Archive for October, 2009

UK mortgage approvals up 6 pct in September (AP)

Thursday, October 29th, 2009 | Finance News

LONDON – Mortgage approvals in the U.K. rose 6 percent in September as the country's battered housing market improved, but cautious consumers paid off debt faster than they borrowed, the Bank of England said Thursday.

Total net lending to individuals secured on dwellings rose by 900 million pounds ($1.5 billion) rose by 700 million pounds in September, down from 1.3 billion pounds in August.

The 56,215 secured loans approved for house purchases in September was above the six-month average, and compared to 52,970 in August.

Credit card borrowing rose by 100 million pounds in September but other unsecured borrowing fell by 300 million pounds, the bank said.

Consumer borrowing in September was 0.5 percent above the year-ago level.


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Global stocks hit three-week low on recovery jitters (Reuters)

Thursday, October 29th, 2009 | Finance News

DUBAI (Reuters) –
World stocks hit a three-week low on Thursday, following a sharp fall on Wall Street, as disappointing European corporate results and weak U.S. data fanned concerns about the strength of the economic recovery.

Oil major Royal Dutch Shell (RDSa.L) fell more than 3 percent after its third quarter net profits fell 73 percent and Chief Executive Peter Voser warned of a slow recovery.

Wednesday's data showed sales of new U.S. homes unexpectedly tumbled in September, posting their first drop in six months. Improvement in the U.S. housing market -- the epicenter of the credit crisis -- is essential for a global recovery to be sustainable.

Investors are also nervous about Thursday's third-quarter U.S. growth data. The world's biggest economy is expected to have grown an annualized 3.3 percent in the period after a contraction of 0.7 percent in the previous quarter.

Markets are worried that the rally in world stocks -- the benchmark MSCI world equity index was up as much as 75 percent this month from March -- has been overdone.

"Markets had run ahead of themselves and are correcting," said Bernard McAlinden, market strategist at NCB Stockbrokers. "There are worries U.S. GDP figures may be weaker than expected, with other economic data like home sales not that great." The MSCI index (.MIWD00000PUS) fell 0.3 percent, while the FTSEurofirst 300 index (.FTEU3) was steady having fallen around 0.2 percent earlier.

"A far less benign economic data backdrop characterizes the current bout of risk aversion compared to previous episodes in the 7-month risk rally. Even a positive surprise in Q3 GDP in the U.S. is unlikely to disrupt this pattern," Citi said in a note to clients.

Emerging stocks (.MSCIEF) fell 1.6 percent.

U.S. crude oil was steady at $77.45 a barrel.


Bonds have jumped on the stall in the stock market rally and Japanese government bonds rose. But in Europe December bund futures were steady, unable to capitalize ahead of a large Italian bond sale later.

The dollar hit a two-week high (.DXY) against a basket of major currencies before slipping.

The yen rose broadly, briefly hitting a one-week high of 90.25 per dollar, as investors took profits on a host of growth-linked trades that had been in vogue in recent months.

The New Zealand dollar fell 0.2 percent to $0.7190 after the country's central bank promised to hold interest rates at a record low at least until July after dropping its easing bias as expected, disappointing those who had expected an early tightening.

(Additional reporting by Joanne Frearson; editing by Patrick Graham)


Galleon paid Wall Street banks millions for “edge”: report (Reuters)

Wednesday, October 28th, 2009 | Finance News

BOSTON (Reuters) –
Hedge fund firm Galleon Group, whose founder has been charged with insider trading, paid $250 million to its Wall Street banks last year and in return received market information that other investors did not get, the Financial Times reported.

New York-based Galleon, which invested $7 billion at its peak last year, became known for pushing its contacts at banks for hints about market developments such as big buy and sell orders, the newspaper wrote.

The newspaper cited unnamed sources who were familiar with Galleon's trading habits at big New York-based banks.

Hedge funds routinely use Wall Street banks to clear trades, help arrange financing and provide research. Most banks bar their employees from divulging details about clients' trading orders to other clients.

Galleon, however, regularly received updates on market developments and pushed executives at the banks that the fund worked with hard for details that other investors did not have, the Financial Times wrote.

Wall Street banks Morgan Stanley (MS.N) and Goldman Sachs (GS.N) were Galleon's top providers of hedge fund services or prime brokerage.

(Editing by Ian Geoghegan)