Equities finished negative on Monday, in spite of opening higher following China’s decision to announce that it will gradually make the CNY’s exchange rate more flexible. The reversal of risk appetite saw stocks trend lower and the DJIA pared back its initial 100 point gains as investors retraced their confidence after the PBOC did not commit to a specific timeframe. The DJIA still managed to outperform its peers with Alcoa (+5.49%) leading the index as co.’s CEO expected demand for co.’s products to grow by 10% this year. Elsewhere, Visa (+5.01%) and Mastercard (+4.24%) outperformed in the S&P 500 after the US Congress decided to protect the transaction fees they charge to banks. The S&P 500 closed down 0.39% at 1113.20, the DJIA closed down 0.08% at 10442.41 and the NASDAQ 100 closed down 0.92% at 1895.84.
UKUK Banks - The UK is planning to announce an annual GBP 2.5bln bank tax today as part of its emergency budget, according to sources. (Sky News)
BP (BP: 30.33 0.00 0.00%) - Co. is looking to collateralise assets, according to Fox Business’s Gasparino. Says co. faces extra USD 500mln in interest on bond sales. Co. doesn’t plan to sell its profitable North Sea business, according to board member Iain Conn. (Fox Business/Handelsblatt) In other news, the first tropical storm of this year’s Atlantic Hurricane season may enter the Gulf of Mexico next week, posing a formidable threat to co.’s efforts to clean up a leaking oil well, according to meteorologists. (Sources)
British Airways (BAY: 79.44 0.00 0.00%) - Co. said it reached agreement with the trustees of its New Airways Pension Scheme and Airways Pension Scheme on a plan to reduce its pension deficits. Co. added that it will now submit the full recovery plan to the UK pension regulator by June 30, 2010. The recovery plan avoids closing the pension scheme. Co. maintains its annual contributions at current level of some GBP 330mln, plus agreed annual increases. Co. also said Iberia has three months to reach a decision on the pension recovery plan. (Sources/RTRS)
Tesco (TESO: 12.59 0.00 0.00%) - Co. is taking over the US operations of two key suppliers to its fledging Fresh & Easy business after its slower than expected expansion. (FT)
Whitbread - Co. said sales at outlets open at least a year rose 7.6% in the 13 weeks ended June 3. (Sources)
USUS Banks - Fed, OCC, OTS and FDIC issue final pay guidance to limit risk taking by banks. Fed’s governor Tarullo says more work needs to be done and says many banks are not fully capturing vulnerability to risk and are lacking mechanisms to ensure limits on risk. Says review finds deficient pay practices at many banks. (Sources)
IBM (IBM: 130.65 0.00 0.00%)/Infosys (INFY: 63.23 0.00 0.00%) - Co.s may bid for India Biometric project worth more than USD 218mln. (Times)
Pfizer (PFE: 15.10 0.00 0.00%) - Co. to withdraw Leukaemia drug Mylotarg from US market, announces co. and the FDA. The US FDA asked co. to pull Mylotarg after study raised safety concerns and showed no benefit, co. says it is voluntarily withdrawing Mylotarg in US. (RTRS)
Lockheed Martin (LMT: 80.07 0.00 0.00%) - Co. reinstated to USD 5bln contract for commando support. (Sources)
EuropeGERMANY
BASF - Co. is to sign a contract on buying smaller rival Cognis today. (Sueddeutsche Zeitung)
Munich Re - Co.’s CEO said he expects the group to generate 15% of its business from Asia in the foreseeable future compared to the current 11%. (Sources)
FRANCE
BNP Paribas - Fitch downgrades co. to AA- from AA; outlook stable. (RTRS) In other news, co. is in talks with Apax Partners over the planned sale of its Belgian consumer-credit unit Cetelem Belgique, according to sources. (La Tribune)
EADS - Emirates Airline president says the carrier is likely to need even more A380s than the 90 it has ordered so far. (Flightglobal)
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