(Bloomberg) -- Aluminum Corp. of China, the nation’s biggest aluminum producer, may take a smaller stake in Rio Tinto Group to win approval for its $19.5 billion investment, the Sydney Morning Herald said, citing people close to the company.
Chinalco is open to letting Rio sell convertible bonds to other shareholders, reducing its planned stake to 15 percent, the Herald said. That may allow the state-owned entity to avoid breaching foreign ownership rules and placate investors concerned at not being offered stock on the same terms.
Rio has agreed to sell $7.2 billion of convertible debt and $12.3 billion worth of stakes in its mines to Chinalco and use the funds to pay debt. The mooted changes don’t remove concerns that an arm of China’s communist government will gain too much control over Rio and its Australian assets, said Senator Barnaby Joyce, who is leading a campaign against the deal.
“There is one thing they want and that is a meaningful interest in the company,” said Ric Ronge, who helps manage the equivalent of $775 million, including Rio shares, at Pengana Capital Ltd. in Melbourne. “Everything will be done to ensure that the deal does go through.”
Rio rose 2.4 percent in Sydney trading to A$66.32 at 11:51 a.m. after gaining 4.3 percent in London yesterday. Under the existing proposal, Chinalco’s stake in Rio Tinto may double to 18 percent should it convert all the debt.
Chinalco Vice President Lu Youqing couldn’t be immediately reached for comment. Rio’s Melbourne-based spokeswoman Amanda Buckley declined to comment.
“We still have the same problem that the resource in situ, in the ground, is owned by another nation’s government,” Senator Joyce today told Bloomberg Television.
Read more here
Wednesday, May 20, 2009
Tuesday, May 19, 2009
Facebook CEO says IPO a few years out
(Reuters) - Facebook CEO Mark Zuckerberg hopes to eventually take his company public but said it won't be for a few years, and stressed that the world's largest online social network is in no immediate need of capital.
The 25-year-old co-founder of Facebook said he is always open to partnerships and investments, but stressed that Facebook can achieve its business goals with its current financial base -- despite numerous media reports that it has had talks on a new round of funding with various investors.
"If there's an investment to be done on very good terms, we will consider it if for no other reason than to have more buffer if we want to do something in the future," Zuckerberg told the Reuters Global Technology Summit.
"Some of the rumblings that people are reporting on, are just different conversations that have happened, but there's really nothing new to talk about there," he added in a telephone interview from Palo Alto, California.
The TechCrunch blog said earlier on Tuesday that Facebook had turned down a $200 million funding offer, which valued the company at $8 billion. Earlier this week, VentureBeat reported that Facebook was in discussions for $150 million in funding.
Zuckerberg declined to confirm these reports.
Facebook has more than 200 million active users, double the number it had last August. The company also ranks as one of the top photo-sharing websites, with more than 15 billion pictures uploaded onto its service.
In 2007, Microsoft Corp invested $240 million in Facebook in exchange for a 1.6 percent stake in the company, giving the social network a $15 billion valuation.
Zuckerberg said on Tuesday that Facebook was not rushing to go public.
"I know for a lot of companies the IPO is the endpoint or the goal," Zuckerberg said. "For us it will be an event on the path to where want to get eventually."
Asked when the time would be right to float shares to the public, he said the 5-year-old company was still "a few years out from that."
Zuckerberg said advertising remains the core revenue source for the company, with Facebook on track to increase sales 70 percent this year and be cash flow positive next year. He declined to specify how much revenue Facebook expects to generate this year.
Facebook works with more than 70 percent of the top 100 largest advertisers in the United States, Zuckerberg said, and the company was also seeing fast growth in international markets, where it has begun to create a direct sales staff.
And with Facebook increasingly taking steps to make aspects of the service available on other websites, like its recent Facebook Connect feature, Zuckerberg said the company could eventually develop a type of online advertising network.
"You can see over time us wanting to offer more ways for people to monetize their site and help out with that, and it could be a pretty natural extension for us to do something with ads or a number of other things that we've considered," he said.
Read more here
The 25-year-old co-founder of Facebook said he is always open to partnerships and investments, but stressed that Facebook can achieve its business goals with its current financial base -- despite numerous media reports that it has had talks on a new round of funding with various investors.
"If there's an investment to be done on very good terms, we will consider it if for no other reason than to have more buffer if we want to do something in the future," Zuckerberg told the Reuters Global Technology Summit.
"Some of the rumblings that people are reporting on, are just different conversations that have happened, but there's really nothing new to talk about there," he added in a telephone interview from Palo Alto, California.
The TechCrunch blog said earlier on Tuesday that Facebook had turned down a $200 million funding offer, which valued the company at $8 billion. Earlier this week, VentureBeat reported that Facebook was in discussions for $150 million in funding.
Zuckerberg declined to confirm these reports.
Facebook has more than 200 million active users, double the number it had last August. The company also ranks as one of the top photo-sharing websites, with more than 15 billion pictures uploaded onto its service.
In 2007, Microsoft Corp invested $240 million in Facebook in exchange for a 1.6 percent stake in the company, giving the social network a $15 billion valuation.
Zuckerberg said on Tuesday that Facebook was not rushing to go public.
"I know for a lot of companies the IPO is the endpoint or the goal," Zuckerberg said. "For us it will be an event on the path to where want to get eventually."
Asked when the time would be right to float shares to the public, he said the 5-year-old company was still "a few years out from that."
Zuckerberg said advertising remains the core revenue source for the company, with Facebook on track to increase sales 70 percent this year and be cash flow positive next year. He declined to specify how much revenue Facebook expects to generate this year.
Facebook works with more than 70 percent of the top 100 largest advertisers in the United States, Zuckerberg said, and the company was also seeing fast growth in international markets, where it has begun to create a direct sales staff.
And with Facebook increasingly taking steps to make aspects of the service available on other websites, like its recent Facebook Connect feature, Zuckerberg said the company could eventually develop a type of online advertising network.
"You can see over time us wanting to offer more ways for people to monetize their site and help out with that, and it could be a pretty natural extension for us to do something with ads or a number of other things that we've considered," he said.
Read more here
Sunday, May 17, 2009
U.S. budget chief says signs of economic free-fall over
(Reuters) - The Obama administration's budget chief said on Sunday there are signs that the free-fall in the economy seems to have halted.
"There are some glimmers of sun shining through the trees, but we're not out of the woods yet," White House budget director Peter Orszag said on CNN's State of the Union.
U.S. economic data have shown evidence that the recession's worst phase may be over, with April consumer prices unchanged and industrial output declining at a slower pace than in March.
Federal Reserve Chairman Ben Bernanke has also suggested that the recession should end this year as long as there is no reemergence of the credit crunch.
Read more here
"There are some glimmers of sun shining through the trees, but we're not out of the woods yet," White House budget director Peter Orszag said on CNN's State of the Union.
U.S. economic data have shown evidence that the recession's worst phase may be over, with April consumer prices unchanged and industrial output declining at a slower pace than in March.
Federal Reserve Chairman Ben Bernanke has also suggested that the recession should end this year as long as there is no reemergence of the credit crunch.
Read more here
Thursday, May 14, 2009
Nike slashes 5 percent of global jobs in largest cut
(Reuters) - Nike Inc, the world's largest maker of athletic shoes and apparel, will slash 5 percent of its 35,000-strong global workforce, or 1,750 jobs, in the largest headcount reduction in the company's history.
The sweeping overhaul to boost competitiveness and clamp down on costs for the owner of the famous "swoosh" logo will include about 500 positions at Nike's Beaverton, Oregon, headquarters, the company said on Thursday.
Nike said it employs about 6,800 workers at its headquarters.
The sports-gear brand first said in February that a review of its sprawling worldwide operations would likely result in a 4 percent staff reduction, or about 1,400 jobs.
Nike has already choked off production at factories in China and Vietnam, trimmed marketing spending, and reorganized its global business into six geographical groups, making China its own region.
While trying to weather a downturn in consumer spending by streamlining its global supply chain and flattening management, Nike has remained relatively resilient during the slump.
Still, shares have lost nearly a quarter of their value in the last year.
The company has banked on the cachet associated with its brand and a diversified portfolio to help it stay on course even as rivals Adidas and Puma have stumbled.
"We recognize the allure of Nike's best of breed status, robust cash flow ... and U.S. share gains, but believe there are meaningful headwinds that will pressure sales, margins and earnings," Sterne Agee analysts said in a May 12 report.
The company's sales declined in its most recent quarter, especially in Europe. Quarterly margins are also under pressure, but the company's selling, general and administrative costs fell nearly 4 percent in its most recent third quarter.
Nike said it hoped to complete most of the layoffs over the coming weeks.
The company's shares held steady in after-hours trading.
"Our new structure sharpens our consumer focus globally to drive continued growth," CEO and President Mark Parker said in a statement. "The decision to reduce our workforce has been a difficult and challenging one.
Besides layoffs, the company has been adjusting its supply chain to cut costs. In March, Nike said it would halt production at three of its Chinese factories and one in Vietnam, which use contract workers not directly employed by the company.
Nike is also cutting back on its marketing spending, which spiked last year in advance of the Beijing Olympics.
Read more here
The sweeping overhaul to boost competitiveness and clamp down on costs for the owner of the famous "swoosh" logo will include about 500 positions at Nike's Beaverton, Oregon, headquarters, the company said on Thursday.
Nike said it employs about 6,800 workers at its headquarters.
The sports-gear brand first said in February that a review of its sprawling worldwide operations would likely result in a 4 percent staff reduction, or about 1,400 jobs.
Nike has already choked off production at factories in China and Vietnam, trimmed marketing spending, and reorganized its global business into six geographical groups, making China its own region.
While trying to weather a downturn in consumer spending by streamlining its global supply chain and flattening management, Nike has remained relatively resilient during the slump.
Still, shares have lost nearly a quarter of their value in the last year.
The company has banked on the cachet associated with its brand and a diversified portfolio to help it stay on course even as rivals Adidas and Puma have stumbled.
"We recognize the allure of Nike's best of breed status, robust cash flow ... and U.S. share gains, but believe there are meaningful headwinds that will pressure sales, margins and earnings," Sterne Agee analysts said in a May 12 report.
The company's sales declined in its most recent quarter, especially in Europe. Quarterly margins are also under pressure, but the company's selling, general and administrative costs fell nearly 4 percent in its most recent third quarter.
Nike said it hoped to complete most of the layoffs over the coming weeks.
The company's shares held steady in after-hours trading.
"Our new structure sharpens our consumer focus globally to drive continued growth," CEO and President Mark Parker said in a statement. "The decision to reduce our workforce has been a difficult and challenging one.
Besides layoffs, the company has been adjusting its supply chain to cut costs. In March, Nike said it would halt production at three of its Chinese factories and one in Vietnam, which use contract workers not directly employed by the company.
Nike is also cutting back on its marketing spending, which spiked last year in advance of the Beijing Olympics.
Read more here
Wednesday, May 13, 2009
Miller Wrestles Whitney in Showdown Over Bank Stocks
(Bloomberg) -- The returns on Legg Mason’s Value Trust mutual fund depend on Bill Miller being right about bank stocks and Meredith Whitney being wrong.
Miller, who beat the Standard & Poor’s 500 Index for a record 15 straight years before stumbling in 2006, says financial companies are his favorite investment for the rest of the decade. Whitney, the former Oppenheimer & Co. stock analyst who became one of Wall Street’s first bears when credit markets started to freeze in 2007, said banks are “grossly overvalued” after government evaluations of their financial health.
The stakes are greater for Miller, 59, who lost more money in the past three years than 99 percent of rival managers by owning Bear Stearns Cos., Freddie Mac and American International Group Inc., according to data compiled by Bloomberg and Morningstar Inc. Whitney, 39, proved prescient by telling her clients to avoid Citigroup Inc., Wachovia Corp. and UBS AG, which lost at least two-thirds of their value last year.
“It could be Bill is right and the vast majority of banks will earn their way out of this,” said William Stone, chief investment strategist at PNC Financial Services Group Inc.’s wealth management unit, which oversees $96 billion in Philadelphia. “But if the economy takes another nosedive and the adverse feedback loop begins again with a vengeance, then maybe it’s Meredith.”
Miller declined to comment, while Whitney didn’t return phone calls or an e-mail message seeking comment.
Bad Bets
Miller, a so-called value investor who seeks the cheapest companies relative to earnings or assets, posted the worst returns within his fund’s category in the past three years, data compiled by Chicago-based research firm Morningstar show.
The fund lost 55.1 percent in 2008 after Miller underestimated the magnitude of the worst financial crisis since the Great Depression. In April last year, a month after Bear Stearns collapsed and was taken over by JPMorgan Chase & Co., he wrote in a letter to fund shareholders that “we have seen the bottom in financials.”
The S&P 500 has tumbled 36 percent since then, with a measure of banks plummeting 56 percent. Today, the S&P 500 fell 2.7 percent to 883.92. Financial stocks dropped 5.2 percent, the biggest decline of 10 industry groups in the broader index.
Miller boosted his stake in McLean, Virginia-based Freddie Mac, once the second-largest U.S. mortgage-finance company, to 17.7 million shares from 5.9 million shares in the first half of 2008, Securities and Exchange Commission filings show.
Most Upside
Miller’s holdings in New York-based AIG, once the world’s biggest insurer, also increased to 9.68 million shares from 8.45 million shares at the end of 2007. Both companies were taken over by the government in September.
“He’s made massive bets in institutions that were wiped off the face of the exchange,” said Frederic Dickson, who helps oversee $20 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.
This year, Miller’s fund has gained 8.1 percent, putting him among the top 10 percent in his category, according to data compiled by Morningstar.
“Financials have the biggest potential to outperform,” he said last week, naming his favorite picks as San Francisco-based Wells Fargo & Co., Capital One Financial Corp. in McLean, Virginia, and New York-based American Express Co.
Home Prices
Miller’s bets hinge on U.S. home prices stabilizing this year and an economy that performs better than projections from the Federal Reserve. The central bank said in January that gross domestic product will shrink by 0.5 percent to 1.3 percent in 2009. Miller projects U.S. equity markets will rise 20 percent to 30 percent in 2009.
More than 19 percent of the Value Trust was invested in financial stocks at the end of the first quarter, according to Legg Mason Inc.’s Web site, greater than their 12.8 percent share of the S&P 500 now.
In the first three months of 2009, Miller bought about 3.77 million shares of Wells Fargo, the largest U.S. mortgage originator, and almost quadrupled his position in credit-card company Capital One, according to data compiled by Bloomberg and Legg Mason’s Web site. Miller also increased his stake in American Express, the biggest U.S. credit-card company by purchases, by about 22 percent, the data show.
Since March 31, Wells Fargo has gained 70 percent. Capital One rose 96 percent, while American Express added 77 percent.
Survival of the Fittest
Today, Wells Fargo lost 5.8 percent, while Capital One slipped 6 percent and American Express decreased 5.3 percent.
Financial companies in the S&P 500 have increased 87 percent since falling to a 17-year low on March 6 as concern waned that more banks, brokerages and insurance companies will fail during the longest U.S. recession since World War II.
Financial stocks in the S&P 500 traded at 20.45 times estimated 2009 earnings yesterday, the lowest since Bear Stearns’s collapse in March last year.
“When you get past the two-to-three-year horizon where they work through their problems, the valuations today are exceptionally cheap,” said Scott Minerd, chief investment officer at Guggenheim Partners Asset Management, which manages $30 billion. “Survival for banks is not a question anymore.”
While Miller is beating the S&P 500 for the year, anyone who bought shares of the Value Trust between July 1997 and October 2008 and never sold them has lost money, according to monthly data compiled by Bloomberg and Morningstar. During that period, the index returned more than 20 percent, including dividends. The fund has given up about $17.7 billion of its assets under management since May 2007, or 82 percent.
Read more here
Miller, who beat the Standard & Poor’s 500 Index for a record 15 straight years before stumbling in 2006, says financial companies are his favorite investment for the rest of the decade. Whitney, the former Oppenheimer & Co. stock analyst who became one of Wall Street’s first bears when credit markets started to freeze in 2007, said banks are “grossly overvalued” after government evaluations of their financial health.
The stakes are greater for Miller, 59, who lost more money in the past three years than 99 percent of rival managers by owning Bear Stearns Cos., Freddie Mac and American International Group Inc., according to data compiled by Bloomberg and Morningstar Inc. Whitney, 39, proved prescient by telling her clients to avoid Citigroup Inc., Wachovia Corp. and UBS AG, which lost at least two-thirds of their value last year.
“It could be Bill is right and the vast majority of banks will earn their way out of this,” said William Stone, chief investment strategist at PNC Financial Services Group Inc.’s wealth management unit, which oversees $96 billion in Philadelphia. “But if the economy takes another nosedive and the adverse feedback loop begins again with a vengeance, then maybe it’s Meredith.”
Miller declined to comment, while Whitney didn’t return phone calls or an e-mail message seeking comment.
Bad Bets
Miller, a so-called value investor who seeks the cheapest companies relative to earnings or assets, posted the worst returns within his fund’s category in the past three years, data compiled by Chicago-based research firm Morningstar show.
The fund lost 55.1 percent in 2008 after Miller underestimated the magnitude of the worst financial crisis since the Great Depression. In April last year, a month after Bear Stearns collapsed and was taken over by JPMorgan Chase & Co., he wrote in a letter to fund shareholders that “we have seen the bottom in financials.”
The S&P 500 has tumbled 36 percent since then, with a measure of banks plummeting 56 percent. Today, the S&P 500 fell 2.7 percent to 883.92. Financial stocks dropped 5.2 percent, the biggest decline of 10 industry groups in the broader index.
Miller boosted his stake in McLean, Virginia-based Freddie Mac, once the second-largest U.S. mortgage-finance company, to 17.7 million shares from 5.9 million shares in the first half of 2008, Securities and Exchange Commission filings show.
Most Upside
Miller’s holdings in New York-based AIG, once the world’s biggest insurer, also increased to 9.68 million shares from 8.45 million shares at the end of 2007. Both companies were taken over by the government in September.
“He’s made massive bets in institutions that were wiped off the face of the exchange,” said Frederic Dickson, who helps oversee $20 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.
This year, Miller’s fund has gained 8.1 percent, putting him among the top 10 percent in his category, according to data compiled by Morningstar.
“Financials have the biggest potential to outperform,” he said last week, naming his favorite picks as San Francisco-based Wells Fargo & Co., Capital One Financial Corp. in McLean, Virginia, and New York-based American Express Co.
Home Prices
Miller’s bets hinge on U.S. home prices stabilizing this year and an economy that performs better than projections from the Federal Reserve. The central bank said in January that gross domestic product will shrink by 0.5 percent to 1.3 percent in 2009. Miller projects U.S. equity markets will rise 20 percent to 30 percent in 2009.
More than 19 percent of the Value Trust was invested in financial stocks at the end of the first quarter, according to Legg Mason Inc.’s Web site, greater than their 12.8 percent share of the S&P 500 now.
In the first three months of 2009, Miller bought about 3.77 million shares of Wells Fargo, the largest U.S. mortgage originator, and almost quadrupled his position in credit-card company Capital One, according to data compiled by Bloomberg and Legg Mason’s Web site. Miller also increased his stake in American Express, the biggest U.S. credit-card company by purchases, by about 22 percent, the data show.
Since March 31, Wells Fargo has gained 70 percent. Capital One rose 96 percent, while American Express added 77 percent.
Survival of the Fittest
Today, Wells Fargo lost 5.8 percent, while Capital One slipped 6 percent and American Express decreased 5.3 percent.
Financial companies in the S&P 500 have increased 87 percent since falling to a 17-year low on March 6 as concern waned that more banks, brokerages and insurance companies will fail during the longest U.S. recession since World War II.
Financial stocks in the S&P 500 traded at 20.45 times estimated 2009 earnings yesterday, the lowest since Bear Stearns’s collapse in March last year.
“When you get past the two-to-three-year horizon where they work through their problems, the valuations today are exceptionally cheap,” said Scott Minerd, chief investment officer at Guggenheim Partners Asset Management, which manages $30 billion. “Survival for banks is not a question anymore.”
While Miller is beating the S&P 500 for the year, anyone who bought shares of the Value Trust between July 1997 and October 2008 and never sold them has lost money, according to monthly data compiled by Bloomberg and Morningstar. During that period, the index returned more than 20 percent, including dividends. The fund has given up about $17.7 billion of its assets under management since May 2007, or 82 percent.
Read more here
Tuesday, May 12, 2009
Nina Wang’s $4.2 Billion Fortune Lands Back in Court
(Bloomberg) -- It’s a tale of love, murder, feng shui and $4.2 billion.
For the second time in a decade, the wealth amassed by property tycoon Teddy Wang has ended up in Hong Kong’s high court, which began a trial yesterday to decide whether the fortune should go to the family run company Wang built or to a 50-year-old feng shui master called Tony Chan.
The court will judge which is the real will of Nina Wang, Teddy’s wife, who herself had to wrest control of the inheritance in 1999 after her kidnapped husband was declared legally dead, though his body was never found.
At stake is the wealth of Asia’s richest woman when she died in 2007, according to Forbes magazine, including control of Chinachem Group, the company she built with Teddy, which owns some 200 buildings in Hong Kong and millions of square feet of development land.
“The estate battle is just like a soap opera,” said Kenny Tang, Hong Kong-based executive director of Redford Securities Co. “The details are too absurd even for a movie.”
The dispute is a further twist in the fate of a fortune Teddy Wang built up over three decades, turning his father’s Shanghai paint and chemical business into one of Hong Kong’s biggest closely held real estate developers. His wife only gained control of his estate years after Teddy had been kidnapped and presumed dead.
‘Little Sweetie’
Dubbed “Little Sweetie” by the Hong Kong media for her pigtails and traditional Chinese dresses, Nina Wang died of cancer on April 3, 2007, at the age of 69. The Shanghai native, born Nina Kung, was a childhood friend of Teddy, whom she married in 1955. They had no children.
Chan will present the famous pigtails at the trial as evidence of their intimate relationship, the Standard newspaper reported yesterday, citing an unidentified spokesman for Chan.
Denis Chang, a lawyer for the Chinachem foundation, told the court that Nina Wang gave Chan three payments totaling HK$2.06 billion ($265.8 million), the Standard reported today.
Wang left her estate to Chan because he understood her personal and business philosophy, Jonathan Midgley, a lawyer at Haldanes, the firm representing Chan, told reporters on April 20, 2007, 13 days after she died. Four days later, Chinachem filed a writ asking the court to decide which will is valid.
‘Nina’s Lover’
In November 2008, Midgley said Chan, who is married with three children, had been Nina’s “lover,” and that the two had a “long, close and affectionate relationship” for about 15 years. Chan later released photographs showing them together, with his hand on her shoulder. Midgley didn’t answer calls to his mobile phone or an e-mail seeking comment. Calls to his office were answered by his secretary, who said he was unavailable.
Chan has business interests in property development and practices feng shui as a hobby, Midgley said in 2007. The High Court appointed accountants from Deloitte Touche Tohmatsu in December 2007 to oversee Chinachem pending the trial.
Feng shui, which means “wind-water,” is a Chinese geomantic practice in which a site is chosen or a building configured in harmony with spiritual energy.
“I can say that in all 27 years I’ve known Nina, I never heard of, nor met, Tony Chan,” Ringo Wong, managing director of Chinachem Entertainment Ltd. and Wang’s former personal assistant, told reporters on April 27. He declined to comment on the trial.
Read more here
For the second time in a decade, the wealth amassed by property tycoon Teddy Wang has ended up in Hong Kong’s high court, which began a trial yesterday to decide whether the fortune should go to the family run company Wang built or to a 50-year-old feng shui master called Tony Chan.
The court will judge which is the real will of Nina Wang, Teddy’s wife, who herself had to wrest control of the inheritance in 1999 after her kidnapped husband was declared legally dead, though his body was never found.
At stake is the wealth of Asia’s richest woman when she died in 2007, according to Forbes magazine, including control of Chinachem Group, the company she built with Teddy, which owns some 200 buildings in Hong Kong and millions of square feet of development land.
“The estate battle is just like a soap opera,” said Kenny Tang, Hong Kong-based executive director of Redford Securities Co. “The details are too absurd even for a movie.”
The dispute is a further twist in the fate of a fortune Teddy Wang built up over three decades, turning his father’s Shanghai paint and chemical business into one of Hong Kong’s biggest closely held real estate developers. His wife only gained control of his estate years after Teddy had been kidnapped and presumed dead.
‘Little Sweetie’
Dubbed “Little Sweetie” by the Hong Kong media for her pigtails and traditional Chinese dresses, Nina Wang died of cancer on April 3, 2007, at the age of 69. The Shanghai native, born Nina Kung, was a childhood friend of Teddy, whom she married in 1955. They had no children.
Chan will present the famous pigtails at the trial as evidence of their intimate relationship, the Standard newspaper reported yesterday, citing an unidentified spokesman for Chan.
Denis Chang, a lawyer for the Chinachem foundation, told the court that Nina Wang gave Chan three payments totaling HK$2.06 billion ($265.8 million), the Standard reported today.
Wang left her estate to Chan because he understood her personal and business philosophy, Jonathan Midgley, a lawyer at Haldanes, the firm representing Chan, told reporters on April 20, 2007, 13 days after she died. Four days later, Chinachem filed a writ asking the court to decide which will is valid.
‘Nina’s Lover’
In November 2008, Midgley said Chan, who is married with three children, had been Nina’s “lover,” and that the two had a “long, close and affectionate relationship” for about 15 years. Chan later released photographs showing them together, with his hand on her shoulder. Midgley didn’t answer calls to his mobile phone or an e-mail seeking comment. Calls to his office were answered by his secretary, who said he was unavailable.
Chan has business interests in property development and practices feng shui as a hobby, Midgley said in 2007. The High Court appointed accountants from Deloitte Touche Tohmatsu in December 2007 to oversee Chinachem pending the trial.
Feng shui, which means “wind-water,” is a Chinese geomantic practice in which a site is chosen or a building configured in harmony with spiritual energy.
“I can say that in all 27 years I’ve known Nina, I never heard of, nor met, Tony Chan,” Ringo Wong, managing director of Chinachem Entertainment Ltd. and Wang’s former personal assistant, told reporters on April 27. He declined to comment on the trial.
Read more here
Monday, May 11, 2009
AIG CEO to fight criticism of employees: report
(Reuters) - American International Group Chief Executive Edward Liddy will speak out against criticism of the insurer's employees on Wednesday and talk about the company's future plans, the Wall Street Journal said.
Liddy will speak to a U.S. House oversight committee and ask for a better partnership with the government, according to the paper.
"Rampant, unwarranted criticism of AIG serves only to diminish the value of our businesses around the world," the paper quoted Liddy's prepared testimony.
The government has stepped forward three times as AIG's benefactor, committing some $180 billion in its efforts to rescue the insurer in exchange for an 80 percent stake. The government aid includes some $85 billion in loans that the insurer is trying to repay through divestitures.
Read more here
Liddy will speak to a U.S. House oversight committee and ask for a better partnership with the government, according to the paper.
"Rampant, unwarranted criticism of AIG serves only to diminish the value of our businesses around the world," the paper quoted Liddy's prepared testimony.
The government has stepped forward three times as AIG's benefactor, committing some $180 billion in its efforts to rescue the insurer in exchange for an 80 percent stake. The government aid includes some $85 billion in loans that the insurer is trying to repay through divestitures.
Read more here
Thursday, May 7, 2009
American Express files for permission to repay TARP
(Reuters) - American Express Co (AXP.N) asked on Thursday for permission to repay the $3.4 billion in TARP funds it received, after the U.S. government stress test showed the credit card firm is well capitalized.
According to bank regulators' guidance, American Express has to show it can issue long-term debt in the public markets that is not backed by government guarantees in order to repay the TARP funds, the fourth-largest U.S. credit card company said.
American Express became a bank last November as bond markets closed down and lenders outside the banking system began looking to fund themselves with deposits. Being a bank also helped American Express win access to capital from the government's Troubled Asset Relief Program.
"Since then, financial markets have become more stable, and American Express has made substantial progress in adapting to a very difficult economic environment," the company said in a statement.
The stress test estimated American Express had enough resources to remain profitable, even in a worst case scenario of 20 percent of credit card losses over 2009 and 2010.
Chief Financial Officer Daniel Henry told analysts on a conference call that American Express did not plan to raise common equity.
Read more here
According to bank regulators' guidance, American Express has to show it can issue long-term debt in the public markets that is not backed by government guarantees in order to repay the TARP funds, the fourth-largest U.S. credit card company said.
American Express became a bank last November as bond markets closed down and lenders outside the banking system began looking to fund themselves with deposits. Being a bank also helped American Express win access to capital from the government's Troubled Asset Relief Program.
"Since then, financial markets have become more stable, and American Express has made substantial progress in adapting to a very difficult economic environment," the company said in a statement.
The stress test estimated American Express had enough resources to remain profitable, even in a worst case scenario of 20 percent of credit card losses over 2009 and 2010.
Chief Financial Officer Daniel Henry told analysts on a conference call that American Express did not plan to raise common equity.
Read more here
Wednesday, May 6, 2009
iPhone app tracks stimulus spending
(CNNMoney.com) -- Arkansas said Wednesday it launched the first iPhone application to track state projects funded through the federal stimulus package.
The free application, Arkansas.gov Recovery Project Search, is available through the Apple iTunes Store and can be downloaded to an iPhone or iPod Touch
"We want transparency in the recovery process," said Chris Masingill of the Arkansas State Recovery Office. "This is taxpayers' money, so we want them to have the information and the tools to access it."
Users can search keywords to find Arkansas state project names and descriptions, including location, dollar allocation, start date and percentage completed.
The location lookup feature displays projects by city or county name, and the "Near Me" button uses an iPhone's Global Positioning System to find projects near the user's location.
Read more here
The free application, Arkansas.gov Recovery Project Search, is available through the Apple iTunes Store and can be downloaded to an iPhone or iPod Touch
"We want transparency in the recovery process," said Chris Masingill of the Arkansas State Recovery Office. "This is taxpayers' money, so we want them to have the information and the tools to access it."
Users can search keywords to find Arkansas state project names and descriptions, including location, dollar allocation, start date and percentage completed.
The location lookup feature displays projects by city or county name, and the "Near Me" button uses an iPhone's Global Positioning System to find projects near the user's location.
Read more here
Tuesday, May 5, 2009
Why stimulus money goes unspent
(CNNMoney.com) -- The federal government has made available more than $74 billion in stimulus funds, but the majority of that money has yet to hit the streets.
That's because states have to jump through hoops before they can claim the funds and put them to use. Some have to get approval from their legislatures before they can spend the money. Others must wait for municipalities and school districts to submit applications to state agencies before distributing the dollars.
These are some of the main reasons why states have drawn down only $15.6 billion of the $74 billion made available to them in the 11 weeks since President Obama signed the $787 billion recovery act. Nearly $14 million of that amount has gone to help states handle the crush of Medicaid expenses.
Still, many states are not waiting to get the checks in hand before putting the stimulus funds to use. They are reversing some of their deepest cuts to public services -- particularly for education and social services -- in anticipation of getting the funds.
States have a lot of money to spend. They, along with local governments, are charged with administering about $280 billion of stimulus funds over the next few years, according to the Government Accountability Office, which is tracking states' use of the money. About $49 billion will be doled out this fiscal year, which ends Sept. 30.
Of that amount, about 90% will be spent on health, transportation and education, primarily through the Medicaid, highway infrastructure and state fiscal stabilization for education programs.
Other than for Medicaid, however, the majority of the money has yet to leave Washington. States have spent only $7.9 million in highway funds, about 10% of what's been made available, according to a federal Department of Transportation report from April 24. And they haven't claimed any of the $5.4 billion in state stabilization funds for education, though eight states have had their applications approved over the past two weeks.
Of course, in some cases, federal agencies dole out the funds over time. For road projects, states request reimbursement from the federal government as they pay the bills. So spending will always lag behind the dollars committed.
"Some outlays happen over years," said Lana Hurdle, the federal Department of Transportation's acting assistant secretary for budget and programs. "It's not something that happens over weeks. There's more than just one single bill per project."
States have even more work to do before they can claim other funds. Some programs, such as energy efficiency and law enforcement, require the states to apply for dollars. For others, such as job training for youths, states have to receive proposals from companies or social service agencies before they can award the money.
Read more here
That's because states have to jump through hoops before they can claim the funds and put them to use. Some have to get approval from their legislatures before they can spend the money. Others must wait for municipalities and school districts to submit applications to state agencies before distributing the dollars.
These are some of the main reasons why states have drawn down only $15.6 billion of the $74 billion made available to them in the 11 weeks since President Obama signed the $787 billion recovery act. Nearly $14 million of that amount has gone to help states handle the crush of Medicaid expenses.
Still, many states are not waiting to get the checks in hand before putting the stimulus funds to use. They are reversing some of their deepest cuts to public services -- particularly for education and social services -- in anticipation of getting the funds.
States have a lot of money to spend. They, along with local governments, are charged with administering about $280 billion of stimulus funds over the next few years, according to the Government Accountability Office, which is tracking states' use of the money. About $49 billion will be doled out this fiscal year, which ends Sept. 30.
Of that amount, about 90% will be spent on health, transportation and education, primarily through the Medicaid, highway infrastructure and state fiscal stabilization for education programs.
Other than for Medicaid, however, the majority of the money has yet to leave Washington. States have spent only $7.9 million in highway funds, about 10% of what's been made available, according to a federal Department of Transportation report from April 24. And they haven't claimed any of the $5.4 billion in state stabilization funds for education, though eight states have had their applications approved over the past two weeks.
Of course, in some cases, federal agencies dole out the funds over time. For road projects, states request reimbursement from the federal government as they pay the bills. So spending will always lag behind the dollars committed.
"Some outlays happen over years," said Lana Hurdle, the federal Department of Transportation's acting assistant secretary for budget and programs. "It's not something that happens over weeks. There's more than just one single bill per project."
States have even more work to do before they can claim other funds. Some programs, such as energy efficiency and law enforcement, require the states to apply for dollars. For others, such as job training for youths, states have to receive proposals from companies or social service agencies before they can award the money.
Read more here
Monday, May 4, 2009
AIG nears $1B sale of Japanese HQ
(Reuters) -- American International Group Inc. is near a deal to sell its Japanese headquarters for about $1 billion in what would be one of its largest asset sales since a September rescue, a source familiar with the matter said Monday.
A Japanese insurance company is expected to buy the prized building in the Otemachi section of Tokyo, although at least two parties were looking at the property, the source said.
A deal for the building, which overlooks the Imperial Palace, is expected to be announced later this week, the source said.
AIG (AIG, Fortune 500) declined to comment on the news, which was first reported by the Wall Street Journal. The source did not want to be identified because the deal has not been announced yet.
The price for the building is in line with what was expected when it was put on the market in February.
Merrill Lynch (MWL) is running the auction for the Tokyo building.
Read more here
A Japanese insurance company is expected to buy the prized building in the Otemachi section of Tokyo, although at least two parties were looking at the property, the source said.
A deal for the building, which overlooks the Imperial Palace, is expected to be announced later this week, the source said.
AIG (AIG, Fortune 500) declined to comment on the news, which was first reported by the Wall Street Journal. The source did not want to be identified because the deal has not been announced yet.
The price for the building is in line with what was expected when it was put on the market in February.
Merrill Lynch (MWL) is running the auction for the Tokyo building.
Read more here
Sunday, May 3, 2009
World Bank Bonds Show What Happens in State Rescues
(Bloomberg) -- Federal guarantees by 13 countries on more than $400 billion of financial company bonds are punishing the AAA-rated World Bank Group with record borrowing costs -- an indication of what can go wrong when government gets in the way.
The Washington-based World Bank, founded in 1944 to rebuild economies after World War II, sold $6 billion of three-year notes March 26 priced to yield 30 basis points more than the benchmark for such borrowings. The so-called spread was the widest for a dollar-denominated bond offering by the supranational lender, said George Richardson, the institution’s head of capital markets, in an interview.
Just seven months ago, the World Bank paid a record low 35 basis points less than the midswap rate, a market measure for exchanging fixed- and floating-rate cash flows. The sudden rise in World Bank relative bond yields is an unintended consequence of sales of taxpayer-backed debt by more than 50 companies, including Goldman Sachs Group Inc., Bank of America Corp. and JPMorgan Chase & Co. While these special offerings were designed to bring stability to the credit markets after $1.4 trillion in losses and writedowns in the past 28 months, no one realized the World Bank would be depreciated by such government policies.
“Governments started announcing guarantees for their banks, and then the whole world changed,” said Richardson, a former Goldman Sachs banker.
Rising Sales
Rising risk premiums are also affecting the Washington- based Inter-American Development Bank, which lends to Latin American and Caribbean countries, and Germany’s state-owned Kreditanstalt fuer Wiederaufbau, whose credit supports housing, education and small business.
Banks and financial companies worldwide sold 320 billion euros ($424 billion) of state-guaranteed debt since October, denominated in euros, dollars and U.K. pounds, according to Leef Dierks, a fixed-income analyst at Barclays Capital in Frankfurt.
They may issue a total of 900 billion euros in bonds for all of 2009, Dierks said.
The total includes $235 billion of dollar-denominated debt in the U.S. with backing from the Federal Deposit Insurance Corp. as of yesterday, according to data compiled by Bloomberg.
Lenders backed by multiple governments, known as supranationals, have the flexibility to borrow billions in multiple currencies and at any part of the yield curve, making their bonds among the most liquid securities.
Read more here
The Washington-based World Bank, founded in 1944 to rebuild economies after World War II, sold $6 billion of three-year notes March 26 priced to yield 30 basis points more than the benchmark for such borrowings. The so-called spread was the widest for a dollar-denominated bond offering by the supranational lender, said George Richardson, the institution’s head of capital markets, in an interview.
Just seven months ago, the World Bank paid a record low 35 basis points less than the midswap rate, a market measure for exchanging fixed- and floating-rate cash flows. The sudden rise in World Bank relative bond yields is an unintended consequence of sales of taxpayer-backed debt by more than 50 companies, including Goldman Sachs Group Inc., Bank of America Corp. and JPMorgan Chase & Co. While these special offerings were designed to bring stability to the credit markets after $1.4 trillion in losses and writedowns in the past 28 months, no one realized the World Bank would be depreciated by such government policies.
“Governments started announcing guarantees for their banks, and then the whole world changed,” said Richardson, a former Goldman Sachs banker.
Rising Sales
Rising risk premiums are also affecting the Washington- based Inter-American Development Bank, which lends to Latin American and Caribbean countries, and Germany’s state-owned Kreditanstalt fuer Wiederaufbau, whose credit supports housing, education and small business.
Banks and financial companies worldwide sold 320 billion euros ($424 billion) of state-guaranteed debt since October, denominated in euros, dollars and U.K. pounds, according to Leef Dierks, a fixed-income analyst at Barclays Capital in Frankfurt.
They may issue a total of 900 billion euros in bonds for all of 2009, Dierks said.
The total includes $235 billion of dollar-denominated debt in the U.S. with backing from the Federal Deposit Insurance Corp. as of yesterday, according to data compiled by Bloomberg.
Lenders backed by multiple governments, known as supranationals, have the flexibility to borrow billions in multiple currencies and at any part of the yield curve, making their bonds among the most liquid securities.
Read more here
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