GLOBAL STOCKMARKETS suffered major losses yesterday and are expected to continue to fall today as Wall Street suffered its biggest one-day fall yesterday since 9/ 11, and on the back of worries about the strength of the Chinese and US economies, says the Guardian.
It was all sparked yesterday by a fall in Shanghai of 9% by close of business and rippled across the globe, to se the Dow Jones closed down more than 400 points and the UK’s FTSE 100 index dropped 150 points or 2.3%
There are now worries US and China are about to plunge into recession – on the back of pressure on the housing market and the rapid price of securitised loan packaging since the bankruptcy of several sub-prime lenders, as well as concerns the White House might be preparing air strikes against Iran's nuclear capability.
The Scotsman adds part of the concern is the South African government is rumoured to be considering a windfall tax on the liquid fuel industry.
LONDON-BASED INVESTMENT BANKS are to be asked to stump up for a reserve fund of more than £1bn to compensate consumers in the event of catastrophic failure by a major financial institution in Britain, according to the Times.
Wholesale firms such as Goldman Sachs, JP Morgan and Deutsche Bank have been exempt from any liability until now because they have no retail customers in Britain.
But the Financial Services Authority is said to be considering proposals which argue authorised wholesale firms should shoulder some of the financial pain in the event of a major collapse.
As a result, wholesale firm are to be asked to underwrite a new “pool of last resort” within the Financial Services Compensation Scheme (FSCS), which would operate in the event of a major collapse.
Investment bankers are reported to be furious because the proposed reform blurs the distinction between the tightly-regulated retail financial services sector and the lightly-regulated wholesale sector.
The proposals are expected to be unveiled sometime in March.
SUPERMARKET GIANT TESCO yesterday tapped into pension funds' thirst for long-dated assets and sold out of its landmark 50-year corporate bond within two hours, continues the Guardian.
The £500m of debt was said to be four times oversubscribed as pension funds were desperate to match their long-term liabilities with long-dated assets.
It is now expected investors will see other UK companies follow suit now a benchmark has been set as the Tesco bond has a yield of 5.23%, compared with 4.06% on the equivalent 50-year government bond.
GLOBAL stock markets were shaken yesterday by a double whammy of the worst plunge in Chinese equities in a decade and worries about a possible US recession.
STANDARD CHARTERED is setting up private banks in China and India this year to service the two nations' fast growing affluent elite, says the Daily Telegraph.
The London-based lender currently makes more than two-thirds of its profits from Asia but is now expanding as it has established a private bank in South Korea last year and is in the process of setting up another in Singapore. It also plans to develop the business in the United Arab Emirates and Jersey.IFAonline
Square Mile’s series of informal interviews
'An entirely different beast': How have emerging markets, Asia and Japanese equities evolved over the past decade?
Talking Strategies: In the video below, Jupiter's fund managers discuss how changing tides over the past two decades have resulted in emerging markets, including EMD, and Asia and Japanese equities to become a core part of many wealth manager portfolios....
Spent 20 years with Aviva
Latest news and analysis