Santander Among 16 Spanish Banks Downgraded by Moody’s
Bloomberg - Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA, Spain’s biggest lenders, were cut three levels by Moody’s Investors Service, which cited a recession and mounting loan losses in downgrading 16 of the nation’s banks. Nine firms were cut three grades and seven were kept on review for further reductions, Moody’s said yesterday in a statement. Santander’s U.K.-based subsidiary also was cut.
The moves followed Moody’s May 14 downgrade of 26 Italian banks and its Feb. 13 cut of Spain’s sovereign debt. The main drivers for the Spanish bank downgrades were a surge in soured loans, the recession, restricted funding access and the reduced ability of the government to support lenders as its own creditworthiness diminishes, Moody’s said.
Yahoo Finally Set to Strike Alibaba Share Deal
All Things Digital - Yahoo is in the final stages of selling a large chunk of its stake in the Alibaba Group back to the company — in a complex deal that is set to include a multi-billion-dollar share buyback to investors of the Silicon Valley Internet giant and an eventual IPO of the Chinese company — according to multiple sources close to the situation.
The deal has yet to be officially approved by the boards of both companies, but sources said it is likely to be and could be announced as early as Monday. This all could change, of course, since negotiations between Alibaba and Yahoo have taken place in a variety of ways in recent years without success and with much acrimony. Talks over a tax-free deal — also involving Yahoo’s Japanese partner, SoftBank — collapsed in February, for example.
A sign of recovery in HP layoffs
24/7 Wall Street - Hewlett-Packard has plans to lay off as many as 30,000 people soon. By some estimates that is 8% of its workforce. HP’s CEO Meg Whitman needs to show that she has found substantial inefficiencies in a corporation that markets PCs, printers, IT and tech advice, software and servers for business, to name most of its largest operations. Whitman follows in the footsteps of other tech CEOs who have slashed jobs as the beginning of great turnarounds or as the engines of ongoing success.
Former CEO Market Hurd built his reputation because he was a talented cost cutter. He fired more people than Whitman will with the upcoming cuts. In one move, after HP bought tech consultant EDS, he sacked 24,000 people he deemed redundant. Despite the human damage, he increased HP’s margins and its share price. If it were not for indiscretions, he would still be wielding his axe.
JPMorgan Unit Has $100 Billion of Risky Bonds
Financial Times – The unit at the centre of JPMorgan Chase’s $2 billion trading loss has built up positions totalling more than $100 billion in asset-backed securities and structured products – the complex, risky bonds at the centre of the financial crisis in 2008.
These holdings are in addition to those in credit derivatives which led to the losses and have mired the bank in regulatory investigations and criticism. The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage-backed bonds and other complex debt securities such as collateralised loan obligations in all markets for three years, more than a dozen senior traders and credit experts have told the Financial Times.
Apple Loses Favor With Hedge Funds SAC Capital, Viking
Bloomberg – SAC Capital Advisors LP and Viking Global Investors LP were among hedge funds that sold a net 6.1 million shares of Apple Inc. (AAPL) last quarter, taking advantage of the 48 percent jump in the iPhone maker’s stock. Hedge funds accounted for more than a third of the 15.2 million net Apple shares that were sold by endowments, banks, insurance companies and other investors during the first quarter, according to data compiled by Bloomberg, which was aggregated from regulatory filings. Even so, Apple remains hedge funds’ most valuable holding. As a group they controlled 37.8 million shares as of March 31.
“Apple has always been a hedge-fund favorite,” said Michael Binger, a senior portfolio manager at Gradient Investments LLC in Shoreview, Minnesota, which oversees about $225 million, including Apple shares. “You’re seeing some locking in of profits.”
Samsung Gets 9 Million Preorders for New Galaxy Phone
Reuters – Samsung Electronics has received some 9 million pre-orders for its third-generation Galaxy S smartphone from more than 100 global carriers, the Korea Economic Daily reported on Friday. Samsung toppled Apple as the world’s biggest smartphone maker in the first quarter, helped by its line-up of Galaxy named devices running on Google‘s free Android software.
The latest version of its flagship phone, unveiled this month, will first go on sale on May 29 in Germany before being rolled out to other countries. The newspaper, which cited an unidentified Samsung official, also said the company’s smartphone factory in South Korea was running at its full capacity of 5 million units per month.
Samsung declined to comment.
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