Hedge funds are betting that commodities trader Glencore will succeed in its battle for miner Xstrata, in a long-running deal that has been profitable for arbitrageurs and is still attracting funds looking to make money.
Arbs, hungry for action after a lean period for M&A, have been buzzing around the deal for months, attracted by its size, liquidity and complexity, and many profited from last week’s move by Glencore(GLEN.L) to sweeten its now 23 billion pound all-share bid.
Reported by Laurence Fletcher and Sophie Sassard, Reuters, Xstrata (XTA.L) was expected to recommend the offer as early as next week, although Qatar Holding – its second-biggest investor after Glencore – has yet to make its decision public.
However, after a breakthrough in talks last week, brokered by former British prime minister Tony Blair, many funds believe it is only a matter of time before the deal gets the Qataris’ stamp of approval.
Posted in Breaking news, Derivatives, ECB, Economy, emerging market, European economy, Hedge Funds, Investment Banking
Tagged banks, Britain, Economy, England, engloand, Europe, financial markets, Glencore-Xstrata, Global Economy, Hedge Funds, investment, investment bank, investment portfolio, Modern Finance Report, tony blair, UK, united kingdom
As the mystery of LIBOR begin to unmask, it aroused more and more attention from the public. Expert from the Economist.com gives a detailed report today on this specific topic.
THE most memorable incidents in earth-changing events are sometimes the most banal. In the rapidly spreading scandal of LIBOR (the London inter-bank offered rate) it is the very everydayness with which bank traders set about manipulating the most important figure in finance. They joked, or offered small favours. “Coffees will be coming your way,” promised one trader in exchange for a fiddled number. “Dude. I owe you big time!… I’m opening a bottle of Bollinger,” wrote another. One trader posted diary notes to himself so that he wouldn’t forget to fiddle the numbers the next week. “Ask for High 6M Fix,” he entered in his calendar, as he might have put “Buy milk”.
What may still seem to many to be a parochial affair involving Barclays, a 300-year-old British bank, rigging an obscure number, is beginning to assume global significance. The number that the traders were toying with determines the prices that people and corporations around the world pay for loans or receive for their savings. It is used as a benchmark to set payments on about $800 trillion-worth of financial instruments, ranging from complex interest-rate derivatives to simple mortgages. The number determines the global flow of billions of dollars each year. Yet it turns out to have been flawed.
Posted in Breaking news, Commodities, Economy, Equity Markets, European economy, Events, Financial Crisis, Hedge Funds, Investment Banking, Libor scandal, Private Equity, Subprime mortgages, Uncategorized, Value Investing, Venture Capital
Tagged asset, bank, Barclays, Bob Dimond, Bollinger, British Bank, Compensation, debt, Disaster, economic, England, Equity management, finance, Financial engineering, Financial instruments, Fraud, Global recession, LIBOR, Money, Mortgage, Rent, Savings, scandal.