Week 38

19 September – 23 September

 

19 September

 

Companies from the Association of Southeast Asian Nations overtook their European counterparts in 2015 to become the biggest investors in the region by value for the first time in three years. That investment should help sustain economic growth regionwide.

 

Bond prices fell and yields jumped this month after the European Central Bank failed to give any clearer guidance on extending their asset purchase programme, and amid fears the Bank of Japan might scale back their stimulus policies.

 

Equity investors should not ignore the impact of changes to money markets. In September 2008, it was arguably the Reserve Fund, one of the then biggest money market funds, “breaking the buck” by failing to maintain its $1 NAV which sent the biggest shockwaves through the markets.

 

he S&P/ASX 200 was down just 1.9 points at 5,294.8 in the afternoon session in Sydney before the exchange operator said all its trade markets would be placed in an “enquire session”.

 

20 September

 

A number of policymakers have been calling for an upward move in rates in recent weeks and some will press their case this week. If the Federal Open Market Committee decides to keep policy unchanged at 2pm on Wednesday it may well signal that an increase is expected by the end of the year.

 

Britain’s biggest banks and financial services companies can withstand the loss of their much-cherished “passporting” rights should the UK leave the European single market, one of the world’s largest credit rating agencies said on Monday

 

Shire sold $12.1bn of debt to fund its takeover of Baxalta on Monday as the Irish pharmaceutical group sought to lock in low borrowing costs in the year’s eighth largest bond sale.

 

Big companies and their outside auditors often have close professional relationships. But now, for the first time, US regulators have taken enforcement action over relationships that became a little too close – it has fined professional services firm Ernst & Young $9.3m for failures including an auditor’s romantic involvement with a client.

 

21 September

 

Germans have a well-earned reputation for thrift. But in the past year or so they have turned into uncharacteristically big spenders, urged on by a combination of record high employment, rising wages, low inflation and near-zero interest rates.

 

Brits love whining about the weather. But bargain fashion retailer Bonmarché has taken this to a new level, and shareholders are not pleased. The company’s shares are now 24 per cent lower, having opened 28 per cent lower at 84.5p.

 

The US financial regulator has launched a probe into ExxonMobil, questioning how the country’s largest oil group reports the value of its assets and reserves, and discloses the potential impact of climate change on its business.

 

This week, Hanjin said it will return all of its chartered vessels to their owners in an effort to cut costs, adding it is losing $2m a day amid a $14bn cargo logjam stemming from its move into bankruptcy last month.

 

22 September

 

In the oil market, talk of a supply glut remains as strong as ever. Hopes of oil producers agreeing a deal to cut their output persist, but the price of Brent crude is still languishing below $50 per barrel, compared to more than $120 at its peak in 2012.

 

Anthem’s proposed $48.4bn takeover of rival US healthcare insurer Cigna edged further towards the brink of collapse after the Department of Justice said in a court filing that the two companies had been trading accusations of breaching deal terms.

 

Asian stocks latched on to a positive lead from Wall Street and rallied in the wake of the Federal Reserve’s decision to stand pat on monetary policy alongside hints it would lift interest rates by the end of the year.

 

The Reserve Bank of New Zealand left the official cash rate unchanged at 2 per cent and left in its easing bias by reiterating that “further policy easing will be required to ensure that future inflation settles near the middle of the target range.”

 

23 September

 

The donor-funded World Bank arm responsible for lending to the globe’s poorest countries is preparing to raise billions of dollars in financial markets after being awarded a credit rating for the first time in its 56-year history.

 

The eurozone’s recovery appears to have lost some of its steam, with an important measure of activity falling to its lowest level in more than a year-and-a-half in September.

 

AP Moller-Maersk has faced what it calls a “perfect storm” in recent years as the Danish conglomerate’s container shipping business — the world’s largest — has suffered from record low freight rates that pushed South Korea’s Hanjin Shipping into bankruptcy at the same time as oil prices more than halved.

 

After the FTSE Asia-Pacific equity index was barely changed, the pan-European Stoxx 600 is down 0.3 per cent. Miners and shares in energy groups are under pressure as the price of Brent crude falls 0.5 per cent to $47.40 a barrel, writes Jamie Chisholm.