BLBG: Stocks in Europe, Asia, U.S. Futures Gain; Barclays, Banks Rise
Stocks around the world climbed for a fifth day as the Group of 20 vowed to clean up toxic assets, Federal Reserve Chairman Ben S. Bernanke said the recession may end soon, and Barclays Plc reported a “strong” start to 2009.
Barclays, the U.K.’s third-biggest lender, surged 22 percent after saying its businesses continue to perform well. UBS AG and Citigroup Inc. gained more than 8 percent. Mizuho Financial Group Inc., which has the most credit-related losses of any Asian bank, added 5.6 percent in Tokyo.
The MSCI World Index climbed 1.3 percent at 11:24 a.m. in London. The gauge of 23 developed nations has surged 11 percent since March 9 as Citigroup, Bank of America Corp. and JPMorgan Chase & Co. said they made money during the first two months of 2009. The global measure has still lost 17 percent this year.
“A lot of action has been taken and this is a positive sign,” Justin Urquhart Stewart, who oversees $2 billion as director of 7 Investment Management in London, said in a Bloomberg Television interview. “It’s a bear market, but you can have sizable rallies so you have to take it up, have a little bit more weighting in equities. Banks will recover but it will take some time.”
Treasuries, Yen
The rally in stocks curbed demand for government debt, sending yields on 30-year U.S. Treasuries to near the highest level in almost four months. The comments from Barclays sent the pound higher against the dollar and the euro, while the yen fell for a third day against the dollar and the euro on speculation a Bank of Japan plan to buy government debt will spur investors to seek higher-yielding assets overseas.
Europe’s Dow Jones Stoxx 600 Index gained 2.3 percent, extending its five-day rise to 9.2 percent after TeliaSonera AB climbed. The MSCI Asia Pacific Index increased 2.1 percent, led by Mitsubishi UFJ Financial Group Inc.
Futures on the Standard & Poor’s 500 Index added 1.2 percent as Bank of America climbed. Fed Chairman Bernanke said in an interview broadcast on CBS Corp.’s “60 Minutes” yesterday that, should the government succeed in stabilizing financial markets, the recession will probably end this year and the economy will expand in 2010.
“Equity markets are set to continue building on last week’s gains,” Matthew Buckland, a dealer at CMC Markets in London, wrote in a note. “Bernanke’s comments in the media over the weekend suggesting that the recession in the U.S. will probably end this year also stands to lift confidence.”
G-20
Finance chiefs from the G-20 this weekend vowed to work together to clean up the toxic assets that helped trigger the financial crisis and led banks to rack up more than $1.2 trillion in losses. G-20 officials outlined guidelines on how governments should rid banks of distressed securities.
U.S. Treasury Secretary Timothy Geithner said separately he will soon announce details of his plan to help banks clean up the non-performing assets that are clogging the financial system.
Barclays surged 22 percent to 90.6 pence. The British lender that is trying to bolster its capital without giving a stake to the government also said it has held talks about the sale of iShares, the exchange-traded funds unit of Barclays Global Investors. The board has made no decision on the sale of any assets, Barclays said.
Deutsche Bank added 4.3 percent to 26.86 euros. Prudential Plc, the U.K.’s second-biggest insurer, rose 8.4 percent to 282.75 pence, trimming its 2009 slump to 32 percent.
UBS Rallies
UBS climbed 8.8 percent to 11.76 Swiss francs, extending its five-day gain to 37 percent. The Swiss bank that this month proposed replacing its chairman nominated Michel Demare, Ann Godbehere and Axel Lehmann to the board of directors, adding finance and risk experts as it revamps its top corporate body.
Separately, Switzerland’s largest bank may eliminate as many as 5,000 management positions as Chief Executive Officer Oswald Gruebel tries to cut costs, SonntagsZeitung said, citing two unidentified UBS managers and its own calculations. UBS is in a reorganization that focuses on streamlining the management structure, spokesman Serge Steiner said by telephone. He declined to comment on the estimates in the report.
Financial firms have led the Stoxx 600’s 53 percent tumble since the beginning of last year. The measure has clawed back 9.2 percent since reaching a 12-year low on March 9.
Citigroup added 10 percent to $1.96 in pre-market trading in New York. Bank of America gained 6.3 percent to $6.12.
The S&P 500 rallied the most since November last week as financial shares capped the steepest advance on record. The U.S. stock benchmark index has declined 16 percent in 2009, rising in only two of 10 weeks, as falling shares of banks raised concern the government would be forced to nationalize some lenders.
Japanese Banks
Mitsubishi UFJ jumped 5.3 percent to 441 yen in Tokyo. Mizuho Financial, Japan’s second-largest bank, added 5.6 percent to 189 yen. The Bank of Japan is considering buying subordinated debt from banks to shore up capital, the Nikkei reported today.
TeliaSonera, Sweden’s largest telephone company, gained 1.6 percent to 38.60 kronor. UBS raised its recommendation to “buy” from “neutral,” citing “solid earnings momentum.”
Banco Popolare SC was one of only three banks in the Stoxx 600 to decline, losing 5.5 percent to 2.33 euros. The first Italian bank to seek state aid during the financial crisis plans to buy the rest of Banca Italease SpA in a 179 million-euro ($227 million) offer, delist the company and reorganize its businesses.
SGL Carbon SE, the world’s largest maker of carbon and graphite products, surged 21 percent to 20.55 euros after German billionaire Susanne Klatten acquired a 7.9 percent stake.
STMicroelectronics NV, Europe’s biggest semiconductor maker, advanced 3.8 percent to 3.47 euros. ASML Holding NV, the region’s largest maker of semiconductor equipment, rallied 4.7 percent to 13.32 euros. Cazenove raised its recommendation on both stocks to “outperform” from “in-line.”
