Here's my summary of the key news today in 90 seconds at 9 am, including news of regulator and court action.
Reuters is reporting overnight that EU antitrust regulators will levy a record fine of at least €1.5 billion on six financial institutions, including Barclays, HSBC and Royal Bank of Scotland , for rigging the yen Libor interest rate benchmark.
At the same time, a court case has opened in New York where a group of professional oil traders are out to prove that BP, Shell and Morgan Stanley, among others, manipulated the Brent oil benchmark. It's a case that could have explosive consequences.
And here's an update from a 2011 case: remember Jon Corzine? He was an ex Goldmans banker who became a politician, then went on to start MF Global, which folded in an investor run following some serious market rule violations. Well, despite the dire things he was accused of at the time, a bankruptcy court has approved a plan where everyone will get all their money back. The insolvency rumour turned out not to be true, even in the stress of a collapse.
Speaking of stress, inflation is rising in China - and more quickly than authorities there are comfortable with. The central bank has issued a warning that they will take action if it goes much higher. 3.5% is their upper tolerance level and September came in at 3.1%. The October data will be released this weekend and is expected to be higher than that.
In other overnight news, German and British factory PMIs rose strongly in October, but EU retail sales were particularly weak. The ECB is about to review its rate settings tomorrow and there is speculation that we may see a cut. The question there is, does low inflation there mean prices are under control, or a signal that deflation is setting in?
The New Zealand dollar shot higher yesterday on the better-than-expected employment numbers. Along with the Auckland housing pressure, markets see a clearer case for RBNZ rate hikes next year.
The NZ dollar starts today at 83.8 USc, 88.0 AUc, and the TWI was at 77.7.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
12 Comments
There's simply no way to do a damage calculation that won't wipe out the entire finance sector when you're talking about pervasive, ongoing manipulation of $5-trillion-a-day markets. That's the problem – there's no way to do a slap on the wrist in these cases. If they're guilty, they're done.
http://www.rollingstone.com/politics/blogs/taibblog/chase-isnt-the-only-bank-in-trouble-20131105
Thanks Andrewj for all your links and countribution!
Yes, thanks for the all great links and contributions Andrewj. Matt Taibbi is superb....his book Griftopia is a must read.
XERO is now officially the second largest company by market capitalisation listed on the NXZ , on target to run down the incumbent #1 , Feltchers ...
... Xero has leapt another $ 1.70 this morning , to reach a SP of $ 39 , and a capitalisation of $ 5.5 billion ....
By way of comparison , application software giant Intuit ( Nasdaq : INTU ) has a cap of $US 21 billion .... but it does have $US 5 billion in annual revenue .... and makes a profit , trading on a PE multiple of 25 this year , and forecast 18 times , next year ... and Intuit pays a small dividend 1.1 % on its current share price of $US 72 ...
Let's hope the shareholders can eat intellectual property with their morning coffee.
Equally, they remain underpriced by some other standards:
The P/E’s of the top 50 Russell 2000 stocks is over 45. The P/E of Linkedin is 755, AOL’s is1278, Chipotle’s is 54.
Gains in price do seem excessive.
No 'Please Explain' letter from NZX to be seen.
I'll call it as another Rakon.
Not far behind is newcomer GeoOP, up 20% today and more than doubled it's 'value' in 3 days.
Xero now at $40.75
I'm pretty adventurous with my investments but you'd have to be bat sh!t crazy to buy Xero at $40.
$ 41 now ! ... she's going too fast Happy123 .... she cannae sustain this speed ... she's gonna blow up .... get the heat shields doon Lieutenant Uhura .... she was ne'er built to cope with these forces , Captain .....
That's what Scotty said at $7 and then she hit warp speed.
Well, despite the dire things he was accused of at the time, a bankruptcy court has approved a plan where everyone will get all their money back. The insolvency rumour turned out not to be true, even in the stress of a collapse.
Including the owners of that beauty previously known as Man International before it became MF Global?
I have follwed Xero since the start up, and changed clients over to it who were using MYOB and Quickbooks. I have always thought it a game changer, the product upgraded every month but no change in subscription price. Xero will crack the US market without a doubt and its revenue stream will just keep on climbing. Well done Rod Drury and the management team!
Agreed, well done to Xero and the other NZ Tech Co's who are killing it, Chch the next silicon valley.....
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.