28 Mar 2012: Equities slide, Abu Dhabi look to inject funds into RBS

  • Equities fall after yesterdays highs, Commodities struggling: After yesterdays highs, there wasn’t any further positivity to sustain Equities at that level. Trading is quite mixed across regions showing a lack of conviction in one particular trend or direction. FTSE All-World sits only 1% below its 8-month high, while S&P is likely to inflect on open- US durable goods orders reports are due this afternoon, and they will be keenly watched. Commodities are struggling too.
  • Stocks: FTSE All World is down 0.2%, and FTSE Eurofirst is down 0.3%; In Asia, FTSE Asia Pacific has lost 0.4%, while Tokyo lost 0.7%; S&P 500 is expected to be flat at open; FTSE 100 is adding 0.1% at open and is at 5903
  • Currencies: Euro has gained 0.2% against Dollar and is at $1.3348; Dollar has lost 0.32% against Yen and is at 82.92. Sterling has lost 0.06% against dollar and is at 1.5938
  • Debt: US 10-years little changed at 2.20%; Bunds at 1.92%; Gilts are at 2.29%
  • Commodities: Brent Crude lost 0.8% cents to $124.50/barrel; Copper falls 0.7% and is at $3.85/pound; Gold falls to $1678/ounce
  • Abu Dhabi eyes £10bn investment in RBS: Shaikh Mansour is being advised by bankers from UK treasury about a potential injection into RBS. Shaikh and his partners would invest about £5bn in RBS stock, with another £5bn being injected as contingent capital, which would convert from debt to equity at a certain trigger, but this provision is being described as ‘complex’ due to RBS’ complicated capital structure. The RBS share gained 7% on Tuesday morning after this news.
  • Oil futures conflict with current prices: 3-5 year oil futures are trading at their biggest ever discount to spot prices. While oil has risen to $125/barrel this year, 5-year oil futures are only worth $95/barrel. This prompts debate about the short lived oil price highs, as experts say that oil production is expected to increase on a 3-5 year time scale.

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