Archive for May, 2011

UBS plans to move investment bank from Switzerland: report

Wednesday, May 25th, 2011 | Finance News

(Reuters) – Swiss bank UBS (UBSN.VX) is planning to separate its investment bank and incorporate it outside of Switzerland to placate regulators, the Wall Street Journal reported on Thursday.

UBS is considering incorporating its investment bank, which lost billions during the financial crisis and was rescued by the Swiss central bank, in London, New York or Singapore, where it would have its own capital and be overseen by local regulators, the WSJ reported.

UBS could not be immediately contacted by Reuters for comment.

Last month, UBS called for a year's delay to stringent Swiss capital rules to allow more clarity on international regulation, while striking a more conciliatory note by vowing to keep its base in Switzerland.

Chairman Kaspar Villiger told the bank's annual shareholders' meeting that UBS was not threatening to relocate abroad and was aware of the advantages of being based in Switzerland, but wanted to highlight the risks of tightening rules.

In April, the Swiss government pushed ahead with plans to make UBS and Credit Suisse (CSGN.VX) (CS.N) reach tough new capital standards, saying the benefit to the economy outweighed costs to the banks.

UBS Chief Executive Oswald Gruebel has said the stiff Swiss standards could force UBS to move units abroad.

(Reporting by Lincoln Feast; Writing by Anshuman Daga; Editing by Neil Fullick)


Distressed home sales fall in Q1: RealtyTrac

Wednesday, May 25th, 2011 | Finance News

NEW YORK (Reuters) – Sales of distressed U.S. homes fell in the first quarter as demand remained weak, but they still made up about 28 percent of total sales, the highest amount in a year, a RealtyTrac report said on Thursday.

Sales of homes owned by banks or in some stage of foreclosure totaled 158,434, down 16.5 percent from the fourth quarter and 35.8 percent from the first quarter of 2010.

Of that total, 107,143 were bank-owned sales and 51,291 were in default or scheduled for auction.

Distressed sales accounted for 27.5 percent of all residential sales, ticking up from 27 percent in the fourth quarter of last year, the report said. It was the highest percentage of sales since the first quarter of 2010.

A fragile economic recovery, high unemployment and tight loan conditions have kept demand far below the large amount of homes available on the market. The glut of inventory -- and more is coming with fresh foreclosures -- is one of the biggest challenges for the housing market.

"With the amount of inventory we have left, it tells me in the best-case scenario we're probably looking at 2014 before we start to see home price appreciation on a national basis," said Rick Sharga, senior vice president at RealtyTrac.

Home prices fell in the first quarter. Prices averaged $168,321, down 1.9 percent from the previous quarter. Prices were 26.7 percent below the average price of properties not in foreclosure, in line with the quarter before.

Nevada had the highest percentage of distressed sales, amounting to 53.3 percent of all sales, slightly down from nearly 54 percent the previous quarter.

(Reporting by Leah Schnurr; Editing by James Dalgleish)


Japan, EU set to take small step in free trade deal

Wednesday, May 25th, 2011 | Finance News

BRUSSELS (AFP) – The European Union and Japan look set to agree on the principle of negotiating a free trade deal linking the world's third economy and the leading global market at a summit Saturday, diplomats say.

After months of tough talks heightened by a history of trade friction, an accord between the two economic giants to move ahead would be significant even if falling short of hopes in Tokyo to wrest a formal launch at the weekend meeting.

"This summit cannot launch negotiations, but it can send a strong political message that we're seeking to launch negotiations," said an EU diplomat who requested anonymity.

EU officials say further work is needed to explore trade sticking-points and line up a to-do list of problems to overcome before the EU's 27 member states approve the official launch of negotiations to ink a free trade agreement (FTA).

Prompted by Britain, EU leaders in March called for FTA negotiations to aid recovery in disaster-struck Japan -- but on the proviso that Tokyo move to lift restrictions to trade.

British Foreign Secretary William Hague said earlier this month that the removal of tariff and non-tariff barriers could deliver over 40 billion euros ($60 billion) of additional European exports to Japan, and more than 50 billion euros of additional exports from Japan to the EU.

Trade ties between the two have consistently shown a strong surplus in favour of Japan -- the EU currently being Japan's third largest trade partner while Japan is Europe's sixth.

Tokyo's better record "is partly a reflection of continuing market access problems for foreign firms in Japan," a European Commission report said this year.

That view from the EU's executive arm is shared by European business leaders, who say Tokyo is failing to offer companies real market access.

Prime Minister Naoto Kan earlier this month asked his cabinet to work on reforms demanded by the European Union, such as removing non-tariff trade barriers and liberalising public procurement.

And last week EU trade ministers acknowledged in meetings that recent Japanese proposals were "a good first step towards negotiations", and agreed the two sides start drawing up over the next months their to-do list -- known as a scoping exercise.

"Europe is important to Japan and Japan is important to the EU," said the diplomat. "We're struggling both of us from the new kids on the block, China, India, Korea."

EU FTA negotiations lasted two and a half years with South Korea, 20 with the Gulf Cooperation Council.

"The more you prepare the negotiations through the scoping exercise, the quicker it will be," said another diplomat.

Japan has been eager to launch free trade negotiations with the European Union as it believes the elimination of EU tariffs on cars and electrical appliances would benefit Japanese companies.