US based fund manager BlackRock finally reached agreement late on Thursday to purchase the Global Investors wing of Barclays, pay $13.5 billion for the company. The deal, paid for in cash and shares, will make BlackRock the largest money manager in the world, handling in excess of £2,000 billion in assets.

Barclays as well as receiving around £5 billion in cash will also receive shares in BlackRock equivalent to close to 20 per cent of BlackRock’s current value.

While that particular deal did capture the imagination of the city, it was small potatoes when compared to the excitement created by the deal taking place in the hallowed corridors of Old Trafford in Manchester and the Bernabeu Stadium in Madrid. After almost two seasons of uncertainty, Manchester United eventually accepted a £80 million bid from Real Madrid for their gifted but petulant superstar player, Cristiano Ronaldo. If everything goes according to plan, the deal will be completed by the end of June and will not only break but shatter the World’s largest transfer record, set only a week previously, also by Real Madrid when they purchased the services of Kaka from AC Milan for £56 million. Obviously the global recession is yet to reach Madrid.

In the stock exchange, shares in Thomas Cook Group Plc jumped 10 percent to 235.75 on reports that Germany’s Rewe Group is interested in taking over the travel company.

Shares in the Indian Film Co Ltd jumped by a massive 48.5 percent after company whose core activity is investment in the Indian film industry posted a more than two-fold jump in full-year pretax profit, while announcing their confidence that next year will be just as strong.

Europe’s third-biggest airline British Airways Plc announced that their chief executive, Willie Walsh is to forgo his July salary owing to the “exceptionally challenging circumstances” facing the airline.” Despite Mr. Walsh’s noble gesture shares in BA remained unchanged at 145.6 pence.

Home Retail Group Plc, owners of the Argos and Homebase retail chains saw their shares rise 7.75 pence to 266 pence prior to the release of an interim management statement.

Overall, FTSE 100 rose again yesterday, this time by 25.12 points to finish on 4,461. 87 while the FTSE 250 rose 24.46 points to close on 7,754.44

Sterling has reached its highest level against the euro since the start of the year after data suggested the UK recession may be over.

The pound was worth 1.1758 Euros in early afternoon trading, up from the previous day’s high of 1.1672 Euros.
Pound/US dollar 1.6578
Pound/Euro 1.1758
Pound/Japanese Yen 161.9284
Pound/Swiss Franc 1.7735

US stocks made a recovery on Thursday on the back of some positive economic news from the Federal Reserve.

The Dow Jones rose 31.9 points to 8770.92, while the NASDAQ recovered by 9.29 points to close on 1862.3.
As part of a raft of executive compensation reforms, The salaries of the top 100 employees at seven US companies who have been recipients of government bail-out funds are due to be vetted by a “special master” named by US government officials. The administration is also expected to institute legislation that would force public companies to hold non-binding shareholder votes on executive pay every year. That news should set some corporate knees knocking.

According to reports from the International Energy Agency (IEA), demand for oil in 2009 looks like being higher than previously expected, although it would still be in decline from the previous year. Estimates are that daily global oil consumption will be 83.3 million barrels a day.

The increased demand added to signs that the worst of the global recession is over.

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Tags: BlackRock, British Airways Plc, British Economy, Cristiano Ronaldo, Financial News, Home Retail Group Plc, Stock Exchange, Thomas Cook Group Plc

Despite all the fancy paraphernalia that surrounds a modern-day stock market, it is based on a very simple principle: it allows the buying and selling of mainly company stocks and shares.

It’s a market place, albeit a quite complicated market place, with plenty of rules, regulations and specialist players.

But, it all comes down to the trade of publically quoted companies, or trusts, which have their shares listed on the stock exchange and are quoted at a price which represents their perceived value. 

The largest stock exchanges are found in London (the Footsie), New York (the Dow Jones) and Tokyo (the Nikkei)

Each lists a large number of national and overseas companies in a number of indices, the main one of which is used to show the market’s performance.

When you hear that the Footsie is down say 100 points, it refers to that day’s performance of the London Stock Exchange’s Financial Times top 100 companies index. In other words, it calculates, while the market is open, a minute-to-minute value of the combined 100 top U.K. companies (the blue-chips) market worth (known as their market capitalisation).

So if British Telecom, one of the U.K.’s largest companies, gains a few pence on it’s share price, it’s gain along with other gains, or other losses of the other 99 blue-chips, are added together every day and this movement is calculated on a points basis, leading to the expression that today the Footsie closed up 99 points, or maybe down 50 points. And those points represent a monetary value after a complex series of calculations.

On the London Stock Exchange (LSE) there are over 3,000 individual stocks and shares traded, and mostly are companies, or equities, although there are a number of other tradable entities. The LSE organise the stocks and shares of its Main Market into a number of groupings, each with its own performance rated index. Therefore, as well as the FTSE 100, there are the FTSE 250 (top 250 stocks), the FTSE 350 (top 350 stocks) and the FTSE Small Cap (some of the Main Markets smallest stocks). And as well as the Main Market, there is a junior market as well, known as AiM, and on which is listed generally smaller companies (although not necessary as a requirement) which are slightly less restricted in their ownership and trading rules.

A company qualifies to join a stock exchange by having at least a set percentage of its shares in public ownership (i.e. not in the hands of one, or a small number of shareholders). Thus, for a company share to be listed on a stock exchange, there has to be a degree of liquidity, in other words, there have to be enough shares in enough hands to create a theoretical market.

Prior to its entry to being listed on a stock exchange and its shares eligible for trading, a company will have to organise something similar to what is known in most markets as a flotation, in which financial institutions and private shareholders are offered shares in the new stock exchange company coming to the market. There are various mechanisms and methods, including certain flotations which only allow recognised financial institutions to take part and excludes, at the start, private investors.

Shares are bought and sold by market-makers, owned by the firms of stock-brokers. Since the Big-Bang revolution in the City in the mid 1980s, market trading is computer screen based and not on a physical stock exchange floor.

Market-makers do as their title suggests; they make markets in particular stocks and create trading spreads. You buy at one price and sell at another. The difference between the two is the spread and a wide spread usually suggests a rarely traded stock, whereas a tight spread suggests an active stock.

Firms of stock brokers are there to advise both institutional and private clients on what shares they should buy, when, and if they should hold onto them, or sell them.

A stock exchange is usually an extremely complex financial mechanism with a whole host of supportive firms and people. For many countries, it reflects their wealth, well-being and status.

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For More information on specific Banks use these links

• Alliance & Leicester
• Barclays
• Capital One
• Child Trust Fund
• First Direct
• HSBC
• Post Office
• Tesco Savings

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Tags: British Telecom, Dow Jones, Footsie, Nikkei, Stock Exchange, Stock Markets, Stocks and shares