Financial News Headlines

Toyota reported Tuesday a 32% drop in its quarterly earnings and abandoned its forecast for annual profit, the impact of floods in Thailand completing disrupt a production line that is not yet fully recovered from the earthquake March 11.

The Japanese automaker also suffers from the strong yen, beating down the profitability of some 1.5 million vehicles exported each year and makes it less competitive with neighboring South Korea's Hyundai Motor.

Despite the unfavorable foreign exchange, Toyota said it did not intend to reduce its cut production, saying instead that he wanted to increase the share of domestic sales in total sales to offset the effect of force the yen.

The builder was particularly affected by flooding in Thailand disaster that claimed more than 500 dead, like Honda, which also dropped its earnings forecasts.

The three assembly plants of Toyota in the country are at a standstill since October 10 and will remain so until at least November 12.

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The Spanish government said Thursday the postponement of the privatization of two major airports of the country, candidates clashing with the acquisition financing difficulties, a decision that deprives the state of several billion euros in revenues in the crisis debt.

The Department of Public Works said that the operation was postponed for three months, after the parliamentary elections of 20 November, which could, according to polls, give power to the Popular Party (PP) today in the opposition.

But the PP is opposed to the sale of the airport and accused the Socialist government of Jose Luis Rodriguez Zapatero to have rushed into a hasty operation by selling the assets of choice at bargain prices in a financial context lackluster.

Last month, the government had already put a stop to the proposed IPO of the National Lottery on the grounds of market conditions.

Banking sources have said that private investors were reluctant to engage in these privatizations few weeks of the election.

Seven groups of investors had expressed interest in the operation, the government hoped to five billion euros.They included, alone or combined funds, the German airport operator Fraport and Spanish groups Ferrovial and Acciona Infrastructure.

TOO EXPENSIVE, THE WRONG TIME

The government demanded too high a price for the Madrid Barajas airport and El Prat in Barcelona, ​​said sources close to the discussions.

"The schedule would not allow privatization to complete just before the elections.But there was also a big difference in price compared to what the government called for the two airports, including Barajas, "said a senior bank in Madrid.

"For example, two funds that had joined the Spanish group Ferrovial Infrastructure sought a return on investment of 12-15%, while Barajas did not offer more than 10%," he added.

An American manager explained his part that "banks may have had the last word on this issue because it is they who will finance the transaction."

Most candidates have financed the operation with 20 to 30% of equity from the balance of the loan, he added.

"Given the pressure on Spanish banks by higher funding costs and rising ratios of their loans / deposits, they increasingly tend to cut back on corporate financing right now," continued the manager .

The Tokyo Stock Exchange closed sharply down Monday, affected again by fears about the debt situation in the euro area and the slowing global economy.

This context prompted investors to shun riskier assets, like stocks, and turned to the bond market as such.

A good Tankan quarterly report of the Bank of Japan, published before the opening and showing a positive turnaround in the business sense, was not a very large effect.

"The October-December quarter begins today and it is hoped, therefore, purchases of domestic funds but for now, the market is primarily concerned with problems of Greece and wondered how the Europeans will face the situation.They also expect U.S. data this week, "said Fujio Ando (Chibagin Asset Management).

Greece missed the deficit targets that were assigned by its international donors for this year and next, according to figures released Sunday by the Greek Ministry of Finance after approval by the Government of the draft budget 2012.

The Nikkei 225 index lost 154.81 points (1.78%) to 8,545.48 while the Topix yielded 14.06 points (1.85%) to 747.11.

Values, Sony has touched its lowest level meeting since June 1987, a victim of clearances by foreign funds, and eventually a loss of 4.51% to 1439 yen.

Stock markets tumbled Thursday, weighed down by the pessimistic picture of the U.S. economy compiled by the Federal Reserve of the United States and the indicator of manufacturing activity in China, which suggests that as the economy slows in the second economy world.

European shares open cuts more than 2% in the wake of Wall Street where the S & P 500 yielded 2.94% Friday. Values ​​related to the economic cycle weigh on the trend with a decline of 4.8% for the European sector of commodities.

In Paris the CAC 40 gave up 2.7% to 9.30. The pan-European FTSEurofirst 300 index lost 2.4%, while the German Dax and London FTSE down 2.8%.

In Tokyo, the Nikkei lost 2.1%.The Shanghai Composite ended down 2.8%, the percentage loss the biggest since seven weeks.

For its part, the dollar rose to a seven-month high against a basket of currencies in favor of expectations of rising interest rates in the short term as part of "Operation Twist" announced by U.S. Federal Reserve.

To come to the aid of an activity in decline, the Fed announced Wednesday it is launching a new program of $ 400 billion to increase the share of long-term securities in its portfolio of assets 2850 billion.

The central bank has warned against downside risks "significant" burden on the U.S. economy and cited "a continued weak market conditions of work".

A Reuters poll conducted after these statements shows that the primary dealers of Treasury estimate that only 15% chance that the Fed's attempt to influence long rates gives a real boost to the U.S. economy.

RISK AVERSION

The trend is also impacted by the announcement of a further contraction in September, the third in a row, the index HSBC Purchasing Managers (PMI) of China's manufacturing sector, a statistic that suggests that China can not be be not be the engine of global growth.

"These data come from China to add to the list of negative factors that everyone has in mind: the U.S. economy depressed the yen's strength against the dollar and the euro, the debt problems in Europe, the question a defect or not Greece, "Judge Koichi Ogawa, portfolio manager at Daiwa SB Investments.

The MSCI equity markets in the Asia-Pacific unscrewed 4.5%, falling to its lowest level in 14 months, while risk aversion is felt in the market for raw materials and the currencies of emerging markets.

The Brazilian real and South African rand recorded their worst daily decline since the bursting of the financial crisis in 2008.

Brent crude gave up 1.71% by 0700 GMT, while December copper fell more than 3% to 8045 dollars tonnes, the lowest since November.

In contrast, the U.S. Treasuries are up, return the paper to 10 years are even fell to a new low of 60 around 1.82%.

The yield securities declined significantly after 30 years the ads from the Fed, to 2.94%, a decrease of 6 basis points (bps) Thursday after falling 22 basis points Wednesday.

In France, just before the market opening, the PMI "flash" in the manufacturing industry has shown that the growth of private sector activity in the Hexagon in September fell to its lowest level since the beginning of the recovery in 2009, accentuated the decline in the industry while expanding services was weakening.

The lack of unity of Europeans at the top in Poland worried the markets. The IMF refers to the default of Athens.

Divisions within the euro area and the lack of concrete progress on the issue have plunged Greece into turmoil Monday and world stock markets, maddened by the scenario of a default of Athens. A "delay" of continuing the privatization program in Greece can lead the country to "default" on its debt, warned Monday the Permanent Representative International Monetary Fund (IMF) in Greece, Bob Traa. And the meeting of European finance ministers on Friday and Saturday in Poland ended in failure.Divided, they postponed any decision on October the payment of a further tranche of 8 billion euros to Greece, which desperately needs the money to avoid bankruptcy.

"Once again, hopes for new policy initiatives to resolve the debt crisis in the eurozone were violently showered," lamented Jane Foley, analyst at Rabobank. Now, "the market is betting on a 98% default of Greece," said Phil Flynn, of PFG Best Research. The reaction of the stock exchanges Monday was unequivocal. At the close, Paris fell 3.00%, 3.17% of Milan, Frankfurt 2.83%, 2.03% in London.

European indices, once again, been sealed by the banks that would be the first victims of failing Greek. The Deutsche Bank dropped 4.54% and 4.11% Italian Intesa Sanpaolo. In France, Societe Generale won 6.70% and 5.48% of BNP Paribas.In New York, the Dow Jones lost 1.57% to 1600 GMT. The announcement by U.S. President Barack Obama plan to further reduce the deficit of 3.000 billion, financed half by an increase in taxes for the rich, did not produce any relief.

Teleconference postponed

Very worried, the markets awaited the outcome of a conference between the Greek government and the Troika representing the country's creditors, namely the European Commisson, the European Central Bank (ECB) and the IMF. First scheduled for mid-day, the conference was delayed about 16h, after the close of European stock. "The quarterly audit of the troika is decisive. If the IMF decides to exit the process, the risk of default of the country will be very large," said Cyril Regnat, an analyst at Natixis.

A default of Greece "is not a working hypothesis" in the euro area, however, assured the French minister of Finance Baroin. Greece must at all costs to demonstrate that it meets its budget commitments, the only way to obtain payment of the next round of international loans. "This is not a working hypothesis, it is not our strategy," he said on the sidelines of a meeting with his counterparts from the African franc zone in Paris. "Our strategy (…) is to operationalize the agreement of July 21" adopted by the euro area to come again in aid to Greece and strengthen the European bailout fund, he added. The Permanent Representative of IMF in Athens, Mr. Traa said Monday morning that additional budgetary savings will be "necessary".

"Privatization has been delayed from the program because politicians can not agree on how to proceed," he said in reference to the privatization program of 50 billion euros by 2015 that Greece is committed. "If you wait (…) the country will go to default," he warned.

"Conditions uncontrollable and painful"

Taking the worst estimates of Athens, he returned the country's return to growth in 2013, anticipating a recession of -5.5% in 2011, and -2.5% in 2012. Recognizing the gravity of the situation, the Greek Finance Minister Evangelos Venizelos said that the week opened "is a very difficult week for the country, for the euro area and for me."Athens announced on Sunday that it would conduct new cost-cutting measures in 2012 to reduce the public sector.

"We must now take historical decisions, otherwise we will have to take soon in uncontrollable and painful conditions," he said, referring to the threat of insolvency of the country. The minister made it a priority "respect for the objective for 2011," involving corrective action of 1.8 billion euros, to enable the country to continue to meet its commitments, including "a primary budget surplus in 2012" . Mr. Venizelos nevertheless felt that Athens should not be used as "scapegoats" facing the "lack of competence in managing the debt crisis" in the eurozone.

As a result of concerns around Greece, the euro Monday accentuated its decline against the dollar: towards 1600 GMT, the euro bought 1.3633 dollars against 1.3797 dollars on Friday night. The price of an ounce of gold fell 3%, investors withdrawing from the yellow metal to cover losses in other markets.

The fear mongering by Christine Lagarde on the urgent need for recapitalization of banks in Europe are not convinced. Neither the EU nor the analysts or investors. Christine Lagarde is in the race to succeed DSK to head the IMF.

The European Union Monday defended the strength of European banks after the words of the IMF chief Christine Lagarde has called for their "urgent recapitalization" in order to restore market confidence and facilitate access to liquidity. Fearmongering that have not really worried the markets.In Paris, for example, the title Natixis gained 3.72% while Societe Generale and Credit Agricole have completed on increases of 3.61% and 3.37%.

"European banks are better capitalized than a year ago," said the Commissioner of Economic Affairs Olli Rehn, during a hearing before the European Parliament, referring to the results of stress tests published in the European banking sector during the summer. The results of these tests conducted in Europe over 90 banks were made public last July. Institutions that have failed to make decisions to recapitalize within six to nine months, through mergers or asset sales in particular, he said. If this does not work, solutions that require public sector intervention to bail them out would then be considered.

Returning to the turbulence of recent weeks, Mr.Rehn, however, admitted that European banks have faced difficulties recently to finance itself. "We hope that their financing conditions will improve. The banks also have access to liquidity set aside by central banks," he added.

Executive Director of the IMF said "urgent" Saturday to recapitalize European banks so that they are "strong enough to face the risks of public debt and weak growth." "It is essential to stop the contagion," she said, considering that "the most efficient would be a substantial recapitalization required" with private funds and public funds "if necessary".

Asked earlier on the subject, the spokesman for Mr.Rehn, Amadeu Altafaj, stated to see no need to go beyond what is already expected to strengthen bank capital, or make "something extra". "The discussions between the IMF and the EU have already taken place. The IMF knows the results and developments to come," he said.

For their part, several large French banks did not hide their surprise after remarks that do not differentiate between European institutions. "French banks are among the strongest in Europe," we fell on condition of anonymity in one of them, referring to the good report of resistance testing.

French Banking Federation (FBF) declined to comment, referring to a statement of 19 August in which it stressed that the capital levels of French banks were "well above regulatory requirements."The CEO of Crédit Agricole SA Jean-Paul Chifflet on Thursday had dismissed any need for capital increase. He also reassured liquidity: its annual plan is "completed at about 90%," with available reserves of over 120 billion.

Lack of precision?

The words of the boss of the IMF were also found to be inaccurate by some analysts. For Pierre Flabbée, an analyst at Kepler CM, "it seems that the idea of ​​Christine Lagarde whether to restore the normal functioning of the interbank market and banks' access to liquidity, the recapitalization is a necessary step.""Bring the capital would be used to restore market confidence," he noted, saying that the banks involved and the amounts necessary "should be clarified" by Ms. Lagarde.

A second analyst, regretted, on condition of anonymity, the "wrong" timing and lack of detail by Christine Lagarde, while the sector is slowly recovering from false rumors that have recently plunged. Especially that "there is no problem of liquidity in the euro area, and if there was one, the ECB is ready to intervene," he noted.

Several institutions have also noticed that they have strengthened their capital base in preparation for the coming into force from 2013 rules so-called "Basel III" in the G20 countries.According to these regulations, banks must hold capital "hard" accounting for 7% of the loans they give to their clients, against 2% currently.

"I do not think the risk is specific to European banks," said Jean Peyrelevade, chairman of Banca Leonardo France and former head of Credit Lyonnais, Business on BFM. As the problem of indebtedness of the States "is not resolved, there is doubt about the strength of the euro area itself and therefore the banks of the euro zone."

News Corp. plans to buy $ 5 billion of shares over the next twelve months, the media group der Rupert Murdoch seeks to calm the turmoil caused by the case News of The World.

News Corp. is the parent of the Fox network and the Wall Street Journal, as well as a series of British newspapers.

Rupert Murdoch has decided to close its Sunday tabloid News of the World, accused of embezzling thousands of voice mail in recent years.

This case comes at the worst time for News Corp. which is engaged in an attempted takeover of BSkyB, an operation estimated at around ten billion euros, which requires final approval from the government.

The share repurchase program announced Tuesday will replace another program, $ 1.8 billion.

AirAsia could pass shortly a major order from Airbus, a subsidiary of EADS, said Saturday Reuters CEO of the Malaysian company to lower costs.

AirAsia said in February it planned to order 175 A320neo, remotorisée version of the device medium-haul Airbus due to enter service in late 2015, and the A330.

"If an agreement is involved, it is imminent, I think," said Tony Fernandes, speaking on the sidelines of the Spanish Grand Prix Formula One in Barcelona that his team was playing Team Lotus.

These words of CEO of AirAsia, the approach to the Paris Air Show to be held from June 20 to 26, suggest that the order could affect about 200 aircraft, an agreement worth up to $ 16 billion ( 11.3 billion euros) at list prices.

Tony Fernandes said that discussions were in progress with Airbus.

"AirAsia has had a big week, nothing has been signed but things are progressing and the fact of finding myself close to France allowed me to move forward," he said.

Friday, CEO of AirAsia chose Twitter to announce a key developments in the negotiations, amid rave reviews on its Formula One team

"In the middle of a beautiful meeting. Nice to meet Will at Airbus and the future of AirAsia," he wrote via micro-blogging site.

Suzuki Motor Co. reported Tuesday a 51% decrease in operating profit in the fourth quarter of fiscal year 2010-2011 while abstaining, like his peers, to provide forecasts for 2011-2012 by Due to a number too large uncertainties.

Like its competitors, the fourth Japanese automaker has suffered the consequences of the earthquake and tsunami of March 11 in Japan, characterized by supply shortages of components and power outages.

However, analysts said, Suzuki is less bad posture such as Toyota and Honda because the bulk of spare parts it needs are manufactured in India.

Last month, Suzuki has been able to run its plants at 65% capacity, against a ratio of only 33% for Toyota.

Operating profit for Suzuki, according to Reuters calculations, stood at 14.48 billion yen (125 million euros) over the period from January to March, while analysts had forecast on average 15.6 billion yen Thomson Reuters by I / B / E / S.

The wholesale price of nuclear electricity EDF sells its competitors will be set at 40 euros per megawatt hour from 1 July 2011, then rise to 42 euros from 1 January 2012, Tuesday said Eric Besson, Minister Industry and Energy.

As part of the reform of the French electricity market (Act Nome), EDF requested that starting price is set at 42 euros and it evolves gradually toward 45 to 46 euros per megawatt hour, while its rivals , including GDF Suez, called for 35 euros.

Asked on Europe 1, Eric Besson has also announced that the nuclear safety authority was auditioning Thursday "for the first time EDF to ask what conclusions he draws from the very serious accident in Fukushima," Japan .

Gas prices will rise about him "not before 1 July 2012", added the minister.