Thursday 26th November 2015
NEWS TICKER, November 24th 2015: New research from the Consilium Strategic Land Fund suggests 19% of estate agents and property developers expect it to become ‘much easier’ to obtain planning permission to build residential homes over the next three years. 56% think it will become ‘slightly easier’ and only 6% believe it will become harder to obtain. Given the UK needs to build around 250,000 new homes a year to meet growing demand, 21% of those interviewed think the level of government incentives to encourage residential property building will increase dramatically over the next 10 years, and a further 70% think they will increase ‘slightly’. Given this, 82% of estate agents and property developers expect the number of homes built in 2020 will be higher than in 2014. When looking at the South East, which is the main focus of the Fund, the corresponding figure is 79% - On the basis of a final compliance notice from the institutions, the Eurogroup Working Group (EWG) agreed late on Friday that the Greek authorities have now completed the first set of milestones and the financial sector measures that are essential for a successful recapitalisation process. The agreement paves the way for the formal approval by the ESM Board of Directors today for disbursing the €2bn sub-tranche linked to the first set of milestones. It also makes subsequent case-by-case decisions by the ESM Board of Directors on the transfer to the HFSF of the funds needed for the recapitalisation of the Greek banking sector out of the €10bn earmarked for this purpose - The performance of the UK credit card asset-backed securities (ABS) market remained positive during the three months ended August 2015, according to the latest indices published by Moody's. Total delinquencies decreased slightly to 1.54% of the outstanding balance in August 2015 from 1.64% in May 2015 and 1.82% in August 2014. The charge-off rate also decreased to 2.65% in August 2015 from 2.83% in May 2015 and 2.79% a year earlier. The payment rate decreased to 17.47% in August 2015 from 18.56% in May 2015 and 21.72% in August 2014 - ETF Securities Group has listed 18 new 3x short and leveraged commodity ETPs and six new 5x short and leveraged currency ETPs on the LSE today. 2015 has seen increased volatility across currencies and commodities and investors globally have demonstrated an increased interest in short and leveraged ETPs, with ETF Securities own platform experiencing US$135mn of inflows year to date. ETF Securities was the first provider to list European currency ETPs in 2010 and is now the first provider to list 5x short and leveraged currency ETPs on the London Stock Exchange having already launched 3x short and leveraged commodity and 5x short and leveraged currency products in Italy and Germany earlier this year. “We are listing these new short and leveraged products on the London Stock Exchange in response to a strong demand from investors. We have seen tremendous growth in our short and leveraged platform across Europe over the last few years.” says Townsend Lansing, executive director – head of short / leveraged & fx platforms, ETF Securities (UK) Limited. “2015 has been a year of heightened currency volatility. We believe the additional leverage will first and foremost allow investors to use the currency products to hedge currency risk as well provide additional opportunities to trade on a short term basis with a competitive total cost of ownership.” - GoldenSourcea provider of Enterprise Data Management (EDM) and Master Data Management (MDM) solutions for the securities and investment management industry, says that Cattolica Assicurazioni has selected its Market Data Solution to efficiently deliver robust pricing and accelerate reporting capabilities for Solvency II. GoldenSource will provide Cattolica with a complete solution for constructing and disseminating fully audited data sets which validates and cleanses multiple sources, ensuring accuracy and timeliness in product control and reporting. After a rigorous evaluation process, GoldenSource was selected due to the completeness of the solution, ease of use and its rapid implementation capabilities - Yes Bank, one of several of India’s private banks, recently signed an agreement with the London Stock Exchange (LSE) regarding the listing of green bonds and equity instruments to raise funds for clean energy infrastructure. The bank has announced plans to list green bonds on LSE worth $500m by December 2016. Yes Bank issued the country’s first green bond in February this year in which it raised $150m. A second green bond issue, floated in partnership with the International Finance Corporation (IFC), raised almost $50m. The Indian Import-Export Bank also raised $500m through the first dollar-denominated green bonds issued in India, and is also expected to issue more bonds raising up to $1.5bn over the next two to five years – Was last week a turning point? The US Fed has given its clearest sign yet that it might raise rates in December, as it notes that inflation looks to be reappearing. However, with global growth continuing to slow, a rate rise is not without risks. After a torrid start to fall, Australian shares closed at their highest level in about a month as a brightening economic outlook buoyed consumer stocks and countered pressure from falling commodity prices. The S&P/ASX 200 rose 20.3 points, or 0.4%. Elsewhere, it a mixed, but not altogether a depressing picture. The Shanghai Composite Index closed down 0.6%, amid expectations that a four-month moratorium on public listings could lift soon, triggering investors to sell current holdings. Hong Kong's Hang Seng Index fell 0.4%. South Korea's Kospi rose 0.7%. Markets in Japan were closed for a holiday. The Straits Times Index (STI) ended 14.42 points or 0.49% lower to 2903.49, taking the year-to-date performance to -13.72%. The top active stocks today were DBS, which declined 0.71%, NOL, which gained4.46%, SingTel, which declined1.03%, OCBC Bank, which declined1.23% and UOB, with a 1.25% fall. The FTSE ST Mid Cap Index declined 0.13%, while the FTSE ST Small Cap Index declined 0.45%. Expectations of higher rates strengthened the dollar against most currencies in trading today with the euro falling to a seven-month low at $1.0599, no surprise when you couple the promise of a US rate rise with the ECB holding out for more easing. ECB President Mario Draghi said Friday that the bank stands ready to deploy its full range of stimulus measures to fight low inflation. A stronger dollar also pressured several commodities, which are priced in the currency. Earlier Monday, three-month aluminum prices on the London Metal Exchange fell to their lowest level since May 2009, to $1,438 a metric ton. The price later edged up to $1,441.50. Brent crude oil, the global benchmark, was down 1.8% at $43.84 a barrel. Prices of West Texas Intermediate fell 3.1% to $40.62 a barrel, after falling below $40 a barrel last week. Gold prices fell 0.5% at $1,070.60 a troy ounce - The European Council says it has extended the mandate of the European Union Special Representative (EUSR) for the South Caucasus and the crisis in Georgia until 28 February 2017. Herbert Salber was appointed in July last year. EUSRs promote the EU's policies and interests in troubled regions and countries and play an active role in efforts to consolidate peace, stability and the rule of law. The first EUSRs were appointed in 1996. Currently, nine EUSRs support the work the High Representative of the Union for Foreign Affairs and Security Policy, Federica Mogherini - Taiwan's Ministry of Economic Affairs (MOEA) approved 3,118 foreign direct investment projects (except from China) with a total value of $3.689bn in January-October 2015, respectively increasing 6.34% and decreasing 6.77% on year, according to MOEA statistics released on November 20th. In the same period, MOEA approved 378 outward direct investment projects (except in China) proposed by Taiwan-based companies or individuals with a total value of $9.4bn, respectively dropping 5.74% and growing 40.42% on year. Also in January-October, MOEA approved 135 investment projects proposed by China-based enterprises with a total value of $134.27m. On the other hand, there were 276 approved projects of direct investment in China proposed by Taiwan-based companies or individuals with a total amount of $8.723bn, slipping 17.61% and rising 11.43% respectively on year. Taiwan's Ministry of Economic Affairs (MOEA) approved 3,118 foreign direct investment projects (except from China) with a total value of $3.689bn in January-October 2015, respectively increasing 6.34% and decreasing 6.77% on year.

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20-20: Ackermann looks to a new future

Thursday, 15 December 2011
20-20: Ackermann looks to a new future The internal structure of Deutsche Bank’s DNA “completely changed under chief executive Josef Ackermann,” says Konrad Becker, an analyst at private bank Merck Finck & Co. Ackermann not only extended the bank’s geographical reach and products but it also became much more client facing. He also introduced a more Anglo-American corporate governance framework with a clear hierarchy. This was revolutionary at the time. By Lynn Strongin Dodds.

The internal structure of Deutsche Bank’s DNA “completely changed under chief executive Josef Ackermann,” says Konrad Becker, an analyst at private bank Merck Finck & Co. Ackermann not only extended the bank’s geographical reach and products but it also became much more client facing. He also introduced a more Anglo-American corporate governance framework with a clear hierarchy. This was revolutionary at the time. By Lynn Strongin Dodds.

The past few weeks have tested Deutsche Bank’s chief executive officer (CEO) Josef Ackermann. He unexpectedly withdrew his candidacy to become chairman of the supervisory board and police raided the bank’s Frankfurt offices and legal department. While headline grabbing, these glitches are not expected to diminish his legacy of transforming the one-time commercial bank into a global banking powerhouse and steering it through the market tumult of the last five years.

Historically, German corporate law shunned the idea of an American-style chief executive and an Anglo Saxon board where executives take responsibility for their own business lines. The preferred model was a Vorstand, a statutory managing board that promoted collective responsibility. Ackermann struck a compromise, although at the time it was considered groundbreaking. He became CEO, shrank the Vortsand and created a 12-man group executive committee, which he chaired. The new structure gave the Vorstand a strategy-making role, while the group executive committee, on which Vorstand members also sit, run the bank’s day-to-day operations.

He also severed long-held industrial ties, raising $5.3bn in the process, including the sale of a €1.6bn stake in Munich Re. He eliminated 14,470 jobs (18% of the workforce) and cut costs by one-third by closing retail branches and outsourcing management of the bank’s computer systems and real estate, and built out the bank’s US business. The Bankers Trust $10bn acquisition in 1999 was key in this regard. Although the purchase was not done on his watch (Rolf Breuer was chairman at the time), it provided a launch pad for Ackermann’s global investment banking ambitions.

“In the middle of the last decade, UBS was very profitable and it was the bank that Deutsche measured itself against, but then the financial crisis happened,” says Becker.  Deutsche Bank weathered the storm but did not escape unscathed. Ackermann often claims that the bank did not need a government injection  of capital, but critics note that in fact the bank (along with others) received the equivalent of a back-door bailout from American taxpayers when the US government intervened to prevent the insurer American International Group from collapsing.

Moreover, the bank faces litigation in the US tied to residential mortgages and in Germany regarding the mis-selling of complex financial products to municipalities. Separately, Ackermann himself is also embroiled in legal wranglings involving a former client, the late Leo Kirsch, and in early November 2011 prosecutors raided the bank’s offices looking for evidence of attempts to mislead the court.

Overall though, Ackermann has won plaudits for the way he has navigated the bank through extremely choppy waters over the past three years. Not everyone has been as happy. “The market capitalisation has more than halved since Ackermann and this has left a bitter taste in shareholder’s mouths,” says Michael Rohr, an analyst at Sylvia Quandt Research GmbH in Frankfurt, with the caveat:  “This has more to do with market conditions. Ackermann has had a strategic vision to transition the bank into a more stable business and has done a very good job with its risk management.”

Recent strategy involves a retreat from the investment banking business which contributes roughly 70% of the group’s total pre-tax profit and a return to commercial banking, retail and private banking. Strategic acquisitions are also on the agenda, among them Deutsche Postbank and Sal Oppenheim, Germany’s largest private bank. The bank is now expected to divest its asset management division— except for its profitable DWS retail franchise in Europe and Asia. A sale could raise $4.5bn which would improve the bank’s capital position in light of impending regulation.

The strategy is widely regarded as being driven by CEO-in-waiting Anshu Jain who, together with Jürgen Fitschen, will run the bank starting next May. Even so, Ackermann was not supposed to take a back seat in 2012; but now it looks as if he will retire. He was likely caught out by German law, which holds that  a chief executive of a listed company may not become its chairman without a two-year cooling-off period, unless 25% of shareholders endorse the move. In a fickle move of fate, Ackermann may not have received the support he anticipated and was put in an untenable position. Paul Achleitner, currently chief financial officer of insurer Allianz, is now mooted as the next chairman.

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