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M & A wrap: Stalking Dexia
Qatar National Bank, the Gulf state’s largest lender, is eyeing Denizbank, the fast-growing Turkish arm of euro zone debt casualty Dexia, in a deal potentially worth up to $6 billion. Deutsche Lufthansa may have to break up its British bmi unit to sell the underperforming carrier, as larger airlines eye its access at Heathrow airport and smaller players look to pick off its budget and regional operations. The NYT’s DealBook digs into the red flags surrounding Groupon and asks the questions: “How did so many Wall Street firms desperate to underwrite the Groupon I.P.O. miss the warning signs when pitching such a sky-high valuation? Or did they just turn a blind eye?” Sears is allowing competitors to sell its Craftsman, DieHard batteries and possibly Kenmore brands, which may bump short-term earnings. “But critics worry that it could, in the end, just be digging the once omnipresent retailer a deeper grave,” reports Fortune. -
UPDATE 1-Russia’s NLMK sees Q3 profit margin bottom of range
* Sees Q3 sales up 5 pct from Q2 vs forecast up 10-15 pct* Q3 crude steel output 2.9 mln T, down 3.6 pct q/qMOSCOW, Oct 18 (Reuters) - Novolipetsk Steel , Russia’s fourth-largest steelmaker, said on Tuesday that the margin on its third-quarter core earnings would be about 20 percent, at the low end of the 20-25 percent guidance issued in August.The company, controlled by Russia’s richest man Vladimir Lisin, also said third-quarter revenue would rise by about 5 percent sequentially, after forecasting a 10-15 percent increase earlier, and that prices in the current quarter will continue to fluctuate.”Q4 pricing will remain largely volatile,” NLMK said in a statement. “Market conditions will be additionally affected by the seasonal lull in demand in the domestic market, as well as the overall uncertainty in the global economy.”Steelmakers in Russia, the world’s fifth-largest steel producer, have cited challenging market conditions in statements this month.Evraz , Russia’s number two producer, said it has experienced weaker trading in recent weeks due to lower production and export prices in part caused by the global economic environment.Novolipetsk also said on Tuesday that fourth-quarter production will rise by 10 percent from the third quarter driven by the launch of a new blast furnace at its main facility in Lipetsk.This will allow the group to achieve record production volumes of 12 million tonnes for the year, up 0.5 million tonnes from 2010.Third-quarter crude steel output reached 2.9 million tonnes, down 3.6 percent from the second quarter. -
TEXT-Fitch: U.S. CREL CDOs delinquencies up slightly
CREL CDO late-pays rose to 12% from 11.6% in August. ‘Given the instability in the broader economy, CREL CDOs delinquencies are expected to continue to seesaw going forward,’ said Director Stacey McGovern.In September, asset managers reported 11 new delinquent assets. Among the newly delinquent assets were three matured balloon loans, six new credit impaired securities, and two term defaults. Partially offsetting the new delinquencies were six removed assets, which included:—One real estate-owned (REO) asset, which was sold at 38% of par;—One mezzanine loan that was foreclosed out at a total loss; and—Four formerly credit impaired CMBS securities.Ratings on the most junior classes remain subject to volatility as losses continue to accumulate. In September, CREL CDO asset managers reported approximately $60 million in realized losses.Additional information is available in Fitch’s weekly e-newsletter, ‘U.S. CMBS Market Trends’, which also contains recent rating actions and an overview of newly released CMBS research, including Fitch presales and Focus reports. The link below enables market participants to sign up to receive future issues of the E-newsletter:’5736&rtype=mm&uid=Fitch’ -
HK, China shares retreat in post-rally profit-taking
* Cyclicals, led by energy, lead H-share underperformance* China CPI down but little room to ease policy (Updates to midday)By Vikram Subhedar and Clement TanHONG KONG/SHANGHAI, Oct 14 (Reuters) - Hong Kong and Shanghai shares fell on Friday as investors took money off the table following a rally in banks and property counters this week, after China inflation data showed that price pressure, while easing slightly, remained high.Incremental steps to restore confidence in the financial system and ease stress caused by monetary tightening, such as China’s sovereign wealth fund buying bank shares and new loan quotas for some small and medium-sized enterprises, spurred a rally in Chinese shares this week, partly on short-covering.Data released on Friday showed China’s annual consumer inflation easing to 6.1 percent in September although stubborn food price rises showed Beijing’s fight against inflation is not over.By the midday trading break, Hong Kong’s Hang Seng index was down 1.39 percent at 18,496.17. The Shanghai Composite Index fell 1.1 percent. On the week the benchmarks are up 4.5 percent and 2.2 percent, respectively.”The gains this past week are the most significant movement since 2009 and likely herald a positive shift,” said Zhong Hua, senior equity analyst at Guotai Junan Securities at an investor conference in Shanghai. “Some of it is undoubtedly to do with Huijin’s move in the market, but from here, even without any official policy loosening, the market is likely to be boosted by improved money supply.”Earlier this week, Central Huijin, the domestic investment arm of China’s sovereign wealth fund, stepped in to buy Shanghai-listed shares of the “Big Four” Chinese banks, a move regarded by market players as the clearest sign yet of Beijing looking to support the struggling stock market.Banks, which rallied on the news, coming off near 2-1/2 year lows, were the top drags on the Hang Seng Index on Friday as some investors cashed in.Agricultural Bank of China Ltd fell 5.3 percent, the weakest performer among large cap financials. Industrial & Commercial Bank of China Ltd fell 3.4 percent.In Shanghai, AgBank was down 1.2 percent and ICBC fell 1 percent.BANKS, ENERGYAgBank shares in Hong Kong has seen the heaviest short-selling among the top four banks over the past week, suggesting investors remain wary about its rebound and expect it to underperform peers going forward.Average short-selling as a percentage of turnover for AgBank this week was 18.4 percent, almost twice the average seen for the four banks taken as a group.Also lower on Friday were major Chinese oil producers on worries over declining profit margins.CNOOC Ltd fell 5.2 percent.Sun Hung Kai Financial, which maintained a “sell” rating on CNOOC, said in a note that margins were likely to be squeezed by falling oil prices and higher taxes.Earlier this week, China said it would extend a regional resource tax on domestic sales of crude oil to the whole country and change the taxation policy on foreign-invested onshore and offshore oil and gas fields, a move set cut into revenue of state-owned energy companies.The weakness in Chinese financials and cyclicals hit the China Enterprises Index of top locally listed mainland companies the hardest with the index down 2.3 percent.The index’s rally this week took it above a downward trendline joining the intraday highs since Aug. 1, but technical analysts say the index needs to hold above this in strong volume to sustain the break. -
After knee repair, half can’t play sports the same
The anterior cruciate ligament, or ACL, is the ligament inside the knee that helps keep the joint stable. About 150,000 ACL injuries occur each year in the United States.”Less than 50 percent of the study sample had returned to playing sport at their preinjury level or returned to participating in competitive sport when surveyed at 2 to 7 years after ACL reconstruction surgery,” wrote Clare Ardern at La Trobe University in Victoria, Australia, who led the study.Ardern and her colleagues followed more than 300 men and women for two to seven years. Participants had either played Australian-rules football, basketball, netball or soccer before their surgeries.At 39 months post-surgery, 208 out of the 314 people who had the operation were still playing a sport, the researchers said.Of those 208, 68 said they played at a lower level than before their injury and 140 said they played about the same as before their injury. The remaining 106 participants either were not playing sports or did not complete the entire study.”Although almost all people returned to playing some form of sport, they did not play continuously for many years after their surgery,” Ardern told Reuters Health in an email.She also noted there may be other reasons why people stopped playing sports, such as fear of getting injured again or less confidence in performing.Of the 196 people who played competitive sports before their injury, 91 returned to their competitive sport.”This is a big injury,” said Edward McDevitt, a spokesman for the American Academy of Orthopaedic Surgeons, who was not part of the study.”Many athletes who choose surgery have a long and difficult road to face. If you’re not willing to go through it, then you might be better off just getting a brace.”He added that while knee surgery does allow people to return to their sport, they couldn’t perform as well as doctors might wish.People who tear the ACL can either opt for physical therapy and surgery or just physical therapy alone.”Some people find that they are able to function well without surgery, provided they have adequate leg strength to support the injured knee,” Ardern said.”Other alternatives may be to avoid sports involving direction changes, jumping and landing or activities that make the knee feel unstable, or use knee braces and supports.”McDevitt speculates that after surgery, some athletes may not have the same range of motion, preventing them from playing as before.”I tell my patients, ‘I can’t make you like before, I’m not God. But I’ll do the best I can to restore you back to the way you were,’” he added. -
White House working with Congress on yuan bill issues
The White House has previously said the bill raises “consistency” issues with U.S. obligations under international trade rules. -
UPDATE 1-Russia mulls export duty to keep grain in country
* Russia exports 10.7 mln T of grain so far* The tariff unlikely to be set in 2011* Analyst supports the timely tariff plan announcementBy Aleksandras BudrysMOSCOW, Oct 11 (Reuters) - Russia is looking at a protective export duty to keep grain in the country if exports exceed 23-24 million tonnes in the current crop year, First Deputy Prime Minister Viktor Zubkov told reporters on Tuesday.”This year the crop is going to be 90, maybe 92 million tonnes,” Zubkov said.”We would need 70-72 million tonnes for domestic consumption. But we also need some 15-16 million tonnes for carryover stocks by the end of the year. Therefore we can afford exports of 23-24 million tonnes in the current crop year.”Russia had opening stocks of more than 20 million tonnes at the beginning of the year.Moscow on July 1 lifted a ban on grain exports imposed last year during a catastrophic drought, but has signalled its preferred method of export control this year would be an export duty.This measure was supported by the powerful grain industry lobby the Russian Grain Union.”It will be a floating tariff,” Zubkov said without providing details. The government will prepare a draft order by Nov. 1 detailing the duty plan.He added that the government aimed to keep domestic wheat prices in the range of 5,600-6,500 roubles ($177.70-206.30)per tonne.Average EXW third-grade milling wheat offer prices declined in the European part of Russia by 75 roubles ($2.34) to 6,050 roubles ($188.77) per tonne last week, fourth-grade by 100 roubles to 5,900 roubles analysts have said.Zubkov said that the tariff will not be introduced this calendar year as since the lifting of the ban on July 1 Russia has exported 10.7 million tonnes of grain and could export a total of 18-19 million tonnes until January 1.ANALYST SUPPORTS THE PLANA leading Russian agricultural analyst supported the timely announcement of the plan.”It is an absolutely reasonable measure and it has a forestalling effect,” Andrei Sizov Sr, President and CEO of SovEcon thinktank commented, adding that the announcement would permit traders to prepare for possible restrictions.”In fact this is now seen as a hypothetical measure because currently we don’t know how much we will export. We have exported 11 million tonnes and may export another 12-13, but we don’t know what domestic and international prices will be. This measure may not be introduced if exports prove to be uncompetitive.”He said international prices were falling and Ukraine has decided to abolish its export duties and increase exports pushing prices further down.Russian grain exports normally decline from October-November when stormy weather sets in at its main export Black Sea ports and later when rivers freeze.($1 = 31.513 Russian Roubles) -
UPDATE 1-Russia mulls export duty to keep grain in country
* Russia exports 10.7 mln T of grain so far* The tariff unlikely to be set in 2011* Analyst supports the timely tariff plan announcementBy Aleksandras BudrysMOSCOW, Oct 11 (Reuters) - Russia is looking at a protective export duty to keep grain in the country if exports exceed 23-24 million tonnes in the current crop year, First Deputy Prime Minister Viktor Zubkov told reporters on Tuesday.”This year the crop is going to be 90, maybe 92 million tonnes,” Zubkov said.”We would need 70-72 million tonnes for domestic consumption. But we also need some 15-16 million tonnes for carryover stocks by the end of the year. Therefore we can afford exports of 23-24 million tonnes in the current crop year.”Russia had opening stocks of more than 20 million tonnes at the beginning of the year.Moscow on July 1 lifted a ban on grain exports imposed last year during a catastrophic drought, but has signalled its preferred method of export control this year would be an export duty.This measure was supported by the powerful grain industry lobby the Russian Grain Union.”It will be a floating tariff,” Zubkov said without providing details. The government will prepare a draft order by Nov. 1 detailing the duty plan.He added that the government aimed to keep domestic wheat prices in the range of 5,600-6,500 roubles ($177.70-206.30)per tonne.Average EXW third-grade milling wheat offer prices declined in the European part of Russia by 75 roubles ($2.34) to 6,050 roubles ($188.77) per tonne last week, fourth-grade by 100 roubles to 5,900 roubles analysts have said.Zubkov said that the tariff will not be introduced this calendar year as since the lifting of the ban on July 1 Russia has exported 10.7 million tonnes of grain and could export a total of 18-19 million tonnes until January 1.ANALYST SUPPORTS THE PLANA leading Russian agricultural analyst supported the timely announcement of the plan.”It is an absolutely reasonable measure and it has a forestalling effect,” Andrei Sizov Sr, President and CEO of SovEcon thinktank commented, adding that the announcement would permit traders to prepare for possible restrictions.”In fact this is now seen as a hypothetical measure because currently we don’t know how much we will export. We have exported 11 million tonnes and may export another 12-13, but we don’t know what domestic and international prices will be. This measure may not be introduced if exports prove to be uncompetitive.”He said international prices were falling and Ukraine has decided to abolish its export duties and increase exports pushing prices further down.Russian grain exports normally decline from October-November when stormy weather sets in at its main export Black Sea ports and later when rivers freeze.($1 = 31.513 Russian Roubles)
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