The following are the days top
business stories:
1. General Motors Raises at Least $20.1 Billion in IPO of Bailed-Out Carmaker
2. Goldman Sachs Promotes 110 to Partner as Wall Street Rebounds From Crisis
3. Yuan Premium in Hong Kong Shrinks 77% as PBOC Provides Funds: China Credit
4. Stocks, Euro Gain as Irish Aid Discussed in Europe; Samp;P 500 Pares Advance
5. Singapore Forecasts Economy to Grow 4% to 6% in 2011, Extending Expansion
6. Irish Talks Turn to Government Bailout as EU Officials Join IMF in Dublin
7. Axis Bank, Enam Securities to Merge Investment Banking Operations in India
8. Citigroup Tells Congress It Will Refile Thousands of Foreclosure Documents
9. Worlds Cheapest Stocks Getting Cheaper as Russian Profits Climb to Record
10.Rapping Hamsters Help Kia Alleviate Quality Concerns as Sales in US Soar
11.India Revives 45-Year-Old Trade Zone System China Adopted to Boost Exports
12.Tibet Lures St. Regis as Chinas Big Cities Crowded by Luxury Hotel Chains
1. General Motors Raises at Least $20.1 Billion in IPO of Bailed-Out Carmaker
General Motors Co. raised more than $20 billion selling
common and preferred stock in an initial public offering that
reduced the US government to a minority shareholder. GM´s
owners, including the US Treasury, sold at least $15.8
billion of common shares at $33 each, making it the
second-largest US IPO on record after San Francisco-based
Visa Inc.´s $19.7 billion sale in March 2008, a statement and
data compiled by Bloomberg showed. An overallotment option and
a sale of preferred shares may boost the total raised to $23.1
billion, more than the $22.1 billion sold by Agricultural Bank
of China Ltd. in the largest IPO of common stock in history.
The offering came 16 months after GM emerged from bankruptcy
and brings Chief Executive Officer Dan Akerson closer to his
goal of returning the $49.5 billion the automaker received in a
taxpayer bailout last year. The Treasury, which is taking a
loss on its portion of the sale, will break even only if the
shares climb more than 60 percent, Bloomberg data shows. It´s
pretty hard to be anything but positive, said Uri Landesman,
who helps oversee about $500 million as president of New
York-based hedge fund Platinum Partners LLP. The IPO shows you
that there are people who are very enthusiastic. People think
that this is a viable company, he said.
2. Goldman Sachs Promotes 110 to Partner as Wall Street Rebounds From Crisis
Goldman Sachs Group Inc. selected 110 people to become
partners, up from 94 in the last round two years ago, as Wall
Street rebounds from the financial crisis. Among the employees
named this year were David Kostin, chief US equity
strategist, Andre Laport Ribeiro, the Sao Paolo-based head of
Latin America equities, and Colin Coleman, who runs the firm´s
South Africa business, according to an internal memo (see full
list below) obtained by Bloomberg News. The appointments take
effect Jan. 1. David Wells, a spokesman for Goldman Sachs in
New York, declined to comment. The elections are a vestige of
the firm´s days as the last major investment bank partnership,
before the company ended 130 years of private ownership with
its 1999 initial public offering. Partners, who get a $600,000
salary, share in a special compensation pool and typically
receive most of their yearend bonuses in restricted stock.
There are no partners in a corporation, this is an honorary
designation that enables people in it to participate in a bonus
pool, said Roy Smith, a finance professor at New York
University´s Stern School of Business who was a partner at
Goldman Sachs before it went public. This is a promotion for
most of them in terms of how much they get paid.
3. Yuan Premium in Hong Kong Shrinks 77% as PBOC Provides Funds: China Credit
The premium paid for yuan in Hong Kong shrank 77 percent in
the past month as monetary authorities made more of the
currency available to ease a shortage. Yuan traded in Hong Kong
closed yesterday at 6.6025 per dollar, 0.6 percent stronger
than the rate in Shanghai, data compiled by Bloomberg show. The
premium reached 2.6 percent on Oct. 19, the most since offshore
trading began in July, and has been as little as 0.3 percent in
the past week. The Hong Kong Monetary Authority said Oct. 28 it
drew down 10 billion yuan ($1.5 billion) via a swap with the
People´s Bank of China. The initial offshore yuan premium over
the onshore was due to insufficient yuan liquidity, said Pin
Ru Tan, a Singapore-based strategist at Royal Bank of Scotland
Plc. This shortage was essentially resolved by the HKMA
tapping the yuan swap line. Premier Wen Jiabao is allowing
yuan to become more readily available beyond China´s borders to
reduce reliance on US dollars in trade and finance, as
money-printing by the Federal Reserve erodes the attraction of
the greenback. The value of yuan transacted daily in Hong Kong
was about $500 million to $700 million in October, up from $200
million to $400 million in September and no more than $100
million in August, according to Gerrard Katz, head of
foreign-exchange trading at Standard Chartered Plc in Hong
Kong.
4. Stocks, Euro Gain as Irish Aid Discussed in Europe; Samp;P 500 Pares Advance
Stocks in Europe rebounded from the biggest drop in four
months, the euro rose and Irish bonds gained as government
officials negotiated aid for the nation. Oil fell a fourth
straight day, the longest streak since September, and US
stocks erased most of their advance. The Stoxx Europe 600 Index
added 0.5 percent and the euro climbed 0.3 percent to $1.3529.
Irish bond yields fell 10 basis points to 8.15 percent. Crude
slumped 2.3 percent to $80.44. The Standard amp; Poor´s 500 Index
advanced less than 0.1 percent as NetApp Inc. joined Cisco
Systems Inc. in spurring concern that technology spending will
slow. After the close, Samp;P 500 futures rose 0.2 percent as of 7
pm in New York while stock indexes fluctuated in early
trading in Japan and Australia. The European Union and
International Monetary Fund will start scanning the books of
Ireland´s banks tomorrow in a prelude to a possible aid package
to stem Europe´s widening fiscal crisis. US government
reports showed today that the increase in consumer prices and
housing starts trailed economist forecasts, bolstering the
Federal Reserve´s case that it needs to buy Treasuries to spur
growth. It´s a bit of a relief bounce, said Quincy Krosby,
chief market strategist for Newark, New Jersey-based Prudential
Financial Inc., which oversees $690 billion. Investors are
realizing that there will be a solution for the Irish situation
that won´t end up in global contagion.
5. Singapore Forecasts Economy to Grow 4% to 6% in 2011, Extending Expansion
Singapore said its economy will next year extend an
expansion that has already prompted the central bank to allow
the currency to rise to a record to damp inflationary
pressures. The economy will grow 4 percent to 6 percent in 2011
after expanding about 15 percent this year, the trade ministry
said in a statement today. Gross domestic product shrank at an
annualized rate of 18.7 percent in the third quarter from the
previous three months, less than the 19.8 percent pace
initially estimated last month, it said. That compares with the
median 17 percent decline in a Bloomberg News survey of 12
economists. Singapore´s economy is in the running to be the
world´s fastest-growing this year after a record first-half
expansion. Inflation is accelerating even after the central
bank said in October it will allow faster currency gains,
breaking from Thailand and Malaysia where policy makers have
refrained from tightening policy this quarter as global growth
slows. We believe that the challenge in the next 12 months
will be fighting inflation, Alvin Liew, a Singapore-based
economist at Standard Chartered Plc, said before the report.
The faster pace of Singapore dollar appreciation could start
being detrimental to exports at some point. A more expensive
Singapore dollar may also make Singapore a less attractive
tourist destination.
6. Irish Talks Turn to Government Bailout as EU Officials Join IMF in Dublin
European Union and International Monetary Fund officials
jet into Dublin today as the Irish government edges closer to
accepting a bailout for its national finances and the banking
system. The government will hold talks with the EU, IMF and the
European Central Bank across the capital over a number of
days, a Finance Ministry spokesman said yesterday. Discussions
will be held at the Irish central bank, the country´s bond
agency and the Finance Ministry. No press briefings are planned
today. While EU Commissioner Olli Rehn indicated yesterday the
discussions will center on the financial system, the central
bank said Ireland will also consider steps to improve market
confidence in the government finances. Prime Minister Brian
Cowen says the government is fully funded until mid-2011. We
are in the end game, said James Nixon, co-chief European
economist at Societe Generale SA in London. A bailout is
desperately needed, not just for the sovereign but for the
banking sector.
7. Axis Bank, Enam Securities to Merge Investment Banking Operations in India
Axis Bank Ltd., India´s top-ranked manager of debt sales,
aims to bolster its equity underwriting operations by merging
the unit with Enam Securities Pvt. in a transaction valued at
about 20.7 billion rupees ($455 million). Axis Bank will swap
5.7 shares for each one of closely held Enam, the Mumbai-based
companies said in a joint statement yesterday. Enam
shareholders will get a 3.3 percent stake in Axis following the
transaction, and Enam´s Manish Chokhani, 44, will be chief
executive officer of the entity to be created by the
combination, according to the release. Axis´s first
financial-services acquisition will combine capital at India´s
fourth-largest bank with the clients and distribution network
managed by Enam, said Deven Choksey, CEO of KR Choksey Shares
amp; Securities Pvt. Shikha Sharma, 51, named CEO of Axis in April
2009, is seeking to expand its investment bank after share
sales in India climbed to a record this year. The deal is a
shot in the arm for Axis, which was looking to expand: when you
are becoming a global player, you need to have a bank at the
front-end and distribution for the back- end, said Choksey,
whose Mumbai-based firm manages $125 million in assets. It´s a
win-win deal for both, as even Enam needs funds from a bank
base.
8. Citigroup Tells Congress It Will Refile Thousands of Foreclosure Documents
Citigroup Inc., the third-largest US bank by assets,
expects to refile affidavits in foreclosure proceedings that
began before the bank overhauled its operations for seizing
homes last year. The lender is reviewing 10,000 affidavits that
were executed before the reorganization was completed in
February, Harold Lewis, a managing director with the
CitiMortgage lending unit said in written testimony for a
congressional hearing tomorrow. About 4,000 affidavits may not
have been signed before a notary and may be resubmitted, he
said. Citigroup has defended its procedures and continued to
seize homes after borrowers accused the country´s biggest banks
of seeking foreclosures without fully reviewing loan documents.
The New York-based bank´s overhaul improved training and
limited the volume of paperwork processed by staff, Lewis said.
Flaws uncovered don´t warrant a sweeping delay, he said. The
changes and safeguards implemented this year give Citi
confidence that there are no systemic issues in its existing
foreclosure processes, he said in comments to be delivered at
a House Financial Services Committee hearing on foreclosures.
Citi has not suspended its foreclosure process and believes
there is no reason to do so.
9. Worlds Cheapest Stocks Getting Cheaper as Russian Profits Climb to Record
Russian stocks, the cheapest worldwide, are getting cheaper
after the nation´s companies posted record profits that topped
analysts´ estimates by the widest margin in emerging markets.
Micex Index companies reported combined earnings of 178 rubles
a share ($5.70) during the past year, the most since at least
2003 and 29 percent above the average of about 400 analyst
estimates compiled by Bloomberg. The Micex is valued at 6.8
times profit forecasts for the next 12 months, the lowest level
among 59 world stock indexes tracked by Bloomberg and about
half the global average of 12 times. While the Micex advanced
13 percent in the past year, its valuation tumbled 31 percent
because Russian shares failed to keep pace with a surge in
earnings estimates spurred by oil´s rally above $80 a barrel.
Equity mutual funds in the world´s largest energy exporter
attracted less money in the past six months than funds in the
other so-called BRICs — Brazil, India and China — as
investors favored more expensive shares in faster-growing
economies, EPFR Global data show. Russia really stands out as
being cheap and attractive, said Maarten-Jan Bakkum, an
emerging-market equity strategist in The Hague at ING
Investment Management, which oversees about $100 billion in
developing nations. Investors will increasingly be looking for
emerging economies that can still improve, he said. For
Russia, there should be some room for improvement.
10.Rapping Hamsters Help Kia Alleviate Quality Concerns as Sales in US Soar
Rapping hamsters and unemployment near a 26-year high are
helping Kia Motors Corp. log record sales in the US even as
its cars plummet in quality surveys. Kia´s US sales gained 15
percent this year through October, outpacing General Motors
Co., Toyota Motor Corp. and Honda Motor Co. That rate would
push Kia, whose lineup sells for about $8,000 less than the
industry average, to its highest annual US sales ever. South
Korea´s second-largest carmaker is defying a drop in quality
rankings by JD Power amp; Associates as 9.6 percent unemployment
spurs demand for inexpensive cars. Commercials featuring
rodents driving the boxy Soul and characters from the
children´s show Yo Gabba Gabba! have also raised the company´s
profile in the US People are looking for value in this
market, and they´re looking at brands they might not have
considered in the past, said Rebecca Lindland, an analyst with
IHS Automotive, based in Boston. The advertisements are so
good and are helping to create a buzz for the models.
11.India Revives 45-Year-Old Trade Zone System China Adopted to Boost Exports
It takes more than an hour to drive the 25 miles of clogged
highway linking New Delhi to Noida Special Economic Zone.
Inside the gate, a smooth four-lane road leads to electronics,
engineering and textile plants that are at the heart of India´s
plan to imitate China´s export success. It´s the kind of place
where one can think of doing business, said Vishnu Pal Singh,
51, whose Noida-based Optic Electronic India Pvt. sells
night-vision devices for rifles and tanks to Germany and
Poland. The zone offers top class infrastructure and tax
benefits. India is counting on entrepreneurs such as Singh to
revive a system it pioneered 45 years ago: using enclaves that
provide lower taxes, faster permits and even their own power
source to boost exports. While India switched focus in the
1970s to industry tax breaks, China adopted the zone idea a
decade later. The system turned the former fishing village of
Shenzhen into an export hub of 8.5 million people in 30 years
and made China, with overseas sales of $1.2 trillion last year,
the world´s largest exporter.
12.Tibet Lures St. Regis as Chinas Big Cities Crowded by Luxury Hotel Chains
Expansion in China, the world´s fastest-growing economy, is
causing an urban lodging glut that´s spurring luxury chains
including Starwood Hotels amp; Resorts Worldwide Inc.´s St. Regis
to head to areas as remote as Tibet. The 162-room St. Regis
Lhasa Resort, which opened this week as the first international
luxury hotel in Tibet´s capital, is about 12,000 feet (3,680
meters) above sea level and boasts a five-star spa. Shangri-La
Asia Ltd. will open a 350-room hotel in Lhasa in 2012, and
InterContinental Hotels Group Plc plans to add a high-end,
2,000-room hotel in the city within three years. The surge of
hotel development in China has led to an oversupply,
particularly in cities, and it may take five years for demand
to catch up, said Jonas Ogren, a Singapore-based director for
STR Global, an industry research company. That´s made Tibet and
other regions far from Beijing and Shanghai increasingly
attractive to expanding hoteliers. While Tibet isn´t
necessarily the first location that comes to mind for a hotel,
these companies usually already have properties in primary and
secondary cities, Ogren said. So more are looking to smaller
markets or resort-type places.
-0- Nov/18/2010 00:35 GMT
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