Posts from Monday May 31 2010

Apple sells 2m iPads

A strong international debut for Apple’s iPad lifted sales of the tablet computer to 2m since its US launch two months ago, the company said, outpacing sales of its flagship Mac laptop and desktop computers, the FT reported. The iPad’s debut exceeded that of the original iPhone but analysts said it fell short of the iPhone 3G, launched in 2008, which sold about 3m units in the first month.

Goldwind plans $1.2bn HK IPO

Chinese wind-turbine maker Xinjiang Goldwind is seeking to raise up to US$1.2 bn from an IPO in Hong Kong, reports Dow Jones newswires. Xinjiang Goldwind, which already trades on the Shenzhen Stock Exchange, has set a price range of HK$19.80-HK$23 for the sale of 395.2m shares, with an overallotment option amounting to 15% of the deal, according to DJN.

Beijing agrees to start gas talks with Japan

China has agreed to start formal talks with Japan on a treaty that would allow joint development of gas resources in contested waters between the often-fractious east Asian powers, the FT reported. The offer of formal talks made by Wen Jiabao, Chinese premier, during a visit to Tokyo on Monday, suggests Beijing is ready to move forward on long-stalled plans for co-operation in the East China Sea. The plans are intended to remove one of the biggest sources of friction between Tokyo and Beijing.

Emerging groups make ‘African lions’ roar

Africa’s top 40 companies — ranging in size from $350m to $80bn and already regional players in mining, consumer industries and services — are emerging as competitors on the global stage, the FT said, citing research by the Boston Consulting Group. The report also identified a group of fast-growing nations which it describes as the “African Lions” – Algeria, Botswana, Egypt, Libya, Mauritius, Morocco, South Africa and Tunisia. Their collective per capita GDP, at $10,000, is already higher than the average for the Brics.

India’s economy grows 8.6 per cent

India, the world’s fastest growing large economy after China, has returned to almost where it was before the global financial crisis struck in October 2008. On Monday, the Central Statistical Organisation showed the economy was in touching distance of a talismanic 9 per cent growth rate, having expanded 8.6 per cent in the quarter ending in March compared with the same period last year, the FT reported.

South Korea’s Hynix raises 2010 spending

Hynix Semiconductor, the world’s second-largest memory chipmaker, on Monday said it would raise its capital expenditure by a third to Won 3,050bn ($2.5bn) this year to take advantage of a strong recovery in the global technology sector, the FT reported. Hynix’s announcement comes two weeks after industry leader Samsung Electronics doubled its investment for semiconductors to Won11,000bn in an effort to cement its technology lead over rivals.

China told property risk is worse than in US

The problems in China’s housing market are more severe than those in the US before the financial crisis because they combine a potential bubble with the risk of social discontent, according to an adviser to the Chinese central bank. Li Daokui, a professor and member of the Chinese central bank’s monetary policy committee, said recent government measures to cool the property market needed to be part of a long-term push to bring high housing prices under control, the FT reported.

Chinese workers swap angst for anger

Suicidal angst is giving way to worker solidarity in southern China, as a factory strike that has halted the Japanese carmaker’s nationwide operations enters its second week, the FT reported. Most worryingly for the Chinese government, the industrial unrest at Honda and other big employers in Guangdong province is raising questions about the nature of work itself on 21st century factory floors. Alienated Chinese workers are signalling that they are determined to fight back.

Eurozone banks face €195bn writedowns

The eurozone’s financial sector and economy face “hazardous contagion” effects from the region’s debt crisis, according to the ECB, which has also predicted another €195bn in bank writedowns this year and next, the FT reported. Soaring government deficits risked driving up general borrowing costs, hitting economic growth prospects, the ECB said in its latest report on the eurozone’s financial stability.

European financial turbulence hits Hitachi

The fallout from Greece’s debt crisis is hitting Hitachi of Japan, in one of the first signs that Europe’s latest bout of financial turmoil is damaging the global industry, the FT reported. Hiroaki Nakanishi, president of the sprawling conglomerate, said some of Hitachi’s biggest projects in Europe had been delayed or even cancelled due to financing problems.

China: like a cocktail party without the cocktails

“The Asian business development model is flawed,” Hugh Hendry, CIO and founding partner of Eclectica Asset Management, writes in the FT. “China produces gross domestic product growth without per capita wealth creation. It is analogous to a cocktail party without the cocktails; what is the point?”

Property tax reform plans hit Shanghai stocks

Shanghai stocks fell sharply on Monday after China’s cabinet said it had approved a plan from the state planning agency to “gradually push forward reform” of the country’s property tax regime, the FT said. The statement provided no further detail but the cryptic reference was taken as a sign by investors that Beijing may further clamp down on the country’s booming real estate market.

Trichet: We are not printing money

European Central Bank president Jean-Claude Trichet has leapt to the defence of the bank’s government bond-buying programme, launched in response to the sovereign debt paralysis in securities markets, the WSJ reports. Trichet said that the ECB had the means to sterilise bond inflows. The ECB’s strategy has been particularly criticised in Germany.

European economic confidence drops

European executive and consumer sentiment posted a surprise drop in May, Bloomberg reports, as sovereign debt fears bite. An index of economic confidence in the eurozone dropped from 100.6 in April to 98.4 in May, below analyst expectations. European Commission data also showed that rises in consumer price inflation slowed in May.

France fights to keep AAA rating

France admitted on Sunday that it faced a challenge to maintain its top-notch triple-A credit rating, but sought to reassure markets with a pledge to implement controversial cost-cutting to bring down public debt, according to the FT. Fitch’s downgrade of Spain’s credit rating to AA+ from AAA on Friday has piled further pressure on Europe’s debt crisis.

Chinese real estate dollar bonds suffer

Yields on dollar bonds issued by Chinese real estate companies are rising rapidly as investors demand high premiums to invest amid fears of government clampdowns on lending, Bloomberg reports. The bonds account for 45 per cent of all corporate dollar debt sold in Asia ex Japan.

Portugal Telecom prepares Vivo bid

Portugal Telecom is in talks to buy out Telefonica’s stake in the Brazilian mobile phone operator Vivo, Bloomberg reports. Investors in Asia and the Middle East have been approached regarding a possible bid. Telefonica made a failed offer to purchase Portugal Telecom’s stake earlier this month, amid a rush by companies to seek toeholds in Brazil’s surging markets.

Euro steadies in Asian markets

The euro steadied in Asian trading on Monday but remained under pressure after Fitch downgraded Spain’s credit rating and France said keeping its top credit rating might be a stretch without tough budget cuts, according to the FT’s rolling global markets overview. Stocks in the region are nevertheless due to post their worst month since October 2008. Europe’s single currency faces further drubbing later in the week, the WSJ adds.

FT Alphaville’s Bank Holiday break

Due to the Spring Bank Holiday in the UK and Memorial Day in the US, not to mention a public holiday in Castilla La Mancha and some other parts of the world, we’re taking a break on Monday. However, FT Alphaville’s London and New York “Cut” newsletters will come out as usual.

Full service will resume on Tuesday. Read more

Oil spill could last ‘months’

BP began preparing on Sunday to fit a containment cap over its leaking Gulf of Mexico well, which could take a week, as the US administration warned that oil might continue to spill until August, reports the FT. The failure of BP’s “top kill” and “junk shot” procedures to block the gusher by pumping mud and firing detritus into it were a blow for the group and for the White House, as the disaster entered its sixth week.

US fund to invest in Russian tech hub

Siguler Guff, the US private equity group, will invest $250m in a high-technology hub outside Moscow, reports the FT. The Kremlin announced plans in February to build a high-tech centre at Skolkovo, a village near Moscow, dubbed Russia’s answer to Silicon Valley. Skolkovo is a pet project of Dmitry Medvedev, Russian president, who is campaigning to reduce the country’s dependence on the cyclical oil and gas industries.

Healthscope gets two $1.6bn bids

Healthscope, Australia’s second-biggest hospital owner, has  received two additional bids that value the group at A$1.84bn ($1.6bn), trumping an offer by buy-out firm Blackstone and its partners, reports Bloomberg. The new bids, both of A$5.80 a share, are 11% above Healthscope’s May 28 closing price and are considered by the board to at least equal an earlier A$5.75-a-share bid, Healthscope said on Monday without identifying the bidders. Blackstone joined rival groups TPG and Carlyle to bid for Healthscope last week.

Weekend catch-up

In case you missed these stories:

Spain to toughen short selling rules
Spain’s stock market regulator is to toughen controls of equity short selling with plans to extend current reporting rules beyond financial sector stocks. Read more

Newsweek auction draws near

OpenGate Capital, the US buy-out firm that owns TV Guide, is among prospective buyers planning to formally declare interest in acquiring Newsweek magazine from the Washington Post ahead of Wednesday’s deadline for non-binding bids, reports the WSJ. Christopher Ruddy, publisher of the conservative magazine Newsmax, has said he also plans to bid, the report said. The Post recently hired Allen & Co to help sell the unprofitable weekly magazine.

Overnight markets: Quiet

Asian markets (Mon)
Nikkei 225 up +11.06 (+0.11%) at 9,774
Topix up +4.69 (+0.53%) at 883.21
Hang Seng down -19.34 (-0.10%) at 19,747

US markets (Fri)
S&P 500 down -13.65 (-1.24%) at 1,089
DJIA down -122.36 (-1.19%) at 10,137
Nasdaq down -20.64 (-0.91%) at 2,257 Read more

Irish sell off health insurance

The bulk of Ireland’s health insurance market is up for sale after Dublin’s decision last week to dispose of the state-owned Voluntary Health Insurance company. In effect, 90% of the Irish market could soon be under new ownership, with Quinn Insurance, part of the family-owned Quinn Group, already on the block after the government’s move in April to put Ireland’s second-largest health insurer into administration, according to the FT.

Spain’s cajas rush to strike deals

Spain’s troubled savings banks are stepping up merger and co-operation agreements before the June 30 expiry of the offer of government aid for the process, reports the FT. In two new proposals unveiled Friday, Caja Madrid, the second biggest of the unlisted savings banks, or cajas de ahorros, is in talks with five small cajas to partially merge their operations, while La Caixa, the third biggest Spanish lender and the strongest caja, is discussing a merger with smaller rival Caixa Girona.

UK’s Phoenix paves way for IPO

Phoenix Group, the closed UK life assurance fund business previously known as Pearl, has reached an agreement with the investor Hugh Osmond that will finally clear the way for its London listing next month, reports the FT. The flotation  – estimated at about £800m – would be among the year’s biggest. Phoenix has been negotiating with Osmond’s Sun Capital investment firm and buy-out group TDR over their ownership of a series of “contingent rights” that must be taken out of play before any listing.

China postpones CDS launch

China has postponed a plan to introduce credit default swaps to its domestic market after regulators objected and senior officials vetoed the proposal, reports the FT. The plan to launch a CDS pilot project in China had initially gained support from the central bank. But other regulators including China’s banking watchdog opposed the plan amid growing international concerns about the impact of derivatives and after Germany banned naked short selling in some securities.

UK Treasury minister quits

David Cameron, the UK prime minister, on Sunday sought to reassure the public that the loss of the Treasury minister over the weekend would not destabilise the coalition government’s plans to tackle its £156bn deficit, reports the FT. David Laws, a Liberal Democrat, resigned at the weekend after revelations about his expenses. The resignation was a blow to the coalition government as it grapples with internal policy rows between its Conservative and Lib-Dem partners.