Each week QFINANCE will endeavor to bring you some of the biggest news stories from the past five days in finance and business, as well as some of the most fascinating websites and links that have crossed our path. We hope you'll enjoy reading, we hope you'll have a great weekend and we hope that you'll come back each Friday to brush up on your finance and business knowledge.
Monday August 8
We, like much of the rest of the world’s media, decided that the best way to summarize the financial markets start to the week was to close our eyes, hope, and wait until close of shop. London’s City A.M. ran with the dramatic title of ‘A SEA OF RED’ as they recounted investors across the world fleeing stocks, abandoning a chaotic market. The Dow Jones closed 5.55 per cent and the Nasdaq shed 6.9 per cent. The S&P 500 saw, for the first time since at least 1996, every single stock fall into negative territory, losing 6.66 per cent overall. US President Barack Obama made an impassioned speech responding to the country’s downgrading by credit rating agency Standard & Poor’s, although this created an even sharper fall in the US markets. Japan’s Nikkei opened 3.4 per cent down on Tuesday and the London FTSE 100 lost an identical 3.4 per cent. There were fears that the FTSE 100 could drop below the 5,000-points mark, a psychologically-important point that the index hadn’t gone below since September 2009…
…which it was reported to have done at 08:44am (GMT) on Tuesday. The sea of red washed through the markets once again, causing particular damage to banks such as RBS (down 5.6 per cent), Lloyds (down 4.5 per cent), HSBC (down 3.5 per cent) and Barclays (down 5.3 per cent).
Read about Monday and Tuesday's 'SEA OF RED' in more depth here.
Wednesday wasn’t much better.
Read about further falls in the stock market, as it happened, in more depth here.
Tuesday August 9
The Chinese government was seen to be struggling in its attempts to rein in inflation. The National Bureau of Statistics reported that consumer prices had risen in July by 6.5% in comparison to the same month last year. Chinese authorities have stated that controlling price rises is at the top of their agenda, and they have already taken a number of steps to remedy this inflation. China’s central bank raised interest rates five times since October, as well as raising the amount of cash banks must hold in their reserves three times in the past 12 months, all in an attempt to curb lending. Being in such a tough position, of trying to rein in prices and ensure that tight monetary policies do not affect growth, is only made worse by a slow-down in the US and Europe, the lacking exports from which could alter China’s growth. Societe General’s Wei Yao commented: “This is the type of data that should have prompted the People’s Bank of China to hike interest rates, but, given the current turmoil in financial markets, we expect them to delay it.”
Read about China's struggle to curb inflation in more depth here.
Wednesday August 10
With the markets being so uncertain, finance professionals have been investing heavily in gold and the Swiss franc, seeing both to at least have some solid foundations while other stocks crumble. The franc jumped up more than 5% to be almost level with the euro on Tuesday. However, the increased value of the franc has been hurting Swiss exporters and on Wednesday the Swiss National Bank announced that it will be executing new measures in an attempt to reduce the franc’s value. The Swiss government said that “energetic intervention” was required to save the currency from its fate, but critics doubted how effective this would be.
Read about the SNB's announcement in more depth here.
Thursday August 11
The engineering company Charter International yesterday referred industrial takeover group Melrose to the Takeover Panel. After Charter rejected two offers from Melrose in the past six weeks (the most recent being £1.4bn) for being too low, the Takeover Panel indicated a deadline of September 6, which gives Melrose less than four weeks to either make a formal offer or walk away. Melrose reacted badly to the ruling, expressing its frustration that Charter has not allowed it to conduct due diligence and open its books, with the takeover target stating that the majority of shareholders oppose such actions.
Read about Charter International, Melrose and the Takeover Panel in more depth here.
Friday August 12
In trying to put an end to the current chaos in the markets, today sees the imposition of a 15-day ban on the short selling of financial stocks for four significant eurozone nations. France, Italy, Belgium and Spain will impose the ban to combat the volatility that has harmed banks such as France’s Societe Generale. It then seemed rather funny that the markets gained ground due to rumors of a Europe-wide short selling ban, as France’s CAC 40 finished up 2.9 per cent and the FTSE 100 went up by 3.1 per cent.
Read about the eurozone's ban on short selling of financial stocks in more depth here.
Come back next Friday for another report on the world of business and finance.
More links to have crossed our lucky path this week:3rd Annual CFO Asia Summit
18 October, 2011, Shangri-La Hotel, Singapore
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Tags: 3rd Annual CFO Summit Asia , Barack Obama , Barclays , Belgium , business and finance news , business news , CAC 40 , Charter International , China , Chinese government , City AM , Dow Jones , finance and business news , finance news , France , FTSE 100 , HSBC , inflation , IQPC , Italy , Japan , Lloyds , London , Melrose , Nasdaq , National Bureau of Statistics , Nikkei , People's Bank of China , RBS , Royal Bank of Scotland (RBS) , Sociéte Générale , Spain , Standard & Poor's , swiss franc , Swiss National Bank , Takeover Panel , US President , Wei Yao