International Business News

Financing costs to be borne by Spain grew strongly at an auction took place Thursday, a day also marked by the confirmation that the country fell into recession and an article by press reports of massive withdrawals of deposits from the fourth Spanish bank.

The Spanish Treasury had to agree to pay a return of around 5% and invest in bonds and three to four years, including an average yield of 5.106% for a security maturing in April 2016 against 3.374% in the last similar operation in March.

"This unfavorable trend seems well established. Ultimately, this increase in performance may lead to a form of intervention outside, "said Richard McGuire, an analyst at Rabobank rate

. Wednesday

, Spanish Prime Minister Mariano Rajoy said that the government may soon find it difficult to fund at acceptable levels …… On

… the secondary market, the yield on ten-year Spanish bonds is around 6.3%, far off the level of 7% who die gered the aid given to Greece, Ireland and Portugal. 

Madrid, however, can take advantage of a rare good news reached the end of the day: the agreement reached with Catalonia, a region that weighs up to 20% of gross domestic product ( GDP) Spanish, a reduction in public spending.

In addition to the current difficulties of the banks, debt regions is considered another major risk factor for Spain, some already see as the next victims of the crisis debt in the euro area.

Last week, the European Commission considered that this debt would be one of the regions of the reasons that would prevent Spain to meet its budget deficit target set for 2012, which is 5.3% of GDP. 

FALLING ACTION Bankia

Earlier in the day, the Spanish government had to disprove the existence of a movement of panic withdrawals from money deposited in the bank in difficulty Bankia, nationalized the week last, the title lost up to 30% following information along these lines.

"It is not true that there is now an exit monitoring Bankia chests," said Fernando Jimenez Latorre, Secretary of Economy, during a press conference. 

For its part, in a notice sent to the Spanish stock exchange authorities, Bankia emphasizes that movements of deposits recorded during the first half of May were seasonal, adding no substantial change in the balance of deposits was not expected in the coming days.

The title Bankia finally ended down 14.08% to 1.422 euro after falling to 1.171 euro in session. The index grouping the European banking stocks yielded 2.36% on its side.

Last week, Spain took control of Bankia, the fourth largest bank, hoping to reassure the markets and stabilize a weak financial sector made by the housing crisis.

In the wake of the nationalization, Madrid has imposed on its banks to increase their reserves to protect themselves from mounting losses on their toxic loans in real estate, while pledging to make a limited assistance to troubled institutions through loans at high rates. 

These measures, however, did not help to dispel investors' doubts about the ability of the Spanish government finally repair the financial system of the country, questions that have aggravated the back of concerns about ; the debt crisis of the euro area, heightened by the political stalemate in Greece.

According to El Mundo, Bankia clients withdrew a few days over one billion euros from their accounts. José Ignacio Goirigolzarri informed the Board of Directors met on Wednesday the funds are withdrawn, the newspaper said.

RECESSION THAT WILL EXTEND

The first quarter of 2012 resulted in a further economic contraction of 0.3%, which, after a decline of similar magnitude to the previous quarter, is officially back in Spain recession, which is technically defined as two consecutive quarters of falling GDP.

"The recession is advancing at a gradual pace, but if we take into account the latest surveys on activity, it seems that the economic contraction will continue into quarters come, "said Tullia Bucco, an economist at UniCredit. 

The Spanish manufacturing sector contracted at its fastest pace in almost three years in April, while the service industry fell for the tenth month of row, according to the purchasing managers' index.

The export sector, the only one that has progressed over the last two quarters, slowed from January to March, the main economic partners of Spain is also experiencing the recession or slowdown.

Although Spain was able to master its accounts, the country is at the forefront if ever Greece, currently in a political impasse, should leave the euro. 

"It's not totally Greece leaving the euro, which is the main issue is the domino effect," said John Bearman, Investment Officer at Thomas Miller Investment.

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The net private capital flight from Russia has already reached $ 43 billion in April. At this rate the figure of 80.5 billion recorded in 2011 could be beaten. Vladimir Putin.

The election of Vladimir Putin in March may have ended the political uncertainties but not the flight of private capital observed for two years in Russia. "Capital flight continued in April, to $ 8 billion, according to our preliminary estimates," said Monday the Deputy Economic Development Minister Andrei Klepach was quoted by RIA Novosti news agency. And the Russian official expects a continuation of mouvenment in May.

"Capital flight is much stronger than expected," added Mr. Klepach. In April, the Russian Central Bank (BCR) had indicated that net private capital flight from Russia had reached nearly $ 35.1 billion in first quarter 2012. In 2011, she had more than doubled compared to last year, to $ 80.5 billion, against $ 34.4 billion in 2010.

To explain this phenomenon, the leaders of the Russian Central Bank has repeatedly complained of the poor investment climate in Russia. The acceleration of this phenomenon is also due to the global financial crisis, making loans harder to obtain, put a stop to capital inflow in Russia, according to rating agency Standard and Poor's. The agency had also discussed the "political uncertainties" that weighed before the presidential election of March 4, won by the country's strongman, Vladimir Putin.

Toyota Motor, the leading Japanese automotive, said he expected to experience a substantial increase of its annual operating profit to more than 1,000 billion yen (9.7 billion euros), unprecedented since the outbreak of the financial crisis.

From January to March, Toyota has increased its quarterly profit more than fivefold to 238 billion yen, while analysts expected 223 billion yen.

This increase is partly explained by a gradual return of the group's production to previous levels to natural disasters that have disrupted last year.

Net income for the fourth quarter of fiscal offset has meanwhile risen to 121 billion yen against 25.4 billion last year. 

At a press conference, CFO Satoshi Ozawa has stressed "the extraordinary contribution of cost reduction efforts."

Akio Toyoda, grand-son of the founder of the group, has embarked on a strategy to reduce costs in all segments, Japanese production lines to those of Mississippi, through the design and engineering involved in the creation of new vehicles and equipment.

IMPROVING MARGINS

The aim is to boost margins Toyota and ride the wave of recovery in sales. The group said it expects to improve its margin to 4.5%, against 1.9% last year, allowing it to move closer to its goal of 5% that he wants to wait until 2015.

It is however far from the 7.1% margin posted by Nissan or Honda's 6.5%. It is even less than half to more than 10% of South Korea's Hyundai.

In fiscal 2012/2013 in progress, the group expected to increase its operating profit to 1.000 billion yen, while analysts expect 990 billion. Toyota also predicted a net profit increase to 760 billion yen against 284 billion for the year 2011-2012.

These comparisons are favored by the difficulties encountered last year during which Japan was hit by an earthquake and a tsunami before Thailand, where lies much of its production line, is in turn affected by floods.

Despite the strength of the yen, the main obstacle to its exports, Toyota is committed to build at least 3 million vehicles this year in its factories in Japan, nearly triple production of its local competitors, Honda and Nissan. 

Toyota has also said that its sales in emerging markets were in line with its projects, particularly in China, where sales from January to April will allow him to imagine a million sold annually vee ; vehicles.

Toyota announced in April a new program to reduce development costs by more than 20%, with an emphasis on sharing components.

Action Toyota ended unchanged Wednesday, before the publication of its accounts. She won more than a third since the low hit in late November by the Exchange.

Pierre Mariani, the Group CEO, denied Wednesday it had set conditions for his eventual departure of the head of the Franco-Belgian bank being de mantling, ensuring that no decision had been taken on his replacement.

Several Belgian newspapers reported that the Belgian government would like to replace Pierre Mariani by Karel De Boeck, former CEO of Fortis.

According to these newspapers, the current Group CEO would be willing to leave his position as number two in the bank if they receive a severance package of 1.2 million euros stipulated in its contract. 

"The Group CEO has made no request to the Belgian and French about the conditions of his eventual departure contrary to news reports published so far," re ; Pierre Mariani is in an email to Reuters.

"No decision on the replacement of the CEO and President (Jean-Luc Dehaene, Ed) Board has been taken to date" he continues.

Dexia Bank, already saved from bankruptcy in 2008 by Belgium, France and Luxembourg, was forced into last fall due to the dismantling of sovereign debt crisis. 

Luc Coene, the Governor of the Central Bank of Belgium (NBB) said Monday that the bank, which enjoys state guarantees for its refinancing needs, would probably need to be recapitalized again e.

The group has since seen its market capitalization crisis collapse. Currently, the bank is valued at about 350 million euros on the stock market with a share price at only 0.18 euros.

"CONFIDENCE TO PETER MARIANI"

Asked by Reuters, Michel Bouvard, president of the supervisory board of the Caisse des Depots (CDC), Dexia's largest shareholder with 17.7% stake, has in turn brought ; support for Pierre Mariani.

"Personally, I have every confidence in Pierre Mariani," said Michel Bouvard. "When you are in managing a complex issue, which is the case, it is better that he who began managing the file management ends until one goes to the next step. "

"I did not speak on matters of internal governance of Dexia," he nevertheless wished to emphasize.

Since the decision late last year to dismantle Dexia, the Belgian authorities have carried out the nationalization of retail banking activities in Belgium while the France has decided to return via the CDC and the Postal Bank, the activities of local government financing.

The European Commission must still approve the plan and set the price that Dexia will have to pay in exchange for 90 billion euros of state guarantees provided. 

Dexia posted a net loss of 11.6 billion euros in 2011 and some analysts said the bank could continue to generate losses in the coming years.

Although in sharp decline, the size of the stock of Dexia is considered by some analysts as a systemic failure to pay the bank would have incalculable consequences for the entire system European banking.

Deutsche Bank announced Thursday a decline in taxable profit in the first quarter, to 1.9 billion euros, due to exceptional charges and trading activity subdued.

A year earlier, taxable income was three billion. The Reuters poll gave it to 2.4 billion euros for the period under review.

The taxable profits of the corporate and securities division, usually the main generator of profits of the bank, declined to 1.7 billion euros against 2.3 billion a year earlier.

Small and medium businesses, entrepreneurs and self-family businesses, which account for most of the economic fabric of the country, paying a heavy price for the Greek crisis. The European Commission is trying to address the funding problems they suffer. In Greece, six out of ten SMEs have seen their incomes decline in 2011.

Up to a thousand individual companies will put the key under the door every week in Greece in the first half of 2012 due to the serious crisis that is sinking the country, said Friday the European Commission, which seeks to root the problem.  

"Greece is facing an economic crisis and social crisis which is reflected in the situation of small and medium enterprises: six out of ten companies have seen their incomes decline in 2011 and 150,000 jobs were lost," said the Commission in a press on the sidelines of the visit to Athens Friday the European Commissioner for Industry, Antonio Tajani. "It is estimated that during the first half of 2012, up to 1,000 small businesses have closed every week," said the statement, which does not provide estimates on the number of companies created in parallel.

The Commission therefore calls for increased aid to these companies, self-entrepreneurs and family businesses, which form the bulk of the Greek economic fabric. Since last September, the European Union through its Task Force for Greece including trying to find ways to overcome the credit crunch affecting SMEs, banks, deficit, cut off from markets and dependent on the ECB, having suspended loans. In March, a special guarantee fund, with 500 million euros, was created by the EU to promote through the European Investment Bank lending to SMEs up to a billion euros.

According to the Commission, in 2010, Greece had 742,600 very small businesses, employing a total of 2.512 million employees, over 85% of total employment in the country, a record level in the EU. These structures produce 35.3% of the value added of the country against 21.8% on average in the EU. With 14% of employees on average in Greece, against 33% in the rest of the EU, large companies they create 28% of the value added, highlighting the low productivity of small businesses in Greece, the Commission added.

The Tokyo Stock Exchange ended down 0.82% Thursday, erasing gains from yesterday in the wake of Wall Street, investors fearing the results of a major auction of Spanish debt provided in the Day.

The Nikkei lost 78.88 points to 9,588.38 points and the Topix broader, yielded 5.14 points (0.63%) to 814.13 points.

At the opening, investors reacted to the downturn on Wall Street by making clearances. But following the publication of figures in the trade balance of Japan, a weaker yen on the foreign exchange market helped limit losses.

The downturn in the Japanese currency has allowed exporters including Toyota and Nissan to earn 0.9% and 0.24%.

Japanese exports rose in March at an annual rate for the first time in six months, mainly due to inflows into the United States but the high price of its crude imports weighs on its trade balance, back into the red.

The European Banking Authority (EBA) would like to see banks of the Old Continent to restructure in order to raise funds directly in the markets without relying on cash-rate cut by the Bank Central Europe (ECB) and the regulator intends to propose measures to this effect at the end of its meetings Tuesday and Wednesday.

The debt crisis weighed heavily on the financing capacity of European banks, leaving them little choice but to resort massively in recent months to two injections of liquidity to three years ECB. Spanish and Italian banks will be among those who most borrowed during these operations.

"The ABE discusses possible policy measures that could accompany this process of deleveraging and restructuring to ensure it takes place in an orderly and measured, allowing banks to maintain a regular supply of credit to the real economy, "said Chairman of the EBA, Andrea Enria, in a dossier presented to finance ministers of the European Uni ; enemies last week.

European regulators want banks such as replacing their short-term financing through funding of longer maturities, to avoid having to call too often investors. 

Such a development would also help banks prepare for the scrutiny of their business models in a new series of stress tests ("stress tests") pre ; for next year.

The EBA also seek this week to ensure that banks with 31, according to its criteria, a total need of fresh capital of 115 billion euros take the necessary steps to fill the gap by the June 30

Andrea Enria estimated last week that the recapitalization plan was "on track" but that some banks were based on "overly optimistic assumptions" about how they plan to raise capital. 

SPANISH AND ITALIAN BANKS: CAUTION, FRAGILE

In the opinion of analysts, the Italian bank Monte dei Paschi, particularly should struggle to achieve by June 30, the goal of a capital ratio "hard" 9%.

The managing director of the bank, Fabrizio Viola, said last week that Montepaschi fill nearly a third of its capital requirements – which amount to € 3.3 billion – by converting hybrid securities into shares. Italian media reported Sunday also that the bank plans to cut heavily into its portfolio of sovereign debt and close 150 branches.

Some Italian banks like to see the EBA to backtrack on its requirements for emergency funds to the crisis, citing the easing of tensions on sovereign debt markets since the two operations rations refinancing three years of the ECB.

The Governor of the Bank of Italy, Ignazio Visco, told Saturday that ABE could relax its requirements for capital. But he said it was a medium-term and that the EBA should not take any decision on this matter at its next meeting.

Spanish banks are also in sight, many are afflicted by the bursting of the housing bubble and the deterioration of the economy.

In case some institutions could achieve their own funds by the June deadline, Andrea Enria proposed that the new emergency fund in the euro area, the mechanism Europé in stability (MES) can directly inject funds to troubled banks after its introduction in July.

At this stage, the MES is designed only to assist States. 

The EBA board will also consider progress made by banks in limiting bonuses was decided in January 2011.

The EBA report is expected after Easter.

The country has avoided bankruptcy thanks to an agreement signed Friday with the creditors.

Greece has avoided bankruptcy by obtaining an agreement Friday to its private creditors to participate in the biggest operation of debt reduction in history and a green light from its partners in the euro area to help pay her 130 billion euros.

This announcement sparked a wave of enthusiastic reactions within the euro area, stuck for over two years in the debt crisis.

Its new president, recently renewed, Herman Van Rompuy, said that "turning the crisis is reached." "We are heading for calmer seas," he said.

French President Nicolas Sarkozy has held that "the page of the financial crisis is beginning to turn" while German Finance Minister Wolfgang Schäuble has wanted more cautious. "We are not out of the woods, but we made a big important step," he told reporters.

Direct consequence: the International Monetary Fund announced it will participate in the new financing plan promised to Greece. After consulting the Member States of its board Friday, IMF Executive Director, Christine Lagarde, said the proposed amount was 28 billion euros to be paid over four years, more than 23 billion envisaged up 'here.

After nine months of tough negotiations, Athens Friday finally got the guarantee to erase at least 100 billion euros of debt to private.

The operation – the largest of its kind ever made – should help significantly reduce the national debt which is sinking into a deep recession, GDP fell by 7.5% yoy in the fourth quarter , according to official figures released Friday also.

In 2020, according to official projections, the Greek sovereign debt should represent more than 120.5% of GDP against over 160% today, a rate considered tolerable by the creditors, although it remains very high. 

Finally, Greece has secured the participation of creditors representing 95.7% of debt held by the private sector, which amounts to 206 billion euros of a total of over 350 billion.

To achieve such a result, the government had to resort to trigger clauses requiring recalcitrant creditors to go along with the offer.

This decision led Fitch to lower the rating of Greece and to place the country in "partial default" after the announcement of the results of the debt swap. Note the country should be raised once the deal is completed.

It also prompted the ISDA, the professional organization of insurance against credit risk (CDS, credit default swaps), to determine unanimously that it was a "credit event "and that investors could be repaid insured.

These assurances can be triggered when a borrower terminates the contract which governs the loan. ISDA has estimated that the use of "collective action clauses" designed to force the recalcitrant creditors, was that debt restructuring was not "voluntary".

Specifically, the exchange of securities to be held Monday for the obligations under Greek law. Security holders are not subject to Greek law have more time, until March 23, 0800 GMT, to make over 7 billion in bonds that are still missing the call.

The Motor Show of Geneva, which will open to the public Thursday, will be dominated by the alliance between PSA Peugeot Citroen and General Motors, the last wedding date in an industry where economies of cost and scale have become the top priority.

The question of how specific short-term reconciliation between the PSA and GM, while the strategic partnership announced Wednesday plans for 2016 the full effect of synergies and the first models of vehicles common, will be on everyone's mind at the first major European motor show of the year.

"This industrial agreement is very revealing of current changes in the automobile sector," said Flavien Neuvy, Director of the Cetelem automobile. "The manufacturers have no choice and they know they can not do everything together."

"However, to achieve such an alliance, it takes time, past experience has shown that the risk of failure is not zero," he adds. "But if it works, it is a promising project."

The last major events of the profession were all marked by the quest for synergy. The 2009 Frankfurt Motor Show had devoted the rapprochement between Fiat and Chrysler, Frankfurt 2011 was marked by the announcement of new cooperation between Renault-Nissan and Daimler. As for Geneva 2010, he remained famous for including the formalization of the collapse of talks between Mitsubishi and PSA, with which the French group was then trying to marry.

ALWAYS OFFER A VARIED DESPITE THE POOLING

In an industry marked by increased global competition, the carmaker can no longer rely only on their internal resources to develop new products both at reasonable cost and in die lais fast enough to track changes in consumer tastes and tougher safety and environmental standards.

But this sharing does not lead to a standardization provided cars because the objective is to share components and architectures invisible from the outside. 

"The Peugeot and Citroen have never shared many components and platforms industrially today, yet they have never had their own identity as distinct," observes Translation ; ois Roudier, spokesman for the Committee of French Automobile Manufacturers (CCFA).

Geneva will be, like any self-respecting lounge, a new ball with some highly anticipated world premieres such as the Renault Zoé, who spearheaded the bet electrical manufacturer.

On the stand Dacia brand Renault's low cost, we discover the minivan Lodgy including the launch of construction in Morocco has been surrounded by controversy on the theme of "Made in France ", a theme central to the presidential campaign. 

Side of the PSA, Citroen C4 unveil its compact 4×4 Aircross based on the Mitsubishi ASX, while Peugeot present the 208 through which the lion brand hopes to extend a success story started in this segment in the 1980s with the 205.

The competition will not be outdone. Another icon, the Volkswagen Golf, GTI will appear in his livery cab, and Audi, the German premium brand group, will present its new A3. Fiat's famous 500 curves take with the L variant, Italian replica of the BMW Mini Countryman.

Builders rely on these innovations to support expected sales down 3% to 4% this year in Europe, making the region one of the world where the automotive market will contract in 2012.

A motor show would not totally successful without some "supercars". Visitors can admire the 6 Series Coupe BMW Grand, the futuristic Nuccio signed by the famous coachbuilder Bertone or the most powerful Ferrari ever made, with the F12 Berlinetta not less than 729 horsepower.

After two press days, Tuesday and Wednesday, the Geneva Motor Show will open to the public from March 8 to 18.