European stocks rose for a third week, the longest streak of gains in more than 10 months, after the Obama administration’s plan to rid lenders of toxic assets spurred a rally in banks.
Barclays PLC soared 66 percent as the US Treasury said it would finance as much as US$1 trillion in purchases of distressed assets and the UK’s third-biggest bank passed stress tests conducted by the UK financial regulator. Lloyds Banking Group PLC and Commerzbank AG jumped more than 30 percent.
The Dow Jones STIOXX 600 Index advanced 2.7 percent to 177.17 last week. The measure has rebounded 12 percent since reaching a 12-year low on March 9 as US Treasury Secretary Timothy Geithner outlined plans to buy illiquid securities and loans that have caused credit to dry up.
“The market right now is ready to give him the benefit of the doubt,” said Monika Rosen, head of research at Bank of Austria Asset Management in Vienna, which oversees about US$41 billion. “We are getting more substance but we still want to see a little more fundamental news.”
National benchmark indexes climbed in 14 out of 18 western European markets. The UK’s FTSE 100 rose 1.5 percent, while France’s CAC 40 advanced 1.8 percent. German’s DAX added 3.3 percent as Volkswagen AG surged.
European banks have led a 21-month market rout as they notched up more than US$380 billion in credit losses and writedowns, contributing to worldwide losses of more than IS$1.2 trillion. The US Treasury’s proposal to remove toxic assets from balance sheets will use between US$75 billion and US$100 billion from the US$700 billion Troubled Asset Relief Program enacted last year, giving the government “purchasing power” of US$500 billion. The Treasury said the program could double “over time.”
Barclays soared 66 percent on optimism the bank may not need to raise additional capital after it passed the Financial Services Authority’s tests.
Barclays has asked bidders to submit offers for its iShares exchange-traded funds business by Friday. The unit could be valued at as much as £4.5 billion (US$6.5 billion), said Jonathan Pierce, an analyst at Credit Suisse Group AG in London.
Lloyds surged 38 percent as the UK’s biggest mortgage lender this week offered to exchange more than £7.5 billion in bonds into senior unsecured debt to boost its financial strength.
Commerzbank, the second-largest German lender, jumped 63 percent as supervisory Board Chairman Klaus-Peter Mueller said he doesn’t expect the German government to raise its stake after agreeing to buy a holding as part of an earlier rescue plan.
Larger rival Deutsche Bank AG also advanced, rising 16 percent. Chief executive officer Josef Ackermann said Germany’s biggest bank had a good start to this year and is expected to return to profit after scaling back risky businesses and shedding toxic assets.
Volkswagen soared 19 percent as part-owner Porsche SE refinanced a 10 billion euro (US$13.3 billion) loan, spurring speculation the sports-car maker will increase its stake.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to