Sanwa/SG Paribas/EU hegemony

DANIEL.DAVIES at flemings.com DANIEL.DAVIES at flemings.com
Thu Apr 15 11:03:02 PDT 1999


SocGen/Paribas is very far from being a done deal. SG/BNP looks like the most likely outcome of the merger battle in France. It'll create the first US$1trn bank by asset size, but it'll be a very domestic-focused institution. I wouldn't be looking for a French Citibank, or even a French Deutsche Bank, in the sense of global financial players who are hard enough hitters to make the central banks listen. The French government wants a Tres Grand Banque Francais, but it will probably have to make do with Cred Ag and Indosuez.

NB that the merged group will be just over 50% owned by Anglo-Saxon institutions, so talk of the "new metropoles" might be a bit premature. I'd follow the sell US/buy euroland tip, though -- next FOMC is 18 May. NB that payroll data is not the indicator of choice anymore since Greenspan's "rejecting the NAIRU" speech. I'd look at the trade deficit, and worry.

dd

))))))))))))))))

Pay attention to this, Lefties. Sanwa Bank is the financial core of the Sanwa keiretsu (500 billion euros in assets, 209 billion euros in annual revenues); Societe Generale is now part of the SG-Paribas conglomerate (which may or may not be absorbed into BNP at a later date), with 574 billion euros of assets. The new metropoles are taking charge at last. Sell those US stocks while you still can, and buy those Euro/Asia markets!

- -- Dennis

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