US & World News

Japanese stocks ended up Thursday, the figures for economic growth in January-March quarter have offset the worries about Greece and its banks.

The Nikkei gained 0.9% or 75.42 points to 8876.59 points, while the Topix broader took 1.12% or 8.28 points to 747.16 points.

Japanese gross domestic product increased by 1% from January to March compared with the previous quarter, helped by a rebound increase in consumption. In this context, investors have taken advantage of the recent decline of 12% of the Nikkei to do some shopping on the cheap.

Values, Credit Saison ended with a gain of 3.88% to 1,658 yen. Society of consumer credit has posted an annual net profit above market expectations.

Bertelsmann announced Wednesday for the first quarter of 2012 up 13% of operating profit and 5% of its turnover, confirming its annual target of moderate growth CA

The first media group in Europe – which has among others the broadcasting group RTL and publisher Random House – said that its operating profit (EBIT) reached 280 million euros against 248 million a year ago.

"For the full year, we are confident to achieve our goal of moderate growth in sales, EBIT stable at a high , and an increase in profit after minority interests, "said Thomas Rabe said in a statement, chief executive of Bertelsmann. 

RTL Group also announced Wednesday an increase in sales during the first quarter. Growth on French and German advertising markets offset a continued decline in Southern Europe and East.

Bertelsmann, which focuses on digital and abroad to spur growth, announced in late March a change in legal structure, which might suggest that the group is more strongly opposed to an introduction scholarship.

France has awarded Thursday 7.43 billion euros of long-term debt at better terms than in previous auctions, three days before the second round of presidential elections .

The Agence France Trésor (AFT) has issued an amount corresponding to the top of the announced range (6.5 to 7.5 billion euros).

Three of the four lines of Treasury bonds (OATs) offered the 4.25% in October 2017, the 3.25% in October 2021, the 3.0% in April 2022 (refer to the OAT ence to 10 years), interest rates have declined from previous auctions.

The weighted average rate of the OAT 6.0% in October 2025 stood at 3.31%. The AFT, which manages the state debt, does not provide a comparison, the bond not been available for many months.

The rate of OAT reference (benchmark) 10-year stood at 2.96% against 2.98% in April. After the auction, the rate fell further in the secondary market at 2.93%, the yield spread with the German Bund at 10 years, the euro area benchmark, contracting six basis points to 133.

Auctions of France and that of Spain, now the focus of investor concerns, helped ease the situation in the market for government bonds in the euro area.

The Spanish Treasury has placed 2.5 billion euros of bonds in three to five years – the maximum referred – but unlike AFT, he had to concede a higher risk premium than in previous auctions.

Overall demand for OAT reached 18.64 billion euros, providing a comfortable coverage ratio. 

"It seems that the relative uncertainty of the presidential election has not weighed heavily. They managed to raise the maximum referred to lower rates and with a coverage ratio decent, "said John Davies, rates strategist at WestLB.

"Holland has softened his speech on the new fiscal pact (…) and said he just wanted to add stimulus to growth," he says, adding that the positions of President of the European Central Bank Mario Draghi and Chancellor Angela Merkel have also evolved.

"We realize that the pure austerity can not walk. The conflict that the market feared when Holland came to power might not be as insurmountable as we thought at first sight, "said John Davies

…. ….. "Solid as usual, decent rates. Where is the political risk? "Said Peter Chatwell, rates strategist at Credit Agricole CIB in London, about the French auction

.

The new futures contract on OAT, due in June, hit a high (126.75) since its launch on April 16 on Eurex, the market for die riveted to the Frankfurt Stock Exchange

Around 12:30, he was earning 57 cents to 126.69 in a volume of more than 11,000 contracts. Open positions reached 43,223 against 58,000 batches on Italian BTP future, launched in 2009 by Eurex.

The Bund future, benchmark futures contracts in the euro zone fell by 14 cents to 141.59 in a volume of more than 202,000 contracts. Positions on maturity in June exceeded the 13 million lots.

The Italian government expects an economic contraction slightly less than 1.3% in 2012, said Monday the Secretary of State for Economy Gianfranco Polillo.

On an Italian television channel, he said that the macroeconomic forecasts of the government may be revised at a meeting Monday night and approved es Wednesday.

The previous government forecast for 2012, conducted last year, had forecast a contraction of 0.4%.

The Bank of Italy has scheduled its next down 1.5%, -1.3% the European Commission and the Italian employers' organization Confindustria -1.6%.

The decision of E. ON to forego building new nuclear plants in Britain does not mean that the company turns its back on the entire value chain, said Friday the meadow , chairman of the Executive Group utilities.

"This is not a rejection of nuclear energy, just a decision on how we are investing," said Johannes Teyssen in an interview published Friday by the German newspaper Handelsblatt.

RWE and E.ON announced on Thursday to abandon their plan of 18 billion euros to build new nuclear plants in the UK, which could undermine the objective of London for renewal of the reactor pool. 

Both groups have justified this decision by the choice of Germany to break with nuclear energy, high operating costs of their joint venture and the dice Horizon ; lais required by the construction of new nuclear plants.

E.ON also said Thursday it would continue its project to build a nuclear reactor in Finland through the consortium Fennovoima, in which the German group owns 34% through its Finnish subsidiary.

BNP Paribas and Societe Generale Wednesday reaffirmed their commitment to carry through their plan to reduce balance sheet.

Speaking at a conference organized by Morgan Stanley in London, Jean-Laurent Bonnafe, the CEO of BNP Paribas, has announced that the bank would be able to completed by the end of her program initiated in the second half of 2011, at the height of the debt crisis in the euro area.

He recalled that the group had given the end of February to the U.S. bank Wells Fargo loan portfolio to oil companies and sold in early March a 28 , 7% in the property company Klépierre. 

"Our number one priority remains the implementation of our plan to reduce balance (…) In all, we have already achieved 70% of the program," said ; John Lawrence Bonnafé.

BNP Paribas announced in September will reduce by 10% the size of its balance sheet by the end of 2012. In late 2011, its assets amounted to 1.965 billion euros against 1.998 billion at end-2010.

Speaking at the same conference, the CEO of Société Générale Frédéric Oudéaa assured that SocGen, whose market capitalization has shrunk by half last year, was also determined to achieve the reduction of its balance sheet.

"The deleveraging will continue," said Frederic Oudéa. "We have clear objectives."

During the fourth quarter of 2011, SocGen sold for 10 billion euros in assets, but analysts still expect the bank's most significant disposals to strengthen its solvency.

"BNP CLEARLY IN ADVANCE"

"On the 'deleveraging' (reducing balance, Ed), BNP Paribas is clearly ahead, with an impact on NLP ('profit and loss', Ed) quite limited. It's rather good news, "said Alex Koagne, an analyst at Natixis

." However, the Company General ; eral, I think they come to do their 'deleveraging' on the sale of loans but they are now waiting on disposal of business units, "he says ……

… "It's been several months since they announced they would sell assets and there was still nothing yet."

To strengthen their financial strength undermined by the crisis in the euro area and alleviate tensions in interbank liquidity, European banks have also begun to re reduce and diversify their funding sources and reduce their financing needs

. Their difficulties in dollar funding has also forced the European Central Bank has injected over $ 1.000 billion euros of liquidity to three years (LTRO) in the European banking system.

BNP Paribas said the bank had reached since the beginning of the year 60% of its funding needs for 2012, raising 12 billion euros between January 1 and March 22.

Societe Generale, for its part said it has raised 7.6 billion euros of debt since the beginning of the year, with a maturity average of 6.3 years.

SocGen is continuing its efforts to restructure its BFI, said its CEO. This table and a reduction of 50 to 60 billion euros of liquidity needs by 2013 in these activities.

In exchange, like most European banking stocks, securities of French banks have closed in the red Wednesday because of investor concerns about growth in the U.S. and the budgetary situation of Spain.

In Paris, BNP Paribas and Societe Generale ended the session down 1.3% and 2.89% respectively. Credit Agricole – who canceled his participation at the London conference – sold 2.82%. The European banking index ended down 1.45%.

Sales of new homes fell again in February in the United States. The lack of foreclosures flooding the housing market of goods at bargain prices. Average prices of back nine, however.

The housing market is still recovering from nine United States. Sales of new single in February fell for the second consecutive month, according to figures released Friday by the Washington Department of Commerce. They fell 1.6% from January, seasonally adjusted data, to 313,000 annualized transactions. He had declined by 5.4% the previous month (revised up).

Sales of new single are depressed for several years in the United States. Over the whole of 2011, sales fell 5.3%. The government has identified this year that 306,000 sales, is the lowest number ever recorded in its annals, dating back to January 1963. Sales of new homes suffer from competition caused by the high number of foreclosures caused by the crisis, resulting in the housing market an influx of goods sold at bargain prices detrimental to developers.

Despite the decline in sales, the average transaction price in February rose 2.2% on month and 1.8% yoy, to $ 267,700 dollars.

The ministry said there were 150,000 new homes for sale in the U.S. in late February, as much as a month earlier when the supply of such goods had fallen to its lowest level since January 1963 at least.

Over the past three months, the U.S. stock market has regained its levels of late 2007. And in Europe, France has rebounded even stronger. The improvement could well last until May. But then train for the return of volatility. Explanations. The stock market rally seen through the evolution of the Dow Jones: an increase of nearly 18% in almost four months.

Equity markets have recovered tone. Wall Street has lost ground with the financial crisis, is now finding its levels in late 2007 after a 11% jump in three months. For the first time in its history, its flagship index, the Dow and the Nasdaq, dominated by technology, rose this week above the psychological threshold of 13,000 points and 3,000 points, during the same session. European stock markets are pronounced the same trend, the Cac 40 in Paris even showing since mid-February a gain of 21% which allowed him to retake the course of 3600 points.

The rally in shares is not new. It has already lasted three months and we owe largely to central banks, said Benjamin Melman, Director absolute performance at Edmond de Rothschild IM. The rebound in stock prices coincided with the opening last December, to tap liquidity from the ECB or the provision of banks over 1000 billion euros of resources at low cost. This proactive reassured investors who constantly claim that the central bank acts as a lender of last resort to stem the contagion of debt. But his determined action has contributed to lower interest rates in the bond market and away along the spectrum of the credit crisis that threatened the European economy. The Fed has also facilitated the rise of the stock market by deciding to extend until 2014 its ultra accommodative monetary policy. Of course, the rescue of Greece has also helped to ease investors. Although all issues are not resolved, a page of the European crisis has turned, says Francois Chevallier, strategist at Bank economist and Leonardo.

And the good news for investors is that the rally is not over yet. Price increases in January and in February was made with very little volume, Melman says Benjamin. Many investors have been waiting patiently for several issues are resolved. They return on the market today. We assist in some way, a second wave of purchases, which explains the recent acceleration in price rises.

How long can it last? Difficult to say. Looking at the ratios of current profits, we say that most of the journey was made, says François Chevallier. However, the stock market has another engine, that of profit expectations. But they will remain well oriented in the short term due to the favorable business surveys. The ZEW index in Germany and that of the Philadelphia Fed – two leading indicators of the industry – improved further in March, says the expert. This means that the plateau expected in the industry has not yet occurred. The next ISM index, which takes the pulse of American industry, may still show an increase in early April, at the same time giving a new impetus to the market.

As of May, however, the stock market could consolidate, ie enter a phase of slower growth. Indeed, the production rates in the industry expected to slow. Moreover, the return of valuations at pre-crisis level will lead to profit taking, says Francois Chevalllier. Tensions on the bond markets – the U.S. 10-year rates rose in a few weeks from 1.8% to 2.3% – would create air holes on the stock market, adds Benjamin Melman. Volatility will brief comeback. The opportunity for investors to remember an old adage stock: sell in may and go away.

Volksbank Austrian bank said Monday it would be partially nationalized and its minority shareholders could lose up to 70% of the value of their participation.

The majority of the capital should remain controlled by regional banks, which will 230 million euros on the table while the state plans to provide at least 250 million.

A financial source said that the state would recover the direct participation of over 40% in Volksbanken after the recapitalization.

The capital of the bank is currently owned 60.8% by sixty Austrian credit institutions, to 23.4% by the German DZ Bank, to 9.4 by the insurer Ergo% and 5.7% by Raiffeisen Zentralbank. 

Volksbanken had received in 2009 one billion euros from the state but failed to meet its deadlines for repayments on time, providing the government Austria the opportunity to turn his loan into securities.

The Austrian Minister of Finance, Maria Fekter, however, said they wanted to avoid this scenario, Vienna has already had to nationalize Kommunalkredit and Hypo Group Alpe Adria since the outbreak of the financial crisis .

The promise made yesterday by Nicolas Sarkozy to ban hats and retreats, golden parachutes has a deja vu. The candidate of 2007 there was already risky. The President also, during his tenure. But from words to action, there is a gap … Nicolas Sarkozy Golden Parachute

What he said in 2007: At the time, the future president described the golden parachutes "detestable practices" and announced their removal "summer 2007" in the name of "values ​​that are not (his) ".

What he did: It is clear that five years later the "golden parachutes" still exist. Certainly, there have been few measures of supervision. But they were sometimes taken by the UMP majority against the Government's view.

In August 2007, the TEPA law requires and golden parachutes are subject to a decision of the Board, and is linked to performance criteria. But the announced removal is not requested. In 2008, during the speech of Toulon, the head of state announced that executive compensation "must be indexed to the actual economic performance of the company. They should not be eligible for a golden parachute when they committed mistakes or put their company in difficulty ". No law follows.

In 2009, following the scandal of the golden parachute of the former CEO of Valeo and stock options of Societe Generale, Nicolas Sarkozy puts it: "There should no longer be any golden parachutes, it should not be any bonuses, distribution of free shares or stock options in a company that receives government assistance, which implements a social pronounced or that relies heavily on partial unemployment. " A decree to this effect was taken in April. But this prohibition applies only to companies that received aid from the state (banking and automobile sectors) until end 2010. And it is not retroactive.

Finally, 21 October 2010, MEPs adopted an amendment during consideration of the budget which provides that golden parachutes may not exceed 'twice the highest severance benefits, provided in case of dismissal by the agreements business or industry. " Baroin, then budget minister, has yet attempted to oppose it. He states that "the government has already done much" and argues that "these elements of compensation (that) feed business competitiveness to attract the best subjects."

Pensions hats

Unlike the golden parachutes, Nicolas Sarkozy has never announced the elimination of pensions hats. But he has often denounced the abuse. And his government has taken steps to harden their taxation. That said, in February 2010, matter in full Proglio, Luc Chatel, a spokesman of the government has not asserted that the least critical of retired boss of Veolia's hat fell within "the hard". He even tried to justify it. And as for golden parachutes, the government has sometimes sought to oppose regulatory ambitions of its majority

What he did:

The decree of 20 April 2009 prohibits hats retreats for executives of companies that have benefited from state assistance, but this provision shall be valid only until the end of 2010. Today, they are perfectly legal.

In October 2009, MEPs in the committee adopt a reform of the governing pensions hats … but waive the government's request. Eric Woerth, budget minister then, justifies its position by the fact that this system affects many thousands of frames and not only the great leaders. The government settle a code of ethics established by the employers.

In October 2010, MPs return to the fray and adopt a law to limit pensions hats. The latter will no longer exceed 30% of the remuneration of the last fiscal year. Unusually, the majority supported the opposition. The government opposes it but will eventually bow, relying on "wisdom" of the assembly.

Taxation has for its part, was weighed down twice in 2010 (particularly in the context of pension reform). And surtax has once again undergo a hardening at the end of last year with the introduction of a progressive scale with three slices according to the amount (7%, 14% or 21%) against two previously (6 % or 12%).

The high wages

What he said

Wednesday night on France 2: "From now on, the remuneration of top leaders will be voted on not by the board, where typically there are many friends, but by the general meeting of shareholders. (They) will be published in the legal documents to be published by the company "

What he has said: ……. In June 2006

. at Agen: "At the very least, is that the leaders of large listed companies assume their remuneration to their employees, their shareholders, and that, therefore, remuneration of each officer is not secretly fixed in the closed session of the Board but publicly endorsed for each of them by the general meeting of shareholders, and, of course, nominally published in the annual report. " What he did

:

Actually, not much thing, except the temporary ban on stock options and bonus shares for companies aided by the State until the end of 2010. Otherwise, the government has clearly shown its refusal to regulate comprehensively Wages and Salaries Francois Fillon saying, still in 2009, such a move would have "no real technical, economic, unless you want naturally regulate all remuneration ". And rely on the wisdom of big business and its ethics code. The measures proposed Wednesday to stay elsewhere in this lineage. Existing in the Anglo-Saxon voting remuneration by the general meeting of shareholders does not guarantee the end of excessive compensation. And the principle of transparency on executive compensation has already been included in the New Economic Regulations Act of 2001.