Archive for February, 2012

SunTrust Bank to transfer wealth management positions to Nashville offices

by Ellis Smith
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SunTrust Bank, with local operations at the corner of Eighth and Marketstreets, is transferring six wealth management staffers to Nashville.

SunTrust Bank will transfer a half dozen wealth management positions to Nashville for “operating efficiency reasons,” the company confirmed on Friday.

The transfers aren’t layoffs, and the affected employees will be allowed to apply for any other open positions within SunTrust if they choose not to move to Nashville, spokesman Hugh Suhr said.

“We will continue to maintain a healthy wealth management presence in Chattanooga,” Suhr said.

Even with the bank’s move of six wealth management positions to Nashville this week, customer service won’t be affected, Suhr said.

“The impacted positions are advisory roles that interact via phone and/or email, so it will be transparent to clients and in no way lessens our commitment to serving the financial needs of this important market,” he wrote in an e-mail.

SunTrust, which until 2010 was the largest Chattanooga-area bank as measured by deposits, occupies one of the largest downtown buildings and once boasted 80 percent of the trust and asset management business in the city, said former executive Peter Cooper, who now heads the Community Foundation of Chattanooga.

But while SunTrust moved to save money by centralizing operations away from Chattanooga, rival First Tennessee Bank grew larger in local deposits, according to FDIC reports.

“They (SunTrust) keep moving further and further away from being a local bank,” Cooper said. “First Tennessee Bank isn’t doing that and is growing quite nicely, and it has replaced them as the largest bank in the city.”

Cooper said SunTrust’s centralization strategy is part of a larger effort that has been under way since before he stepped down from SunTrust in 1990.

“Probably their first move in ’87 was when they took 15 people out at that time, and after I left they kept whittling it down and taking more sections out,” Cooper said.

The bank’s eighth floor, he said, used to have 30 workers but more recently was closer to just six. In fact, SunTrust doesn’t own the building anymore, after selling it to The Simpson Organization in 2007, according to the real estate company’s website.

The landmark Chattanooga tower, completed in 1968, has more than 18,411 square feet of empty space, according to Simpson.

SunTrust, which was formed when Florida-based Sun Bank and the Trust Company of Georgia merged in 1985, entered the Chattanooga market in 1995 when SunTrust bought Nashville-based Third National Bank, the parent company of what was then American National Bank in Chattanooga.

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Saturday, February 25th, 2012 EN No Comments

S&P hits highest level since June 2008


NEW YORK — A two-point gain was enough to push the Standard Poor’s 500 index to its highest level since June 2008.

For the second day this week, the Dow Jones industrials nudged above 13,000, then pulled back.

What will it take for the Dow to close above 13,000 and stay there? Mark Lamkin, CEO of Lamkin Wealth Management in Louisville, Ky., said it would require a surprising news event, like a huge merger or an economic report that blows past expectations.

“It needs some type of surprise, a bombshell,” Lamkin said. “We’ve had a pretty good run over the past four months. Now it’s going to take something great to keep it above 13,000.”

On the Big Board: Rising issues outpaced decliners by about 13-to-11 on consolidated volume of 3.28 billion shares, down from 3.70 billion Thursday. For the week, the Dow gained 0.26 percent, the Nasdaq rose 0.41 percent, and the SP 500 added 0.33 percent.

— The Associated Press

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Saturday, February 25th, 2012 EN No Comments

S&P 500 posts highest close since ’08

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NEW YORK — The Standard Poor’s 500 index advanced on Friday to the highest level since June 2008 amid better-than-expected consumer sentiment and home sales reports.

The SP 500 rose 0.2 percent to 1,365.74. The narrower Dow Jones industrial average slipped 1.74 points, or less than 0.1 percent, to 12,982.95 after again rising above 13,000 earlier in the day.

What will it take for the Dow to close above 13,000 and stay there? Mark Lamkin, CEO of Lamkin Wealth Management in Louisville, Ky., told The Associated Press it would require a surprising news event, like a huge merger or an economic report that blows past expectations.

“It needs some type of surprise, a bombshell,” Lamkin said. “We’ve had a pretty good run over the past four months. Now it’s going to take something great to keep it above 13,000.”

The SP 500 gained as data showed that purchases of new homes in the U.S. exceeded forecasts in January after climbing a month earlier to a one-year high. The Thomson Reuters/University of Michigan final index of consumer sentiment for February rose to 75.3. Economists projected a reading of 73.

Before Friday, the SP 500 twice this week advanced above its highest close since 2008 only to retreat by the end of the day.

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Saturday, February 25th, 2012 EN No Comments

CITIGROUP INC. : Citigroup Successfully Executes Sale of 9.85% Interest in … – 4

Citigroup Inc. today announced it has sold 145.3 million shares in
Housing Development Finance Corporation Ltd. (HDFC) through the National
Stock Exchange, representing the entirety of its 9.85% interest, for INR
657.56 per share. Total proceeds from the transaction are expected to be
$1.9 billion at the current exchange rate, resulting in a pre-tax gain
to Citigroup of $1.1 billion (INR 54.9 billion), and an after-tax gain
of approximately $722 million (INR 35.5 billion).

Headquartered in Mumbai, HDFC (www.hdfc.com)
is a leader in housing finance, with an asset base of $ 27.6 billion as
of December 31, 2011. As a leading financial conglomerate, HDFC has
interests in banking, insurance, asset management and property funds.
The sale of Citi’s remaining stake in HDFC is part of Citi’s ongoing
capital planning efforts.

“We are pleased with the results of our investment in HDFC and will
continue to value our long-standing relationship with the company. Citi
remains deeply committed to India and we continue to focus on growth
opportunities for our franchise in this very important market,” said
Pramit Jhaveri, Chief Executive Officer of Citi India. “Our combination
of unique experience, deep relationships and valuable local insights
provide us with strong competitive advantages.”

Today, Citi is one of the largest foreign banks in India employing
nearly 8,000 people and is integrally connected to the trade and capital
flows in the region touching 16% of nationwide foreign exchange flows
and 8% of trade flows. Citi plays a leading role in helping
multi-nationals expand in India and also helping Indian companies grow
overseas. Over the past three years, Citi has helped raise nearly $60
billion from the capital markets for its clients in India and advised on
nearly $25 billion of India-related MA. In the consumer business, Citi
has 42 full-service Citibank branches in 30 cities and a market share of
over 20% in credit card spend. As of December 31, 2011, Citi had
approximately $29 billion in assets in India.

Citi, the leading global financial services company, has approximately
200 million customer accounts and does business in more than 160
countries and jurisdictions. Citi provides consumers, corporations,
governments and institutions with a broad range of financial products
and services, including consumer banking and credit, corporate and
investment banking, securities brokerage, transaction services, and
wealth management.

Additional information may be found at www.citigroup.com
| Twitter: @Citi | YouTube: www.youtube.com/citi
| Blog: http://new.citi.com
| Facebook: www.facebook.com/citi
| LinkedIn: www.linkedin.com/company/citi

Citigroup Inc.
Media Contacts:
Shannon Bell (New
York) +1 212 793-6206
Richard Tesvich (Hong Kong) +852 2868 7689
Debasis
Ghosh (Mumbai) +91 (22) 4001-5009
or
Investors:
John
Andrews +1 212 559-2718
or
Fixed Income Investors:
Ilene
Fiszel Bieler +1 212 559-5091

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Friday, February 24th, 2012 EN No Comments

Fund Advisers Europe Wealth Management Sponsor British Breakfast

Geneva, Switzerland — (SBWIRE) — 02/23/2012 — Fund Advisers Europe Wealth Management and the British Swiss Chamber of Commerce, Geneva, invited His Excellency Mr Peter Gooderman, CMG, to speak at the Great British Breakfast in Geneva on 1 February 2012.

Ambassador Peter Gooderham gave a packed breakfast dining room a clear account of the major, multilateral themes which have influenced his four year period of office, now regrettably drawing to an end.

He highlighted three significant subjects:

1. The so-called ‘Arab Spring’
2. The rise in importance of the ‘BRICS’ nations
3. The European Union

He also explained tha there had been a significant shift in attitude and perception in recent years. He higlighted the UN Human Rights Council and the general opinion today that the UN should uphold fundamental freedoms such as freedom of expression by holding offending countries to account.

Expanding on his three themes, Ambassador Gooderham reminded the audience that the ‘Arab Spring’ had taken most Middle East experts by surprise. Nevertheless, it seemed tailor-made for Britain’s foreign policy of ‘liberal interventionism” initiated during the Tony Blair era.

The irresistible rise in influence of the ‘BRICS’ has made for a more complicated agenda in a range of Geneva-based organisations, notably the WTO and WIPO. Recent events regarding the UK’s relationship with the EU, arising out of the Lisbon Treaty, have, he commented, highlighted the two competing visions of that institution, namely a collection of cooperating and collaborating nation states versus a single entity speaking with one voice.

This was the first British Breakfast to be held jointly by Fund Advisers Europe Wealth Management and the British Swiss Chamber of Commerce in Geneva. David Cooper, speaking after the event said “The British Breakfast has proved to be an important gathering of British business interests in Geneva and we are delighted to be making these events possible in 2012. To have the British Ambassador to the UN speaking at the first breakfast of the year is a huge honour, not only for Fund Advisers Europe but also for the Chamber. We look forward to helping make many more of these events possible during the year.”

Fund Advisers Europe Wealth Management will be participating in future Great British Breakfasts during the year with the next one being on Thursday 19th of April when the guest speaker will be Brigitte Baumann, CEO, Go Beyond Ltd and President, EBAN, European trade association for Business Angels Seed Funds “Wealth on Wings”.

About Fund Advisers Europe
Fund advisers Europe Wealth Management, headquartered in Brussels and with representative offices in Luxembourg and Geneva, provides independent financial advice, insurance and property related financial investment products and estate management services to private individuals. More information about Fund Advisers Europe Wealth Management can be found at http://www.fundadvisers.eu or by contacting one of our media contacts. Fund Advisers Europe Wealth Management is regulated by the Financial Services and Markets Authority in Belgium and by PolyAsset in Switzerland.

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Friday, February 24th, 2012 EN No Comments

Asset sales a global trend


ROBERT G. PATMAN

OPINION:

The Key government plans to sell 49 per cent of four state owned energy companies – Mighty River Power, Meridian, Genesis, and Solid Energy, and a further 23 per cent of Air New Zealand. It is claimed that $5-7 billion can be “freed up” to reduce debt and invest in new infrastructure.

The re-elected centre right Government moved quickly after last November’s election to implement this partial privatisation pledge.

The Government has recently appointed four investment firms to fill three joint manager slots for its first state asset sale in more than a decade.

The Government’s asset sales agenda is linked to two international trends. One is long term, and concerns the advent of globalisation in the 1980s – a process, powered by revolutionary changes in information and communications technology, which heralded the intensification of interconnections between societies, institutions, cultures, and individuals on a worldwide basis.

With a new global context, decision-makers in Wellington were keen to frame economic policies that could help realise the new possibilities that were available for trade, foreign investment and a strongly market-based approach (sometimes called the Washington Consensus).

In the 1980s, New Zealand began to liberalise and reform its economy in earnest. As part of the process of economic integration, New Zealand signed a series of agreements with Australia in 1983 known as Closer Economic Relations (CER). By 2005, New Zealand traded with more than 150 countries and was widely regarded as having one of the most open economies amongst the OECD countries.

At the same time that New Zealand began its economic restructuring, political reforms were also implemented. Many of these involved introducing New Public Management practices into the running of the core public sector service.

So, in a sense, then, Key’s asset sales plan seems to be consistent with the recognition by both Labour and National governments since the 1980s that globalisation was here to stay, and that the role of government was to make policy choices that maximised New Zealand’s national interests in a increasingly interconnected world. Adaptation, rather than resistance, was and is still seen as the best course of action in global circumstances that are largely beyond New Zealand’s control.

Presumably, the Key government believes that a partial privatisation programme will increase production efficiency, inject a financial discipline alongside the social and strategic concerns that governments generally bring to their investments, provide new opportunities for investment by businesses and business people from around the world, and generate substantial amounts of cash for the government.

These expectations are shaped, in part, by the international experience of privatisation. It was in the 1980s under the leaderships of Margaret Thatcher in the UK and Ronald Reagan in the USA, that privatisation gained worldwide momentum. In the UK this culminated in the 1993 privatisation of British Rail under Thatcher’s successor, John Major; British Rail having been formed by prior nationalisation of private rail companies.

Significant privatisation of state owned enterprises in Eastern and Central Europe and the former Soviet Union was undertaken in the 1990s with assistance from the World Bank, the US Agency for International Development, the German Treuhand, and other governmental and nongovernmental organisations.

Privatisation in the Czech Republic, for example, has had far-reaching effects on that country’s economy. In 1989 the private sector accounted for less than 1 per cent of the gross domestic product in the Czech Republic in 1989. That figure had reached 22 per cent by the start of 1993 and 44 per cent by the start of 1994.

The impact of privatisation for Latin American countries almost paralleled the experience of formerly communist countries. Mexico provides a good example. From 1989 to 1994, President Carlos Salinas privatised 252 state companies including major banks and TELMEX, the government-owned company that monopolised telephone services.

Sales of Mexican businesses have generated sorely needed funds for the Mexican government, which faced a major debt crisis in 1995-96. Mexico has been able to discontinue subsidies to unprofitable state-owned businesses.

Another major privatisation involves Japan Post, encompassing Japanese post service and the largest bank in the world. This privatisation, spearheaded by Junichiro Koizumi, started in 2007 following decades of debate. The privatisation process is projected to last until 2017.

Egypt undertook widespread privatisation under President Hosni Mubarak. But after his overthrow in the 2011 revolution, many of the newly privatised businesses were associated with the corruption of the old regime and this, along with the new look at long-festering labor and police-state issues, has led to calls for re-nationalisation.

Clearly, privatisation through the selling of state assets is taking place in very different economies. These differences cannot be glossed over when trying to draw lessons from the process. Privatisation in a less developed country is quite different from privatisation in a developed state. Similarly, a country’s history as a capitalist, communist or closed economy cannot be ignored when weighing the international significance of privatisation. Thus, the track record of privatisation is somewhat mixed.

The other trend that has affected the calculations of the Key government is short-term in nature, but no less significant.

It concerns the fall-out from the global financial meltdown of 2008-2009. Although New Zealand economy came through the crisis better than many, the impact of what happened in the US and Europe eventually registered in Wellington, following several international credit rating downgrades and after the ballooning costs of the Christchurch earthquakes in 2010 and 2011.

The financial collapse of countries like Iceland, Ireland and Greece served to highlight the current dangers of excessive borrowing, and encouraged the Key government to embrace the option of state asset sales to raise public funds – albeit on a one-off basis.

But if the Government’s focus on the selling of state assets is related to two broader international trends, it must keep an eye on another very significant development to avoid a policy miscalculation.

Globalisation has often been treated as a purely economic phenomenon. But that is a mistake. During the post-Cold War era, we have witnessed, particularly after the 2008-9 global financial crisis, the rising power and political focus of international civil society.

The Occupy Wall Street movement is a symptom of this major development and the same can be said for the uprisings in the Arab world. A combination of new technologies, the falling cost of international communication, and the gradual increase in international awareness on the part of civil society throughout the world has unleashed new social and political forces that have not only toppled several dictatorships but also call into question the way the global economic system currently operates.

The growing concentration of wealth in relatively few hands does not sit comfortably with a world that, thanks to technology, is increasingly aware of such discrepancies. Demands for greater financial transparency, taxation reform, and a more equitable distribution of wealth are set to intensify in many countries.

Thus, the Government will face much more public scrutiny than previous New Zealand governments did in selling major state assets over a decade ago. And if talk of ‘Mum and Dad’ investors proves to be just empty rhetoric, the Government will face the prospect of strong opposition across the political spectrum to its strategy of asset sales.

Robert G. Patman is a Professor of International Relations at the University of Otago

– © Fairfax NZ News

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the asset sales here cannot be compared to those by Mrs Thatcher in the UK. For Mrs T it was driven by ideology – to convert inefficient overmanned dinosaurs into better run companies. Here it is simply to get short term money.

airman #7 the profit? You mean the $4B the Electricity Commission found they had ripped us off by?

Neil Watts #14 the main thing depowering your vote is population expansion.

Yes Asset Sales is globalization at its worst. Countries have always taken over other countries. Initially with Armies – now the Bankers do it. How did we go from billion dollar surplus to billion dollar losses in a couple of years? – don’t say the world economic collapse, that’s just too easy and hides necessary details.
What are the other real options? Can anyone tell me why the US and the UK can print their own money and we can’t or don’t and why we don’t take action to devalue our dollar? I can guess the last one – as it would increase interest payments etc., So we are now serving the bankers as well – oh well had to happen.

Proceeds of state asset sales are included within economic statements, could we all make attempts to look further than 3-4 years into our future, as this is where the real cost lies.

@TimE#11
Say What? Quote “I think the US would prefer that other economies weren’t drowning in debt and living well beyond their means”
Umm dont know here you have been but the US is $11 Trillion in debt has been living beyond its means since 1975…

Assets are related to sovreignty if you dont know what those terms mean, look them up. Debt is used to leverage sovereign assets deliver them into private hands .

Debt based currency is one ginormaous pyramid scheme designed to suck up all anything of any real value swap it for their paper..

If an industry requires regulation it is, by definition, done so to ensure the interests of the community are being taken into account.
Generally this is to address moral, commercial fairness, safety and environmental reasons.
But when regulation is required to define “what work they must complete” and “what they can charge customers” (as mentioned by Sam)what is the point? It is effectively a state run asset where the profits go to the few.
Regulation can also be whittled down over time. Sure the government can put all sorts of controls in place to protect the asset for the nation, but over time those controls can be reduced, and even disappear, leaving the country vulnerable – the current government cannot control what a future government may do.

I heard some of Professor Patman’s points on Radio New Zealand after the Dunedin debate on asset sales, at which only 5% of the audience supported asset sales at the start, and only 2.5% at the end, after hearing some informed discussion.

I was dissapointed that other media didn’t pick this inconvenient truth up, so credit to stuff for finally getting around to it.

Yes, state asset sales are indeed a global trend in a world where democracies have been undermined by wealthy corporations and powerful lobby groups, who now effectively control the countries we used to think of as western democracies.

This isn’t lefty conspiracy theory – any idiot can observe the influence corporations have over soveriegn states, including New Zealand; Warner Brothers is just the tip of the iceberg. It is equally simple to observe the relative lack of power held by ordinary people. Hence, a policy which has minimal public support, but which benefits the most wealthy, gets forced on the people of New Zealand. Let’s not forget that the media, who largely control the debate, are also working in the interests of the wealthy elites who own them.

Is it an organised takeover on a global scale? Probably not, but it just so happens that Rightwing politicians, media moguls and international corporations share the same common interests of accumulating wealth and influence, by devaluing the rights of the person on the street, as well as the power of their vote.

As Professor Patman points out, people will only tolerate such corruption for so long, and Mr Key’s Government should tread very carefully when they tread on their own country’s best interests.

Thanks again Fairfax for publishing Patman’s important contribution.

Andrwe #9

I agree that a government shouldn’t be profit driven, but when your books are in negative you have to do somehting about it. That’s not suggesting we should sell assets though, I believe the opposite.

That being said any profits to the country should benefit the people of the country, it means more money towards community things which make NZ a better place to live.

What a load of psycho-frantic media rubbish !

People equating assets to sovereignty are fear-mongering.

Provided you maintain the ability t oregulate a market, there is no threat to sovereignty. But of course that doesn’t fit with the conspiracy theorist US-world domination-1 per cent blah blah that is oh-so convenient.

I think the US would prefer that other economies weren’t drowning in debt and living well beyond their means, so that consequent economic collapse doesn’t spread a contagion around the world that dumps on everyone’s economy.

And if it is all a US-driven conspiracy to lower countries’ debts… how is that a bad thing? the attitude that everyone’s entitled to live like kings needs to stop. Live within your means – what a concept!

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Friday, February 24th, 2012 EN No Comments

New Perpetual boss gets tough on costs

Updated: 12:50, Thursday February 23, 2012

New Perpetual boss gets tough on costs

Wealth manager Perpetual’s new chief executive says the company will aggressively cut costs as profits continue to fall and investment markets remain weak.

Announcing a 25-per-cent drop in first half profit, Geoff Lloyd said cost cuts were a main priority.

‘I have formed a dedicated internal team to identify further meaningful cost reductions across our business units, commencing immediately,’ the CEO said in a statement on Thursday.

An international consulting firm has been appointed to help identify reductions.

Cost saving initiatives will likely start before the end of the current financial year.

In January, Perpetual lost chief executive Chris Ryan after the board disagreed with his strategy for the company.

Mr Lloyd took up the role on February 6.

Challenging economic conditions had weighed heavily on investment markets, and Perpetual’s average funds under management, of $8.2 billion, as of December 31, 2011, were down seven per cent compared with six months earlier, Mr Lloyd said.

‘Clearly, market sentiment has not supported industry fund flows, demand for wealth advice or lending activity, the three main influences on our revenue,’ he said.

‘However, we can’t rely on an improvement in the external environment to drive improved performance.’

Perpetual on Thursday posted a net profit of $22.93 million for the six months to December 31, down 25 per cent on the $35 million in the previous corresponding period.

The result included a $10.2 million expense from Perpetual’s closure of its Dublin business, plus a $2.2 million loss on market investments.

The group’s $197.67 million revenue was down 14 per cent from the same period in the previous year.

As advised one week ago, Perpetual’s underlying profit for the six months to December was $34.7 million, down 15 per cent from the same period a year earlier.

Perpetual declared a fully-franked interim dividend of 50 cents per security.

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Thursday, February 23rd, 2012 EN No Comments

Perpetual appoints consultancy amid 25pc H1 profit plunge

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Thursday, February 23rd, 2012 EN No Comments

Profit at St James’s Place up on turmoil

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Thursday, February 23rd, 2012 EN No Comments

ETF Strategy: how to spot liquidity traps

ETF Strategy: how to spot liquidity traps

One of the benefits of exchange traded funds (ETFs) is the intra-day liquidity they provide, but investors should be aware how liquidity levels can vary and the ways in which this can affect the cost of trading.

An ETF has two main sources of liquidity based on the stocks underlying the ETF and the amount at which the ETF is traded. Liquidity can be affected, for example, by market conditions, such as if the underlying market is closed or at times of investor uncertainty.

‘If liquidity is poor, spreads will be wide,’ said Christopher Aldous (pictured) chief executive at Evercore Pan-Asset Capital Management. ‘It also depends on your view on the underlying asset. ETFs on the US market, for example, are pretty liquid.’

He said there is an established futures market covering the US, so it is easier to gauge where the markets will be and price from this. Conversely, he said that emerging markets do not have such a developed futures market, meaning it is more a case of taking a view, which could lead to these ETFs having wider spreads.

Don’t rely on screen trading volumes

Although ETFs trade like stocks on an exchange, investors should not just rely on looking at screen trading volumes to determine the liquidity of an ETF.

While one level of liquidity does stem from the volumes of ETFs traded, the other arguably more prominent source is derived from the liquidity of the underlying constituents of the index.

Another reason why investors should not rely on trading volumes printed on-screen is caused by the paradoxical nature of the European market, whereby the majority of ETF trading takes place off-exchange, or over-the-counter (OTC). 

This is compounded by the fact that there are no regulatory requirements to report OTC trades, which limits the available data on transparency and pricing.

The second instalment of the Markets in Financial Instruments Directive (Mifid) is set to include OTC reporting requirements for ETFs. Many market commentators are also expecting an EU directive that will result in all trading activity for an ETF taking place under one ticker symbol, as it does in the US.

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Wednesday, February 22nd, 2012 EN No Comments