The Bank of Japan kept interest rates at zero to 0.1% and said it would expand its asset-purchase fund to 40tn yen from 30tn, reports Bloomberg. Earlier, industrial production data for Q1 showed a lower rise than had been expected, reports Bloomberg separately.
Standard & Poor’s cut Spain’s credit rating by two notches, from A to BBB-plus, and put a negative outlook on the country’s credit. The ratings agency cited expectations the government finances will deteriorate even more than previously thought as a result of a contracting economy and an ailing banking sector, reports Reuters.
Samsung Electronics’ Q1 profits exceeded expectations after surging sales of Galaxy smartphones helped mask slumping earnings at the chip business, says Bloomberg. Net income jumped 81% from a year earlier to 5.05tn won ($4.4bn), beating the 4.24tn won average of a Bloomberg survey.
PetroChina’s first-quarter profit rose unexpectedly after it ramped up oil and gas production, while Sinopec’s earnings slumped on losses from selling fuels at state-controlled prices, reports Bloomberg. Net income rose 5.8% from a year earlier to 39.2bn yuan ($6.2bn), PetroChina reported on Thursday, beating the 34.8bn yuan mean estimate in a Bloomberg survey. Profit at Sinopec slumped 35%, almost triple the pace forecast by analysts.
Reformers within the Chinese Communist party are trying to exploit the recent ousting of Bo Xilai by making constitutional and political changes, reports the FT, citing senior officials and people close to party leaders.
Chesapeake Energy’s board of directors moved to cut off a controversial perk it has long granted to CEO Aubrey McClendon, and said it would review Mr McClendon’s personal financial interactions with firms that have a relationship with the company, the WSJ reports. Meanwhile the SEC has opened an informal inquiry into the programme, which granted Mr McClendon a share in each of the company’s natural gas wells, says Reuters, citing a source familiar with the matter.
Barclays and Deutsche Bank won an auction for a slice of the “Maiden Lane III” CDO portfolio held by the New York Fed, which originated fromthe controversial government bailout of AIG, reports the FT. Market participants said that the winning joint bid by the two banks for the so-called “Max CDOs” was more than 65 cents on the dollar on securities with a face value of $7.5bn. The price will be disclosed in July.
US prosecutors in California are investigating a Goldman Sachs banker for allegedly sharing confidential information about pharmaceutical mergers with an employee of Galleon, the hedge fund run by Raj Rajaratnam, the FT reports, citing a person familiar with the matter.
Kelvin Woo and Joe Zhang are leaving GLG Partners to set up their own Asia-focused macro hedge fund, says Bloomberg, citing four people with knowledge of the matter.
COMMENT AND CURIOS
– Gulf oil states are spending more of their oil revenues at home. (Wall Street Journal)
– What the BoE needs: I would give the palm to Mark Carney, says Samuel Brittan. (Financial Times)
– Money market funds still need reform, says Boston Fed president Eric Rosengren. (Wall Street Journal)
– South Korean youth face worsening job prospects as the country’s conglomerates shift strategy. (Financial Times)
– The future belongs not to China but to the new global middle class, says Philip Stephens. (Financial Times)
OVERNIGHT MARKETS: UP
Gains in Asia were capped by S&P’s downgrade of Spain’s credit rating. [More]