Member Article

BSkyB and BT lower on Premiership deal

Risk assets were out of favour this morning, as investors took fright at a downgrade of Spain’s sovereign credit rating, which was decreased to one notch above junk status by Moody’s last night. The yield on Spanish 10 year bonds touched an all time high of 7%, indicative of the markets fear about the government’s ability to contain the crisis. As we have mentioned in the past few days, Italy has become increasingly in the sights of the bond vigilantes, and today had to pay 5.3% at an auction of three year debt. This compares to a 3.9% interest rate only a month ago.

Credit Suisse dropped closed to 10% following comments from the Swiss National Bank that the institution would need to raise capital this year. The central bank of Switzerland was also in the news for comments that implied they are prepared to impose capital controls to stop the Swiss Franc surging in value if investors flee euro denominated assets in response to potential turmoil following the Greek election. The comments epitomise the uncertainty over the election on Sunday, in what is the penultimate trading day for markets participants to position their portfolios.

Within the UK, British Sky Broadcasting fell heavily following news that securing television rights to the English Premier League for the next three seasons was to cost £3billion, a 70% increase over the previous deal. BT, which are new to the domestic football broadcast market, paid £738m for the right to broadcast 38 games, with Sky paying the remainder to broadcast 116 matches. Shares in both companies closed around 3.5% lower on the day.

American initial jobless claims came in at 386,000, ahead of the 375,000 that was forecast and above the revised figure for last week of 380,000. Markets recovered from their afternoon lows, although the FTSE100 still finished the day weaker by 0.3% at 5467. The French CAC finished slightly higher, with US indices close to 1% better off in decent trading.

This was posted in Bdaily's Members' News section by James .