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Home > Blogs > QFINANCE Editor > A week in the world of business and finance (October 10 – 14, 2011)

A week in the world of business and finance (October 10 – 14, 2011)

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 October 10
Whilst most of the rest of the world’s population were probably relaxing and enjoying their Sunday afternoon, the board of the troubled Belgian bank Dexia were sitting down for fourteen-hour meeting to decide on the bank’s future. The conclusions of this meeting were announced bright and early on Monday morning, with the governments of France, Belgium and Luxembourg promising a bail-out package designed to prevent the institution from going bankrupt. The Belgian government said that it will be buying Dexia’s division in Belgium for €4bn (£3.4bn, $5.4bn), whilst Luxembourg’s finance minister told reporters that a Qatari investment group was ready to buy the bank’s Luxembourg unit. In addition to this, the bank will receive state guarantees of up to €90bn to secure borrowing over the next ten years. Belgium will be providing 60.5% of this bail-out fund, with France being responsible for 36.5% and Luxembourg 3%. This plan came after French and German leaders announced that recapitalizing crisis-hit banks was a priority and, with a balance sheet of more than €500bn, Dexia certainly had to be dealt with if market turmoil was to be avoided.
Read about the plans to save Dexia in more depth here.

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Tuesday October 11
In a shocking development in the saga that is the European sovereign debt crisis, the Slovakian government voted against granting increasing additional power to the eurozone bail-out fund on Tuesday evening. The Slovaks fell after attaching the bail-out vote to a no-confident motion. With just 55 out of 150 lawmakers actually voting for the bill, Slovakia became the first country to vote down changes to the European Financial Stability Facility (EFSF), which would have boosted the bail-out fund maximum guarantees to €780bn, with a lending capacity of €440bn. As one of the eurozone’s poorest countries, Slovakia would have seen its guarantees to the EFSF increase to around €7.7bn from the original €4.4bn.
Read about Slovakia's decision in more depth here.

However, no more than twenty-four hours later the world press was reporting that Slovak opposition leader Robert Fico announced that the country’s political parties have agreed to ratify plans to expand the eurozone’s bail-out fund, approving the plan by Friday and then holding an election in March. Prime minister Iveta Radicova and her cabinet will remain in office until the new administration is formed. It has promised to approve the EFSF ratification and resubmit it to parliament.
Read the revised story of Slovakia and the EFSF here.

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Wednesday October 12
On Wednesday figures were released for the struggling hedge fund giant Man Group that revealed its computer-driven vehicle AHL had lost 5.5 per cent last week, as hopes of measures to tackle the Eurozone debt crisis sent caused a rally in equities. This means that the fund is down 3.2 per cent so far this year, which is eight to nine per cent away from its high-water mark, above which it can earn performance fees. Shares in Man then closed 5.96 per cent, which led many to believe that there could be a takeover approach for the group.
Read about the ailing fortune of the Man Group in more depth here.

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Thursday October 13
BP announced that it has been permitted to proceed with a new £4.5bn oil project just west of the Shetland Islands, an extension of the existing Clair oil field. UK Prime Minister David Cameron showed positive reaction to the plans, saying that the news meant a “massive boost for jobs and growth”. BP has claimed that, along with its partners, it will be investing almost £10bn in North Sea oil and gas work over the coming five years. BP chief executive Bob Dudley stated that “they story of the North Sea oil industry has a long way yet to run”.
Read about BP's expansion near the Shetland Islands and the UK government's reaction in more depth here.

In other news, credit ratings agency Fitch decided to downgrade two of the UK’s biggest banks, Lloyds and Royal Bank of Scotland. Fitch justified its move by saying that, following the Independent Commission on Banking’s report suggesting a ring-fencing of investment from retail arms of banks, the UK government was less likely to support the banks if they got into trouble. On this same day, QFINANCE blogger Anthony Harrington posted an analytical piece discussing recent dramatic moves by the key ratings agencies and whether these would eventually lead to their destruction.
Read this week's QFINANCE blog on the current and future state of ratings agencies in more depth here.

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Friday October 14
Inspiring brilliant puns such as "fuelling momentum" and "driving up demand", and adding a positive to what appears to have been an otherwise miserable week, our final news piece of the week comes as toy manufacturer Mattel announce increased profits in the third quarter for their toys, helped by Disney’s Pixar movies and, in particular, their new release, Cars 2. Worldwide sales rose 9% taking the US firm's net income totalled $301m (£191m) for the three months. Barbie's sales went up a staggering 17% after both her and Ken were featured in the other big recent Pixar hit Toy Story 3.
Read about this story here.

Come back next Friday for another report on the world of business and finance.

Featured Events:

Announcing the marcus evans CFO Summit November 10-12, 2011 in Las Vegas, NV!
Delegates will have the opportunity to attend cutting-edge keynote presentations and workshops on pertinent and relevant issues in the industry. As a Delegate, you will benefit from extensive networking with an executive, focused group of your peers to discuss and debate different strategies and develop future business contacts.
To register contact: Christina Sears, Senior Marketing Manager, enquiries@marcusevansch.com

Announcing the marcus evans Tax Officers Summit November 10-12, 2011 in Las Vegas, NV!
Delegates will have the opportunity to attend cutting-edge keynote presentations and workshops on pertinent and relevant issues in the industry. As a Delegate, you will benefit from extensive networking with an executive, focused group of your peers to discuss and debate different strategies and develop future business contacts.
To register contact: Christina Sears, Senior Marketing Manager, enquiries@marcusevansch.com

Financial Channel Innovation 2011, Dec.8-9, Beijing China.With a line-up of decision-makers from world-class financial services institutions and experts from leading technology and solution providers, together with advisors from the regulatory department and analysis institutions, the conference will focus on regulation and compliance issue of channel development, newly emerging technologies and innovative financial services, novel partnerships and business models in the mobile payment ecosystem, opportunities and challenges in this most dynamic industry, and other hot topics.

International anti-fraud Professionals to gather in Singapore in less than 2 weeks!
2011 ACFE Asia Pacific Fraud Conference
Companies in Asia-Pacific and beyond, face great challenges in detecting and deterring fraud. A recent ACFE study, revealed that an organisation typically loses an estimated 5 percent of its annual revenue to fraud. This October, join fellow anti-fraud professionals from nearly 20 countries and:
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Tags: ACFE Asia Pacific Fraud Conference , AHL , Anthony Harrington , Belgium , BP , business and finance news , business news , Clair oil field , David Cameron , Dexia , EFSF , european debt crisis , European Financial Stability Facility , eurozone , finance news , Financial Channel Innovation 2011 , Fitch , France , Independent Commission on Banking , Iveta Radicova , Lloyds , Luxembourg , Man Group , marcus evans CFO Summit , marcus evans Tax Officers Summit , market turmoil , North Sea oil , rating downgrading , ratings agencies , Robert Fico , Royal Bank of Scotland , Shetland Islands , Slovakia , sovereign debt , UK Prime Minister
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