The European Central Bank is expected to pump half a trillion euros in ultra-cheap, three-year loans into the eurozone’s troubled financial system today.
In the second such operation to fight the eurozone crisis, banks can stock up on as much of the cheap funding as they like – a ploy the ECB unveiled late last year to dampen tensions on eurozone bond markets.
ECB President Mario Draghi said after the first of the operations that “a major credit crunch” had been averted.
Banks used much of the €489bn they borrowed last year to cover maturing debt.
Mr Draghi has urged them to lend out the funds they tap at today’s operation to households and businesses, helping strengthen economic growth.
Financial markets are monitoring the progress of the longer-term refinancing operations.
The LTROs are unleashing a wall of money just as the US Federal Reserve and the Bank of England have with their quantitative easing (QE) programmes.
The ECB operations differ from QE in that they provide liquidity against guarantees instead of intervening directly in bond markets.
They achieve a similar result while allaying the concerns of some policymakers – led by the Germans – about funding governments.
ECB policymakers in Germany and beyond are nonetheless worried that the central bank risks storing up problems for the future by releasing the wave of cash through the LTROs.
http://tourism9.com/ http://vkins.com/
2012年2月29日星期三
Loans flow from Europe’s central bank, but analysts debate if they’re a cure or a crutch
Throughout his waning months in office, European Central Bank President Jean-Claude Trichet boasted that he had avoided the excesses of his counterparts at the U.S. Federal Reserve and kept the ECB’s response to his continent’s financial crisis relatively modest.
It has taken his successor, Italian central banker Mario Draghi, less than three months to upend that approach, triggering a debate about whether the ECB has quietly solved the euro-zone debt crisis or simply postponed a reckoning by shuffling hundreds of billions of dollars among banks, governments and the central bank’s own coffers.
It has taken his successor, Italian central banker Mario Draghi, less than three months to upend that approach, triggering a debate about whether the ECB has quietly solved the euro-zone debt crisis or simply postponed a reckoning by shuffling hundreds of billions of dollars among banks, governments and the central bank’s own coffers.
As it did in December, the ECB this week is again offering inexpensive three-year loans to euro-region banks. Market analysts expect the central bank to provide new loans worth a trillion dollars or more, putting the ECB on a fast track to catch the Fed.
The policy has stabilized European finances in recent weeks, contributing in a roundabout way to a decline in the exorbitant interest rates that some heavily indebted governments had to pay. After the first round of ECB loans, banks spent some of the money on government bonds, and Italy and Spain as a result saw a drop in the cost they had to pay to attract bond investors.
The banks also began to retire their own bonds, reducing the competition for money on private markets. And bank lending to households and businesses ticked up.
These were all reassuring developments after an autumn consumed by fears that the region’s debt crisis would lead to a breakup of the euro zone.
“There are tentative signs of stabilization,” Draghi said at a recent news conference on ECB policy.
But some analysts and bankers are warning that the policies under Draghi could leave the European financial industry addicted to cheap ECB loans that will be difficult to replace if the region’s economy remains stagnant.
For a variety of reasons, the euro zone remains in trouble. The region is heading into recession, and governments are scrambling to restructure economies ill-suited to compete globally or support the costs of aging populations.
Greece, the region’s hardest-hit country, is in the midst of a bond restructuring that will shape its future. If all goes smoothly, the exchange of new, less-expensive bonds for older ones will greatly reduce the country’s outstanding debts and pave the way for a large package of new international loans. But the debt restructuring has left the country in technical default on its bonds, possibly triggering the insurance payments to bond holders — a development that some analysts worry could stigmatize the euro region for years.
If nothing else, the ECB loans have bought time and helped the currency union through a bulge of borrowing required by governments and financial companies in the first months of the year.
The ECB lending program was launched at a critical moment, when borrowing costs for Spain and Italy were at such a high level that they might have needed a bailout that the rest of Europe and the International Monetary Fund could ill afford. As those rates have dropped, Spain has actually accelerated its borrowing for the year to take advantage.
http://tourism9.com/ http://vkins.com/
The policy has stabilized European finances in recent weeks, contributing in a roundabout way to a decline in the exorbitant interest rates that some heavily indebted governments had to pay. After the first round of ECB loans, banks spent some of the money on government bonds, and Italy and Spain as a result saw a drop in the cost they had to pay to attract bond investors.
The banks also began to retire their own bonds, reducing the competition for money on private markets. And bank lending to households and businesses ticked up.
These were all reassuring developments after an autumn consumed by fears that the region’s debt crisis would lead to a breakup of the euro zone.
“There are tentative signs of stabilization,” Draghi said at a recent news conference on ECB policy.
But some analysts and bankers are warning that the policies under Draghi could leave the European financial industry addicted to cheap ECB loans that will be difficult to replace if the region’s economy remains stagnant.
For a variety of reasons, the euro zone remains in trouble. The region is heading into recession, and governments are scrambling to restructure economies ill-suited to compete globally or support the costs of aging populations.
Greece, the region’s hardest-hit country, is in the midst of a bond restructuring that will shape its future. If all goes smoothly, the exchange of new, less-expensive bonds for older ones will greatly reduce the country’s outstanding debts and pave the way for a large package of new international loans. But the debt restructuring has left the country in technical default on its bonds, possibly triggering the insurance payments to bond holders — a development that some analysts worry could stigmatize the euro region for years.
If nothing else, the ECB loans have bought time and helped the currency union through a bulge of borrowing required by governments and financial companies in the first months of the year.
The ECB lending program was launched at a critical moment, when borrowing costs for Spain and Italy were at such a high level that they might have needed a bailout that the rest of Europe and the International Monetary Fund could ill afford. As those rates have dropped, Spain has actually accelerated its borrowing for the year to take advantage.
http://tourism9.com/ http://vkins.com/
Banks Vie for $2 Billion in Secretive Europe Equity Derivatives
February 29, 2012, 2:56 AM EST
By Elisa Martinuzzi and Zijing Wu
Feb. 29 (Bloomberg) — Investment banks including Deutsche Bank AG and Morgan Stanley are vying for as much as $2 billion in annual fees in Europe arranging customized equity derivatives — a secretive market that has defied the downturn.
The business, about as large as underwriting initial public offerings before the 2008 financial crisis, is now three times bigger and held steady last year, according to estimates from six bankers who asked not to be identified because the information is private. The contracts accounted for almost 10 percent of total investment-banking fees last year in Europe, the Middle East and Africa as revenue from dealmaking and trading sank, data compiled by research firm Freeman & Co. show.
Because the deals, whose value is tied to stocks, are customized and not traded on exchanges, banks are able to charge higher fees than for contracts in which customers seek competing bids. They’re also attractive to lenders because new rules demanding capital buffers against potential losses aren’t as punitive as for other derivatives.
“Regulatory change may drive banks back to the business, not away from it,” said Rachel Lord, Citigroup Inc.’s London- based global head of corporate equity derivatives. “This is one part of the investment-banking industry where, despite compressed margins, the business remains a high priority because it’s so important to the client base.”
Tailor-Made
Investors such as Aabar Investments PJSC, the Abu Dhabi- based sovereign-wealth fund, and Italy’s Fondazione Monte dei Paschi di Siena, owner of the world’s oldest bank, sought derivatives to protect the value of their holdings or to borrow against equity stakes.
Banks including Deutsche Bank AG, Morgan Stanley and Goldman Sachs Group Inc. are competing in a region that’s the biggest in the world by fees, surpassing the U.S. and Asia. The annual notional value of tailor-made equity derivatives is typically more than $50 billion in Europe, the Middle East and Africa, according to estimates from two of the bankers.
The market is so big and lucrative that even lenders shrinking their investment-banking arms want to keep the business going. Royal Bank of Scotland Group Plc, which is selling or closing brokerage, merger-advisory and IPO- underwriting units, will continue arranging “profitable” equity derivatives, the London-based firm said last month. Credit Agricole SA, France’s second-largest bank by assets, will do the same for corporate clients, said Bertrand Hugonet, a Paris-based spokesman.
“There’s a lot of competition because there’s been a history of profitable transactions in this space,” said Samuel Losada, London-based head of European corporate equity derivatives at Bank of America Corp. “You can achieve over the long run, if risks are managed properly, above-market returns.”
Daimler Derivative
Because the deals are private, there aren’t any publicly available rankings. Based on bankers’ own assessments and the sharing of information among them, the business is dominated by the region’s top equity brokers and better-capitalized firms. Industry leaders include Frankfurt based Deutsche Bank, Morgan Stanley, Goldman Sachs and Citigroup, all in New York, and Zurich-based Credit Suisse Group AG, the bankers said.
Deutsche Bank, Morgan Stanley and Bank of America arranged a derivative in May that allows Abu Dhabi’s Aabar to keep its share of the potential near-term gains of Daimler AG, even as the fund sold a 1.25 billion-euro ($1.7 billion) bond exchangeable for the German automaker’s shares. The sale could cut Aabar’s Daimler holding to 7.2 percent from 9.1 percent when the bond matures in 2016.
The deal was the region’s largest ever derivative overlay, a strategy to hold multiple contracts against the same assets, linked to an exchangeable bond, according to Losada.
Emerging Markets
“There’s a clear trend that the emerging-market business is becoming more important,” said Losada. “We saw continuous activity in this space over the last 12 months.”
Increasing demand from emerging-market clients, such as Middle Eastern sovereign-wealth funds, has helped buck a slowdown in Western European deal flows.
“The business can be divided into two parts: the growth markets, where it’s harder for some to obtain liquidity and hence is driven by financing, and developed markets, where clients seek to manage their equity positions,” said Simon Watson, a managing director at Goldman Sachs in London who heads corporate equity derivatives for the region.
While financial firms are cutting employees in other investment-banking areas, many are looking to add to their equity-derivatives businesses in the region.
‘Beefing Up’
Bank of America, based in Charlotte, North Carolina, may hire two bankers this year to join the eight it has in London today, said Losada. Citigroup this month named Sophie Lecoq to the new position of head of corporate equity derivatives for Europe, the Middle East and Africa.
Morgan Stanley also may increase its team’s headcount, according to Daniel Palmer, the firm’s London-based global head of corporate equity derivatives.
“We expanded our business significantly over the past three years,” said Palmer. “Our team is now almost complete, but we might add one or two heads later in the year.”
Nomura Holdings Inc., which took over Lehman Brothers Holdings Inc.’s European business in 2008, may add one senior banker to its 12-person team in London, said Kenneth Brown, global head of equity capital markets. Lenders are “beefing up their European teams” of corporate equity derivatives because Europe is a now a bigger market than the U.S., he said.
It’s also a more resilient market, and the teams, which typically employ about a dozen people, are small compared with those that manage IPOs, said Christopher Wheeler, a banking analyst at Mediobanca SpA in London.
“It’s a business driven by the sweat of the brow,” Wheeler said.
Margin Loans
While banks can earn more arranging tailor-made equity derivatives than underwriting stock sales, increasing competition has driven down fees for financing some deals, including margin loans, or loans from securities firms backed by clients’ equity holdings used as collateral, the bankers said.
Margin loans are a way for investors who have limited access to bank funding or capital markets to raise money. At least 10 firms competed to win a margin loan from an Italian client this year, compared with three or four that would have bid for the business a couple of years ago, said one banker, who declined to be identified citing client confidentiality.
Monte dei Paschi
Fondazione Monte dei Paschi, the biggest investor in Banca Monte dei Paschi di Siena SpA, last year raised about 600 million euros through loans backed by collateral on its stake in the lender.
Eleven banks participated in the deal, which helped raise funds to pay for shares sold by the bank in June, said Gianni Tiberi, a spokesman for the foundation. The firms, which included Credit Suisse and JPMorgan Chase & Co., participated equally, Tiberi said, declining to elaborate. The loan was reduced to about 525 million euros as Monte dei Paschi shares fell, he said.
In one type of equity derivative, known as an equity swap, one party agrees to receive gains in a stock or basket of stocks and in return makes interest payments to the other party on the value of the securities it bet on. Investment banks typically act as intermediaries between the two parties in the swap.
Under the so-called Basel III rules, approved by the Basel Committee on Banking Supervision and scheduled to be phased in through 2019, banks will face a capital charge for potential mark-to-market losses on over-the-counter derivatives.
Data Gaps
“Because credit markets tend to be less liquid and transparent than equities, banks often need proxies to measure the counterparty risk in credit derivatives, creating data gaps and higher capital charges,” said Anastasios Zavitsanakis, a financial-risk consultant at PricewaterhouseCoopers LLP in London. “The actual exposure in equities is more measurable in the short term, and there might be more collateral, reducing further the capital charges.”
Still, banks’ waning risk appetite is spreading the business around more evenly, said Citigroup’s Lord.
“In the past 10 years, two to three banks would typically lead the industry, while over the last year it has been much more broad-based,” Lord said. “Before 2008, banks would have been happy to be sole books on very large deals. It’s not feasible to do that now, so there’s a lot more deal-sharing.”
Morgan Stanley has expanded its business by building up a book of margin loans, said Palmer.
“Some competitors are looking to sell their loans,” he said. “As banks de-lever, we’ve come across clients coming to us seeking to raise money on a shareholding, for example.”
‘Bespoke Solutions’
Even with the increased competition, Deutsche Bank sees demand from clients “as high as ever,” said Ian Holt, the bank’s London-based global head of equity structuring.
“It’s a good business because you are providing bespoke solutions and providing clients with what they need in and around complex situations, which makes higher margins naturally achievable,” said Holt.
Success for most firms this year depends on whether there’s a pick-up in mergers, bankers said. When companies combine, a seller left with a minority stake may seek to raise funds against the holding by buying put options on the shares and using the options to raise cash. Banks can also use derivatives to help investors who receive stock protect the value of their holdings.
“In M&A, you’re the exclusive adviser, and that’s where you can have prime access to interesting situations before they become public knowledge,” said Bank of America’s Losada. “That’s where the real alpha is.”
–With assistance from Ben Moshinsky in Brussels. Editors: Robert Friedman, Edward Evans
To contact the reporters on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net; Zijing Wu in London at zwu17@bloomberg.net
To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net; Jacqueline Simmons at jackiem@bloomberg.net
http://tourism9.com/ http://vkins.com/
By Elisa Martinuzzi and Zijing Wu
Feb. 29 (Bloomberg) — Investment banks including Deutsche Bank AG and Morgan Stanley are vying for as much as $2 billion in annual fees in Europe arranging customized equity derivatives — a secretive market that has defied the downturn.
The business, about as large as underwriting initial public offerings before the 2008 financial crisis, is now three times bigger and held steady last year, according to estimates from six bankers who asked not to be identified because the information is private. The contracts accounted for almost 10 percent of total investment-banking fees last year in Europe, the Middle East and Africa as revenue from dealmaking and trading sank, data compiled by research firm Freeman & Co. show.
Because the deals, whose value is tied to stocks, are customized and not traded on exchanges, banks are able to charge higher fees than for contracts in which customers seek competing bids. They’re also attractive to lenders because new rules demanding capital buffers against potential losses aren’t as punitive as for other derivatives.
“Regulatory change may drive banks back to the business, not away from it,” said Rachel Lord, Citigroup Inc.’s London- based global head of corporate equity derivatives. “This is one part of the investment-banking industry where, despite compressed margins, the business remains a high priority because it’s so important to the client base.”
Tailor-Made
Investors such as Aabar Investments PJSC, the Abu Dhabi- based sovereign-wealth fund, and Italy’s Fondazione Monte dei Paschi di Siena, owner of the world’s oldest bank, sought derivatives to protect the value of their holdings or to borrow against equity stakes.
Banks including Deutsche Bank AG, Morgan Stanley and Goldman Sachs Group Inc. are competing in a region that’s the biggest in the world by fees, surpassing the U.S. and Asia. The annual notional value of tailor-made equity derivatives is typically more than $50 billion in Europe, the Middle East and Africa, according to estimates from two of the bankers.
The market is so big and lucrative that even lenders shrinking their investment-banking arms want to keep the business going. Royal Bank of Scotland Group Plc, which is selling or closing brokerage, merger-advisory and IPO- underwriting units, will continue arranging “profitable” equity derivatives, the London-based firm said last month. Credit Agricole SA, France’s second-largest bank by assets, will do the same for corporate clients, said Bertrand Hugonet, a Paris-based spokesman.
“There’s a lot of competition because there’s been a history of profitable transactions in this space,” said Samuel Losada, London-based head of European corporate equity derivatives at Bank of America Corp. “You can achieve over the long run, if risks are managed properly, above-market returns.”
Daimler Derivative
Because the deals are private, there aren’t any publicly available rankings. Based on bankers’ own assessments and the sharing of information among them, the business is dominated by the region’s top equity brokers and better-capitalized firms. Industry leaders include Frankfurt based Deutsche Bank, Morgan Stanley, Goldman Sachs and Citigroup, all in New York, and Zurich-based Credit Suisse Group AG, the bankers said.
Deutsche Bank, Morgan Stanley and Bank of America arranged a derivative in May that allows Abu Dhabi’s Aabar to keep its share of the potential near-term gains of Daimler AG, even as the fund sold a 1.25 billion-euro ($1.7 billion) bond exchangeable for the German automaker’s shares. The sale could cut Aabar’s Daimler holding to 7.2 percent from 9.1 percent when the bond matures in 2016.
The deal was the region’s largest ever derivative overlay, a strategy to hold multiple contracts against the same assets, linked to an exchangeable bond, according to Losada.
Emerging Markets
“There’s a clear trend that the emerging-market business is becoming more important,” said Losada. “We saw continuous activity in this space over the last 12 months.”
Increasing demand from emerging-market clients, such as Middle Eastern sovereign-wealth funds, has helped buck a slowdown in Western European deal flows.
“The business can be divided into two parts: the growth markets, where it’s harder for some to obtain liquidity and hence is driven by financing, and developed markets, where clients seek to manage their equity positions,” said Simon Watson, a managing director at Goldman Sachs in London who heads corporate equity derivatives for the region.
While financial firms are cutting employees in other investment-banking areas, many are looking to add to their equity-derivatives businesses in the region.
‘Beefing Up’
Bank of America, based in Charlotte, North Carolina, may hire two bankers this year to join the eight it has in London today, said Losada. Citigroup this month named Sophie Lecoq to the new position of head of corporate equity derivatives for Europe, the Middle East and Africa.
Morgan Stanley also may increase its team’s headcount, according to Daniel Palmer, the firm’s London-based global head of corporate equity derivatives.
“We expanded our business significantly over the past three years,” said Palmer. “Our team is now almost complete, but we might add one or two heads later in the year.”
Nomura Holdings Inc., which took over Lehman Brothers Holdings Inc.’s European business in 2008, may add one senior banker to its 12-person team in London, said Kenneth Brown, global head of equity capital markets. Lenders are “beefing up their European teams” of corporate equity derivatives because Europe is a now a bigger market than the U.S., he said.
It’s also a more resilient market, and the teams, which typically employ about a dozen people, are small compared with those that manage IPOs, said Christopher Wheeler, a banking analyst at Mediobanca SpA in London.
“It’s a business driven by the sweat of the brow,” Wheeler said.
Margin Loans
While banks can earn more arranging tailor-made equity derivatives than underwriting stock sales, increasing competition has driven down fees for financing some deals, including margin loans, or loans from securities firms backed by clients’ equity holdings used as collateral, the bankers said.
Margin loans are a way for investors who have limited access to bank funding or capital markets to raise money. At least 10 firms competed to win a margin loan from an Italian client this year, compared with three or four that would have bid for the business a couple of years ago, said one banker, who declined to be identified citing client confidentiality.
Monte dei Paschi
Fondazione Monte dei Paschi, the biggest investor in Banca Monte dei Paschi di Siena SpA, last year raised about 600 million euros through loans backed by collateral on its stake in the lender.
Eleven banks participated in the deal, which helped raise funds to pay for shares sold by the bank in June, said Gianni Tiberi, a spokesman for the foundation. The firms, which included Credit Suisse and JPMorgan Chase & Co., participated equally, Tiberi said, declining to elaborate. The loan was reduced to about 525 million euros as Monte dei Paschi shares fell, he said.
In one type of equity derivative, known as an equity swap, one party agrees to receive gains in a stock or basket of stocks and in return makes interest payments to the other party on the value of the securities it bet on. Investment banks typically act as intermediaries between the two parties in the swap.
Under the so-called Basel III rules, approved by the Basel Committee on Banking Supervision and scheduled to be phased in through 2019, banks will face a capital charge for potential mark-to-market losses on over-the-counter derivatives.
Data Gaps
“Because credit markets tend to be less liquid and transparent than equities, banks often need proxies to measure the counterparty risk in credit derivatives, creating data gaps and higher capital charges,” said Anastasios Zavitsanakis, a financial-risk consultant at PricewaterhouseCoopers LLP in London. “The actual exposure in equities is more measurable in the short term, and there might be more collateral, reducing further the capital charges.”
Still, banks’ waning risk appetite is spreading the business around more evenly, said Citigroup’s Lord.
“In the past 10 years, two to three banks would typically lead the industry, while over the last year it has been much more broad-based,” Lord said. “Before 2008, banks would have been happy to be sole books on very large deals. It’s not feasible to do that now, so there’s a lot more deal-sharing.”
Morgan Stanley has expanded its business by building up a book of margin loans, said Palmer.
“Some competitors are looking to sell their loans,” he said. “As banks de-lever, we’ve come across clients coming to us seeking to raise money on a shareholding, for example.”
‘Bespoke Solutions’
Even with the increased competition, Deutsche Bank sees demand from clients “as high as ever,” said Ian Holt, the bank’s London-based global head of equity structuring.
“It’s a good business because you are providing bespoke solutions and providing clients with what they need in and around complex situations, which makes higher margins naturally achievable,” said Holt.
Success for most firms this year depends on whether there’s a pick-up in mergers, bankers said. When companies combine, a seller left with a minority stake may seek to raise funds against the holding by buying put options on the shares and using the options to raise cash. Banks can also use derivatives to help investors who receive stock protect the value of their holdings.
“In M&A, you’re the exclusive adviser, and that’s where you can have prime access to interesting situations before they become public knowledge,” said Bank of America’s Losada. “That’s where the real alpha is.”
–With assistance from Ben Moshinsky in Brussels. Editors: Robert Friedman, Edward Evans
To contact the reporters on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net; Zijing Wu in London at zwu17@bloomberg.net
To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net; Jacqueline Simmons at jackiem@bloomberg.net
http://tourism9.com/ http://vkins.com/
CVC Capital Buys Ahlsell For EUR1.8 Billion From Cinven, Goldman Sachs
LONDON -(Dow Jones)- Funds advised by Private equity and investment advisory firm CVC Capital Partners Wednesday announce the EUR1.8 billion acquisition of Ahlsell, a Nordic technical products wholesaler from Cinven and Goldman Sachs Capital Partners.
MAIN FACTS:
-Transaction marks the successful completion of exclusive talks between these parties.
-Ahlsell has over 220 outlets in Sweden, Norway, Finland, Denmark, Estonia and Russia.
-Company specializes in providing professional users with a wide range of goods and peripheral services within the heating & plumbing, electrical, tools & machinery, refrigeration and DIY product space.
-In 2011, Ahlsell reported revenues of EUR2.3 billion
-Completion of the transaction is subject to customary competition clearances.
-CVC was advised by Deutsche Bank, Roschier, Freshfields, KPMG and BCG.
-Financing was led by Nordea, Deutsche Bank, Goldman Sachs, Barclays Capital, DNB Nor and Danske Bank.
-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296; ian.walker@dowjones.com
http://tourism9.com/ http://vkins.com/
MAIN FACTS:
-Transaction marks the successful completion of exclusive talks between these parties.
-Ahlsell has over 220 outlets in Sweden, Norway, Finland, Denmark, Estonia and Russia.
-Company specializes in providing professional users with a wide range of goods and peripheral services within the heating & plumbing, electrical, tools & machinery, refrigeration and DIY product space.
-In 2011, Ahlsell reported revenues of EUR2.3 billion
-Completion of the transaction is subject to customary competition clearances.
-CVC was advised by Deutsche Bank, Roschier, Freshfields, KPMG and BCG.
-Financing was led by Nordea, Deutsche Bank, Goldman Sachs, Barclays Capital, DNB Nor and Danske Bank.
-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296; ian.walker@dowjones.com
http://tourism9.com/ http://vkins.com/
2012年2月28日星期二
Saxo Bank Scoops 4 Awards at the Social Forex Awards 2011
SINGAPORE–(Marketwire -02/27/12)- Saxo Bank, the online trading and investment specialist, has won no less than four Awards at the inaugural Social Forex Awards 2011.
Saxo Bank ranked number one in the following categories:
The awards recognise the outstanding players in the industry and were presented by LetstalkFX and Social-Markets.net, in conjunction with e-Forex magazine and were sponsored by The Chicago Mercantile Exchange. The votes were cast by members of the letstalkFX.com community and marketing was undertaken by the Bank using LinkedIn and Facebook.
Disclaimer:Saxo Capital Markets Pte. Ltd. (“Saxo Capital Markets”) is licensed as a Capital Market Services provider and an Exempt Financial Advisor, and is supervised by the Monetary Authority of Singapore.
You should carefully consider whether trading in leveraged products is appropriate for you in the light of your financial circumstances. You should be aware that dealing in products that are highly leveraged carry significantly greater risk than non-geared investments such as share trading. As such, you could both gain and lose large amounts of money. You may sustain losses in excess of the moneys you initially deposit and also in excess of the margin required to establish and maintain any positions in leveraged products.
For further information, please see:
http://sg.saxomarkets.com/about-us/general-disclaimer
About Saxo Capital Markets
Saxo Capital Markets Pte Ltd is a wholly-owned subsidiary of Saxo Bank A/S, the Copenhagen-headquartered online trading and investment specialist. It serves as the Asia Pacific headquarters and holds a Capital Markets Services license from the Monetary Authority of Singapore. Saxo Capital Markets also holds a Commodity Broker licence from The International Enterprise Singapore.
Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, its leading multi-asset online trading platforms.
SaxoTrader is available directly through Saxo Capital Markets or through one of its institutional clients. White labelling is a significant business area for Saxo Capital Markets, and involves customising and branding of its online trading platform for other financial institutions and brokers.
About Saxo Bank
Saxo Bank is a leading online trading and investment specialist. A fully licensed and regulated European bank, Saxo Bank enables private investors and institutional clients to trade FX, CFDs, ETFs, Stocks, Futures, Options and other derivatives via three specialised and fully integrated trading platforms: the browser-based SaxoWebTrader, the downloadable SaxoTrader and the SaxoMobileTrader application available in over 20 languages. Saxo Bank also offers professional portfolio and fund management through Saxo Asset Management who accommodates high-net-worth private clients and institutional investors and provides banking services and advice to retail clients through Saxo Privatbank. The Saxo Bank Group is headquartered in Copenhagen with offices throughout Europe, Asia, Middle East, Latin America and Australia.
http://tourism9.com/ http://vkins.com/
Saxo Bank ranked number one in the following categories:
- Most Social Bank (through the use of Social Media tools such as LinkedIn, Facebook and Twitter
- Best Social Campaign
- Best Social Initiative/Innovation
- Best Social Research
The awards recognise the outstanding players in the industry and were presented by LetstalkFX and Social-Markets.net, in conjunction with e-Forex magazine and were sponsored by The Chicago Mercantile Exchange. The votes were cast by members of the letstalkFX.com community and marketing was undertaken by the Bank using LinkedIn and Facebook.
Disclaimer:Saxo Capital Markets Pte. Ltd. (“Saxo Capital Markets”) is licensed as a Capital Market Services provider and an Exempt Financial Advisor, and is supervised by the Monetary Authority of Singapore.
You should carefully consider whether trading in leveraged products is appropriate for you in the light of your financial circumstances. You should be aware that dealing in products that are highly leveraged carry significantly greater risk than non-geared investments such as share trading. As such, you could both gain and lose large amounts of money. You may sustain losses in excess of the moneys you initially deposit and also in excess of the margin required to establish and maintain any positions in leveraged products.
For further information, please see:
http://sg.saxomarkets.com/about-us/general-disclaimer
About Saxo Capital Markets
Saxo Capital Markets Pte Ltd is a wholly-owned subsidiary of Saxo Bank A/S, the Copenhagen-headquartered online trading and investment specialist. It serves as the Asia Pacific headquarters and holds a Capital Markets Services license from the Monetary Authority of Singapore. Saxo Capital Markets also holds a Commodity Broker licence from The International Enterprise Singapore.
Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, its leading multi-asset online trading platforms.
SaxoTrader is available directly through Saxo Capital Markets or through one of its institutional clients. White labelling is a significant business area for Saxo Capital Markets, and involves customising and branding of its online trading platform for other financial institutions and brokers.
About Saxo Bank
Saxo Bank is a leading online trading and investment specialist. A fully licensed and regulated European bank, Saxo Bank enables private investors and institutional clients to trade FX, CFDs, ETFs, Stocks, Futures, Options and other derivatives via three specialised and fully integrated trading platforms: the browser-based SaxoWebTrader, the downloadable SaxoTrader and the SaxoMobileTrader application available in over 20 languages. Saxo Bank also offers professional portfolio and fund management through Saxo Asset Management who accommodates high-net-worth private clients and institutional investors and provides banking services and advice to retail clients through Saxo Privatbank. The Saxo Bank Group is headquartered in Copenhagen with offices throughout Europe, Asia, Middle East, Latin America and Australia.
http://tourism9.com/ http://vkins.com/
Bad Credit Loans for Emergency Pet Vet Bills and Medical Expenses
Sacramento, CA (PRWEB) February 28, 2012
In the current economic downturn, consumers know they can turn to trusted ReallyBadCreditOffers.com for bad credit loans and no hassle financial help, but now the beloved family pet has a financial ally as well. The site has announced a new suite of installment loan offers for pet owners in need of money for emergency vet bills to ensure the family pet receives the medical attention it needs.
According to the U.S. Bureau of Labor Statistics, 77% of veterinarians in private practice service the medical needs of pet owners, predominantly dogs and cats. Medical expenses for treating pets have been rising and families face the tough decisions if they do not have the money required to meet the costs of care for their beloved animals.
People with bad credit ratings facing financial hardship in these tough times do not have access to the traditional resources good credit scores make available. The new personal loans being offered allow families access to money with a 60 second application process and no credit check required. In so doing the site hopes to lend a helping hand in an area traditional lenders do not consider an emergency.
“I own a cat and a dog, they are valued members of my family, and have helped me through some very tough times, we just would like to acknowledge how important our pets are to us in challenging times and ensure no family pet is denied the care they deserve because of money trouble,” said Ariel Pryor, founder.
The popular consumer site offers a variety of resources to help families improve their personal finances, eliminate debt and fix and reenter the financial system after bankruptcy, foreclosure and bad credit. Visitors to the site can see a variety of bad credit loans with no hidden fees to compare the offers and choose the best of the recommended services.
Contact:
Ariel Pryor, Credit Expert http://www.reallybadcreditoffers.com
In the current economic downturn, consumers know they can turn to trusted ReallyBadCreditOffers.com for bad credit loans and no hassle financial help, but now the beloved family pet has a financial ally as well. The site has announced a new suite of installment loan offers for pet owners in need of money for emergency vet bills to ensure the family pet receives the medical attention it needs.
According to the U.S. Bureau of Labor Statistics, 77% of veterinarians in private practice service the medical needs of pet owners, predominantly dogs and cats. Medical expenses for treating pets have been rising and families face the tough decisions if they do not have the money required to meet the costs of care for their beloved animals.
People with bad credit ratings facing financial hardship in these tough times do not have access to the traditional resources good credit scores make available. The new personal loans being offered allow families access to money with a 60 second application process and no credit check required. In so doing the site hopes to lend a helping hand in an area traditional lenders do not consider an emergency.
“I own a cat and a dog, they are valued members of my family, and have helped me through some very tough times, we just would like to acknowledge how important our pets are to us in challenging times and ensure no family pet is denied the care they deserve because of money trouble,” said Ariel Pryor, founder.
The popular consumer site offers a variety of resources to help families improve their personal finances, eliminate debt and fix and reenter the financial system after bankruptcy, foreclosure and bad credit. Visitors to the site can see a variety of bad credit loans with no hidden fees to compare the offers and choose the best of the recommended services.
Contact:
Ariel Pryor, Credit Expert http://www.reallybadcreditoffers.com
SBA Loan Firm Now Offers Fixed Rates on SBA 504 and SBA 7a Loans
Chicago, IL (PRWEB) February 28, 2012
Clopton Capital, a provider of business loans, working capital and SBA loans is announcing the arrival fixed rates on both SBA 504 and SBA 7a loans. These small business loans are believed by the firm to be more advantageous and less risky for the borrower since it will be easier to predict the total cost of borrowing business capital or working capital on a fixed SBA loan. They believe this will help drive more business to their firm that they had previously been unable to acquire. This announcement is being made via their SBA loan website, SBABusinessLoanSource.com, CloptonCapital.com and this press release. They believe that it is necessary to establish themselves as soon as possible as a source for fixed interest rate working capital business loans since they believe many of their competitors are soon to do the same. “Being able to provide fixed interest rate SBA loans is definitely a breakthrough for us. I can safely say that this change will benefit us and even more so our clients”, said Jake Clopton, the founder of Clopton Capital.
Clopton Capital states that these fixed interest rate SBA loans have been made available roughly one week before the publishing of this release and that they are fully capable of accepting new SBA loan requests immediately. “This is really exciting to be able to offer these SBA loans as there have been few times in history when they were needed more. I imagine there will be a significant spike in business immediately following our current prospects and clients learning of this”, said Matt Reed, an associate of Clopton Capital.
For more information about Clopton Capital’s business loan services visit their website dedicated to them at CloptonCapital.com. To join their financial link exchange visit CloptonCapital.com/link.
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Clopton Capital, a provider of business loans, working capital and SBA loans is announcing the arrival fixed rates on both SBA 504 and SBA 7a loans. These small business loans are believed by the firm to be more advantageous and less risky for the borrower since it will be easier to predict the total cost of borrowing business capital or working capital on a fixed SBA loan. They believe this will help drive more business to their firm that they had previously been unable to acquire. This announcement is being made via their SBA loan website, SBABusinessLoanSource.com, CloptonCapital.com and this press release. They believe that it is necessary to establish themselves as soon as possible as a source for fixed interest rate working capital business loans since they believe many of their competitors are soon to do the same. “Being able to provide fixed interest rate SBA loans is definitely a breakthrough for us. I can safely say that this change will benefit us and even more so our clients”, said Jake Clopton, the founder of Clopton Capital.
Clopton Capital states that these fixed interest rate SBA loans have been made available roughly one week before the publishing of this release and that they are fully capable of accepting new SBA loan requests immediately. “This is really exciting to be able to offer these SBA loans as there have been few times in history when they were needed more. I imagine there will be a significant spike in business immediately following our current prospects and clients learning of this”, said Matt Reed, an associate of Clopton Capital.
For more information about Clopton Capital’s business loan services visit their website dedicated to them at CloptonCapital.com. To join their financial link exchange visit CloptonCapital.com/link.
http://tourism9.com/ http://vkins.com/
Loans, grants available for home repair
Area residents who need help making home repairs should contact the U.S. Department of Agriculture as soon as possible regarding available loans and grants, said Amy Johnson, a rural development specialist for the USDA’s Rural Development office in Oregon.
“It really is a great program for people who otherwise couldn’t afford to make renovations,” Johnson said. “And people who are at risk of losing their home because of a health and safety issue, this can help with that, too.”
The USDA’s Rural Development program for Northwest Illinois offers financial assistance for home repairs in the form of loans and grants. A repair loan must be used to improve or modernize homes, make them safer and more sanitary, or to remove health and safety hazards, states a USDA news release. Eligible repairs include roofing, siding, windows, foundation repairs, kitchen cabinets, septic system, and furnace/air-conditioning.
The maximum loan amount is $20,000, and loans can be made for a term of 20 years at 1 percent interest, the release states. To qualify, an applicant needs to own and occupy the home, have acceptable credit, be able to repay the loan, and meet “very low” income guidelines, the release states. To help illustrate these guidelines, a family of four in Stephenson County can earn up to $29,950 and still qualify, the release states.
The home repair grants are only awarded for projects that address health, safety, or accessibility issues for a home. Unlike the loans, the grants do not have to be repaid. Grants are often made in conjunction with small loans, and there’s a $7,500 lifetime limit on repair grant funds.
A limited number of these grants are available, the release states. Applicants must meet very low income guidelines, be 62 years of age or older, and demonstrate an inability to make loan payments, the release states.
Johnson said homeowners who think they might qualify for a loan or grant should call the USDA office in Oregon. Department officials will ask callers several preliminary questions to get a sense of whether they qualify. Then, an application will be sent to the homeowner if they wish, Johnson said. For disabled residents, USDA officials can also visit the individual’s home to deliver the application and help them with the process, she said.
“It runs all year long every year,” Johnson said of the Rural Development program.
The USDA’s Rural Development office in Oregon serves seven counties in Northwest Illinois, including Stephenson, Jo Daviess, Carroll, Boone, Winnebago, Ogle, and Lee.http://tourism9.com/ http://vkins.com/
“It really is a great program for people who otherwise couldn’t afford to make renovations,” Johnson said. “And people who are at risk of losing their home because of a health and safety issue, this can help with that, too.”
The USDA’s Rural Development program for Northwest Illinois offers financial assistance for home repairs in the form of loans and grants. A repair loan must be used to improve or modernize homes, make them safer and more sanitary, or to remove health and safety hazards, states a USDA news release. Eligible repairs include roofing, siding, windows, foundation repairs, kitchen cabinets, septic system, and furnace/air-conditioning.
The maximum loan amount is $20,000, and loans can be made for a term of 20 years at 1 percent interest, the release states. To qualify, an applicant needs to own and occupy the home, have acceptable credit, be able to repay the loan, and meet “very low” income guidelines, the release states. To help illustrate these guidelines, a family of four in Stephenson County can earn up to $29,950 and still qualify, the release states.
The home repair grants are only awarded for projects that address health, safety, or accessibility issues for a home. Unlike the loans, the grants do not have to be repaid. Grants are often made in conjunction with small loans, and there’s a $7,500 lifetime limit on repair grant funds.
A limited number of these grants are available, the release states. Applicants must meet very low income guidelines, be 62 years of age or older, and demonstrate an inability to make loan payments, the release states.
Johnson said homeowners who think they might qualify for a loan or grant should call the USDA office in Oregon. Department officials will ask callers several preliminary questions to get a sense of whether they qualify. Then, an application will be sent to the homeowner if they wish, Johnson said. For disabled residents, USDA officials can also visit the individual’s home to deliver the application and help them with the process, she said.
“It runs all year long every year,” Johnson said of the Rural Development program.
The USDA’s Rural Development office in Oregon serves seven counties in Northwest Illinois, including Stephenson, Jo Daviess, Carroll, Boone, Winnebago, Ogle, and Lee.http://tourism9.com/ http://vkins.com/
Private Equity, Finance Lawyer Melinda Rishkofski Joins Baker Botts L.L.P. as Partner in Moscow
MOSCOW, February 28, 2012 /PRNewswire/ –
Melinda Rishkofski, who has represented private equity fund managers, international financial institutions and portfolio companies in Russia, Eastern Europe, the UK and the US, has joined Baker Botts L.L.P. as a partner in the firm´s Moscow office.
(Photo: http://photos.prnewswire.com/prnh/20120228/DA58239)
(Logo: http://photos.prnewswire.com/prnh/20100503/BAKERBOTTSLOGO)
Rishkofski´s experience includes working with Russian and Eastern European privatization policies, policy advice and drafting laws for the new Russian economy, development of Russian corporate securities and regulatory structures. She also worked on regulatory and legislative matters with representatives for the U.S. and Russian governments.
“Melinda adds depth to our international transactional resources, ” said Baker Botts Managing Partner Walt Smith. “Her focus on the Russian market and her extensive private equity experience are significant additions to our client offerings.”
Prior to joining Baker Botts, Rishkofski was general counsel for Russian-based Baring Vostok Capital Partners. As principal advisor, negotiator and transaction counsel, she provided legal support to financial institutions, multilateral development banks, private equity fund managers and Russian companies with respect to debt and equity financing transactions, mergers and acquisitions, restructurings, employee incentive programs, dispute resolution and general corporate matters.
In this role, Rishkofski has worked with and served more than 35 investee companies and the legal needs of private equity investment funds with more than $2 billion in capital and assets. She has also worked extensively with the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD) and the Overseas Private Investment Corporation (OPIC) on secured credit and debt and equity financing transactions.
“Melinda´s extensive knowledge of the private equity and funds sector in Russia and the CIS, a market sector where we expect to see significant increased activity in 2012, will provide our clients working in or entering into this sector an expertise not currently available from legal consultants in the region, ” said Steven Wardlaw, Partner in Charge of Baker Botts´ Moscow office.
Rishkofski obtained a BS from the Pennsylvania State University in the U.S., a J.D. from the Dickinson School of Law (now part of the Pennsylvania State University), and an LL.M in International Business and Finance from the University of London, Kings College in the UK.
About Baker Botts L.L.P.
Baker Botts is an international law firm with over 725 lawyers and a network of 13 offices around the globe. Based on our experience and knowledge of our clients´ industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Throughout our 172-year history, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit http://www.bakerbotts.com/.
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Stephen Winningham Joins Houlihan Lokey as Co-Head of European Corporate Finance
LONDON–(BUSINESS WIRE)–
Houlihan Lokey, an international investment bank, announced today that Stephen Winningham has joined as Managing Director and Co-Head of European Corporate Finance in the firm’s London office.
Mr. Winningham, formerly with Lloyds Banking Group, will work alongside Brian McKay, Managing Director and fellow Co-Head of European Corporate Finance, and will focus on further developing the firm’s European M&A and financing business. He will report to Scott Adelson and Robert Hotz, Senior Managing Directors and Global Co-Heads of the firm’s Corporate Finance business.
Mr. Winningham was recently head of Major Corporates at Lloyds Banking Group, overseeing the group’s coverage of U.K. and U.S. investment grade corporate clients. Prior to this, he was global head of Lloyds Banking Group’s Financial Institutions business.
“Stephen’s extensive international experience and proven track record in building client relationships will be instrumental in further enhancing our European and cross-border coverage,” said Scott Adelson. “Stephen’s appointment underlines our commitment to provide fully-integrated client focused advisory services to our corporate clients. He will be working closely with our sector and product specialists to build on the strong presence Houlihan Lokey has already created in the region,” added Robert Hotz.
“I’m delighted to join the firm at a time when there is an increasing need for independent strategic advice in the marketplace, which is something that Houlihan Lokey specializes in,” said Stephen Winningham. “I look forward to contributing to our growth strategy and further enhancing our client offering.”
Mr. Winningham brings with him three decades of experience in investment banking and commercial banking. Prior to Lloyds Banking Group, he was group head of the Asia Industrials and M&A groups at Salomon Brothers/Citigroup in Hong Kong. He also held leadership roles at Paine Webber Inc. and Kidder Peabody & Co. in New York (both now part of the UBS Group). He started his investment banking career at Drexel Burnham Lambert. Mr. Winningham holds a MBA from Columbia University and a bachelor’s degree from Colgate University in New York. He undertook additional graduate level studies in economics at New York University.
About Houlihan Lokey
Houlihan Lokey is an international investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, and valuation serving clients for 40 years. The firm is ranked globally as the No. 1 restructuring advisor, the No. 1 M&A fairness opinion advisor over the past 10 years, and the No. 1 M&A advisor for U.S. transactions under $1 billion, according to Thomson Reuters. Houlihan Lokey has 14 offices and more than 850 employees in Europe, the United States and Asia. The firm serves more than 1,000 clients each year, ranging from closely held companies to Global 500 corporations. For more information, visit http://www.hl.com/.
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EU, Indonesia negotiate partnership
Jakarta (The Jakarta Post/ANN) – Indonesia and the European Union (EU) began negotiations on Monday on a comprehensive economic partnership agreement (CEPA) that seeks to eliminate over 95 per cent of import tariffs on goods and improve bilateral investment.
The chief operating officer of the EU’s external action service, David O’Sullivan, said the Indonesia-European Union CEPA would be very important for the economic growth of both regions amidst the global economic turmoil.
“We already are a major trading and investment partner of Indonesia. In fact, we have huge complementarity. We believe it is very beneficial in terms of trade and investment to have an agreement with Indonesia. It is a win-win solution for both sides,¿ O’Sullivan said.
The EU has a combined non oil and gas trade value of US$32 billion in 2011 with Indonesia, an all time high, and a trade surplus of $8 billion for Indonesia.
In terms of investments, businesses from the EU invested up to $2.2 billion in 2011, making it the second-largest source of foreign investment into Indonesia. EU companies also employ over 500,000 employees in Indonesia.
“It is time to start the negotiation. From our perspective, trade negotiation typically takes a couple of years but this negotiation could go relatively quickly,¿ O’Sullivan said.
Based on policy recommendations from a joint study team, the CEPA would cover improvements in market access, capacity building and facilitation of trade and investment. On trade, the agreement would implement gradual tariff reduction within a period of nine years, eliminating 95 per cent of tariffs and possibly even the remaining 5 per cent.
The capacity-building program would include a permanent forum for business-to-business and business-to-government technical dialogue and joint financing for programs. CEPA would also cover standard protocols for joint cooperation in infrastructure development under the so-called private-partnership framework.
House of Representatives’ trade commission chairman Airlangga Hartarto said that the multitude of issues being discussed meant the agreement could potentially provide many beneficial opportunities for both regions.
“This is not a Free Trade Area (FTA) agreement but will be more comprehensive. The issues being discussed include trading, investment and capacity-building. These issues make this agreement different from the FTA, which only aims at eliminating levies,¿ Airlangga said.
Indonesian Employers’ Association (Apindo) chairman Sofjan Wanandi said that he expected EU investment to provide benefits to small- and medium-scale enterprises (SMEs), a sector on which Indonesia relied heavily for growth.
“I believe this [agreement] will benefit both sides and we must also involve SMEs in our future investment plans. We are going to promote this agreement throughout the essential business regions in the country,¿ Sofjan said.
“Now that the negotiation is underway, we need to promote this agreement to the public so that they can give us their input. This [negotiation] will take time and therefore Indonesia must play the main role in ensuring the discussions go in line with our interests,¿ he added.
Indonesian Chamber of Commerce and Industry (Kadin) deputy chairman for international trade Emirsyah Satar said that establishing a comprehensive partnership with the EU was important because there was still a lot of untapped potential.
“We rank only at number 23 in the world in imports to the EU. On the other hand, the EU is the fourth-largest exporter into Indonesia. So, there is still a lot of room for business growth,¿ Emirsyah said.
COPYRIGHT: ASIA NEWS NETWORK
The chief operating officer of the EU’s external action service, David O’Sullivan, said the Indonesia-European Union CEPA would be very important for the economic growth of both regions amidst the global economic turmoil.
“We already are a major trading and investment partner of Indonesia. In fact, we have huge complementarity. We believe it is very beneficial in terms of trade and investment to have an agreement with Indonesia. It is a win-win solution for both sides,¿ O’Sullivan said.
The EU has a combined non oil and gas trade value of US$32 billion in 2011 with Indonesia, an all time high, and a trade surplus of $8 billion for Indonesia.
In terms of investments, businesses from the EU invested up to $2.2 billion in 2011, making it the second-largest source of foreign investment into Indonesia. EU companies also employ over 500,000 employees in Indonesia.
“It is time to start the negotiation. From our perspective, trade negotiation typically takes a couple of years but this negotiation could go relatively quickly,¿ O’Sullivan said.
Based on policy recommendations from a joint study team, the CEPA would cover improvements in market access, capacity building and facilitation of trade and investment. On trade, the agreement would implement gradual tariff reduction within a period of nine years, eliminating 95 per cent of tariffs and possibly even the remaining 5 per cent.
The capacity-building program would include a permanent forum for business-to-business and business-to-government technical dialogue and joint financing for programs. CEPA would also cover standard protocols for joint cooperation in infrastructure development under the so-called private-partnership framework.
House of Representatives’ trade commission chairman Airlangga Hartarto said that the multitude of issues being discussed meant the agreement could potentially provide many beneficial opportunities for both regions.
“This is not a Free Trade Area (FTA) agreement but will be more comprehensive. The issues being discussed include trading, investment and capacity-building. These issues make this agreement different from the FTA, which only aims at eliminating levies,¿ Airlangga said.
Indonesian Employers’ Association (Apindo) chairman Sofjan Wanandi said that he expected EU investment to provide benefits to small- and medium-scale enterprises (SMEs), a sector on which Indonesia relied heavily for growth.
“I believe this [agreement] will benefit both sides and we must also involve SMEs in our future investment plans. We are going to promote this agreement throughout the essential business regions in the country,¿ Sofjan said.
“Now that the negotiation is underway, we need to promote this agreement to the public so that they can give us their input. This [negotiation] will take time and therefore Indonesia must play the main role in ensuring the discussions go in line with our interests,¿ he added.
Indonesian Chamber of Commerce and Industry (Kadin) deputy chairman for international trade Emirsyah Satar said that establishing a comprehensive partnership with the EU was important because there was still a lot of untapped potential.
“We rank only at number 23 in the world in imports to the EU. On the other hand, the EU is the fourth-largest exporter into Indonesia. So, there is still a lot of room for business growth,¿ Emirsyah said.
COPYRIGHT: ASIA NEWS NETWORK
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Manhattan Lures REITs Capitalizing on Rising Rents as Sales Lag: Mortgages
Tom Toomey, chief executive officer of real estate investment firm UDR Inc. (UDR), is betting the best rental deal in Manhattan is owning the whole building.
The nation’s third-largest apartment real estate investment trust bought a five-tower apartment complex on Columbus Avenue between West 97th and 100th streets for about $630 million last month, with rents from $2,500 for a studio or one-bedroom apartment to more than $10,000 a month for a penthouse suite. It’s Toomey’s fifth purchase in Manhattan in the past year as rents soar and financing difficulties make it harder for individuals to buy.
“Financing and underwriting are much tighter,” Toomey said in a telephone interview. With purchases requiring larger down payments, “people are going to stay renters for a long time,” said Toomey, who’s based in Highlands Ranch, Colorado.
Strict lending standards for so-called jumbo mortgages have contributed to declining home buying across the U.S. by even the most creditworthy borrowers as issuance of the loans has dropped 68 percent since 2007. Nowhere is that more evident than in Manhattan, where the median price of a two-bedroom apartment is about $1.2 million, almost twice the limit backed by government- supported mortgage companies Fannie Mae and Freddie Mac.
Manhattan rents rose 9.5 percent last quarter to an average $3,121, Miller Samuel Inc. and Prudential Douglas Elliman Real Estate said in a report last month. That’s about three times the rate for the 44 largest apartment markets in the U.S., according to Marcus & Millichap, a real estate brokerage firm. Manhattan rental apartment vacancy rates fell to a four-year low of 0.96 percent last year, down from 1.2 percent a year earlier and 1.9 percent in 2009, according to brokerage Citi Habitats. Vacancy bottomed in 2006 at 0.76 percent.
Jumbo loans exceed limits set for government-controlled mortgage companies by congress. For New York that’s $625,500.
Wall Street’s pay practices are also making it harder to buy, as financial firms increasingly pay bonuses in stock and deferred cash, said Alan Johnson, managing director of compensation consultant Johnson Associates Inc.
Morgan Stanley, Credit Suisse Group AG and Citigroup Inc. have all reduced senior investment bankers’ pay for last year as revenue slows. Morgan Stanley is capping immediate cash bonuses at $125,000, people with knowledge of the move said last month.
Renters outnumber homeowners in the country’s largest cities including New York, Los Angeles and Chicago. More than 77 percent of Manhattan’s occupied units were rented in the decade ended 2010, compared with nearly 23 that were owned, data from the Census Bureau showed.
Nationally, the home ownership rate fell 1.1 percent to 65.1 percent from 2000 to 2010, the largest decrease since the Great Depression, according to the U.S. Census Bureau.
Low vacancy rates and rents that are likely to continue climbing this year have made apartments the “darling” of commercial real estate, according to Ryan Severino, economist at research firm Reis Inc.
Toomey said in August that the REIT planned to invest as much as $1.8 billion in Manhattan apartment buildings. Its most recent purchase, about 700 apartment units at Columbus Square on the Upper West Side, was a joint venture with MetLife Inc. (MET), the biggest U.S. life insurer.
They partly funded the purchase with $302.3 million of 10- year fixed- and floating-rate debt from Fannie Mae, the government-supported mortgage company, UDR said in a statement last month. The loans pay 3.8 percent interest.
That compares with a rate of 4.85 percent for a 30-year jumbo mortgage to an individual in New York (ILMJNY) and 4.73 percent nationally, according to Bankrate.com data. For conforming Freddie Mac (NMCMFUS) loans, rates are 3.95 percent, after falling to 3.87 percent this month, the lowest in records dating to 1971.
For Fannie Mae and Freddie Mac, the conforming limit is $625,500 in high-priced markets such as New York, San Francisco and the Florida Keys, compared with $417,000 for most of the rest of the country. The Federal Housing Administration (FHAVARM$), a government agency with the goal of expanding ownership for “underserved” communities, according to its website, will insure loans up to $729,750 in New York.
Banks and mortgage lenders issued $110 billion in jumbo loans last year, up 5.8 percent from 2010, according to Guy Cecala, publisher of Inside Mortgage Finance. The market has contracted from $348 billion in 2007 after peaking in 2003 at $650 billion.
Lenders and bankers, no longer able to package jumbo loans and sell them to investors, are required to have enough capital to carry non-conforming debt on their books until maturity.
“Some don’t have the ability to keep it on their balance sheets,” Monte N. Redman, president of bank holding company Astoria Financial Corp., said in a telephone interview.
FHA loans are also harder to get in Manhattan, and aren’t available at all for co-op apartments, because borrowers purchase shares in the building’s management company instead of buying the property itself. The FHA does limited lending for condominiums, units individually grouped into a cluster. It insured 107 mortgages for condos in Manhattan last year, compared with 90 in 2010 and 42 in 2009, the FHA said.
Non-conforming loans nationally accounted for nearly 2 percent of all purchase applications last year, up 33 percent relative to 2010, according to the Mortgage Bankers Association’s monthly profile of state and national mortgage activity.
Those loans have tougher standards such as high interest rates and down payments ranging from 25 to 40 percent, according to Mike Fratantoni, vice president of research for the Mortgage Bankers Association.
“They’re only available to the best credit borrowers,” Fratantoni said.
Financing a purchase with loans above government limits won’t get easier until the secondary market grows an appetite for jumbo loans, according to Miller of Miller Samuel.
The secondary market comprises mortgage bankers, savings and loan associations and large private investment institutions that buy mortgages from primary lenders or investors.
Redwood Trust Inc. (RWT), a real estate investment trust based in Mill Valley, California, has completed four sales of bonds totaling about $1 billion tied to new U.S. home loans since 2010, according to Mike McMahon, managing director of Redwood, which specializes in jumbo loans.
Wells Fargo & Co., the nation’s largest home lender, plans to trim credit requirements this year as it aims to increase its loan volume, according to Greg Gwizdz, sales manager for the eastern U.S. for Wells Fargo Home Mortgage. The bank reduced the cost of loans over $2 million last month and is lowering post- closing requirements for cash reserves, he said.
“We’re seeing a fair amount of demand, we have a strong appetite and we’re doing a lot of volume,” Gwizdz said in a telephone interview.
Wells Fargo funded $13.7 billion in non-conforming loans across the nation for the nine month period ending September, the San Francisco-based lender said. In Manhattan its volume of loans without government backing increased 56 percent from a year earlier.
“Without the conversion, the condos wouldn’t have sold or would have sold at half the price,” Bob Scaglion of Rose Associates, the company’s manager, said. Eventually, the owners want to put the condominiums back on the purchase market, according to Heather McDonough, broker for Prudential Real Estate who works to sell William Beaver units.
“The rentals are in high demand,” McDonough said. “In a few years, maybe it will be different.”
To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net
To contact the editor responsible for this story: Rob Urban at robprag@bloomberg.net
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The nation’s third-largest apartment real estate investment trust bought a five-tower apartment complex on Columbus Avenue between West 97th and 100th streets for about $630 million last month, with rents from $2,500 for a studio or one-bedroom apartment to more than $10,000 a month for a penthouse suite. It’s Toomey’s fifth purchase in Manhattan in the past year as rents soar and financing difficulties make it harder for individuals to buy.
“Financing and underwriting are much tighter,” Toomey said in a telephone interview. With purchases requiring larger down payments, “people are going to stay renters for a long time,” said Toomey, who’s based in Highlands Ranch, Colorado.
Strict lending standards for so-called jumbo mortgages have contributed to declining home buying across the U.S. by even the most creditworthy borrowers as issuance of the loans has dropped 68 percent since 2007. Nowhere is that more evident than in Manhattan, where the median price of a two-bedroom apartment is about $1.2 million, almost twice the limit backed by government- supported mortgage companies Fannie Mae and Freddie Mac.
Manhattan rents rose 9.5 percent last quarter to an average $3,121, Miller Samuel Inc. and Prudential Douglas Elliman Real Estate said in a report last month. That’s about three times the rate for the 44 largest apartment markets in the U.S., according to Marcus & Millichap, a real estate brokerage firm. Manhattan rental apartment vacancy rates fell to a four-year low of 0.96 percent last year, down from 1.2 percent a year earlier and 1.9 percent in 2009, according to brokerage Citi Habitats. Vacancy bottomed in 2006 at 0.76 percent.
Wall Street Pay
“The key to the strength of the rental market is tightness of credit,” Jonathan Miller, president of appraiser Miller Samuel, said in a telephone interview. “It takes quadruple-A bizarre credit requirements to get approved.”Jumbo loans exceed limits set for government-controlled mortgage companies by congress. For New York that’s $625,500.
Wall Street’s pay practices are also making it harder to buy, as financial firms increasingly pay bonuses in stock and deferred cash, said Alan Johnson, managing director of compensation consultant Johnson Associates Inc.
Morgan Stanley, Credit Suisse Group AG and Citigroup Inc. have all reduced senior investment bankers’ pay for last year as revenue slows. Morgan Stanley is capping immediate cash bonuses at $125,000, people with knowledge of the move said last month.
Shorter Commitment
“It’s not a great sign for the financial sector contributing to purchasing apartments because there’s no sense of urgency to buy,” said Johnson. “Rentals are a much shorter commitment.”Renters outnumber homeowners in the country’s largest cities including New York, Los Angeles and Chicago. More than 77 percent of Manhattan’s occupied units were rented in the decade ended 2010, compared with nearly 23 that were owned, data from the Census Bureau showed.
Nationally, the home ownership rate fell 1.1 percent to 65.1 percent from 2000 to 2010, the largest decrease since the Great Depression, according to the U.S. Census Bureau.
Low vacancy rates and rents that are likely to continue climbing this year have made apartments the “darling” of commercial real estate, according to Ryan Severino, economist at research firm Reis Inc.
Apartment Indices
The Bloomberg REIT Apartment Index (BBREAPT) of 16 publicly traded landlords returned 10 percent in the past year, including reinvested dividends, compared with returns of 6.8 percent for the Bloomberg REIT Index (BBREIT) and 5.2 percent for the Standard & Poor’s 500 Index. Equity Residential (EQR), the largest U.S. apartment REIT, returned 11.2 percent in the past year, according to data compiled by Bloomberg, and UDR gained 10.8 percent.Toomey said in August that the REIT planned to invest as much as $1.8 billion in Manhattan apartment buildings. Its most recent purchase, about 700 apartment units at Columbus Square on the Upper West Side, was a joint venture with MetLife Inc. (MET), the biggest U.S. life insurer.
They partly funded the purchase with $302.3 million of 10- year fixed- and floating-rate debt from Fannie Mae, the government-supported mortgage company, UDR said in a statement last month. The loans pay 3.8 percent interest.
That compares with a rate of 4.85 percent for a 30-year jumbo mortgage to an individual in New York (ILMJNY) and 4.73 percent nationally, according to Bankrate.com data. For conforming Freddie Mac (NMCMFUS) loans, rates are 3.95 percent, after falling to 3.87 percent this month, the lowest in records dating to 1971.
Housing Limits
Lenders have been wary to issue mortgages for non- conforming loans including jumbos since the housing market started falling in 2006 and losses on mortgage securities propelled the nation into the worst financial crisis since the Great Depression.For Fannie Mae and Freddie Mac, the conforming limit is $625,500 in high-priced markets such as New York, San Francisco and the Florida Keys, compared with $417,000 for most of the rest of the country. The Federal Housing Administration (FHAVARM$), a government agency with the goal of expanding ownership for “underserved” communities, according to its website, will insure loans up to $729,750 in New York.
Banks and mortgage lenders issued $110 billion in jumbo loans last year, up 5.8 percent from 2010, according to Guy Cecala, publisher of Inside Mortgage Finance. The market has contracted from $348 billion in 2007 after peaking in 2003 at $650 billion.
Origination Volumes
Mortgage origination overall was down 17 percent year-over- year to $1.35 trillion, the lowest in over a decade, according to Cecala.Lenders and bankers, no longer able to package jumbo loans and sell them to investors, are required to have enough capital to carry non-conforming debt on their books until maturity.
“Some don’t have the ability to keep it on their balance sheets,” Monte N. Redman, president of bank holding company Astoria Financial Corp., said in a telephone interview.
FHA loans are also harder to get in Manhattan, and aren’t available at all for co-op apartments, because borrowers purchase shares in the building’s management company instead of buying the property itself. The FHA does limited lending for condominiums, units individually grouped into a cluster. It insured 107 mortgages for condos in Manhattan last year, compared with 90 in 2010 and 42 in 2009, the FHA said.
Manhattan Sales
Manhattan co-op and condominium sales totaled 2,011 in the fourth quarter, 12.4 percent less a year earlier, according to Miller Samuel and Prudential.Non-conforming loans nationally accounted for nearly 2 percent of all purchase applications last year, up 33 percent relative to 2010, according to the Mortgage Bankers Association’s monthly profile of state and national mortgage activity.
Those loans have tougher standards such as high interest rates and down payments ranging from 25 to 40 percent, according to Mike Fratantoni, vice president of research for the Mortgage Bankers Association.
“They’re only available to the best credit borrowers,” Fratantoni said.
Financing a purchase with loans above government limits won’t get easier until the secondary market grows an appetite for jumbo loans, according to Miller of Miller Samuel.
The secondary market comprises mortgage bankers, savings and loan associations and large private investment institutions that buy mortgages from primary lenders or investors.
MBS Sales
There are signs of revival for mortgage-backed securities, according to Jan Scheck, managing director at DE Capital Mortgage, a New York-based mortgage consulting firm.Redwood Trust Inc. (RWT), a real estate investment trust based in Mill Valley, California, has completed four sales of bonds totaling about $1 billion tied to new U.S. home loans since 2010, according to Mike McMahon, managing director of Redwood, which specializes in jumbo loans.
Wells Fargo & Co., the nation’s largest home lender, plans to trim credit requirements this year as it aims to increase its loan volume, according to Greg Gwizdz, sales manager for the eastern U.S. for Wells Fargo Home Mortgage. The bank reduced the cost of loans over $2 million last month and is lowering post- closing requirements for cash reserves, he said.
“We’re seeing a fair amount of demand, we have a strong appetite and we’re doing a lot of volume,” Gwizdz said in a telephone interview.
Wells Fargo funded $13.7 billion in non-conforming loans across the nation for the nine month period ending September, the San Francisco-based lender said. In Manhattan its volume of loans without government backing increased 56 percent from a year earlier.
William Beaver House
For now, building owners don’t have time to wait for the rebound. William Beaver House in Manhattan’s Financial District was mostly empty in 2010, two years after the 47-story condominium tower was built. It’s almost 90 percent occupied after owner CIM Group converted the units to luxury rentals costing more than $8,000 a month for a three-bedroom. A down payment on a $3 million apartment at William Beaver would range anywhere from $750,000 to over $1 million, per jumbo loan standards. A pre-recession down payment, averaging 20 percent or less, would have cost $600,000.“Without the conversion, the condos wouldn’t have sold or would have sold at half the price,” Bob Scaglion of Rose Associates, the company’s manager, said. Eventually, the owners want to put the condominiums back on the purchase market, according to Heather McDonough, broker for Prudential Real Estate who works to sell William Beaver units.
“The rentals are in high demand,” McDonough said. “In a few years, maybe it will be different.”
To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net
To contact the editor responsible for this story: Rob Urban at robprag@bloomberg.net
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CIMB Holds Talks for RBS Asian Assets as Profit Hits Record
February 27, 2012, 10:33 PM EST
By Chong Pooi Koon
(Updates with analyst’s reaction in seventh paragraph.)
Feb. 28 (Bloomberg) — CIMB Group Holdings Bhd., Malaysia’s second-biggest bank, said fourth-quarter profit surged 30 percent to a record on increased lending as it seeks to grow its Asia-Pacific reach.
The Kuala Lumpur-based bank is in talks to buy part of the Royal Bank of Scotland Plc’s investment banking and securities business in the region, CIMB Chief Executive Officer Nazir Razak told reporters in Kuala Lumpur yesterday. It’s simultaneously in negotiations to acquire a stake in Manila-based Bank of Commerce, he said, declining to give details on both deals.
Net income climbed to 1.13 billion ringgit ($374 million), or 15.2 sen per share, in the three months ended Dec. 31 from 872.6 million ringgit, or 11.8 sen per share, a year earlier, the company said in an exchange filing. It declared a higher dividend of 10 sen per share, compared with 8 sen previously.
“I think 2012 could surprise on the upside as most of the downside risks are already quite visible,” Nazir said in a separate e-mailed statement. “The investment banking deal pipeline is good,” he told reporters.
CIMB wants to extend its regional reach after being Malaysia’s top underwriter for equity and rights offerings in the past three years. It has made acquisitions in Singapore, Thailand and Indonesia in the last seven years and may be one of two remaining bidders for RBS’s Asian equities, mergers and acquisitions businesses as well as its research arm, the Financial Times reported Feb. 7, citing people it didn’t name.
Philippine Talks
The Malaysian group is in separate talks with San Miguel Corp. and other shareholders to buy a 60 percent stake in Bank of Commerce, a person with knowledge of the matter said last month. It was the 16th largest lender in the Philippines by assets as of June 30 with 122 branches, according to the county’s central bank.
“Management again reassured that both mergers and acquisitions if successful won’t be financed through equity,” UOB-Kay Hian Holdings Ltd. said in a report today. “Financing will come mostly through internal funds.”
UOB upgraded the stock to “hold” and increased its price target to 6.90 ringgit from 6.20 ringgit, still below its unchanged market price of 7.14 ringgit at 11:05 a.m. in Kuala Lumpur trading today. Hong Leong Investment Bank Bhd. boosted its price target for CIMB to 7.78 ringgit from 7.69 ringgit, according to a separate broking report.
CIMB joined other Malaysian lenders Malayan Banking Bhd. and Public Bank Bhd. in posting increased earnings for the quarter as a domestic economy that expanded 5.1 percent last year helped spur demand for loans and financing. Hong Leong Bank Bhd. yesterday reported a 31 percent jump in quarterly net income, while RHB Capital Bhd. is expected to report today.
Net interest income, or revenue from borrowers after deducting interest paid to depositors, increased 7 percent to 1.76 billion ringgit in the quarter, CIMB said. Allowances for impairment losses on loans and financing grew 73 percent to 289 million ringgit, the company said.
–Editors: Barry Porter, Chan Tien Hin
To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net
To contact the editor responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net
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By Chong Pooi Koon
(Updates with analyst’s reaction in seventh paragraph.)
Feb. 28 (Bloomberg) — CIMB Group Holdings Bhd., Malaysia’s second-biggest bank, said fourth-quarter profit surged 30 percent to a record on increased lending as it seeks to grow its Asia-Pacific reach.
The Kuala Lumpur-based bank is in talks to buy part of the Royal Bank of Scotland Plc’s investment banking and securities business in the region, CIMB Chief Executive Officer Nazir Razak told reporters in Kuala Lumpur yesterday. It’s simultaneously in negotiations to acquire a stake in Manila-based Bank of Commerce, he said, declining to give details on both deals.
Net income climbed to 1.13 billion ringgit ($374 million), or 15.2 sen per share, in the three months ended Dec. 31 from 872.6 million ringgit, or 11.8 sen per share, a year earlier, the company said in an exchange filing. It declared a higher dividend of 10 sen per share, compared with 8 sen previously.
“I think 2012 could surprise on the upside as most of the downside risks are already quite visible,” Nazir said in a separate e-mailed statement. “The investment banking deal pipeline is good,” he told reporters.
CIMB wants to extend its regional reach after being Malaysia’s top underwriter for equity and rights offerings in the past three years. It has made acquisitions in Singapore, Thailand and Indonesia in the last seven years and may be one of two remaining bidders for RBS’s Asian equities, mergers and acquisitions businesses as well as its research arm, the Financial Times reported Feb. 7, citing people it didn’t name.
Philippine Talks
The Malaysian group is in separate talks with San Miguel Corp. and other shareholders to buy a 60 percent stake in Bank of Commerce, a person with knowledge of the matter said last month. It was the 16th largest lender in the Philippines by assets as of June 30 with 122 branches, according to the county’s central bank.
“Management again reassured that both mergers and acquisitions if successful won’t be financed through equity,” UOB-Kay Hian Holdings Ltd. said in a report today. “Financing will come mostly through internal funds.”
UOB upgraded the stock to “hold” and increased its price target to 6.90 ringgit from 6.20 ringgit, still below its unchanged market price of 7.14 ringgit at 11:05 a.m. in Kuala Lumpur trading today. Hong Leong Investment Bank Bhd. boosted its price target for CIMB to 7.78 ringgit from 7.69 ringgit, according to a separate broking report.
CIMB joined other Malaysian lenders Malayan Banking Bhd. and Public Bank Bhd. in posting increased earnings for the quarter as a domestic economy that expanded 5.1 percent last year helped spur demand for loans and financing. Hong Leong Bank Bhd. yesterday reported a 31 percent jump in quarterly net income, while RHB Capital Bhd. is expected to report today.
Net interest income, or revenue from borrowers after deducting interest paid to depositors, increased 7 percent to 1.76 billion ringgit in the quarter, CIMB said. Allowances for impairment losses on loans and financing grew 73 percent to 289 million ringgit, the company said.
–Editors: Barry Porter, Chan Tien Hin
To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net
To contact the editor responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net
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2012年2月26日星期日
Online resources for doing research
If you’re considering a company as a possible investment, you’ll need to determine how healthy and promising it is. Here are some online resources that can help. (Two good offline resources are “The Little Book That Still Beats the Market” by Joel Greenblatt and “The Little Book of Value Investing” by Christopher H. Browne — both Wiley, $20.)
•The company’s own website. Look for links labeled “About Us,” “Corporate Information,” “Investor Relations,” etc., and try to read through at least the most recent annual report. Even a “Career Opportunities” section can give you insights into how heavily it’s hiring and what kinds of people it needs. Search engines such as Google.com can help you find a company’s website.
•Online company data providers, such as finance.yahoo.com and caps.fool.com. Financial statements that companies must file with the Securities and Exchange Commission (SEC) are available through such sites and also at sec.gov/edgar.shtml.
•Analyst research reports. Most major online brokerages (such as E-Trade, TD Ameritrade, Schwab, Fidelity, etc.) offer customers access to a range of Wall Street reports on loads of stocks. Learn more about choosing the best brokerage at broker.fool.com.
•Industry information. Research an industry at websites such as these: virtualpet.com/industry /rdindex2.htm, bls.gov/iag, and valuationresources.com/IndustryReport.htm. Simple Google searches can help, too.
•Historical P/E ratios and other measures. Look these up at sites such as morningstar.com.
Historical numbers can be very handy. If a company you’re examining has a P/E of 22, for example, and you see that over the past five years its P/E has usually been around 30, then you might be looking at an attractive price right now. (Do more digging, though, to make sure the company isn’t facing some current tough challenges.)
•Articles in current issues and archives of financial periodicals such as The Wall Street Journal and Fortune. You can read many online for free, and your local newspaper’s business section can be informative, too.
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•The company’s own website. Look for links labeled “About Us,” “Corporate Information,” “Investor Relations,” etc., and try to read through at least the most recent annual report. Even a “Career Opportunities” section can give you insights into how heavily it’s hiring and what kinds of people it needs. Search engines such as Google.com can help you find a company’s website.
•Online company data providers, such as finance.yahoo.com and caps.fool.com. Financial statements that companies must file with the Securities and Exchange Commission (SEC) are available through such sites and also at sec.gov/edgar.shtml.
•Analyst research reports. Most major online brokerages (such as E-Trade, TD Ameritrade, Schwab, Fidelity, etc.) offer customers access to a range of Wall Street reports on loads of stocks. Learn more about choosing the best brokerage at broker.fool.com.
•Industry information. Research an industry at websites such as these: virtualpet.com/industry /rdindex2.htm, bls.gov/iag, and valuationresources.com/IndustryReport.htm. Simple Google searches can help, too.
•Historical P/E ratios and other measures. Look these up at sites such as morningstar.com.
Historical numbers can be very handy. If a company you’re examining has a P/E of 22, for example, and you see that over the past five years its P/E has usually been around 30, then you might be looking at an attractive price right now. (Do more digging, though, to make sure the company isn’t facing some current tough challenges.)
•Articles in current issues and archives of financial periodicals such as The Wall Street Journal and Fortune. You can read many online for free, and your local newspaper’s business section can be informative, too.
http://tourism9.com/ http://vkins.com/
Christian financial advisers welcome review into payday loans
The Association of Christian Financial Advisers has welcomed the Government’s decision to investigate payday loans.
The Office of Fair Trading is to investigate payday lenders amid claims that they are taking advantage of people in financial difficulty and providing loans without checking that borrowers can afford to repay them.
The ACFA is calling for legislation to cap interest rates.
The group outlined its concerns in a letter to Chancellor George Osborne last December in which it expressed “increasing dismay” over the manner in which payday loan companies were allowed to trade.
The letter criticised the “unfair and unreasonable” interest rates charged by lenders.
According to the Independent, the typical APR charged by a payday lender is 4,000%.
“These rates of interest are not dissimilar to those of a back street loan shark, but dressed up with a fancy website and slick paced advertising,” the ACFA stated in its letter.
“Many consumers are now using this easy access to credit as a form of roll-over credit, month by month, thereby racking up unaffordable debt at extortionate rates of interest.”
The ACFA is calling upon the Chancellor to introduce legislation to cap interest rates for all personal lending, including unauthorised bank overdrafts.
It wants to see APR capped at a maximum percentage above base rate and interest limited to a rate similar to that imposed on credit unions – currently 12 per cent.
The ACFA has asked the Government to urgently introduce a measure to limit interest rates in the forthcoming budget.
“We’re delighted the government has announced this review of so-called Payday loans,” said Chairman Aidan Vaughan.
“There should be no place for the extortion of the desperate and vulnerable.”
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The Office of Fair Trading is to investigate payday lenders amid claims that they are taking advantage of people in financial difficulty and providing loans without checking that borrowers can afford to repay them.
The ACFA is calling for legislation to cap interest rates.
The group outlined its concerns in a letter to Chancellor George Osborne last December in which it expressed “increasing dismay” over the manner in which payday loan companies were allowed to trade.
The letter criticised the “unfair and unreasonable” interest rates charged by lenders.
According to the Independent, the typical APR charged by a payday lender is 4,000%.
“These rates of interest are not dissimilar to those of a back street loan shark, but dressed up with a fancy website and slick paced advertising,” the ACFA stated in its letter.
“Many consumers are now using this easy access to credit as a form of roll-over credit, month by month, thereby racking up unaffordable debt at extortionate rates of interest.”
The ACFA is calling upon the Chancellor to introduce legislation to cap interest rates for all personal lending, including unauthorised bank overdrafts.
It wants to see APR capped at a maximum percentage above base rate and interest limited to a rate similar to that imposed on credit unions – currently 12 per cent.
The ACFA has asked the Government to urgently introduce a measure to limit interest rates in the forthcoming budget.
“We’re delighted the government has announced this review of so-called Payday loans,” said Chairman Aidan Vaughan.
“There should be no place for the extortion of the desperate and vulnerable.”
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Saudi- Personal bank loans skyrocket 20 times to SR219 billion in 13 years
(MENAFN – Arab News) There has been a tremendous increase in the total value of personal loans extended by Saudi local banks in recent years. It shot up nearly 20 times within the last 13 years reaching SR219 billion in 2011 from SR11 billion in 1998, according to a report in Al-Eqtisadiah business daily.
This was mainly attributed to a huge increase in the number of banking customers and their reliance on local lenders to meet most of their personal requirements. Subsequently, almost all local banks have expanded their base of personal lending substantially even without taking into account the solvency of customers. Several financial and legal experts warned customers against relying heavily on banks to meet their financial requirements but most of them ignore such warnings.
Earlier, the number of customers who took out personal bank loans was very limited. In 1998, the volume of personal loans extended by local banks was merely SR11.2 billion. However it jumped three times to SR38.4 billion in 2001. The total value of personal loans was SR178.4 billion and SR198.8 billion in 2007 and 2010 respectively.
During Q3, 2011, the volume of personal loans extended by banks rose to SR218.9 billion. These included SR27.7 billion for real estate financing, SR46.2 billion for financing purchase of vehicles and equipment, and SR144.8 billion for other purposes, while credit card loans account for SR8.65 billion.
The huge increase in personal loans attributed mainly to the remarkable growth in the number of bank customers in recent years and their increased dependence on banks to meet most of their financial requirements. A number of Saudi financial and legal experts recently noted that Saudi banks had adopted a more cautious approach while extending personal loans in the past. Before 2000, the local banks concentrated mainly in extending loans only to companies and firms rather than individuals.
However, now the situation has been changed tremendously and almost all banks are competing each other to exploit this situation and resorting to the practice of receiving personal loan repayments directly from the salaries of borrowers. This practice served as a motivation for local banks to extend more personal loans to employees without taking into account their solvency.
The Saudi Arabian Monetary Agency (SAMA) introduced regulations for consumer financing and made them binding for the local banks effective Jan. 1, 2006. Banks are able to solve all the problems related to personal loans following the regulations issued by the central bank. There was also a SAMA directive that allows banks to treat the salaries of borrowers as security if they take out personal loans. This has helped banks to expand their base of personal lending substantially.
Some financial experts stressed that consumers must take utmost care and caution while taking personal loans so as not to affect their solvency as well as to prevent them from falling into a debt trap. They noted that consumers should take loans only if they are sure that they can make their prompt repayment. Loans be taken to fulfill only basic needs and not for any unnecessary requirements. There should be precise calculations and well thought out planning before taking loans, and there should not be any hasty decisions to take a loan. Precaution is to be taken against taking loans from illegal and unauthorized financial firms so as to avert becoming victims of fraudulent means and cheating.
Also, the monthly amount of repayment must be affordable to the consumer. There should also be proper balance between spending, borrowing and savings of the consumer. The consumer must have obtained all the relevant information with regard to the terms and conditions of borrowing and be fully aware of his ability to make repayments without affecting his solvency. The experts also cautioned against the habit of taking personal loans at regular intervals.
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This was mainly attributed to a huge increase in the number of banking customers and their reliance on local lenders to meet most of their personal requirements. Subsequently, almost all local banks have expanded their base of personal lending substantially even without taking into account the solvency of customers. Several financial and legal experts warned customers against relying heavily on banks to meet their financial requirements but most of them ignore such warnings.
Earlier, the number of customers who took out personal bank loans was very limited. In 1998, the volume of personal loans extended by local banks was merely SR11.2 billion. However it jumped three times to SR38.4 billion in 2001. The total value of personal loans was SR178.4 billion and SR198.8 billion in 2007 and 2010 respectively.
During Q3, 2011, the volume of personal loans extended by banks rose to SR218.9 billion. These included SR27.7 billion for real estate financing, SR46.2 billion for financing purchase of vehicles and equipment, and SR144.8 billion for other purposes, while credit card loans account for SR8.65 billion.
The huge increase in personal loans attributed mainly to the remarkable growth in the number of bank customers in recent years and their increased dependence on banks to meet most of their financial requirements. A number of Saudi financial and legal experts recently noted that Saudi banks had adopted a more cautious approach while extending personal loans in the past. Before 2000, the local banks concentrated mainly in extending loans only to companies and firms rather than individuals.
However, now the situation has been changed tremendously and almost all banks are competing each other to exploit this situation and resorting to the practice of receiving personal loan repayments directly from the salaries of borrowers. This practice served as a motivation for local banks to extend more personal loans to employees without taking into account their solvency.
The Saudi Arabian Monetary Agency (SAMA) introduced regulations for consumer financing and made them binding for the local banks effective Jan. 1, 2006. Banks are able to solve all the problems related to personal loans following the regulations issued by the central bank. There was also a SAMA directive that allows banks to treat the salaries of borrowers as security if they take out personal loans. This has helped banks to expand their base of personal lending substantially.
Some financial experts stressed that consumers must take utmost care and caution while taking personal loans so as not to affect their solvency as well as to prevent them from falling into a debt trap. They noted that consumers should take loans only if they are sure that they can make their prompt repayment. Loans be taken to fulfill only basic needs and not for any unnecessary requirements. There should be precise calculations and well thought out planning before taking loans, and there should not be any hasty decisions to take a loan. Precaution is to be taken against taking loans from illegal and unauthorized financial firms so as to avert becoming victims of fraudulent means and cheating.
Also, the monthly amount of repayment must be affordable to the consumer. There should also be proper balance between spending, borrowing and savings of the consumer. The consumer must have obtained all the relevant information with regard to the terms and conditions of borrowing and be fully aware of his ability to make repayments without affecting his solvency. The experts also cautioned against the habit of taking personal loans at regular intervals.
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Remedies to help underwater homeowners not enough, PUSH panel says
BY MAUDLYNE IHEJIRIKA Staff Reporter mihejirika@suntimes.com February 25, 2012 8:36PM
Updated: February 25, 2012 9:42PMOnly strident remedies — such as a national moratorium on foreclosures and offering financial aid to “underwater” homeowners — can help stem a crisis sending severe reverberations through poor and minority communities, members of an Operation PUSH panel said Saturday.
Those communities will have to demand action through voting power and protest, seeking redress through legislative and legal means, because the recent settlement between the nation’s largest lenders and 49 state attorneys general shows they can’t count on government solutions, said the Rev. Jesse Jackson and other members of the panel.
“In the 1960s, we fought against restrictive covenants, then redlining, then for the Community Reinvestment Act. We finally get a rise in black and brown home ownership. Now this,” said Jackson, pointing to research showing the largest segment of “underwater” homes — where the amount owed exceeds the value of the home — are found in poor and minority communities.
“Much of this is race-based driven exploitation,” Jackson said. “We must now fight to recover our lost assets stolen from us and not protected by the government. We must connect our votes with our remedy.”
About 11 million households nationally are underwater.
The government bailout of banks that was supposed to help many of those households stave off foreclosure “have not helped nearly as much as it needs to,” asserted Woodstock Institute Vice President Spencer Cowan.
Nor, Cowan said, will the landmark $25 billion settlement reached last month with five top mortgage lenders, which helps only 1 million households.
“The $25 billion settlement is only a small aspect and doesn’t address the myriad other problems that led us to this point,” he said. “Nor does it address the two largest holders of mortgages, Fannie Mae and Freddie Mac.”
Others noted the crisis has pushed more of the middle-class into poverty.
“The only investment most middle-class people have is their home. Now these same people have no credit. If they can’t get a loan, their kids can’t go to college. You have a whole generation of people moving from middle-class to poverty,” said the Rev. Janette Wilson, PUSH Education Director.
The panel advocated criminal action against lenders who participated in the predatory and deceptive lending practices, issuing loans destined to fail.
“Find the people who robo-signed these loans, and start going after them. The $25 billion settlement doesn’t rule out criminal investigation of the banks for some of these other problems,” said Cowan.
Research by his group found in the six-county Chicago metropolitan region, the average underwater homeowner owes $50,000 more than their home’s value.
The number of homes hit with foreclosures in the region rose 13.9 percent in January from December — to 13,750 homes, or one in every 276 homes.http://tourism9.com/ http://vkins.com/
Banks to grab share of ECB’s €500bn loans
The European Central Bank is set to flood banking markets with €500bn (£424bn) of cheap loans this week, taking its financial support of the European Union to €1trn in just three months.
On Wednesday, the ECB will hold its second allotment of three-year loans to private banks and other institutions, known as the longer-term refinancing operations (LTRO). Analysts are expecting banks to apply for between €200bn and €750bn in total, with most forecasts around the €500bn mark.
In December, 523 banks borrowed €489bn from the first LTRO. The loans carried an interest rate of around 1 per cent a year. The new loans will be just as cheap, but the collateral requirements have been loosened. Banks will be able to pledge corporate and consumer loans, rather than just government bonds, in return for the borrowing.
The new LTRO will be conducted through national central banks, not the ECB, so governments will take the losses should their banks be unable to repay the loans.
The first unprecedented provision of liquidity has been credited by the ECB president, Mario Draghi, with helping Europe to avoid a banking crisis this year. Some banks had found it increasingly difficult to borrow in the second half of last year. These institutions used the ECB’s cheap funds to meet their liabilities.
The liquidity injection also seems to have helped bring down the borrowing costs of some distressed eurozone states, as banks, particularly in Spain and Italy, have used the money to invest in bonds issued by their governments. Italian 10-year yields have come down from above 7 per cent to 5.5 per cent. Spanish 10-year yields have fallen from 5.7 to 5 per cent.
Sony Kapoor of the Re-Define think tank said: “The bigger the LTRO next week, the more the short-term relief for the banking sector, but at the cost of making a sustainable exit from life-support even harder.”
Jens Larsen of RBC Capital Markets, argued that the LTRO would be beneficial as long as banks restructure. “If the euro banks spend the time wisely by reducing their balance sheets and raising the necessary capital that’s not so bad,” he said. “But if they’re not doing that, it’s dangerous.”
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In December, 523 banks borrowed €489bn from the first LTRO. The loans carried an interest rate of around 1 per cent a year. The new loans will be just as cheap, but the collateral requirements have been loosened. Banks will be able to pledge corporate and consumer loans, rather than just government bonds, in return for the borrowing.
The new LTRO will be conducted through national central banks, not the ECB, so governments will take the losses should their banks be unable to repay the loans.
The first unprecedented provision of liquidity has been credited by the ECB president, Mario Draghi, with helping Europe to avoid a banking crisis this year. Some banks had found it increasingly difficult to borrow in the second half of last year. These institutions used the ECB’s cheap funds to meet their liabilities.
The liquidity injection also seems to have helped bring down the borrowing costs of some distressed eurozone states, as banks, particularly in Spain and Italy, have used the money to invest in bonds issued by their governments. Italian 10-year yields have come down from above 7 per cent to 5.5 per cent. Spanish 10-year yields have fallen from 5.7 to 5 per cent.
Sony Kapoor of the Re-Define think tank said: “The bigger the LTRO next week, the more the short-term relief for the banking sector, but at the cost of making a sustainable exit from life-support even harder.”
Jens Larsen of RBC Capital Markets, argued that the LTRO would be beneficial as long as banks restructure. “If the euro banks spend the time wisely by reducing their balance sheets and raising the necessary capital that’s not so bad,” he said. “But if they’re not doing that, it’s dangerous.”
2012年2月25日星期六
JP Loans – Mortgage Broker Brisbane Releases a Comprehensive Guide to Low Doc Home Loans & Bad Credit Home Loans …
Brisbane, Australia (PRWEB) February 25, 2012
JP Loans, mortgage broker Brisbane have just published two guides on securing home loans for customers that have credit or document related limitations. These guides provide the potential borrowers who require low doc home loans and bad credit home loans with some useful tips on what to look for, how to minimize their cost of borrowing and ensure they get mortgages approved fast. To find out more guides and posts about home loans and finance, please visit the company website.
The guides detail several groups of customers who get their applications rejected due to bad credit that results from minor defaults arising out of unpaid utility bill, several numbers of small defaults, major defaults, or discharged bankruptcies. The guides provide tips on how to obtain up to an 80% lending ratio even with these limiting situations. Extensive research, utilizing available resources, and not to mention creating a decent payment history for the last 6 months can work wonders for bad credit home loans, according to these guides.
Low doc home loans are required mostly for the self employed customers who are not able to provide sufficient financial information as per the lending criteria. This type of loan often only requires an income declaration from the borrower or borrower’s accountant. The guide from JP Loans – mortgage broker Brisbane gives the tip that there are lenders in the market who do not even take liabilities, income, or assets of the applicant into account.
Talking about low doc home loans and bad credit home loans, the Managing Director of JP Loans John Paynter states, “The big advantage of being a mortgage broker is having access to so many lenders and products and there is often also even a great solution for customers with incomplete documentation or a prior default”. Mr. Paynter and his team have helped many such customers to secure hassle free home loans. Meisha Robins, one of their satisfied customers from Brisbane, thanked JP Loans stating “The service you have provided was very refreshing, and I would confidently recommend you to friends. I wish you and your company all the very best”.
About the Company: JP Loans Pty Ltd is Brisbane based mortgage brokers catering to customers throughout Australia. The company specializes in home loans, equipment finance, medical finance and car loans. They not only look for the best solution for now but also for the duration of the loan. They also work with tax specialists, lawyers, financial planners along with many others to deliver you the best scenario for you. What’s more, their service is at absolutely no cost to you!
http://tourism9.com/ http://vkins.com/
JP Loans, mortgage broker Brisbane have just published two guides on securing home loans for customers that have credit or document related limitations. These guides provide the potential borrowers who require low doc home loans and bad credit home loans with some useful tips on what to look for, how to minimize their cost of borrowing and ensure they get mortgages approved fast. To find out more guides and posts about home loans and finance, please visit the company website.
The guides detail several groups of customers who get their applications rejected due to bad credit that results from minor defaults arising out of unpaid utility bill, several numbers of small defaults, major defaults, or discharged bankruptcies. The guides provide tips on how to obtain up to an 80% lending ratio even with these limiting situations. Extensive research, utilizing available resources, and not to mention creating a decent payment history for the last 6 months can work wonders for bad credit home loans, according to these guides.
Low doc home loans are required mostly for the self employed customers who are not able to provide sufficient financial information as per the lending criteria. This type of loan often only requires an income declaration from the borrower or borrower’s accountant. The guide from JP Loans – mortgage broker Brisbane gives the tip that there are lenders in the market who do not even take liabilities, income, or assets of the applicant into account.
Talking about low doc home loans and bad credit home loans, the Managing Director of JP Loans John Paynter states, “The big advantage of being a mortgage broker is having access to so many lenders and products and there is often also even a great solution for customers with incomplete documentation or a prior default”. Mr. Paynter and his team have helped many such customers to secure hassle free home loans. Meisha Robins, one of their satisfied customers from Brisbane, thanked JP Loans stating “The service you have provided was very refreshing, and I would confidently recommend you to friends. I wish you and your company all the very best”.
About the Company: JP Loans Pty Ltd is Brisbane based mortgage brokers catering to customers throughout Australia. The company specializes in home loans, equipment finance, medical finance and car loans. They not only look for the best solution for now but also for the duration of the loan. They also work with tax specialists, lawyers, financial planners along with many others to deliver you the best scenario for you. What’s more, their service is at absolutely no cost to you!
http://tourism9.com/ http://vkins.com/
The burden of student debt
At the height of the Occupy protests last fall, young people held signs announcing how much they owed in student loans. While the pundits were asking each other what, exactly, the protesters wanted, a big part of the answer was on those signs: Students are leaving colleges and universities with a staggering financial burden and bleak job prospects.
“When you get out of college at 21 with a 30-year loan, it’s soul crushing,” says Scot Ross, executive director of One Wisconsin Now, a progressive organization that is launching an advocacy campaign on the issue. Ross is on leave to serve as communications director for gubernatorial candidate Kathleen Falk.
The student loan landscape has shifted dramatically since the parents of current students and recent graduates left college. In 2006, the U.S. Education Department’s National Center for Education Statistics reported that most borrowers who finished college in the early 1990s were able to manage their student loan burden. Most paid the loans back in 10 years. Today, many students face 20 to 25 years of making payments. In the early ’90s, about half of students borrowed; in 2006, two-thirds had to borrow. And their loans are much bigger.
Federal and state policy and budgetary decisions in recent years have contributed to the student debt burden. Public funding for public universities has fallen steeply at the same time that tuition has skyrocketed. Congress slashed funding for Pell Grants that helped the most needy students and put provisions in place to protect private lenders.
Federally funded student loans are no longer available from Sallie Mae, and its private loans have much higher interest rates than do home or car loans.
Last year, students borrowed more than $100 billion dollars — a new record. The College Board, an advocacy group that works to ensure that every student has the opportunity to prepare for, enroll in and graduate from college, reports that students are borrowing twice as much as in 2001. The total amount owed on all outstanding student loans is expected to reach $1 trillion next year. A full-time undergraduate student borrowed an average of almost $5,000 in 2010, 63% more than a decade earlier after adjusting for inflation, according to the College Board.
These young debtors are not just those who opted to attend prestigious private universities. Tuition at public universities has soared as those institutions struggle to offset cuts in public funding. University of Wisconsin-Madison’s in-state tuition jumped from $5,866 in 2005 to $9,672 in 2011. The estimated total cost for a year at UW-Madison was $15,256 in 2005. Now it’s $25,421.
About half of 2010-2011 bachelor’s degree recipients at UW-Madison will have borrowed an average total of $24,493, says Susan Fischer, director of the office of Student Financial Aid. For those who go on to graduate school, the debts increase sharply. About three-quarters of law school graduates will have loans and owe an average $99,723. Almost 90% of medical school graduates will have borrowed, and their average debt will be $151,383.
To make matters worse, student loans differ from all other kinds of debt in two significant ways. They are excluded from bankruptcy protection, and it is not possible to refinance or restructure loans to take advantage of falling interest rates.
“It is easier to be a deadbeat dad than it is to lose your student loan debt,” Ross says of the lack of bankruptcy protection. “What does that say about us as a nation?”
People on disability who can’t afford to pay their student loans can even have their payments garnisheed, Ross notes. The only recourse, he adds, is “loan rehabilitation, which means you have to agree to make extended payments and take a new loan, with added fees. You end up with even more debt.”
Ross admits he has a dog in this fight. He borrowed about $30,000 in 11 different loans to pay for his bachelor’s and master’s degrees. He laughs, a little ruefully, when he admits that, at 42, he is in “year 12 of a 30-year student debt,” and says he’s fortunate to have a job and be able to keep up with the payments.
Ben Manski, founder of the Liberty Tree Foundation, is another advocate for reforms to the student loan system. He contends that the huge increases in student debt are the inevitable result of cuts to higher education in state budgets.
“Generation X was the first generation to experience the impact of debt and a restructured job market,” says Manski, 37, who was recently appointed campaign director for Green Party presidential candidate Jill Stein. “We are overemployed and overworked. We do not have job security. Retirement is not even a consideration. The Millennials have it even worse, because of high unemployment. When you have this kind of debt, you lose freedoms — the freedom to engage in public service, for example, or pursue the career you are most fitted for as opposed to one that will make ends meet.”
Despite the heart-stopping debt statistics, the UW’s Fisher thinks it’s still possible to get at least an undergraduate degree without going very deeply into debt.
“Sometimes, students accrue big debt because they change majors and take longer to graduate. Or they choose a private or out-of-state public school that the family really cannot afford. My advice to incoming students is to work while they are in school and live frugally. And get in and get out. If they do that, I think they can finish with a minimal amount of debt.”
But starting working life owing tens of thousands of dollars during a period of high unemployment has many students wondering how they will be able to afford to marry, have children or buy a house. Paying off even a relatively small loan in a sagging economy is proving very difficult for many people. Here are some of their stories.
‘You can’t live your life without worrying’
Christina Spector left UW-Madison with an undergraduate degree in elementary education and psychology (2002), a graduate degree in educational leadership and policy analysis (2008) and a law degree (also 2008).
“It was a conscious decision to go to UW-Madison for the in-state tuition. I had scholarships, a little help from my parents, and I always had jobs while I was in school,” she says. But it wasn’t enough.
“The first time I signed a promissory note, I had such a hard time of it. I cried for two days about entering that system, but I had no other choice.”
A school administration consultant for the State Department of Instruction, Spector will pay $550 a month for a total of 25 years before her loans are paid off. Her husband, who has a master’s degree and is employed by the American Federation of Teachers, makes student loan payments of $200 a month.
That $750 monthly expense means they must live very frugally.
“We are on a really strict budget,” she says. “We don’t make large purchases unless we absolutely have to. We bought much less house than we qualified for, and we drive an inexpensive car. We are thoughtful about little things like buying coffee. We take our lunch to work. We can’t travel, so we use our vacations to visit family.”
One place where the family does not cut corners is on daycare for their 2-year-old child.
“Daycare costs more than our mortgage, but that’s one thing you’re not going to scrimp on.”
The debt drives all the family’s decisions — having another child, making a career change, moving.
“It’s difficult sometimes, because you can’t live your life without worrying about it,” she says. “I am much less inclined to take any kind of risk because of it.”
Spector knows she could ease the financial burden by abandoning a job she loves in the public sector and joining a private law firm.
“I never went to law school wanting that. I always wanted to work in the public sector. I have friends from law school who have made that decision so they could pay off their loans. To me, it seems like selling your soul. I just couldn’t do it. That would be a true prison on top of the bondage of the loans.”
‘We have given up many things’
A Madison West high school graduate, Ben Manski has an undergraduate degree in sociology and a law degree from UW-Madison. His higher education left him with $70,000 in student loan debt. His wife, Sarah, also has debt for her student loans.
“I am paying about $500 a month. For both my wife and me, it’s about $800 a month. It’s a major part of our budget, almost as much as we pay for housing,” he says.
Although Manski could be earning big bucks in a private law firm, he has stayed true to his commitment to use his education to work for social change. Founder of the Liberty Tree Foundation, he ran for the state Legislature as a Green Party candidate in 2010. He also practices a little law and teaches sociology at Madison College.
“I had other choices I could have made,” Manski says. “I was offered a lobbying job for an insurance company when I was 22 years old that would have paid $80,000 a year. I turned it down.”
Manski and his wife have had to make difficult choices because of their student loans.
“It is very difficult to save, and we have given up many things. We are not in a position where we can help others financially. And, certainly, we are not having a family until we have the ability to afford kids,” he says. He and his wife recently started a new website, posipair.com, designed to put environmentally responsible businesses in touch with each other and with customers, in an effort to generate some independent income.
Manski, who comes from a family of teachers, has a passion for education and would like to teach full time.
“I think there’s no higher calling than teaching and no more important institution than education,” he says.
Sometimes, he says, his students ask him if their schooling is worth the money and if they will be able to get jobs when they finish. “I used to be able to say it is definitely worth it,” he says. “But now that question is more difficult to answer.”
‘We can’t take vacations’
When Kathy Wallace learned that her Kenosha employer, Powerbrace Corp., might be moving its operations to Mexico, she decided to follow her dream of becoming a math teacher.
With a bachelor’s degree in math already in her pocket she would need only to complete the requirements for a teaching license. She enrolled at Carthage College, where she took night classes for four years on top of working 40 hours processing accounts payable. In 2006, she had to quit her job to student teach. She landed a job as a substitute teacher at Bullen Middle School in Kenosha and continued to work toward a master’s degree through an online Walden University program. She completed the master’s degree 20 months later, and now has a full-time teaching position.
Dream achieved.
But Wallace’s career change left her with a total of $60,000 in student loans and the prospect of supporting her family of four on a teacher’s salary and the modest disability payments her husband receives. Her loan payments are $700 a month.
“I’ve been paying the first one [for the undergraduate degree] since 2007, and I still owe about $19,000 on that one. I finished the master’s program in August and owe $30,000 for that. It will probably take at least 12 years to pay it all off.” Wallace will be 54 years old by then.
She says her husband’s disability payments cover their mortgage, but the family has to get by on her income for everything else.
“We don’t go out to eat. We can’t take vacations. Our kids don’t get to do things the other kids get to do. It’s really hard knowing you can’t do things for your own kids.”
Those children, now 11 and 16 years old, both want to go to college.
“I’ve told them I’d chip in as much as I could. I’ve encouraged them to go for scholarships. The rest will have to be student loans,” Wallace says. “My kids seeing me get more education showed them this is what you need to do to survive. Without college, there’s not much out there for you.”
Wallace hopes she may be able to take advantage of a loan forgiveness option for her federal Stafford and Perkins loans after five years of teaching. She qualifies on two counts — she teaches mathematics and she teaches in a Title 1 school. But she worries that she might not make the five-year requirement.
“If I can get [those loans forgiven] it takes a lot of pressure off me. But we are facing layoffs again in our district.”
‘The interest is very high’
Tanya Oemig finished paying off her own student loans in her early 30s, but now, at 46, she faces paying back $15,000 she borrowed to send her children to college.
“They couldn’t borrow enough themselves,” she explains, adding that, as a single parent, she was unable to save for her children’s higher education.
Until recently, Oemig was a communicable disease surveillance specialist with the Wisconsin Division of Public Health. Her salary there was not enough to pay the bills after taking on the new debt, and she had to add a second job. She finally decided she was on overload and quit both jobs to work for a software development company at a higher salary.
“I loved the work at Public Health, but I just couldn’t afford to keep doing it. I was lucky to find a good place to work, and it pays enough that I’m able to make the payments on one salary now. There are people struggling a lot more than I am.”
Still, Oemig worries about her children’s prospects. Both still live with her. One graduated from Madison Media Institute in May with an associate degree and now works at a gas station while he looks for a job related to his skills and education. The other one is still at Madison College, working toward a two-year degree in information systems administration. He has a part-time help desk job, but his hours were cut recently.
“I worry about their job prospects all the time. Currently they don’t make enough to support themselves. They can make their loan payments, but they can’t pay for car insurance or cell phones. And I worry they won’t find a job before their education is obsolete. They are both very discouraged.”
Oemig thinks the time allowed before graduates have to start repaying student loans is unrealistic, given the dismal job market.
“Even if they had a job right out of school, they would have a lot of expenses getting started. They need more than six months so they can save enough to afford an apartment and maybe a car — to get their feet on the ground.”
And she wonders why interest on student loans is so high when loans for other purposes are cheap these days. One of her sons has a Sallie Mae loan with an interest rate of 10%.
“I had good credit so I could get federal loans, but those who don’t have to go to private loans where the interest is very high.”
‘Sometimes I wonder why I’m doing this’
There was never any question in Dustin Bradley’s family that the Beloit Memorial graduate would go on to college.
“My grandparents didn’t go to college, and my father [a third grade teacher in Wauwatosa] was the first and only one to get a degree. My family always encouraged me and expected me to get more education,” he says. However, he admits that he drifted during his first couple of years at UW-Madison, struggling with the math required for the business program where he first enrolled, and finally finding his academic passion in sociology.
“I did the victory lap,” he explains of his extra fifth year as an undergraduate. He will receive his bachelor’s degree in May.
But Bradley’s accumulation of student debt is not over. He plans to enroll in a paralegal certificate program next fall. It’s a high-demand skill, and he’s sure he’ll find work. Then, after a few years of gaining experience, he wants to enroll in law school.
So far, Bradley’s debt load is only about $12,500, lower than average, because his family was able to kick in for his first few years and because he worked an average of 32 hours a week while in school. But from here on out, he’s on his own.
He’s looking at paralegal programs at technical colleges in Madison and Milwaukee and at several online programs. The private web-based programs are convenient, especially for someone who has a job, he says, but they are more expensive. Programs at the tech schools cost about $4,000 for the one-year course. The costs for online courses that have accreditation range from $7,500 to more than $10,000. Bradley expects he will have to borrow that money on the far more expensive private student loan market, but hopes he can pay most it off before he starts law school.
That is where the really big debt will start to build. According to UW-Madison statistics, the average law school graduate in 2012 will owe almost $100,000. That number includes accumulated undergraduate debt, but law school alone leaves the average borrower some $80,000 in debt.
Still, Bradley is confident that incurring the debt will be a good investment. “I think I’ll be making enough to make [the payments] manageable. But it’s hard when I look at some of my friends who got jobs right out of high school at Chrysler or GM. They have high-paying jobs but don’t have this debt. So sometimes I wonder why I’m doing this.”
Cause for hope
Many college graduates face a sobering reality: turning 50 and still not being free of student loan payments. But there are efforts under way to ease the burden. The progressive organization One Wisconsin Now is launching an advocacy campaign that proposes the following for state residents:
“This is an issue that is just starting to bubble up to the surface,” says One Wisconsin Now’s deputy director, Mike Browne. “We’re in relatively early days, legislatively.”
http://tourism9.com/ http://vkins.com/
“When you get out of college at 21 with a 30-year loan, it’s soul crushing,” says Scot Ross, executive director of One Wisconsin Now, a progressive organization that is launching an advocacy campaign on the issue. Ross is on leave to serve as communications director for gubernatorial candidate Kathleen Falk.
The student loan landscape has shifted dramatically since the parents of current students and recent graduates left college. In 2006, the U.S. Education Department’s National Center for Education Statistics reported that most borrowers who finished college in the early 1990s were able to manage their student loan burden. Most paid the loans back in 10 years. Today, many students face 20 to 25 years of making payments. In the early ’90s, about half of students borrowed; in 2006, two-thirds had to borrow. And their loans are much bigger.
Federal and state policy and budgetary decisions in recent years have contributed to the student debt burden. Public funding for public universities has fallen steeply at the same time that tuition has skyrocketed. Congress slashed funding for Pell Grants that helped the most needy students and put provisions in place to protect private lenders.
Federally funded student loans are no longer available from Sallie Mae, and its private loans have much higher interest rates than do home or car loans.
Last year, students borrowed more than $100 billion dollars — a new record. The College Board, an advocacy group that works to ensure that every student has the opportunity to prepare for, enroll in and graduate from college, reports that students are borrowing twice as much as in 2001. The total amount owed on all outstanding student loans is expected to reach $1 trillion next year. A full-time undergraduate student borrowed an average of almost $5,000 in 2010, 63% more than a decade earlier after adjusting for inflation, according to the College Board.
These young debtors are not just those who opted to attend prestigious private universities. Tuition at public universities has soared as those institutions struggle to offset cuts in public funding. University of Wisconsin-Madison’s in-state tuition jumped from $5,866 in 2005 to $9,672 in 2011. The estimated total cost for a year at UW-Madison was $15,256 in 2005. Now it’s $25,421.
About half of 2010-2011 bachelor’s degree recipients at UW-Madison will have borrowed an average total of $24,493, says Susan Fischer, director of the office of Student Financial Aid. For those who go on to graduate school, the debts increase sharply. About three-quarters of law school graduates will have loans and owe an average $99,723. Almost 90% of medical school graduates will have borrowed, and their average debt will be $151,383.
To make matters worse, student loans differ from all other kinds of debt in two significant ways. They are excluded from bankruptcy protection, and it is not possible to refinance or restructure loans to take advantage of falling interest rates.
“It is easier to be a deadbeat dad than it is to lose your student loan debt,” Ross says of the lack of bankruptcy protection. “What does that say about us as a nation?”
People on disability who can’t afford to pay their student loans can even have their payments garnisheed, Ross notes. The only recourse, he adds, is “loan rehabilitation, which means you have to agree to make extended payments and take a new loan, with added fees. You end up with even more debt.”
Ross admits he has a dog in this fight. He borrowed about $30,000 in 11 different loans to pay for his bachelor’s and master’s degrees. He laughs, a little ruefully, when he admits that, at 42, he is in “year 12 of a 30-year student debt,” and says he’s fortunate to have a job and be able to keep up with the payments.
Ben Manski, founder of the Liberty Tree Foundation, is another advocate for reforms to the student loan system. He contends that the huge increases in student debt are the inevitable result of cuts to higher education in state budgets.
“Generation X was the first generation to experience the impact of debt and a restructured job market,” says Manski, 37, who was recently appointed campaign director for Green Party presidential candidate Jill Stein. “We are overemployed and overworked. We do not have job security. Retirement is not even a consideration. The Millennials have it even worse, because of high unemployment. When you have this kind of debt, you lose freedoms — the freedom to engage in public service, for example, or pursue the career you are most fitted for as opposed to one that will make ends meet.”
Despite the heart-stopping debt statistics, the UW’s Fisher thinks it’s still possible to get at least an undergraduate degree without going very deeply into debt.
“Sometimes, students accrue big debt because they change majors and take longer to graduate. Or they choose a private or out-of-state public school that the family really cannot afford. My advice to incoming students is to work while they are in school and live frugally. And get in and get out. If they do that, I think they can finish with a minimal amount of debt.”
But starting working life owing tens of thousands of dollars during a period of high unemployment has many students wondering how they will be able to afford to marry, have children or buy a house. Paying off even a relatively small loan in a sagging economy is proving very difficult for many people. Here are some of their stories.
‘You can’t live your life without worrying’
Christina Spector left UW-Madison with an undergraduate degree in elementary education and psychology (2002), a graduate degree in educational leadership and policy analysis (2008) and a law degree (also 2008).
“It was a conscious decision to go to UW-Madison for the in-state tuition. I had scholarships, a little help from my parents, and I always had jobs while I was in school,” she says. But it wasn’t enough.
“The first time I signed a promissory note, I had such a hard time of it. I cried for two days about entering that system, but I had no other choice.”
A school administration consultant for the State Department of Instruction, Spector will pay $550 a month for a total of 25 years before her loans are paid off. Her husband, who has a master’s degree and is employed by the American Federation of Teachers, makes student loan payments of $200 a month.
That $750 monthly expense means they must live very frugally.
“We are on a really strict budget,” she says. “We don’t make large purchases unless we absolutely have to. We bought much less house than we qualified for, and we drive an inexpensive car. We are thoughtful about little things like buying coffee. We take our lunch to work. We can’t travel, so we use our vacations to visit family.”
One place where the family does not cut corners is on daycare for their 2-year-old child.
“Daycare costs more than our mortgage, but that’s one thing you’re not going to scrimp on.”
The debt drives all the family’s decisions — having another child, making a career change, moving.
“It’s difficult sometimes, because you can’t live your life without worrying about it,” she says. “I am much less inclined to take any kind of risk because of it.”
Spector knows she could ease the financial burden by abandoning a job she loves in the public sector and joining a private law firm.
“I never went to law school wanting that. I always wanted to work in the public sector. I have friends from law school who have made that decision so they could pay off their loans. To me, it seems like selling your soul. I just couldn’t do it. That would be a true prison on top of the bondage of the loans.”
‘We have given up many things’
A Madison West high school graduate, Ben Manski has an undergraduate degree in sociology and a law degree from UW-Madison. His higher education left him with $70,000 in student loan debt. His wife, Sarah, also has debt for her student loans.
“I am paying about $500 a month. For both my wife and me, it’s about $800 a month. It’s a major part of our budget, almost as much as we pay for housing,” he says.
Although Manski could be earning big bucks in a private law firm, he has stayed true to his commitment to use his education to work for social change. Founder of the Liberty Tree Foundation, he ran for the state Legislature as a Green Party candidate in 2010. He also practices a little law and teaches sociology at Madison College.
“I had other choices I could have made,” Manski says. “I was offered a lobbying job for an insurance company when I was 22 years old that would have paid $80,000 a year. I turned it down.”
Manski and his wife have had to make difficult choices because of their student loans.
“It is very difficult to save, and we have given up many things. We are not in a position where we can help others financially. And, certainly, we are not having a family until we have the ability to afford kids,” he says. He and his wife recently started a new website, posipair.com, designed to put environmentally responsible businesses in touch with each other and with customers, in an effort to generate some independent income.
Manski, who comes from a family of teachers, has a passion for education and would like to teach full time.
“I think there’s no higher calling than teaching and no more important institution than education,” he says.
Sometimes, he says, his students ask him if their schooling is worth the money and if they will be able to get jobs when they finish. “I used to be able to say it is definitely worth it,” he says. “But now that question is more difficult to answer.”
‘We can’t take vacations’
When Kathy Wallace learned that her Kenosha employer, Powerbrace Corp., might be moving its operations to Mexico, she decided to follow her dream of becoming a math teacher.
With a bachelor’s degree in math already in her pocket she would need only to complete the requirements for a teaching license. She enrolled at Carthage College, where she took night classes for four years on top of working 40 hours processing accounts payable. In 2006, she had to quit her job to student teach. She landed a job as a substitute teacher at Bullen Middle School in Kenosha and continued to work toward a master’s degree through an online Walden University program. She completed the master’s degree 20 months later, and now has a full-time teaching position.
Dream achieved.
But Wallace’s career change left her with a total of $60,000 in student loans and the prospect of supporting her family of four on a teacher’s salary and the modest disability payments her husband receives. Her loan payments are $700 a month.
“I’ve been paying the first one [for the undergraduate degree] since 2007, and I still owe about $19,000 on that one. I finished the master’s program in August and owe $30,000 for that. It will probably take at least 12 years to pay it all off.” Wallace will be 54 years old by then.
She says her husband’s disability payments cover their mortgage, but the family has to get by on her income for everything else.
“We don’t go out to eat. We can’t take vacations. Our kids don’t get to do things the other kids get to do. It’s really hard knowing you can’t do things for your own kids.”
Those children, now 11 and 16 years old, both want to go to college.
“I’ve told them I’d chip in as much as I could. I’ve encouraged them to go for scholarships. The rest will have to be student loans,” Wallace says. “My kids seeing me get more education showed them this is what you need to do to survive. Without college, there’s not much out there for you.”
Wallace hopes she may be able to take advantage of a loan forgiveness option for her federal Stafford and Perkins loans after five years of teaching. She qualifies on two counts — she teaches mathematics and she teaches in a Title 1 school. But she worries that she might not make the five-year requirement.
“If I can get [those loans forgiven] it takes a lot of pressure off me. But we are facing layoffs again in our district.”
‘The interest is very high’
Tanya Oemig finished paying off her own student loans in her early 30s, but now, at 46, she faces paying back $15,000 she borrowed to send her children to college.
“They couldn’t borrow enough themselves,” she explains, adding that, as a single parent, she was unable to save for her children’s higher education.
Until recently, Oemig was a communicable disease surveillance specialist with the Wisconsin Division of Public Health. Her salary there was not enough to pay the bills after taking on the new debt, and she had to add a second job. She finally decided she was on overload and quit both jobs to work for a software development company at a higher salary.
“I loved the work at Public Health, but I just couldn’t afford to keep doing it. I was lucky to find a good place to work, and it pays enough that I’m able to make the payments on one salary now. There are people struggling a lot more than I am.”
Still, Oemig worries about her children’s prospects. Both still live with her. One graduated from Madison Media Institute in May with an associate degree and now works at a gas station while he looks for a job related to his skills and education. The other one is still at Madison College, working toward a two-year degree in information systems administration. He has a part-time help desk job, but his hours were cut recently.
“I worry about their job prospects all the time. Currently they don’t make enough to support themselves. They can make their loan payments, but they can’t pay for car insurance or cell phones. And I worry they won’t find a job before their education is obsolete. They are both very discouraged.”
Oemig thinks the time allowed before graduates have to start repaying student loans is unrealistic, given the dismal job market.
“Even if they had a job right out of school, they would have a lot of expenses getting started. They need more than six months so they can save enough to afford an apartment and maybe a car — to get their feet on the ground.”
And she wonders why interest on student loans is so high when loans for other purposes are cheap these days. One of her sons has a Sallie Mae loan with an interest rate of 10%.
“I had good credit so I could get federal loans, but those who don’t have to go to private loans where the interest is very high.”
‘Sometimes I wonder why I’m doing this’
There was never any question in Dustin Bradley’s family that the Beloit Memorial graduate would go on to college.
“My grandparents didn’t go to college, and my father [a third grade teacher in Wauwatosa] was the first and only one to get a degree. My family always encouraged me and expected me to get more education,” he says. However, he admits that he drifted during his first couple of years at UW-Madison, struggling with the math required for the business program where he first enrolled, and finally finding his academic passion in sociology.
“I did the victory lap,” he explains of his extra fifth year as an undergraduate. He will receive his bachelor’s degree in May.
But Bradley’s accumulation of student debt is not over. He plans to enroll in a paralegal certificate program next fall. It’s a high-demand skill, and he’s sure he’ll find work. Then, after a few years of gaining experience, he wants to enroll in law school.
So far, Bradley’s debt load is only about $12,500, lower than average, because his family was able to kick in for his first few years and because he worked an average of 32 hours a week while in school. But from here on out, he’s on his own.
He’s looking at paralegal programs at technical colleges in Madison and Milwaukee and at several online programs. The private web-based programs are convenient, especially for someone who has a job, he says, but they are more expensive. Programs at the tech schools cost about $4,000 for the one-year course. The costs for online courses that have accreditation range from $7,500 to more than $10,000. Bradley expects he will have to borrow that money on the far more expensive private student loan market, but hopes he can pay most it off before he starts law school.
That is where the really big debt will start to build. According to UW-Madison statistics, the average law school graduate in 2012 will owe almost $100,000. That number includes accumulated undergraduate debt, but law school alone leaves the average borrower some $80,000 in debt.
Still, Bradley is confident that incurring the debt will be a good investment. “I think I’ll be making enough to make [the payments] manageable. But it’s hard when I look at some of my friends who got jobs right out of high school at Chrysler or GM. They have high-paying jobs but don’t have this debt. So sometimes I wonder why I’m doing this.”
Cause for hope
Many college graduates face a sobering reality: turning 50 and still not being free of student loan payments. But there are efforts under way to ease the burden. The progressive organization One Wisconsin Now is launching an advocacy campaign that proposes the following for state residents:
- A “truth in lending” provision, similar to what’s required for a mortgage, so students understand when they take out a loan how much they will be paying back and for how long.
- Bankruptcy protection.
- The opportunity to refinance or consolidate student loans.
- Provisions for forgiving student debt.
“This is an issue that is just starting to bubble up to the surface,” says One Wisconsin Now’s deputy director, Mike Browne. “We’re in relatively early days, legislatively.”
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China issues green-credit guideline for banks
The Chinese government introduced a “green credit” guideline for commercial lenders on Friday to facilitate economic restructuring in a manner that’s environmentally friendly and saves energy.
The China Banking Regulatory Commission, the top banking regulator, ordered lenders to cut loans to industries with high-energy consumption and high levels of pollution or excessive capacity, and to strengthen financial support for green industries and projects.
The CBRC encouraged banks to evaluate, classify and rate the environmental and social risks inherent in their clients’ businesses and take the results as a key reference in their ratings and access to credit.
“Through credit controls, banks can have an influence on businesses’ awareness of energy savings, emissions-reductions and the benefits to the public,” said Yan Yanfei, deputy director-general of the statistics department at the CBRC.
He said that in the next step, the CBRC will set up some key indexes to make the guideline more specific and try to include adherence to the plan in the rating system.
Lenders also need to improve management of any overseas projects that they support, to ensure that the initiators of those projects comply with local environmental, land, healthcare and security legislation, according to the guideline.
Zhang Rong, the programme manager of environment and social standards at the International Finance Corporation of the World Bank Group, said the guideline is welcome, especially given the increased involvement of Chinese enterprises in the global market, and the increasing number of calls urging the overseas projects to take more care of the local environment and to reduce energy use.
“Actually Chinese banks have already made very good attempts at green credit, and they can learn from the mature technology and management systems that their international counterparts have already been using for some time,” Zhang said.
China Development Bank Corp, which makes nearly half of the total loans supporting overseas projects of Chinese enterprises, has just provided credit to a Chinese company that operates an iron ore mine in Africa. The funds will help the company move surface soil to a place of safety to protect the seeds of local plants, according to Lu Hanwen, deputy director-general of CDB’s Project Appraisal Department II.
By the end of 2011, CDB had lent 658 billion yuan ($104 billion) to support environmental protection, energy-saving and emissions-reduction projects, accounting for 12.7 per cent of the bank’s total outstanding loans.
Yang Bin, deputy general manager of Corporate & Investment Banking at Shanghai Pudong Development Bank Co Ltd, said banks have enough motivation to lend green credits because the demand from clients that they undertake green initiatives has been rising constantly.
Such loans have a lower non-performance ratio than other lending because enterprises can usually obtain strong incentives for green projects from the government to repay the loans, he said.
“And the rate of return against cost for green credits is much higher than other lending,” said Yang, adding that evaluating the environmental impact and energy-consumption of their clients will cost the banks little.
“But State-owned enterprises should also be ordered to implement green policies if the government wishes to achieve its energy-saving and emissions-reduction goals,” Yang said.
http://tourism9.com/ http://vkins.com/
The China Banking Regulatory Commission, the top banking regulator, ordered lenders to cut loans to industries with high-energy consumption and high levels of pollution or excessive capacity, and to strengthen financial support for green industries and projects.
The CBRC encouraged banks to evaluate, classify and rate the environmental and social risks inherent in their clients’ businesses and take the results as a key reference in their ratings and access to credit.
“Through credit controls, banks can have an influence on businesses’ awareness of energy savings, emissions-reductions and the benefits to the public,” said Yan Yanfei, deputy director-general of the statistics department at the CBRC.
He said that in the next step, the CBRC will set up some key indexes to make the guideline more specific and try to include adherence to the plan in the rating system.
Lenders also need to improve management of any overseas projects that they support, to ensure that the initiators of those projects comply with local environmental, land, healthcare and security legislation, according to the guideline.
Zhang Rong, the programme manager of environment and social standards at the International Finance Corporation of the World Bank Group, said the guideline is welcome, especially given the increased involvement of Chinese enterprises in the global market, and the increasing number of calls urging the overseas projects to take more care of the local environment and to reduce energy use.
“Actually Chinese banks have already made very good attempts at green credit, and they can learn from the mature technology and management systems that their international counterparts have already been using for some time,” Zhang said.
China Development Bank Corp, which makes nearly half of the total loans supporting overseas projects of Chinese enterprises, has just provided credit to a Chinese company that operates an iron ore mine in Africa. The funds will help the company move surface soil to a place of safety to protect the seeds of local plants, according to Lu Hanwen, deputy director-general of CDB’s Project Appraisal Department II.
By the end of 2011, CDB had lent 658 billion yuan ($104 billion) to support environmental protection, energy-saving and emissions-reduction projects, accounting for 12.7 per cent of the bank’s total outstanding loans.
Yang Bin, deputy general manager of Corporate & Investment Banking at Shanghai Pudong Development Bank Co Ltd, said banks have enough motivation to lend green credits because the demand from clients that they undertake green initiatives has been rising constantly.
Such loans have a lower non-performance ratio than other lending because enterprises can usually obtain strong incentives for green projects from the government to repay the loans, he said.
“And the rate of return against cost for green credits is much higher than other lending,” said Yang, adding that evaluating the environmental impact and energy-consumption of their clients will cost the banks little.
“But State-owned enterprises should also be ordered to implement green policies if the government wishes to achieve its energy-saving and emissions-reduction goals,” Yang said.
http://tourism9.com/ http://vkins.com/
15. Investing in the right causes
Tandem Fund assists social enterprises in getting financing
TANDEM Fund calls itself a “patient investor” to social enterprises.
“For all their benefits, social enterprises find it difficult to obtain financing,” its website reads.
“On one hand, they generate returns that are too low for banks of traditional investors. On the other, they are often ineligible for foundation money as for-profit enterprises.
“Our role is to fill that gap. We act as a patient investor, providing capital to social enterprises that wouldn’t otherwise be able to gain investment.”
The venture fund, says its chief operating officer Kal Joffres, is the only one in Malaysia that invests exclusively in social enterprises.
As a not-for-profit fund, it differs from a conventional investment firm in that the returns from its investees are recycled into other social enterprises, rather than paid back as a dividend to shareholders.
A native Canadian, Joffres was a strategy consultant to non-profits and United Nations agencies prior to joining Tandem Fund.
The business and philosophy graduate from McGill University moved to Malaysia after helping a client here to start a social venture fund, which became Tandem Fund.
The fund has two sources of capital: the income from its subsidiary Tandemic, a social media consultancy, and a major banking group in Malaysia, who was the client that hired Joffres.
Tandemic – which has worked with consumer brands and government agencies – helps build social movements by organising communities around causes using social media and on-ground events.
“We started Tandemic because we thought some of our skills would be useful for companies and brands. The way we see it is a lot of organisations that are interested in social media aren’t doing it very well.
“They tell people, Here’s our latest deal, follow us on Twitter’, which is not effective. We try to engage people around causes they care about, we build communities around causes,” Joffres quips.
A portion of the Tandemic’s profit is used to finance Tandem Fund’s more experimental social enterprises.
On the second source, Joffres points out that the fund does not receive any cash for investment but rather acts as a conduit to identify social enterprises that meet several criteria, including financial sustainability and social impact. It is the bank that invests directly in the social enterprises, he says.
The social enterprises that are at a mature stage and can turn in a profit are put under Tandem Fund’s management, while the ones that more closely resemble a non-profit are directed to the bank’s philanthropic arm.
Tandem Fund has four projects under its belt: Design Change, Do Something Good, Sols24/7, and a yet unnamed mobile healthcare unit that aims to deliver medical care via waterways, especially in Sarawak.
Besides funding social enterprises, it helps streamline their operations, for example by customising a set of performance measures for each company.
On the challenges faced by fledgeling social enterprises, Joffres says this includes profitability, management skills, market access, and talent.
“A lot of social enterprises in Malaysia haven’t figured out how to make money yet. There’s still work to be done on the business model.
“They also tend to have very thin middle management. There are very passionate people running them, but it’s also important to have operational people in place to make sure things run smoothly,” he elaborates.
The country’s geography, he adds, can also be a hindrance as the people who need assistance are often deep in remote areas.
Disorganisation is another thing. “It’s easier to work with communities that are internally organised, but these are limited,” Joffres says.
“When you have one player that tries to do too many things along the value chain, instead of having a few to help you along the line, your risk increases. This is especially so if you are a start-up.”
In addition, he notes that there are talent acquisition issues in the sector, but insists that “just because you work for a social enterprise doesn’t mean you don’t get paid as well (as other companies)”. Some social enterprises do pay competitively, he says.
Nonetheless, he adds that “people love the fact they are working for social missions” in social enterprises.
“For the most part, it isn’t easy to get talent in any sector. We have a really passionate team and they get to pursue causes they’re interested in,” he says.
Joffres thinks that interest in the sector is growing among the youth and urbanites.
“If you have a strong social dimension you have an edge over companies that don’t,” he says.
“For instance, people don’t buy Body Shop products only because they’re good products, but also because of the social impact (they have). People who have spending power care about this stuff.”
Related Stories:
The rise of social enterprises
Creating an impact
SEA says some local enterprises are ready for investors
http://tourism9.com/ http://vkins.com/
TANDEM Fund calls itself a “patient investor” to social enterprises.
“For all their benefits, social enterprises find it difficult to obtain financing,” its website reads.
“On one hand, they generate returns that are too low for banks of traditional investors. On the other, they are often ineligible for foundation money as for-profit enterprises.
“Our role is to fill that gap. We act as a patient investor, providing capital to social enterprises that wouldn’t otherwise be able to gain investment.”
The venture fund, says its chief operating officer Kal Joffres, is the only one in Malaysia that invests exclusively in social enterprises.
As a not-for-profit fund, it differs from a conventional investment firm in that the returns from its investees are recycled into other social enterprises, rather than paid back as a dividend to shareholders.
A native Canadian, Joffres was a strategy consultant to non-profits and United Nations agencies prior to joining Tandem Fund.
The business and philosophy graduate from McGill University moved to Malaysia after helping a client here to start a social venture fund, which became Tandem Fund.
The fund has two sources of capital: the income from its subsidiary Tandemic, a social media consultancy, and a major banking group in Malaysia, who was the client that hired Joffres.
Tandemic – which has worked with consumer brands and government agencies – helps build social movements by organising communities around causes using social media and on-ground events.
“We started Tandemic because we thought some of our skills would be useful for companies and brands. The way we see it is a lot of organisations that are interested in social media aren’t doing it very well.
“They tell people, Here’s our latest deal, follow us on Twitter’, which is not effective. We try to engage people around causes they care about, we build communities around causes,” Joffres quips.
A portion of the Tandemic’s profit is used to finance Tandem Fund’s more experimental social enterprises.
On the second source, Joffres points out that the fund does not receive any cash for investment but rather acts as a conduit to identify social enterprises that meet several criteria, including financial sustainability and social impact. It is the bank that invests directly in the social enterprises, he says.
The social enterprises that are at a mature stage and can turn in a profit are put under Tandem Fund’s management, while the ones that more closely resemble a non-profit are directed to the bank’s philanthropic arm.
Tandem Fund has four projects under its belt: Design Change, Do Something Good, Sols24/7, and a yet unnamed mobile healthcare unit that aims to deliver medical care via waterways, especially in Sarawak.
Besides funding social enterprises, it helps streamline their operations, for example by customising a set of performance measures for each company.
On the challenges faced by fledgeling social enterprises, Joffres says this includes profitability, management skills, market access, and talent.
“A lot of social enterprises in Malaysia haven’t figured out how to make money yet. There’s still work to be done on the business model.
“They also tend to have very thin middle management. There are very passionate people running them, but it’s also important to have operational people in place to make sure things run smoothly,” he elaborates.
The country’s geography, he adds, can also be a hindrance as the people who need assistance are often deep in remote areas.
Disorganisation is another thing. “It’s easier to work with communities that are internally organised, but these are limited,” Joffres says.
“When you have one player that tries to do too many things along the value chain, instead of having a few to help you along the line, your risk increases. This is especially so if you are a start-up.”
In addition, he notes that there are talent acquisition issues in the sector, but insists that “just because you work for a social enterprise doesn’t mean you don’t get paid as well (as other companies)”. Some social enterprises do pay competitively, he says.
Nonetheless, he adds that “people love the fact they are working for social missions” in social enterprises.
“For the most part, it isn’t easy to get talent in any sector. We have a really passionate team and they get to pursue causes they’re interested in,” he says.
Joffres thinks that interest in the sector is growing among the youth and urbanites.
“If you have a strong social dimension you have an edge over companies that don’t,” he says.
“For instance, people don’t buy Body Shop products only because they’re good products, but also because of the social impact (they have). People who have spending power care about this stuff.”
Related Stories:
The rise of social enterprises
Creating an impact
SEA says some local enterprises are ready for investors
http://tourism9.com/ http://vkins.com/
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