Morgan Stanley, the firm targeting a 2% market-share gain in fixed-income trading this year, was burned by a wager on US inflation expectations in the second quarter, sources said. The banks interest-rates trading group lost at least tens of millions of dollars on the trade, which the firm has been unwinding. Traders at the bank bet that inflation expectations for the next five years would rise in Treasury markets, while forecasts for the next 30 years would fall. Such wagers on so-called breakeven rates involve paired purchases and short sales of Treasuries and Treasury Inflation Protected Securities, or TIPS, in both maturities.
Deutsche Boerse, NYSE seek EU nod for merger
Deutsche Boerse and NYSE Euronext on Wednesday requested the European Unions approval of their merger, kicking off what is expected to be a lengthy probe of the potential threats to competition from the combination of the two stock exchanges. Deutsche Boerse AG said in February that it would buy the parent company of the New York Stock Exchange for $10 billion, creating the worlds largest exchange operator. Deutsche Boerse runs the Frankfurt Stock Exchange, while NYSE Euronext owns bourses in Paris, Lisbon, Brussels and Amsterdam, in addition to the flagship New York trading platform.
Ferragamo shines in Milan debut
Shares of Italian luxury shoemaker Salvatore Ferragamo rose in their first day of trading on Wednesday, defying expectations for a muted debut. The Florence-based maker of shoes worn by Hollywood stars, such as Audrey Hepburn and Marilyn Monroe, trimmed debut gains to be up 6.17% at 9.555 euros at 0711. The blue-chip FTSE MIB index gained 0.96%. We have faced difficult moments on the equity markets, but we made it, chairman Ferruccio Ferragamo said at a ceremony marking the launch of trading on the Milan bourse. The shares had been priced at 9 euros each in the initial public offering (IPO), at the middle of their flotation range.
Zynga initial public offer may raise $2 billion
Online social game company Zynga plans to raise $1.5 billion to $2 billion in an initial public offering and could file paperwork with US regulators as soon as Wednesday, a source familiar with the situation said on Tuesday. Zynga, the company behind a series of popular games on Facebook including FarmVille and Mafia Wars, has more than 215 million monthly active users, according to its website. It is the top games publisher on Facebook and its revenue mainly comes from selling virtual items such as tractors and weapons in games that users can play on their computers. Zynga is expected to float only a small portion of its shares and the IPO could value the company as high as $15 billion to $20 billion, the source said.
Siemens plans for Osram initial share sale tested
Siemens AG is trying to sell light bulbs to investors just as growth prospects darken. The sales boost from the economic recovery is petering out and growth is easing at the Osram lighting subsidiary, Siemens chief financial officer Joe Kaeser said on Tuesday. The Munich- based company has slated an initial public offering for Osram in the second half, in a sale that may raise about $4.31 billion, sources said. Siemens is attempting one of the biggest share sales in Germany in a decade at a time when the European sovereign debt crisis is roiling investors.
Tepco may extend power restrictions on customers
Tokyo Electric Power may ask customers to prolong restrictions on power usage beyond summer unless it can restart idle reactors at its Kashiwazaki Kariwa nuclear plant, the utility's new president said on Wednesday. Toshio Nishizawa on Tuesday took over the helm of the troubled utility, which is still struggling to halt a radiation leak at its crippled nuclear plant in Fukushima. Tepco has asked households and business in Tokyo and its surrounding regions to reduce power consumption by 15% in order to avoid exceeding generating capacity after Japans tsunami crippled the Fukushima facility.