Investments  

Morning papers: Alert as warning signals flash over Portugal

Political disarray in Lisbon triggered a surge in Portugal’s bond yields and declines in share prices across Europe yesterday amid fears that the country will struggle to exit its 78 billion bailout on time, reports The Times.

With Greece facing the threat of delays to its official loan payments, euro area periphery woes spread to Portugal with the resignation of two high-profile government ministers. The yield on ten-year Portuguese bonds spiked to 7.5 per cent, the highest level since late 2012, while the country’s key share index suffered its sharpest slide since 2011.

Brussels backs down on pay cap for fund managers

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The European Parliament narrowly voted to overturn an agreement made by lawmakers to ban bonuses bigger than salaries as part of the broader Ucits V directive, reports The Telegraph.

The plan was rejected by 348 votes to 341. However MEPs warned that the fund management industry, the lion’s share of which is based in Britain, is likely to face bigger demands for transparency. The Parliament suggest that a higher proportion of fund managers’ bonuses should be in shares and should be deferred. EU member countries would have to agree to any changes first.

Qatar seeks to shake off trophy investor image

The government of the gas-rich state of Qatar is rethinking the way it invests billions of dollars of state funds in property in an attempt to introduce a commercial rigour to its dealmaking and to end its reputation as a trophy investor, reports the Financial Times.

The Gulf state is reviewing scores of deals made through government-funded vehicles since 2007 as it shapes its investment strategy, according to people familiar with Qatar Investment Authority, the asset manager with more than $100bn in assets, under whose auspices most property deals are made.

RBS: Rothschild to consider good bank/bad bank split

Investment bankers at Rothschild are to be paid £850,000 for conducting a review, commissioned by the chancellor, into whether Royal Bank of Scotland should be split into a good and bad bank, reports the Guardian.

George Osborne announced the review in his Mansion House speech and said he wanted the work to be completed by autumn. RBS, 81%-owned by the taxpayer, is expected to pick up the bill.

Bank of Japan to discuss China as ‘biggest risk’ to recovery

Despite bright signs in the Japanese economy, the Bank of Japan is worried it still may not be strong enough to withstand sudden shocks from overseas, according to people familiar with the BOJ’s thinking who cited China as the economy’s “biggest risk,” reports The Wall Street Journal.

Concern over whether the world’s second-largest economy can achieve a soft landing will likely put China near the top of the agenda of next week’s BOJ policy-board meeting, the people said. The meeting isn’t expected to produce any change in the bank’s main monetary policy.