The company, led by chief executive Rooney
Anand, accelerated plans to increase the number of managed pubs it has to
1,100 from 888 now. Along with that, Greene King will sell almost 400
tenanted pubs.

The strategy of selling off small beer-led pubs and chasing growth with large
scale sites offering food is not a new one in the pub sector – Marston’s and
Mitchells and Butlers are doing the same. But Greene King is already showing
it can do it well. Like-for-like sales at its managed pubs are up 6pc in the
last eights weeks, and the tenanted business has stabilised. The company
also almost doubled profits to £101.9m, paid down debt and raised its
dividend.

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Comeback for shamed HBOS team

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A team of HBOS bankers who led a doomed buying spree at the height of the boom
have landed lucrative jobs managing the same assets the taxpayer had to bail
out in 2008.

Graeme Shankland, who headed the integrated finance operations for Bank of
Scotland before its rescue by Lloyds TSB, led an eight-year deal spree in
which HBOS paid top-of-the-market prices for stakes in an array of British
companies.

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Deutsche Bank boss Ansh Jain sells stake in IPL’s Mumbai Indians

By Harry Wilson, Financial Services Correspondent






Published: 9:40PM BST 21 Apr 2010

Ansh Jain, co-head of Deutsche Bank‘s global investment bank, has sold his
10pc stake in the Mumbai Indians, one of the eight cricket teams that make
up the highly lucrative Indian Premier League (IPL).

A spokesman for Deutsche Bank confirmed that Mr Jain, who earned £8.4m in
2009, had last year sold his stake in the team, originally bought in 2008,
for the same price that he bought it.

The stake was bought by the team’s largest shareholder Mukesh Ambani, chairman
of Indian conglomerate Reliance Industries and the country’s richest man
with a fortune of around £19bn.

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Greece debt fears hit fever pitch

Published: 3:25PM BST 08 Apr 2010





















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A morning of volatile trading saw investors demand the most to own Greek
government debt since the country joined the euro in 2001. The yield on
Greece’s 10-year bond jumped to 7.42pc.

“International support for Greek debt will continue to wane until we actually
see explicit details of the support package,” said Jim Reid, head of
fundamental strategy at Deutsche Bank. “The market is in the mood to force
the hand of the authorities over this.”

Greece’s debt has given European Monetary Union its severest crisis in the
currency’s short history, raising questions over whether German taxpayers
will be prepared to bail-out Europe’s most indebted country. The euro has
tumbled 7pc against the dollar since the start of the year amid fears that a
credible plan for rescuing Greece will be agreed.

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City trio held after ‘insider dealing’ raid: Investigators swoop on homes and businesses

By
Stephen Wright and Simon Duke
Last updated at 1:20 AM on 24th March 2010

Three leading City financiers were arrested yesterday on suspicion of making hundreds of thousand of pounds through insider dealing.
In an unprecedented crackdown on ‘market abuse’, three other people were also held during raids on 16 homes and businesses.
One of the suspects was named last night as Julian Rifat, 41, who works for Moore Capital, one of the world’s biggest hedge funds.
The Deutsche Bank offices in the City of London: An employee has been arrested as part of an insider trading investigation (file picture)
The £10billion fund, based in New York but with an office in
Mayfair, takes high-risk bets on currency and debt markets around the
globe. Mr Rifat is understood to be a a middle-ranking executive whose job is to buy and sell shares as the fund’s financiers decide.

The second City figure works for the German financial giant
Deutsche Bank, which employs more than 8,000 people in the Square Mile,
and the third is with broker Exane BNP Paribas, which is half owned by
French banking giant BNP Paribas It is claimed the City workers passed inside information about forthcoming deals to traders, both directly and via middlemen.
Typically, traders take advantage of inside information by
buying shares before the announcement of a deal sends their price
rocketing. They then reap massive profits by selling the stock.
Solicitor Christopher McQuoid was found guilty of insider dealing last year
The Financial Services Authority-which led yesterday’s
operation, said it was the largest of its kind to target suspected
insider traders. More than 140 investigators from the FSA and the Serious
Organised Crime Agency took part in the raids in London, the South East
and Oxfordshire.Computers, mobile phones and documents were being examined last
night as investigators questioned the suspects, some of whom are said
to earn seven-figure salaries.
Suspicions over transactions involving the six men were first raised in late
2007.
The move was the latest chapter in a crackdown on insider trading by the City regulator.
They were the fifth set of arrests to take place since 2008 and
the watchdog has secured five jail terms for financiers convicted of
insider trading. Three further cases are working their way through the criminal
justice system. Last March Christopher McQuoid, a solicitor, and his
father-in-law James Melbourne were found guilty of insider dealing in
the first such prosecution under the FSA’s tougher approach. The jury found that McQuoid, 40, had passed inside information
to his father-in-law in 2006 and that Melbourne, 75, used it to make a
profit of almost £49,000. Three months later he gave McQuoid a cheque for exactly half the cash he had made.
McQuoid was jailed for eight months. His father-in-law received
the same sentence but it was suspended for a year, partly because of
his age. The FSA also obtained a court order freezing the profits from the trade.
Earlier this month, Malcolm Calvert, a former equities
marketmaker at stockbroker Cazenove, was sentenced to 21 months in jail
for insider dealing. Calvert, 65, was found guilty over deals which made him a
profit of more than £100,000. A confiscation and costs hearing will
take place on April 23.

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Six are questioned over insider dealing after dawn raids by FSA

Staff at some of the City’s biggest names, including an executive at Deutsche
Bank and a trader at Moore Capital, one of the world’s biggest hedge funds,
were questioned yesterday in the biggest operation against insider dealing
launched in Britain.

Six men were questioned after dawn raids on 16 homes and businesses across
London, Oxfordshire and Kent, carried out by 143 staff from the Financial
Services Authority and officers from the Serious Organised Crime Agency
(Soca).

It is the first time that the agencies have worked together and the size of
the operation has sparked speculation that the alleged offences cover many
hundreds of thousands of pounds.

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Deutsche Bank and Moore Capital raided over ‘insider dealing’

Six men arrested this morning on suspicion of involvement in a long-running
insider-dealing scheme include an executive from Deutsche Bank and a trader
at one of the City’s most blue-blooded hedge funds, Moore Capital.

The arrests were made after a dawn raid on 16 addresses in a joint operation
by the Financial Services Authority (FSA) and Serious Organised Crime
Agency. It is the biggest operation of its kind by the FSA.

The revelation that the offices of one of the capital’s best-known hedge funds
was one of 16 properties raided in London, the South East and Oxfordshire
will shake the City. Moore Capital is a $20 billion hedge fund run by its
founder Louis Bacon and the star trader Greg Coffey.

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