XLF, Banking and Financial Sector Stocks: All's Quiet in Investment Banking -- Too Quiet

» Q_out - All's Quiet in Investment Banking -- Too Quiet

Firms don't want to take on new hidden debt, nor are they ready to raise money with stock offerings. Mergers and acquisitions are being delayed.
http://www.chicagobusiness.com/cgi-bin/m...

Excerpts

Investment banks had a lousy first quarter, and the outlook isn't much brighter for the rest of the year.

Credit Suisse First Boston (CSFB), the largest stable on LaSalle Street, continues to shrink. After laying off about a half-dozen professionals last week, its roster is in the low 50s, compared with roughly 90 two years ago.

"Equity volume, particularly IPO volume, has been way down," says Robert S. Murley, a CSFB vice-chairman. "Business is still a challenge." Adds another Chicago office head of a Wall Street firm: "Nobody likes to admit it, but everyone has done their share of pruning."

Goldman Sachs Group Inc. contends that its 29 professionals here are holding their own, despite the beginnings last week of a quiet, but -- according to sources -- firmwide purge.

Over the longer term, Goldman Sachs is more optimistic, negotiating a lease of over 200,000 square feet in a proposed new skyscraper to replace 150,000 square feet which it now leases in the Sears Tower. However, it would be a few years before the new building could be ready.
http://www.chicagobusiness.com/cgi-bin/m...

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DISCLAIMER: My words and observations are general in nature, and are not meant as specific investment advice. Individuals should consult with their own advisors for specific investment advice.

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