By Tim Worstall, Contributor This decision strikes me as quite alarming in its potential longer term effects. The Italian government, in the form of prosecutors, has just confiscated €1.8 billion ($2.4 billion, ish) of money from Nomura’s Italian subsidiary. If you wanted to make Europan banking even more precarious than it already is this would be a good thing to do: otherwise, not so much. MILAN—Italian financial police have seized €1.8 billion ($2.35 billion) from Banca Nomura International PLC, a unit of Nomura Holdings Inc., 8604.TO -0.90% as part of an investigation into Banca Monte dei Paschi di Siena SpA, BMPS.MI +1.57% prosecutors from the town of Siena said Tuesday. The background to this is slightly complicated so bear with me. Monte Del Paschi entered into a series of at least three derivatives contracts. One, with Nomura, was called “Alexandria”. Another was with Deutsche Bank and another with a bank as yet unknown. These contracts then suffered large losses: oh dear, well, that sometimes happens.
Tag Archives: Deutsche Bank
Italy seizes 1.8BN euro from Nomura in MPS probe
Italian authorities have seized 1.8 billion euro ($2.35 billion) from Japan’s Nomura bank and placed its former European CEO under investigation as part of its probe into the trading scandal at Monte Paschi di Siena bank.
Siena prosecutors said Tuesday Nomura‘s retired Europe chief, Sadeq Sayeed, and Raffaele Ricci, a managing director for fixed income sales, were accused of obstructing regulatory authorities. Nomura declined comment.
Monte Paschi, the world’s oldest bank, has been embroiled in a derivatives scandal that has cost it some 730 million euros and forced it to request an increase in state aid to keep afloat.
The bank has said it would sue former chairman Giuseppe Mussari and former general manager Antonio Vigni, along with Nomura and Deutsche Bank, over the two costliest trades in the scandal.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/tXhHmBs9ikg/
Be Civilized and Don't Buy Gold in 2013
By Doug Ehrman, The Motley Fool
Filed under: Investing
When Warren Buffett speaks, the investment world tends to listen, and for good reason. Likewise, when Buffett’s second in command, Berkshire Hathaway Vice Chairman Charlie Munger, expresses an opinion, you should take note. Nearly a year ago, Munger told CNBC that he thinks that “civilized people don’t buy gold,” instead preferring a collection of well-run business, much like those in Berkshire’s portfolio. While his advice was sound a year ago, it truly resonates this year as analysts across the street slash price expectations and, in some cases, recommend being short gold. Given the turmoil and increasingly negative outlook settling over the gold market, 2013 may be a good year to sit out in pursuit of more prim and proper pursuits.
What Munger advocates
Rather than focus such plebian investment vehicles as gold, or even the gold ETF — the SPDR Gold Trust — Munger talks up Berkshire’s holdings:
We just have a wonderful portfolio in business, if you average them out. By and large they’re doing productive, useful work. It’s not outsmarting the computer systems in the trading markets.
Even though the comment is self-serving, and arguably stale, it highlights an important concept when thinking about the gold market, namely that gold doesn’t really do anything. Unlike silver, which has a myriad of industrial uses, as do Molycorp‘s rare earths, gold is mostly coveted as a safe-haven investment or inflation hedge.
“I think civilized people don’t buy gold,” Munger said; “they invest in productive businesses.” Where the rare earth materials produced by Molycorp and others are used in health care, technology, water treatment, and defense applications, gold is used for very little beyond jewelry. He may not have had other materials companies in mind, but this distinction for gold is an important one and should not be lost.
The analysts are circling
Both Goldman Sachs and Deutsche Bank recently cut their respective outlooks for gold for the rest of 2013 and beyond. Deutsche focused on the strength of the U.S. dollar, the shift into stocks, and its view on improving U.S. growth as all being negative for gold over the medium and longer terms. It trimmed its 2013 outlook by nearly 12% and, while it dropped its 2014 projection by 4.7%, it still sees gold climbing to $1,810 next year.
Goldman’s view is much grimmer, leading the investment bank to recommend that clients go short gold ahead of continued weakness. In its second cut of the year, Goldman dropped its 2013 price target to $1,545 and its 2014 target to $1,350, well below the estimate of many peers. Some of the reasons cited include the muted response gold prices have had to economic weakness and the potential for accelerated selling pressure as speculative investments are wound down.
Ultimately, I believe reality lies somewhere in between the views of the two investment houses, with the real possibility that another debt hiccup in Europe could serve as a catalyst to redraw the
From: http://www.dailyfinance.com/2013/04/13/be-civilized-and-dont-buy-gold-in/
Fifth Street Finance Floats New Stock Issue
By Eric Volkman, The Motley Fool
Filed under: Investing
Fifth Street Finance is about to expand its capital base. The company has launched a fresh issue of 13.5 million shares of its common stock in an underwritten public offering. It also intends to grant its underwriters a purchase option for an additional 2.025 million shares.
Fifth Street said it plans to use the proceeds of the issue to retire debt drawn from its credit facilities and, through reborrowing under those facilities, to make investments in small and mid-sized businesses.
The lead book-running managers for the issue are Morgan Stanley, Barclays, Goldman Sachs, and the Securities units of Wells Fargo and Deutsche Bank.
The article Fifth Street Finance Floats New Stock Issue originally appeared on Fool.com.
Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs and Wells Fargo and owns shares of Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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Resource Capital Floats New Stock Issue
By Eric Volkman, The Motley Fool
Filed under: Investing
Resource Capital has begun a 16.25 million-share common stock issue in an underwritten public flotation. Additionally, it intends to grant those underwriters a 30-day purchase option for up to an additional 2.44 million shares.
In the press release announcing the move, the REIT said it plans to use the proceeds of the issue for “general corporate purposes.” It did not elaborate on what those might be.
It also did not specify a price or range for the issue. Resource Capital‘s most recent closing stock price was $6.53.
The two joint book-running managers for the offering are Deutsche Bank‘s Securities unit, and JPMorgan Chase‘s near-namesake investment banking subsidiary J.P. Morgan.
The article Resource Capital Floats New Stock Issue originally appeared on Fool.com.
Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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Starwood to Float New Stock Issue
By Eric Volkman, The Motley Fool
Filed under: Investing
Starwood Property Trust will release 26.5 million shares of common stock in an underwritten public flotation. In addition, the company’s underwriters will be granted a 30-day purchase option for an additional 3.975 shares of the REIT.
The company didn’t specify the pricing of the new issue, nor did it say when the shares would be floated.
Starwood said it plans to use the proceeds of the issue to “originate and purchase additional commercial mortgage loans and other target assets and investments.” It added that it might use a portion of the monies to fund some of the purchase price of recent acquisition LNR Property.
The joint book-running managers for the offering are the Securities units of Wells Fargo, Credit Suisse, and Deutsche Bank.
The article Starwood to Float New Stock Issue originally appeared on Fool.com.
Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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Deutsche Bank: 'Global Central Banks Are Flying Blind' (And Other Quotes Of The Week)
What arguably were the two biggest market stories of the week were inextricably linked. …read more
Source: FULL ARTICLE at Forbes Latest
Offshore Tax Haven Report Will ‘Increase Pressure:’ German Finance Minister
By The Huffington Post News Editors
By Stephen Brown
BERLIN, April 5 (Reuters) – German Finance Minister Wolfgang Schaeuble said on Friday he was glad the identities of thousands of holders of bank accounts in tax havens had been leaked because it would help do away with a business model that Cyprus had shown was flawed.
“I’m glad about this report, which will increase the pressure,” he said, referring to a report by the Washington-based International Consortium of Investigative Journalists (ICIJ) in cooperation with some international media.
The investigation, titled “Secrecy for Sale”, details what it calls “complex offshore structures” used by wealthy people from all over the world, including government officials and their families. The German media says these include hundreds of Germans.
It has received major media coverage in Germany and France, where President Francois Hollande‘s former campaign treasurer was reported to have had joint ownership of two firms registered in the Cayman Islands, a Caribbean tax haven.
The ICIJ report said international banks have “aggressively worked” to help wealthy clients use offshore banking facilities in tax havens like the British Virgin Islands. This prompted a response from Germany‘s biggest bank, Deutsche Bank, defending the legality of its wealth management services.
Schaeuble told German radio it remained to be seen how much of the activity revealed by the ICIJ was actually illegal, “but much of it is at least a grey area”.
Berlin has taken a leading role in getting international bodies like the G20 and Organisation for Economic Cooperation and Development (OECD) to define clearly which countries were acting as tax havens and then ensure that “legal consequences are brought to bear”, he said.
The minister cited the example of euro zone member Cyprus, which was forced by its partners, led by Germany, to impose significant losses on depositors in its big banks in exchange for a 10 billion euro EU bailout.
The island nation has attracted large deposits from wealthy foreigners, particularly Russians, with low taxes and loose regulations. …read more
Source: FULL ARTICLE at Huffington Post
This Subprime Bubble Is Getting Ready to Burst
By Amanda Alix, The Motley Fool
Filed under: Investing
There’s another subprime loan problem brewing, but this time, home mortgages aren’t the main ingredient in the securities being created, sliced, rated, and sold to hungry investors.
Subprime auto loans are making a comeback, as are the asset-backed securities that include these and other risky loans. Investors are snapping up these products, and a recent article on the subject strongly suggests that the Federal Reserve is to blame for the whole thing.
This bubble has been expanding at a rapid pace
ABSes have seen a resurgence in popularity over the past year, after falling out of favor shortly after the financial crisis hit. These investment products — which are made up of debt such as student loans, credit card balances, and auto loans — have become more attractive as stingy yields have become the norm.
A rejuvenated market for new cars and trucks has revved subprime auto loan production, and Equifax noted in its January report that auto loan balances have risen to a two-year high. By September of 2012, ABSes backed by subprime auto loans totaled more than $14 billion, more than the $12.7 billion issued during the whole of the previous year. For 2013, almost $4 billion has already been sold to yield-starved investors.
Shotguns as downpayments
The Reuters article referenced above is truly spooky, as it tells a tale of one individual with a shaky credit history purchasing a used truck with a shotgun as the primary down payment. One of the most active lenders in this space is Exeter Finance, a subprime lender with big backers such as Goldman Sachs , Wells Fargo , Citigroup, and Deutsche Bank.
How is the Fed to blame for this scenario, you ask? According to the author of the Reuters article, Federal Reserve policies designed to jump-start the economy have caused investment yields to plummet, turning everyday investors into ravenous risk-takers willing to go to any lengths to make a buck. While QE3 and other programs have certainly made some investments less attractive, I think it is a great exaggeration to lay the gearing up of risky investment behavior entirely at the Fed’s doorstep.
Banks may have helped the subprime auto loan market speed up. Early last year, Bank of America and Wells Fargo were among the big banks that began loosening credit restrictions for these borrowers, although these two banks primarily financed prime and near-prime auto loans.
A crisis in the making?
The author of the Reuters article notes that a bursting of the subprime auto bubble would not affect the economy in the same way as the mortgage meltdown did, but concerns remain. Even a Goldman Sachs representative expressed worry over this market at the annual American Securitization Forum this past January.
For investors, at least, this type of investment can be dicey. While ABSes backed by prime auto loans have been stable, those containing subprime loans showed annualized losses of 6.72% at the end of 2012.
Even with an industry expectation of a 25% default …read more
Source: FULL ARTICLE at DailyFinance
Should I Buy Wolseley?
By Harvey Jones, The Motley Fool
Filed under: Investing
LONDON — I’m shopping for shares again, and I’m anxious to get to the checkout. Should I pop Wolseley into my basket?
An ill wind
Cold winds from Europe continue to send shivers through the FTSE 100, with plumbing merchant Wolseley the latest to catch a nasty chill. Presenting the company’s half-yearly results to the end of January 2013, chief executive Ian Meakins blamed its disappointing figures on “substantial headwinds in Europe“. There was better news in its main market, the U.S., so should I buy Wolseley?
Meakins was reporting a drop in group pre-tax profitability of 20.4% to £199 million, which included £63 million of restructuring charges in its French business, where revenues fell 10.4%. Revenues also slipped more than 6% in the Nordic region, as the construction malaise spread across the continent. Europe strikes again! And once again, the U.S. remains a global bright spot. It contributes 51% of Wolseley’s revenues, and like-for-like sales rose a healthy 8.3%. Canada grew 2.3%. The U.K. was broadly flat. Overall, reported group revenue fell 8.25% to £6.276 billion. These are tough times, even for good businesses.
U.S. and them
Management was keen to highlight its strong U.S. performance, where it enjoyed market share gains and productivity improvements. It completed four bolt-on acquisitions for £120 million in the U.S. and U.K., bringing in aggregate annual revenue of £245 million. Wolseley is streamlining its French operation, allowing to focus on markets where there are healthier profits to be made. Meakins was sufficiently confident to announce a 10% hike in the dividend, but said third-quarter trading would bring more of the same, with gains in the U.S., slippage in Europe. Cost-cutting has helped maintain margins.
Unsurprisingly, the Wolseley share price took a knock on the news. But this follows a strong run, up 30% over the past 12 months, against 8% for the FTSE 100 as a whole. Broker views are mixed. Deutsche Bank has lifted its target price from £31.97 to £34, and stands by its buy recommendation. Jefferies upped its target price by 40 pence to £25.40, some way short of the current market price of £32.09. These discrepancies are hardly surprising. Wolseley is a world leader in plumbing and heating products, but the world is going through a rough patch.
WOS (not WOS)
Forecast earnings-per-share growth of 9% to July 2013 and a robust 20% over the next 12 months look promising to me. I’d be happy to take a position in this stock, and hang on for the recovery, which I’m sure will come, as management appears to have a clear strategy. But two things hold me back. First, its lowly 1.9% yield, covered 2.8 times, although management does have a progressive dividend policy. My second worry is the valuation. Trading at a pricey 19 times earnings, investors are vulnerable to further cold winds from the continent.
Motley Fool share analysts reckon there are better growth opportunities out there. They have found what …read more
Source: FULL ARTICLE at DailyFinance
Bank of America Reaches Important Legal Settlement
By John Maxfield, The Motley Fool
Filed under: Investing
Shares of the nation’s second largest bank by assets, Bank of America , are trading higher today after the lending giant came to an agreement with the federal regulator of credit unions. Under the terms of the deal, Bank of America will pay $165 million to settle allegations that it “downplayed risks of poor-quality mortgages packaged into securities” that were then sold to credit unions around the country.
According to prepared remarks issued this morning by the National Credit Union Administration, “As a result of the Bank of America settlement, NCUA has now successfully recovered more than a third of a billion dollars on behalf of credit unions. These settlements and our ongoing lawsuits further NCUA‘s goal of minimizing the losses of the corporate crisis and cutting future costs to credit unions.”
As the remarks intimate, Bank of America joins a growing list of institutions that have come to terms with the NCUA. In November of 2011, Deutsche Bank and Citigroup agreed to pay a combined and eerily similar $165.5 million to settle analogous claims — for the NCUA press releases see here and here, respectively (links may open PDFs). And in March of last year, London-based HSBC did the same. In addition, as The Wall Street Journal noted, the NCUA still has outstanding suits against JPMorgan Chase and Goldman Sachs , among others.
For Bank of America specifically, this marks a small but important victory on its journey to put past transgressions behind it — primarily those of Countrywide Financial, which the bank acquired at the beginning of 2008. As I discussed at length in this series on Bank of America’s legal liabilities, while it’s already paid out tens of billions of dollars to atone for Countrywide’s sins, considerable obstacles remain ahead.
That aside, this agreement helps to clear up yet another unknown liability that’s been holding down shares of the bank. At the beginning of this year, Bank of America acknowledged that it had come to a preliminarily agreement on the settlement amount with the NCUA. But beyond the fact that the amount wasn’t disclosed at the time, it was also “subject to the negotiation and execution of mutually agreeable settlement documentation and approval by the NCUA board.” Suffice it to say, the news today puts any questions to rest.
Expert advice on whether to buy or sell Bank of America’s stock
Bank of America’s stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it’s critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool’s premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank’s operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.
LIBOR Ruling Good for Investors, Bad for Customers
By Molly McCluskey, The Motley Fool
Filed under: Investing
For those Fools who hoped the LIBOR manipulation scandal might finally confront the sins of big banking, a judgment Friday brought a swift disappointment. A judge ruled that the collusion of 20 banks to rig the worldwide interest rate did not violate U.S. antitrust laws. In doing so, she effectively ended a majority of the private lawsuits brought against the 16 banks involved in the scandal.
As I wrote in January, regulation and fines would have little impact on the banks involved in the rate manipulation. Deutsche Bank was found to have made at least $654 million profit in 2008 due to a rate change. It puts the fines of the other banks in perspective: Barclays‘ $467 million fine, UBS‘s $1.5 billion and Royal Bank of Scotland‘s $612 million.
Any impetus for change would have been led by private lawsuits, and several were filed over the past year. Lawsuits in California, New York and Illinois all alleged significant financial damages as a result of the rate manipulation. Pensions for teachers and government employees, returns for individual investors, and even mortgage rates for homeowners were all affected by the rate manipulation, claimed the lawsuits. The City of Baltimore, as lead plaintiff, claimed the rate manipulation had cost the city millions of dollars, and that the collusion was a clear violation of antitrust laws.
Early in March, JPMorgan Chase , Bank of America , and several other banks involved in antitrust lawsuits claimed the rate wasn’t competitive, and therefore couldn’t violate antitrust laws. The judge agreed.
One bright spot in the scandal: U.K. politicians have called for an improvement of the culture and professional standards in the banking industry, and fines from the banks involved in LIBOR have gone to helping military veterans with combat stress and mental illness.
What does this mean for investors? As I wrote in December, the promise of change to a banking system fraught with financial disasters was encouraging, but actual change would be astounding. The dismissal of the lawsuits proves that change won’t come. While banks may stop manipulating LIBOR, the lack of significant prosecution and/or fines proves once again that such chicanery will continue in one form or another. The only question is, what form will it take next?
Bank of America is one of the 16 banks facing LIBOR charges. The Motley Fool has taken a hard look at the challenges facing the large bank and prepared a special report. Download it today; it’s free for Fools.
The article LIBOR Ruling Good for Investors, Bad for Customers originally appeared on Fool.com.
Molly McCluskey owns shares of the Royal Bank of Scotland. Follow her on Twitter @MollyEMcCluskey. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a …read more
Source: FULL ARTICLE at DailyFinance
RAIT Financial Trust Floats New Stock Issue
By Eric Volkman, The Motley Fool
Filed under: Investing
RAIT Financial Trust has floated 7 million shares in an underwritten public issue. The REIT also expects to grant the underwriters a 30-day purchase option for an additional 1.05 million shares.
In the press release announcing the move, RAIT Financial Trust didn’t specify the pricing of the offering.
The company said it plans to use its proceeds to “make investments relating to its business and for general corporate purposes.” It did not further elaborate.
Deutsche Bank‘s Securities unit and Barclays are the joint book-running managers of the issue.
The article RAIT Financial Trust Floats New Stock Issue originally appeared on Fool.com.
Fool contributor Eric Volkman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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Deutsche Bank Appointed as Successor Depositary Bank for the Level I American Depositary Receipt Pro
By Business Wirevia The Motley Fool
Filed under: Investing
Deutsche Bank Appointed as Successor Depositary Bank for the Level I American Depositary Receipt Program of Petroleum Geo-Services ASA
NEW YORK & OSLO, Norway–(BUSINESS WIRE)– Deutsche Bank today announced its appointment as the successor depositary bank for the Level I American Depositary Receipt (ADR) program of Petroleum Geo-Services ASA (PGS).
PGS is a focused marine geophysical company providing a broad range of seismic and reservoir services, including acquisition, processing, interpretation, and field evaluation. The Company’s MultiClient data library is among the largest in the seismic industry, with modern 3D coverage in all significant offshore hydrocarbon provinces of the world. PGS operates on a worldwide basis with headquarters at Lysaker (Oslo) Norway, and with other regional centers in London, Houston and Singapore. The PGS share is listed on the Oslo stock exchange (OSE: PGS).*
Edwin Reyes, Head of Depositary Receipts at Deutsche Bank, said, “We welcome PGS to our depositary receipts platform. This notable mandate demonstrates Deutsche Bank‘s commitment to Norway and we are pleased to utilize our broad range of customized services to assist PGS in enhancing the visibility of its ADR program with the investor community.”
*Source: Petroleum Geo-Services ASA (March 2013)
About Deutsche Bank Trust & Securities Services
Deutsche Bank‘s Trust & Securities Services business, part of Global Transaction Banking, is one of the leading providers of trustee, agent, depositary, registrar, SPV management and related services for a wide range of financial structures and transactions. It is a leading depositary for American and Global Depositary Receipts, providing value-added services to companies raising capital in international markets or listing on the New York, NASDAQ, London, Luxembourg, Singapore or NASDAQ Dubai stock exchanges by means of depositary receipts. It also offers both mutual and alternative fund administration and provides securities custody, clearing and agency lending services from a global network spanning more than 30 markets. Additional details are available on www.adr.db.com or www.tss.db.com.
This announcement appears as a matter of record only. This announcement has been approved and/or communicated by Deutsche Bank AG New York.
American Depositary Receipts have been registered pursuant to the US Securities Act of 1933 (the “Act”). The investment or investment service which is the subject of this notice is not available to retail clients as defined by the UK Financial Services Authority. This notice has been approved and/or communicated by Deutsche Bank AG London. The services described in this notice are provided by Deutsche Bank Trust Company Americas (Deutsche …read more
Source: FULL ARTICLE at DailyFinance
Leap Wireless Tenders for Its Convertible Notes
By Eric Volkman, The Motley Fool
Filed under: Investing
Leap Wireless has launched an offer for its convertible notes maturing next year. The company is offering $1,005 in cash for each $1,000 in principal value of the notes, plus accrued and unpaid interest. The offer is subject to certain conditions, including one that specifies company unit Cricket Communications “shall have consummated the borrowing of term loans under its delayed-draw incremental term loan facility.”
This offer expires at midnight, Eastern time, on April 22.
All told, the issue has an aggregate principal amount of $250 million. The notes carry an interest rate of 4.50%. Leap’s tender offer covers the entire issue.
Deutsche Bank‘s eponymous Securities unit is the dealer manager in the tender.
The article Leap Wireless Tenders for Its Convertible Notes originally appeared on Fool.com.
Fool contributor Eric Volkman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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Is Joe Fresh Already Going Stale for J.C. Penney?
By Adam Levine-Weinberg, The Motley Fool
Filed under: Investing
On March 15, J.C. Penney opened its highly anticipated Joe Fresh shops in nearly 700 stores. J.C. Penney executives hope that Joe Fresh, a popular Canadian apparel brand, will bring new customers into their stores. Retail analysts suggested that the launch was fairly successful in terms of customer interest and traffic. However, based on my own store checks, traffic appears to have dropped off quickly. There is little reason to believe that the Joe Fresh brand will help turn around J.C. Penney’s awful sales performance anytime soon.
First-weekend success
Joe Fresh is one of the most important components of J.C. Penney’s new “shops” strategy, so Penney heavily promoted the brand’s launch. The new line went on sale online last month, and was featured heavily in J.C. Penney’s commercials during the Oscars. It quickly became the top brand on Penney’s website, with seven times more visitors than Liz Claiborne, the No. 2 brand. Moreover, most of the customers buying Joe Fresh merchandise in the first few days after the online launch had not previously shopped through J.C. Penney’s website.
J.C. Penney hoped to generate a similarly impressive first-weekend performance in stores, and offered a coupon for $10 off a $50 purchase to drive traffic to its stores. Deutsche Bank analyst Paul Trussell stated that this coupon offer led to a solid opening weekend for Joe Fresh, with sales increasing over the course of the weekend. Trussell believes that the launch was stronger in markets like New York and California, rather than J.C. Penney’s traditional bastion in middle America.
Analysts at Oppenheimer visited several stores in New York and New Jersey over the weekend, and were also generally upbeat about the new Joe Fresh shops. “Traffic is difficult to measure, but customers do seem to be reacting positively to the Joe Fresh launch,” they wrote. The analysts also opined that the price range for the Joe Fresh collection (most items are less than $40) would appeal to the core J.C. Penney customer.
Follow-through?
While retail analysts seem relatively pleased with Joe Fresh‘s opening weekend, this may be the result of low expectations stemming from J.C. Penney’s extremely weak performance in the past year. I visited three J.C. Penney stores (also in New York and New Jersey) on Tuesday in order to gauge traffic and interest in the Joe Fresh shops. I also visited Macy’s stores in the same malls to create a baseline for comparison, since Tuesday would typically be a light traffic day. In each mall I visited, Macy’s was noticeably busier than J.C. Penney: in two of the three cases, dramatically so. Whereas a few sections of each J.C. Penney might be busy, with the rest of the store feeling deserted, the Macy’s stores had strong traffic throughout (for a Tuesday).
Joe Fresh was not a strong performer in terms of traffic or customer interest in the three J.C. Penney stores I visited. …read more
Source: FULL ARTICLE at DailyFinance
Arbor Realty Trust Prices Share Issue
By Eric Volkman, The Motley Fool
Filed under: Investing
Arbor Realty Trust has priced its upcoming stock issue. The company will sell the 5.625 million common shares it’s floating at $8.00 apiece in the form of common stock in an underwritten public flotation. Additionally, the company’s underwriters have been granted a 30-day purchase option for an additional 843,750 shares.
Arbor said it plans to use the proceeds of the offering for “investments, to repurchase or pay liabilities and for general corporate purposes.”
Deutsche Bank‘s eponymous Securities unit is the sole book-running manager for the issue, while JMP Securities is its lead manager.
The article Arbor Realty Trust Prices Share Issue originally appeared on Fool.com.
Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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Deutsche Bank takes $0.8 billion lawsuits charge
Deutsche Bank has cut its 2012 profit figure because of new charges for possible costs from mortgage-related lawsuits in the U.S.
The bank said Tuesday it would increase the amount set aside to pay such costs by €0.6 billion ($0.8 billion) to €2.4 billion.
The charge reduced annual net profit to €291 million from €665 million. That’s an even steeper plunge from €4.3 billion in 2011.
The bank said the information about the lawsuits had become available after it published unaudited, preliminary figures on Jan. 31. Accounting rules require the bank to disclose new information afterward if it significantly affects the previous numbers.
The bank said its dividend would remain unchanged at €0.75 per share.
U.S. Bank to Acquire the U.S. Municipal Bond Trustee Business from Deutsche Bank
By Business Wirevia The Motley Fool
Filed under: Investing
U.S. Bank to Acquire the U.S. Municipal Bond Trustee Business from Deutsche Bank
MINNEAPOLIS–(BUSINESS WIRE)– U.S. Bancorp (NYS: USB) announced today that its lead bank, U.S. Bank National Association, has entered into a definitive agreement to purchase the municipal bond trustee business of Deutsche Bank.
Expected to close in the third quarter of 2013, the transaction will add approximately $57 billion to the more than $3 trillion in assets currently under administration within U.S. Bank’s corporate trust division. U.S. Bank has approximately 125,000 trust and agency contracts. The Deutsche Bank transaction will add another 1,100 contracts. Terms of the agreement are not being disclosed.
“This transaction complements the existing U.S. Bank municipal bond trustee business and will further strengthen our position as the #1 provider of municipal trustee and agency services in the nation,” states Bryan Calder, president, U.S. Bank Global Corporate Trust Services. “This acquisition is consistent with U.S. Bank’s ongoing commitment to continued strategic business investments and its commitment to corporate trust services.”
This transaction will build upon key U.S. municipalities and regions of U.S. Bank’s global corporate trust business including California, Mississippi, New York, Tennessee and Texas.
“The U.S. Bank team will work closely with Deutsche Bank to ensure a seamless transition and is committed to providing our new customers with the same high level of quality services our current U.S. Bank corporate trust customers have come to expect,” states Terry McRoberts, executive vice president, U.S. Bank Global Corporate Trust Services.
Satvinder Singh, Deutsche Bank Head of Trust & Securities Services and Cash Management for Financial Institutions said, “Our main goal with this transaction was to find a partner that will continue to deliver the highest quality services to our municipal trust clients, enabling us to sharpen our focus on our existing award winning global trust business. We feel we have achieved our objective with our partner, U.S. Bank, with whom Deutsche Bank has an excellent existing working relationship.”
About U.S. Bank Global Corporate Trust Services
U.S. Bank Global Corporate Trust Services is one of the premier providers of corporate trust services in the nation, serving private and public companies, government and tax-exempt entities, and financial services companies. The group operates a network of 48 domestic offices and three international locations in …read more
Source: FULL ARTICLE at DailyFinance
3 Ways an Expanded ETF Deal Affects Investors Today
By Nicole Seghetti, The Motley Fool
Filed under: Investing
The multitrillion-dollar exchange-traded fund (ETF) market has brokerage firms fighting tooth and nail for your business. Just last week, Fidelity and BlackRock expanded their partnership, which will provide even more ETF offerings. Let’s briefly review the deal and then look at what it means for investors.
Partnership details
The deal effectively extends a three-year-old contact between Fidelity and BlackRock that was due to expire. The partnership will give Fidelity customers increased and broader access to BlackRock’s passively managed and extremely popular iShares ETFs.
Known for its active management prowess, Fidelity has faced criticism for not diving into the passive ETF market. But being a huge financial services provider with access to millions of individuals and institutions puts Fidelity in an advantageous position. According to BlackRock, the company sees this expanded deal as creating an “ETF manufacturing and distribution powerhouse.” It also seals the likelihood of a long-term strategic alliance with broader implications for the active ETF, retirement, and managed accounts markets in the future. But let’s not get ahead of ourselves.
So what does the deal mean for ETF investors today?
1. More choices
Fidelity’s fund extension announcement comes nearly one month after Charles Schwab unveiled its new ETF OneSource program, which offers 105 commission-free ETFs. Fidelity will more than double its current lineup of commission-free ETFs, offering 65 funds including all 10 iShares Core ETFs.
But Fidelity’s expanded offerings are still fewer in number than most competitors’. TD Ameritrade and E*TRADE Financial each present more than 100 and 80 commission-free ETFs, respectively. Researched and hand-selected by Morningstar, most of TD Ameritrade’s offerings are iShares, Vanguard, or State Street‘s SPDR ETFs. Meanwhile, most of E*TRADE’s lineup is managed by Deutsche Bank and Wisdom Tree.
Even though Fidelity offers fewer ETFs in its program versus its rivals, iShares still dominate the market. According to The Wall Street Journal’s MarketWatch, the 65 iShares ETFs in Fidelity’s program hold an impressive 18% of all assets in ETFs. By comparison, Schwab’s OneSource ETFs hold less than 4% of all ETF assets.
Without a doubt, an increased number of ETF choices give investors more opportunities and latitude when crafting their portfolios. But extra choices come at a cost. When we’re faced with an abundance of options, we sometimes have a tendency to feel overwhelmed, which can lead to indecision.
2. Lower costs
The $2 trillion ETF market has grown leaps and bounds during its 20-year tenure. And as the market has grown, competition has heated up, driving fees down for investors. Because ETFs are based on indexes, that really cuts down on their cost structure. Studies have shown that minor improvements in fees can pay off substantially, leaving you more money in your account. So getting your hands on a high-quality, low cost ETF is really beneficial to helping you meet your financial goals.
Vying for a bigger slice of the ETF market, brokers are both revisiting the underlying index they track and …read more
Source: FULL ARTICLE at DailyFinance