April 2009
30 April
The US economy continued to contract in the first quarter of 2009, led by the biggest fall in exports for 40 years. US GDP contracted at an annualised rate of 6.1% during the quarter, little improvement on the 6.3% fall in the last three months of 2008. Exports fell by 30%, the Commerce Departmen t said, as the global recession hit worldwide spending. Separately, the Federal Reserve held interest rates at near zero and said the recession in the US may be easing.
Industrial output in Japan rose in March for the first time in six months, according to government figures. Production rose by 1.6% in March compared with February, after months of decline.
The German government says the country's economy will shrink 6% this year, in a dramatic revision to its earlier forecast of a 2.25% decline. It would be by far the worst post-war performance of the German economy, as the biggest previous decline was 0.8% in 1993, just after re-unification.
29 April
Lithuania’s economy shrank by 12.6% in the first quarter compared with the same period of 2008 - the largest year-on-year fall in the EU since the recession began.
Shareholders in Fortis booed, threw shoes and walked out of its general meeting in Ghent as they called for the company's executives to resign.
28 April
US taxpayers would take a majority shareholding in General Motors under a sweeping debt-for-equity restructuring proposal that the carmaker revealed in a bid to avoid bankruptcy. Under the plan, GM said it would shut 13 of 47 plants by the end of next year, resulting in an additional 7,000 job losses. The latest job cuts would reduce GM’s US workforce from 61,000 last year to about 40,000 by the end of 2010.
National Australia Bank , the country’s largest lender, announced net profits fell 1% to A$2.66bn in the six months ended March, while cash earnings fell 9% to A$2bn.
Global shares have fallen further as the swine flu outbreak continues to weigh on markets. The UK's FTSE 100 index was down 1.4% in early trading, while Japan's Nikkei earlier closed down 1.7% and Hong Kong's Hang Seng shed 1.4%. The declines come after the Dow Jones index lost 0.6% in New York. "We had finally begun to see a bottom for the global economy and that has been ruined by pigs," said analyst Tsuyoshi Segawa of Shinko Securities.
27 April
Japan’s government cut its forecast for the economy, predicting that it will shrink 3.3% in the year to next March instead of its previous estimate of zero growth, as the world’s second largest economy remains in the grip of the worst recession since World War II.
24 April
Microsoft’s revenues fell for the first time in its 34-year history by 6% in the latest quarter to US$13.65bn, some US$500m below Wall Street’s expectations.
United Parcel Service’s (UPS) quarterly net income fell by 56%, dropping to US$401m in the first quarter of 2009 from US$906m a year earlier. Revenues fell 13.7% to US$10.9bn from US$12.7bn a year before.
Mizuho Financial Grou p, Japan’s second largest bank, warned it would report a full-year loss of Y580bn (US$5.9bn) rather than a profit of Y100bn in the year to March 2009.
22 April
UK Chancellor Alistair Darling has said the UK will have to borrow a record £175bn as he admitted the economy faces its worst year since the second world war.
The global economy is set to decline by 1.3% in 2009, in the first global recession since second world war, the International Monetary Fund (IMF) said. In January, the IMF had predicted world output would increase by 0.5% in 2009. It now projects that the UK will see its economy shrink by 4.1% in 2009, and by a further 0.4% in 2010. But other major economies are predicted to shrink even more, with Germany declining by 5.6%, Japan by 6.2%, and Italy by 4.4% in 2009.
Japan is to issue an extra Y10,800bn (US$110bn) of government bonds this fiscal year to help it tackle its worst recession since the second world war. The bonds will fund the bulk of the government’s stimulus plan and will bring its expected total new issuance for the fiscal year starting this month to a record Y44,100bn, a 33% rise on last year.
Sweden’s central bank halved its key interest rate to a record low of 0.5% and forecast that the country’s open economy would this year suffer its worst recession since 1940.
A series of interest rate cuts in India has failed to lead to cheaper commercial lending, leaving Asia’s third largest economy to grow at only 6% this year, the central bank said. The Reserve Bank of India (RBI) issued the first official growth forecast under 7% and cut its key repo lending rate by 25 basis points to 4.75%.
The deteriorating global economy means financial institutions now face total losses of USS$4.1 trillion on loans and other assets, the International Monetary Fund (IMF) said in its Global Financial Stability Report, urging governments to take ‘bolder steps’ to shore up institutions - including nationalizing them where necessary.
21 April
UBS’s new management took a first step to trimming the balance sheet and redeploying capital with the US$2.5bn sale of Pactual, the Swiss banking group’s Brazilian financial services operations, to some of its founders.
UK annual inflation measured by the Retail Prices Index (RPI) went negative in March for the first time since 1960, to -0.4%, down from zero in February. The Consumer Prices Index (CPI), fell in March to 2.9% after February's unexpected rise to 3.2%, the Office for National Statistics (ONS) said.
The supermarket chain Tesco has reported underlying annual pre-tax profits of £3.13bn, an improvement of 10% on the previous year.
General Electric reported a 35% fall in quarterly profit. Profit in the first three months of 2009 slid to US$2.8bn from US$4.4bn a year earlier.
_20 April _
UK Chancellor Alistair Darling has decided to concede for the first time that the government will not recoup the full costs of its banking interventions and that the bill could be as high as £60bn. The provision for banking losses will come in a Budget likely to be dominated by forecasts of huge public borrowing, with the Treasury expected to project a peak deficit of £170bn-£180bn.
The International Monetary Fund(IMF) has formally approved a US$47bn line of credit for Mexico.
First-quarter profits at JPMorgan Chase have come in ahead of expectations, despite falling 12.5% from a year ago to US$2.1bn. The group's investment bank reported a profit of US$1.6bn, and the forecast-beating results sent its shares up 2.6% on Wall Street.
16 April
China’s economy grew 6.1% in the first quarter, the lowest year-on-year reading since quarterly GDP data was first published in 1992. The increase was down from 6.8% in the fourth quarter and 9% for the whole of 2008.
Prices in the US fell in the year to March, marking the first annual decline since 1955. Consumer prices fell 0.4% over the year to March, the labour department said, and dipped 0.1% last month from February owing to weak energy and food prices.
AIG is in advanced talks to sell its US personal lines insurance business to Zurich Financial Services for about US$2bn.
The rump of the bankrupt bank Lehman Brothers is sitting on a stockpile of 450,000 lb of uranium "yellowcake”, according to the Guardian.
15 April
Swiss bank UBS says it will axe 8700 jobs around the world in a bid to cut costs after posting a loss of around US$1.75bn for the first quarter.
Poland's government is to ask the International Monetary Fund (IMF) for a US$20bn credit line to help tackle the economic crisis.
Fortis Bank has seen a €20.6bn loss for 2008 following write-downs on debt and the division of the business.
14 April
Goldman Sachs has reported a US$1.8bn net quarterly profit, beating analyst expectations. The bank also said it would place US$5bn worth of its stock on the market, to raise funds to repay an emergency US$10bn loan provided by the US government.
ING has unveiled a ‘back to basics’ strategy that will sell 10 to 15 businesses worth up to €8bn and focus its lending activities on Europe.
Bankruptcy-related mergers and acquisitions have hit their highest level globally since August 2004, and are set to keep rising as more companies are forced into distressed sales, according to Thomson Reuters data and restructuring practitioners. Thomson Reuters identified 34 announced deals in March alone, and 67 so far this year, where the target company was in bankruptcy or administration proceedings. The vast majority were in the US or Japan.
The credit quality of global companies has deteriorated to levels not seen for more than a quarter of a century, according to Moody’s Investors Service. The ratings agency said the ratio of companies having their credit ratings cut versus the number of companies being upgraded - an indicator of declining credit quality - had reached its highest level since 1983.
Wells Fargo lifted hopes for the banking sector by announcing that it would report record first-quarter profits of US$3bn later this month.
9 April
Ireland’s finance minister Brian Lenihan outlined plans to set up a national asset management agency to take over an estimated €80bn-€90bn of bad loans extended by local domestic banks to developers and property companies that now look as if they will not be able to repay.
Royal Bank of Scotland is cutting up to 9,000 jobs worldwide in areas such as technology and call centres in what is the biggest single job cull at a bank this year.
7 April
The Reserve Bank of Australia cut its benchmark rate by a quarter percentage point to 3%, a 49-year low.
UK car sales fell by 30.5% in March, compared with the same month last year, the latest industry figures have shown.
The UK government may have to find an extra £39bn a year by 2016 to bring borrowing under control, the Institute for Fiscal Studies (IFS) said. This is on top of the £38bn of fiscal tightening the chancellor announced in the pre-Budget report (PBR).
Japan is to implement another fiscal stimulus plan of more than 10 trillion yen (£66bn) to fight the recession. It comes on top of 12 trillion yen of stimulus spending that has already been agreed. The new sum amounts to more than 2% of the annual output of Japan's economy.
2 April
Meeting in London, the G20 reached an agreement to tackle the global financial crisis with measures worth US$1 trillion (£681bn). The International Monetary Fund (IMF) will receive an extra US$750bn to help nations that have been particularly hard hit. The G20 has pledged around US$250bn to boost global trade. Speaking on behalf of the G20, UK Prime Minister Gordon Brown announced the following steps:
* Bankers' pay and bonuses will be subject to stricter controls.
* A new Financial Stability Board will be set up to work with the IMF to ensure co-operation across borders.
* There will be greater regulation of hedge funds and credit ratings agencies.
* A common approach to cleaning up banks' toxic assets.
* The world's poorest countries will receive US$50bn in aid.