Ryanair’s warning that things are going to get worse in Europe’s economies has understandably got investors in airline shares flustered. The airline’s own shares fell by more than 8 percent.The low-cost airline’s finance director Howard Miller couldn’t have been more stark in his comments: “There are no signs of recovery in any country across Europe. We think things are getting worse. There are no signs of green shoots so a tough winter for everyone”.At least Ryanair still reckons it will be profitable — with net profit of around 200 million euros — for the year as a whole.That’s more than can be said of most other European airlines, who must be increasingly concerned by Ryanair’s resilience. Ryanair points out that it has “only” 10 percent of the total European market so far — giving it plenty of scope for gains.Ryanair’s earnings have been helped by lower fuel costs, and chief executive Michael O’Leary should be heartened by a Reuters poll of oil supply and demand forecasts for 2010 which shows the oil market is set to remain well supplied until then.And with plans to increase its fleet to 300 from 200 by 2012, it looks as though you’ll be seeing more not fewer of the airline’s planes — with their distinctive gold harp logo — flying overhead.

An interesting snippet from the weekly Thomson Reuters Investment Banking Scorecard.

While the value of M&A deals in the biotech sector has fallen sharply year-on-year — largely because of the disproportionate impact of Roche’s takeover of Genentech last year — the number of deals done is actually up, by 15 percent.

Bristol-Myers Squibb’s $1.9 billion acquisition of Medarex has lifted the volume to $5.3 billion for year-to-date 2009.

That’s a 90 percent decrease from 2008 levels.

But if you exclude Roche’s $46.7 billion acquisition of Genentech, biotech M&A volume is down just 22 percent over 2008 levels.

More good news for JP Morgan and Goldman Sachs who top the advisor rankings in the sector.

Chinese anger at Rio Tinto for reneging on a deal with aluminium group Chinalco and opting instead for an iron ore joint venture with BHP Billiton last month was understandable. Indeed, China has good reason to question the Rio-BHP JV on competition grounds.

But the detention of four Rio Tinto employees – on suspicion of espionage according to Australia’s foreign minister — bang in the middle of sensitive negotiations on iron ore exports to China is a dangerous step in the wrong direction. Beijing must either justify the arrests publicly or release the Rio staff immediately.

Rio is locked in tough negotiations with China’s massive steel sector following its refusal to agree to Chinese demands for a bigger cut in contract prices. As a result, Rio is for now at least charging its Chinese customers spot market prices, which are considerably higher.

Comments earlier this week by a Rio Tinto spokesman saying the company has never been so busy and is selling all the iron ore it can make can’t have pleased its customers or the government in Beijing.

There is a history of bad relations between the two big iron ore producers and China’s government. In the past this has prompted the miners to wrap themselves in the Australian flag to draw Canberra in on their side to protect their interests.

That last open confrontation came in 2006, when Canberra protested vigorously about a secret letter from China’s Ministry of Commerce to the country’s customs inspectors urging them to pay particular attention to the paperwork accompanying imports of Australian ore to ensure the ore matched the documentation precisely and reject any cargoes that did not.

Canberra threatened to refer the discriminatory treatment of Australian ore exports to the World Trade Organisation. The situation was defused following negotiations between Canberra and Beijing that resolved the “misunderstanding”.

A bull(ish) note from growing investment banking group Jefferies Putnam Lovell predicting “a steady flow of M&A activity in the global asset management industry” for the second half of 2009.

Jefferies is basing its view on the following factors:

• divestitures by larger financial groups shoring up their capital base 
• pure-play asset managers looking to bulk up
• private equity firms drawn not least by lower capital requirements

And the firm is putting its money where its mouth is. It has recently been hiring scores of senior bankers from rival firms as it seeks to build itself a major presence.

This hasn’t been without its problems. UBS filed a claim against Jefferies after the mid-sized investment bank lured away nearly three dozen of the Swiss bank’s healthcare bankers.

Jefferies is pinning part of its confidence on a wider “relief that economies, while unsteady, are coming out of the crisis toward recovery”.

Perhaps its prediction of a radical reshaping of the asset management industry reflects some of its own hopes for a redrawing of the investment banking landscape.

London’s transport bosses are telling travellers on the tube system to beat the heat by carrying a bottle of water with them when they venture underground.But how many of us are refilling our bottles with tap water rather than pouring money down the tube — not to mention the cost of recycling the plastic bottles — by buying a new bottle of water each day?Cue the National Hydration Council whose eye-catching advertising campaign to encourage people to buy more “naturally sourced bottled water” — on health grounds — featured prominently on the underground network earlier this year.The worrying thing for the bottled water lobby is not that people are doing what would appear to be the most sensible thing and refilling their bottles from the tap, but that Britons are replacing bottled water with sugary drinks instead.We’re told that sales of bottled water fell by 7 percent last year, with 71 percent of that decline the result of people buying sweet drinks instead. Good news for the soft drinks industry perhaps, but a worry for health officials.Meanwhile, beneath the streets of London, the hot and flustered faces of fellow tube passengers shows just how dire it is on board the capital’s underground trains when the mercury rises.With a decent air-conditioning system on most lines a distant prospect, Transport for London (TfL) could show it cares by offering each of its cash-strapped passengers a free TfL water bottle and the opportunity to refill them at its stations.

– Alexander Smith is a Reuters columnist. The views expressed are his own –Investment banks are going to have a lot of explaining to do. After the lows of 2008, and despite the mauling they’ve had from politicians and the public, 2009 is going to be a bumper year for those that lived to tell the tale. The banks have pocketed an incredible $16 billion in fees in the second quarter, according to Thomson Reuters first half data on deals and fee income, released on Friday. Click here for related news.True, this is down from Q2 2008, when fees were almost $24 billion. But it should not come as a surprise to anyone who has been watching — often in disbelief — the huge amount of capital raising that has been going on in both the equity and bond markets.Take the bond markets, where total first-half issuance — excluding financials — has already reached $598 billion, outstripping previous records for an entire year. If anyone pretends it has been tough selling these bonds, don’t believe them. The sales teams have been pushing at an open door, with fund managers buying anything they could get their hands on. The fees are good and so far this year, the risk has been limited.The ones to suffer have been the loan desks, with syndicated lending hitting a 13-year low. But since this market has always been seen as a loss-leader to help sell other products, there are probably fewer tears being shed at the top of the banks involved.The real star of the show, however, has been equity capital markets. Traditionally the poor cousins to the sexier and higher profile “rainmakers” in mergers and acquisitions, ECM desks have raked in underwriting fees of $7.6 billion in Q2 alone, almost half the industry total. As with bond issues, lead managing or underwriting such deals does carry a risk, but so far this year that has been limited as shareholders have lapped up the rights issues.There’s no denying that many companies badly needed capital and that the banks have the expertise to get these deals done. The question that will increasingly be asked is whether the fee structure can still be justified. True, rights issues can fail, as underwriters of the 4 billion pound offering by British bank HBOS last year no doubt recall. But with banks charging bigger fees and pricing offerings at larger discounts, the rewards currently outweigh the risks.One area of investment banking which is still in the doldrums is M&A, despite the best efforts of some of the brightest minds in the game to get dealmaking back on track.The Thomson Reuters data shows global M&A revenues declined for a third consecutive quarter, with fees on completed deals down some 66 percent on the same period last year at just $3 billion. M&A activity — measured by the value of deals done — is down almost 45 percent so far this year, the lowest figure since 2003 and the sharpest fall since 2001. Click here for related news.Of course, it is possible that these big fees will be wiped out by continued losses on the toxic assets that some investment banks still have on their balance sheets. But for an industry that was teetering on the brink last autumn, investment banking appears in rude health. With a second backlash already beginning as salaries rise and bonuses come back into fashion, the big investment banks — particularly those which still owe taxpayers money or government shareholders — will need to make sure their lines are well rehearsed.– At the time of publication Alexander Smith did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund.–