Shares of Bank of American Corp. (BAC) fell more than 26% during trading yesterday (Tuesday) as investors reacted to the company’s disclosure that it was cutting its dividend after its third-quarter earnings plunged a stunning 68%.
In a bold move to provide stability to the frozen short-term credit markets, the U.S. Federal Reserve yesterday (Tuesday) announced new measures aimed at boosting liquidity and allowing corporations to maintain daily operations. But the U.S. markets were less enthusiastic about the Fed’s new measure. Slight gains in early morning trading quickly reversed course to plunge much lower.
It takes big cojones to invest in the US banking sector right now. Barely a week passes without another financial giant hitting the wall. The sector has been one of the worst hit this year.
But are there firms that will benefit from the wholesale restructuring of the industry? Money Map editor Horacio Marquez says Bank of America Corp. (NYSE:BAC) “will jump from merely being one of the largest banks in the world to being a commercial-and-investment banking powerhouse.”
Horacio recommends using short-term volatility to buy BAC shares on market dips to gradually build up a long-term position by the end of the year.
Damned if they do, damned if they don’t, politicians the world over are looking pretty sheepish right now. Nationalizing failed banks, mortgage lenders and insurance firms hardly makes for a strong election pitch. It won’t do much to coax fresh risk capital into shoring up financial balance-sheets, either. But letting them fail would only look worse…
One man’s loss is another man’s gain. Jason Simpkins reports that Barclays PLC (NYSE:BCS) is buying up the ‘healthy’ remains of Lehman Brothers (NYSE:LEH) at bargain prices, expanding and diversifying its operations in the process. Meanwhile, Goldman Sachs‘ (NYSE:GS) Q3 earnings were dreadful but still beat analyst expectations.
As Wall Street implodes, Bank of America Corp. (NYSE:BAC) has become the “new big kid on the block,” says Jennifer Yousfi. BofA has bought struggling Countrywide Financial and now Merrill Lynch (NYSE:MER) to become a US leader in financial services.
The State of Qatar will invest about $8 billion in Libyan companies across various sectors, officials told the Financial Times.
The investment is one of many made by large, national sovereign wealth funds, or global cash barons, and will help Libya diversify its economy away from a reliance on hydro carbons.
According to the FT, Barwa Real Estate Co., an affiliate of the Qatar Investment Authority’s $40 billion property wing, agreed to invest $2 billion in state-owned Libyan Development and Investment Co to develop commercial, residential and leisure facilities.
European stocks were gutted yesterday (Thursday) as banks took heavy losses in the face of more hawkish inflation comments from European Central Bank (ECB) President Jean-Claude Trichet that put pressure on already struggling financials.
The Dow Jones Stoxx 600 closed down 2.6% to 288.48, the worst finish for the Eurozone index since October 2005.
The FTSEurofirst 300 had a 2.5% drop, to close at 1,197.02 points, its largest one-day percentage drop since mid-March, Reuters reported.
Starving for capital and hell-bent on retaining its handsome dividend, Barclays PLC (ADR: pAs much as 1.58 million shares will be sold to existing investors China Investment Bank and Singapore’s stronga href="http://www.temasekholdings.com.sg/" onclick="s_objectID="Temasek Holdings Pte. Ltd/a/strongstrong., /strongas well as new investors Japan’s a href="http://finance.google.com/finance?cid=674312" onclick="s_objectID=" finance?cid="674312_1";return">Sumitomo Mitsui Banking Corp., Qatar Investment Authority and Challenger – a fund that represents “the beneficial interests” of Qatar’s royal family.
The hot gossip these days among investors is all about the emerging markets in Asia, Africa and Latin America. Twenty years ago the talk would still have been about Asia. But one country in now gets written off as a has-been: Japan.
