Home Blog Page 778

Asian stock markets battered by US credit turmoil

0

SINGAPORE (Thomson Financial) – Stock markets across Asia tumbled Monday, dragged down by Wall Street’s sharp decline Friday as
investors continued to fret about the growing problems in the US credit markets.

The Singapore Straits Time Index led the decline, shedding 3.7 percent of its value in the morning session. Banks were among the worst hit as players dumped stocks in the sector amid worries over exposure to collateralized debt obligations, which are securities backed by bonds and loans and which could include US subprime mortgages.

Banks have been downplaying their exposure to the US credit crisis, but late last week, DBS Group Holdings, the biggest lender in Singapore, said it has exposure of about 850 million US dollars. It dismissed the sum as insignificant relative to its capital position and said it’s comfortable with its investment portfolio.

United Overseas Bank is reported to have exposure of less than 500 million Singapore dollars while Oversea China Bank has about 600 million dollars at risk.

Other stock indexes were also hit hard. In Hong Kong, the Hang Seng was last down 2.4 percent, Australia’s S&P;/ASX 200 fell 2.1 percent, South Korea’s benchmark, the KOSPI, was down 1.8 percent, Taiwan’s Taiex was off 1.6 percent and Thailand’s SET index slumped 2.8 percent.

In Japan, the Nikkei 225 index ended the morning session down 148.16 points or 0.9 percent at 16,831.70, well off a low of 16,675.39 hit early in the day. Traders said a weakening yen had helped the market trim its losses, raising interest in big exporters such as Toyota.

Elsewhere, the Kuala Lumpur composite index fell 2.7 percent, the Jakarta composite index slid 4.2 percent and Manila’s composite index ended down 2.8 percent to its lowest level in more than three months.

Wall Street plunged anew Friday, sending the Dow Jones Industrial Average down 281 points or 2 percent after comments from a major investment bank exacerbated the market’s fears of a widening credit crunch.

The drop came after two volatile weeks on Wall Street where investors have been spooked by growing numbers of bad home loans and rising risk aversion that it has made it harder to raise money to finance leveraged buy-outs.

This time, the catalyst for a sharp skid was Bear Stearns Cos Chief Financial Officer Sam Molinaro, who described the turmoil in the credit market as the worst he’d seen in 22 years.

Standard & Poor’s cut its outlook on Bear Stearns credit to negative due to the impact of bad loans on some of its investment funds. A weaker-than-expected jobs report for July also weighed on sentiment.

However, Citigroup said Monday that the recent selloff in Asian markets is overdone and that regional banks, insurance companies and non-bank financial institutions should be able to manage their exposure to the US crisis.

‘The impact of US subprime asset-quality problems and falling prices of structured products such as collateralized debt obligations (CDO), mortgage-backed securities (MBS) and asset-backed securities (ABS) on Asian financials should be manageable,’ Citigroup analyst Tracy Yu said in a note to clients.

Taiwan’s insurance companies and Singapore’s banks have the highest CDO exposure, she said.

‘We believe Hong Kong and Chinese banks and insurers have small exposure to CDO, MBS and ABS,’ Yu said.

Banks in Malaysia, alongside Indian and Indonesian banks are reported to have no or minimal exposure, the analyst said.

Malaysia’s largest lender Maybank owns credit-linked notes issued by financial institutions that have significant subprime exposure but the amount is fairly small at 60 million dollars, according to Yu.

Chinese markets bucked the negative trend in the region on Monday. The Shanghai Composite Index was last up 3.5 percent, while the Shanghai A Index gained 3.5 percent.

ciara.linnane@thomson.com

cl/ms

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

China A-shares end morning up as steel, metal stocks gain-UPDATE

0

SHANGHAI (XFN-ASIA) – China A-shares ended the morning stronger after the main index hit another intraday high, helped by gains in steel and metal companies seen as having attractive valuations, dealers said.

The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, ended the session up 67.08 points or 1.47 pct at 4,627.85. It hit a fresh intraday high of 4,629.10, surpassing the previous high of 4,562.69 reached on Friday.

‘The market continued its advance from Thursday after a slump prompted by worries about the US mortgage sector,’ said Wu Feng, an analyst at TX Investment Consulting Co. ‘The rise in the morning was led by steel and metal companies with relatively low valuations.’

But Wu cautioned that share prices could be volatile this week as profit-taking pressure will cap some overvalued sectors such as property stocks.

Analysts said the index will likely finish at a new record today. It closed at a record high on Friday, the third time in a week, and has gained more than 60 pct this year on ample liquidity and upbeat interim earnings.

Guangzhou Iron and Steel Co Ltd (SHA 600894) surged 0.72 yuan or by a 10 pct daily limit to 7.89. The official Xinhua news agency reported that the listed company’s parent Guangzhou Iron and Steel Enterprises signed an agreement with Group Japanese steel giant JFE Holdings Inc to jointly invest 6.34 bln yuan in building a steel sheet plant in the southern city of Guangzhou.

Maanshan Iron & Steel Co Ltd (SHA 600808; HK 0323) gained 0.77 yuan to 9.01, while Wuhan Iron & Steel Co Ltd (SHA 600005) added 0.86 yuan to 14.26.

Analysts added that an industry consolidation is expected to provide catalysts for share prices going forward.

Non-ferrous metal companies also were stronger as analysts expected international metal prices to remain firm.
Jiangxi Copper Co Ltd (SHA 600362; HK 0358), China’s largest integrated copper producer, rose 2.62 yuan to 34.65.
It soared seven pct on Friday after it said it received regulatory approval to issue 290 mln additional A-shares in a private placement.

Xiamen Tungsten Co Ltd (SHA 600549) climbed 2.16 yuan to 24.03 after it rose its 10 pct daily limit in the previous session.

Bank of Ningbo Co Ltd (SZA 002142), in which Singapore’s Oversea-Chinese Banking Corp holds a 10 pct stake, shed 0.47 yuan to 30.98, despite its report of first half net profits rising 40.93 pct year-on-year. Analysts said the profit had been anticipated and its share price had already reflected this factor.

The Shanghai A-share Index rose 70.82 points to 4,855.21, and the Shenzhen A-share Index was up 22.61 points at 1,406.86.

The FTSE/Xinhua China A 50 Index was up 397.97 points at 18,072.06. The FTSE/Xinhua China A 200 Index was up 285.20 points to 13,614.86 and the FTSE/Xinhua China A 600 Index up 228.97 points at 11,628.83.

(1 usd = 7.57 yuan)

lilian.wu@xfn.com

xfnlw/xfnwk

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AXA closes German fund to new investors on subprime credit market woes – report

0

FRANKFURT (Thomson Financial) – AXA SA’s unit AXA Investment Managers on July 23 closed a 680 mln eur money market fund to new investors after its value slumped 13 pct in one day, Wirtschafts Woche reported, without saying where it got the information.Some 41 pct of the fund was invested in sub-prime loans, it said.AXA has decided to offer to buy back shares in the AXA IM US Libor Plus fund, which was offered to investors in Germany, at above market prices to stop a decline in liquidity as investors pulled their money out of the fund, it said.This is the second fund to be closed in Germany. Union Investment also closed a fund on July 23 due to the sub-prime loan sector crisis, the magazine said.maria.sheahan@thomson.commas/bsdCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

Microsoft takes on software pirates as it cuts price of Vista in China – report

0

BEIJING (Thomson Financial) – Microsoft Corp has cut by more than half the price of its Windows Vista operating system in China as the group seeks to attract buyers away from illegal copies of the software, the Wall Street Journal reported.

The newspaper said Microsoft cut the retail price for its basic version of the software by two-thirds to 499 yuan and the premium package by half to 899 yuan.

The Wall Street Journal said a study by research firm International Data Corp estimated that 82 pct of software used in China in 2006 was pirated.

tf.TFN-Europe_newsdesk@thomson.com
wj

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

Disney acquires Club Penguin for $350M

0

NEW YORK (AP) – Club Penguin, an online hangout that has quickly become a rage among preteens despite limited marketing and advertising efforts, has been purchased by the Walt Disney Co. for at least $350 million, the companies announced Wednesday.
Payments could double to as much as $700 million if profits grow, Disney Chief Financial Officer Thomas O. Staggs said.
The acquisition by Disney gives Club Penguin more resources with which to grow. According to comScore Media Metrix, the site nearly tripled in usage over the past year to 4.7 million unique U.S. visitors in June. Executives hope to expand to additional markets abroad and gain even more customers through promotions on Disney-branded sites.
‘We have been actively searching for an organization that not only shares our values and concerns for children, but also has the ability and desire to help us bring Club Penguin to more children throughout the world,’ said Club Penguin co-founder Lane Merrifield said in a statement. ‘We have found that partner in Disney.’
Club Penguin, from Canada’s New Horizon Interactive Ltd., offers a mix of games and chatting tools targeting the kids ages 6-14, who appear onscreen as plump cartoon penguins.
Kids win gold coins by playing games such as sled racing and, with a paid membership costing about $5 a month, buy virtual items like clothing for their penguins and furniture for their online persona’s igloos. Kids can attend parties and make friends by adding other penguins to their buddy lists.
Although sites like Club Penguin and its rival, Webkinz, are forcing parents to grapple with how young kids should be roaming about and chatting with friends online, many Internet safety experts believe these social-networking precursors are far safer than News Corp.’s MySpace, Facebook and other hangouts for older users.
Parents, for instance, can choose an ‘ultimate safe’ mode, meaning chat messages sent and received are limited to prewritten phrases, such as ‘How are you today?’
In the standard mode, kids can type messages freely, but filters look for foul language and even innocent-sounding words such as ‘mom’ — to prevent someone from asking, ‘Is your mom home?’
‘Club Penguin embodies principles that are of the utmost importance to Disney — providing high-quality family entertainment and fostering parental trust,’ Bob Iger, Disney’s president and chief executive, said in a statement. ‘The founders have woven together new technologies and creativity to build an incredibly compelling, immersive entertainment experience for kids and families.’
Other than renaming the service ‘Disney’s Club Penguin,’ Disney said it has no immediate plans to change Club Penguin’s operations, which will continue to run from Kelowna, Canada.
‘Club Penguin is going to continue to exist as is,’ Iger said during the company’s conference call to report quarterly earnings. ‘The experience will not change at all. We don’t intend to get in the way of that or do anything that would in any way have a negative impact on their business.’
Iger said Disney planned to integrate Club Penguin into other Disney businesses, promoting it on the Disney.com site and the Disney Channel, Radio Disney and the company’s theme parks.
Disney already operates the virtual game ‘Toontown’ and is developing a similar virtual world around its ‘Pirates of the Caribbean’ characters. Iger hinted that Disney also was working on a virtual world based on ‘Cars,’ an animated movie created by Disney-owned Pixar.
Iger said the acquisition of Club Penguin would give Disney the expertise to grow those properties more quickly.
Club Penguin says it has more than 700,000 paying subscribers and 12 million registered users, mostly in the United States and Canada.
Associated Press Business Writer Gary Gentile contributed to this report from Los Angeles.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Cigar tax proposal threatens US retailers, Latin American countries

0

 

WASHINGTON (Thomson Financial) – US specialty tobacco shops are worried that a proposed increase in federal taxes on cigars will drive thousands of small retailers out of business, and could also lead to substantial job losses in Latin American countries that produce and export most cigars sold in the US.

At issue is a bill approved last week by the House tax writing committee that would dramatically increase taxes on cigars, cigarettes and other tobacco products in order to pay for increased funding for a nation-wide children’s health insurance program.

The House Ways and Means Committee approved a bill Thursday that would more than double taxes on large cigars, most of which are premium cigars, to 44.6 pct, up from the current level of 20.7 pct.

The House bill was approved in committee a week after the Senate indicated it could support a 53 pct tax on large cigars.

Chris McCalla, legislative director for the Retail Tobacco Dealers of America, said the taxes being considered could force premium cigar prices in the US to double or even triple, since the tax would apply every time a cigar changes hands at the import, distribution and retail levels. As one example, he said a 4 usd cigar could cost as much as 12 usd under the new tax.

McCalla said the tax would likely drive a large percentage of the 3,600 specialty tobacco retailers in the US out of business, since he does not expect consumers to pay this steep price.

‘If this happens, expect a great number of these family-owned cigar shops to close,’ he said of the legislation. McCalla’s group includes about 2,000 small retailers as members.

Another potential problem is that the Senate bill would require the new tax to be assessed immediately on all cigar inventories maintained by tobacco shops once the law takes effect, leading to a huge one-time charge that could prompt some stores to close before taking the tax hit.

Internationally, industry sources said they expect a shrinking number of US tobacco retail outlets to lead to reduced US imports of cigars from Latin American countries.

‘This would have a devastating impact on Nicaragua, Honduras and the Dominican Republic, which have tens of thousands of people working in the tobacco industry,’ said Norman Sharp, president of the Cigar Association of America.

Ironically, Ways and Means Committee Chairman Charles Rangel of New York supports the bill, even though he has previously championed efforts to ensure Latin American countries have fair access to the US market. Rangel indicated last week that he was reluctant to support the tax hike, but the bill was approved by his committee nevertheless.

‘I have a history of opposition to excise taxes, but in light of the heavy financial weight smokers place on Medicare expenditures and the overwhelming proof linking the increase in cost of tobacco products with a decrease in youngsters buying cigarettes, I am very pleased to have worked with my colleagues on the bill we are reviewing today,’ he said.

The House bill as approved would also more than double taxes on cigarettes and other products like chewing tobacco. Taxes on cigarettes would account for most of the revenues generated by the tobacco tax hike.

Cigarette producer RJ Reynolds has already publicly called on Congress to reject a tax hike on cigarettes, while other companies such as Philip Morris USA and Loews Corporation are also known to oppose the tax hike. One industry source said it is widely expected that a tax increase on tobacco would reduce consumption of cigarettes in the US.

‘Between federal, state, and local taxes and tobacco settlement payments, government entities raked in more than 33 bln usd from smokers in 2006,’ according to a notice on RJ Reynolds’ website. ‘Why should 20 pct of the adult population be forced to pay even more?’

pete.kasperowicz@thomson.com

pik/wash/cm2

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

Labor undeterred by Drummond verdict

0

BIRMINGHAM, Ala. (AP) – After more than a decade of trying to use an archaic law to punish U.S. corporations for alleged wrongdoing overseas, organized labor lost the first such case ever to go before a jury.

But union attorneys say they won’t be deterred by the outcome of the case against Drummond Ltd., and lawyers for both labor and corporate interests say rulings on appeals stemming from the trial may be more important in the long run than the verdict itself.

A jury on Thursday rejected claims that Alabama-based Drummond coal was to blame for the killing of three union leaders in Colombia in 2001. Families of the dead men and their union alleged the company was behind the gunshot killings by paramilitary forces.

Jurors sided with Alabama-based Drummond, which denied any involvement with the killings or with militia forces.
The case was the first one against a U.S. corporation to make it to trial under the Alien Torts Claims Act, which lets foreigners file suit in U.S. courts for alleged wrongdoing overseas.

An attorney involved in another suit said the Drummond case showed the ‘serious problems’ created by using U.S. courts to review conduct in foreign countries.

‘Hopefully this outcome will cause others to realize it’s not enough to make wild, unsubstantiated allegations and hope juries will be swayed,’ said Robert A. Mittelstaedt of Jones Day in San Francisco.

Mittelstaedt’s firm represents Chevron Corp., which is being sued over alleged abuses in Nigeria.

Here, the plaintiffs attorney, Terry Collingsworth, promised an appeal of the Drummond verdict. He said he disagreed that the jury decision would endanger other, similar cases filed under the more than 200-year-old law.

‘The facts in this case were the facts,’ said Collingsworth. ‘But it doesn’t affect any other case because the law is still letting them go forward.’

Collingsworth is executive director of the International Labor Rights Fund, which represented families and the union of the dead men in the case against Drummond.

Drummond attorney Bill Jeffress said the jury’s decision showed the folly of groups trying to use the law to pursue U.S. multinationals and ‘might discourage overuse of this statute.’

Eventual appellate rulings from the Drummond case will likely help determine the course of future cases under law, according to Jeffress and Collingsworth.

The law was originally passed in 1789 as a way to combat piracy.

For the families to win in the Drummond case, a judge told jurors they had to believe Drummond committed a war crime in Colombia by knowingly assisting gunmen who shot the union leaders to death in 2001.

The panel rejected the claim, ruling that neither Drummond nor its Colombian president were liable for the slayings.

XX:SU:APNNTP#SN:v1884#XX:40967.0#HS:route_0_2007-7-27_19:38:57_5_207#DU:aplooked#XN:##XP:fiplan1.afxnews.com
~

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

 

Hungary officials raid Microsoft office

0

BUDAPEST, Hungary (AP) – Hungary’s state Competition Authority raided the offices of Microsoft Corp.’s local subsidiary as part of a probe into the company’s relationship with large software distributors.

The unannounced raid took place July 19 at the offices of Microsoft Magyarorszag Kft., according to a notice posted on the authority’s Web site.

According to the statement, Microsoft used sales conditions and offered software distributors incentives — described as ‘loyalty discounts’ — so they wouldn’t offer clients anything but Microsoft Office products.

Such behavior could lead to the exclusion of competitive products from the market and violate European Union rules, according to the authority known as the GVH.

‘During the raid, the GVH gathered evidence supporting these suspicions,’ the authority said, adding that the probe did not mean Microsoft had broken the law.

Microsoft spokesman Guy Esnouf said the software company was cooperating with Hungarian authorities.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

New group lobbies against Internet fraud

WASHINGTON (AP) – Well-known companies such as Dell Inc., Yahoo Inc. and Marriott International Inc. are lobbying Congress for tougher laws targeting online scammers who profit from their brand names.United as the Coalition Against Domain Name Abuse, 10 companies have hired the law firm Alston and Bird LLP to persuade federal lawmakers of the need to crack down against those who claim Web addresses, or domain names, that include — or even resemble — a legitimate company’s trademark.The coalition estimates that so-called cybersquatting costs companies worldwide more than $1 billion annually in diverted customer sales and enforcement expenses.In the past, Internet speculators claimed famous-sounding or popular domain names in the hopes of selling them to corporations for thousands or millions of dollars. They also purchased Web domain names that sounded like a popular company as a way to quickly generate traffic and sell online advertising.But the coalition says scammers increasingly employ cybersquatting to sell counterfeit goods, secretly install malicious software on computers or dupe customers into providing personal data through, hurting both companies and their customers.Cybersquatting enables ‘phishing’ scams, said Paul Martino, a former counsel to the Senate Commerce Committee from 2001 to 2005 on Internet issues and now a lobbyist for the coalition.Phishers attempt to lure Internet users via e-mails to counterfeit Web sites disguised as trusted companies in order to get sensitive data, such as credit cards.’The bigger the brand name, the more lucrative it is to cybersquat the brand,’ Martino said.Both the Federal Trade Commission and the FBI’s cyber division said that under existing laws cybersquatting, in and of itself, is not necessarily a crime.’If the intent of the (Web) site is to defraud or to commit some other illegal act, then it’s a crime and we can possibly step in,’ FBI spokeswoman Cathy Milhoan said.Dell says it sees 500 new infringements of its brand name each month. Citing a report by MarkMonitor, a brand-protection firm, the group said cybersquatting grew by 248 percent in the past year.Fighting cybersquatting has become more difficult, companies said.Many scammers now use automated technology to buy a domain name, test its profitability and then drop it for a refund within an accepted 5-day grace period, tactics referred to as ‘tasting’ and ‘kiting.’About 2 million domain names daily are tasted and kited this way by exploiting the grace period, originally designed to rectify legitimate mistakes such as mistyping a domain name.Susan Crane, Wyndham Worldwide Corp.’s group vice president of intellectual property, said this makes it almost impossible to find the true identities of cybersquatters, who also provide false information on registration forms.’You can never catch who has it because the ball keeps bouncing around,’ she said.However, a fear among domain name holders who use their sites for legitimate purposes is that deep-pocketed corporations could unfairly target them as cybersquatters and try to take away their Web addresses.Josh Bourne, the coalition’s president, said a 1999 federal consumer protection law against cybersquatting isn’t deterring the practice and civil penalties — which now range from $1,000 to $100,000 — aren’t enough, he added.He said the 5-day grace period should also be eliminated, which would require the Internet Corporation for Assigned Names and Numbers, the Internet’s key oversight agency, to change its policy. The group will also seek an international treaty on cybersquatting..Bourne would not divulge the group’s budget or how much they plan spend lobbying, but said: ‘Money isn’t an issue.’In addition to Martino, the firm’s other registered lobbyists include Naotaka Matsukata, who was director of policy planning for former U.S. Trade Representative Robert Zoellick and Eric Shimp, who handled trade and investment issues also at the U.S. Trade Representative’s office.The coalition’s members also include: Verizon Communications Inc., Hilton Hotels Corp., American International Group Inc., HSBC Holdings Plc., Eli Lilly & Co. and Swiss-based Compagnie Financiere Richemont SA, which makes Cartier jewelry.–Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Synthes has setback in FDA panel backing of Medtronic spinal disk – report

0

ZURICH (Thomson Financial) – Synthes Inc has had a small setback in the US after a Food and Drug Administration advisory panel recommended approval for Medtronic Inc’s Bryan Disk, a product competing with Synthes’s ProDisc, said a report in Swiss bi-weekly Finanz und Wirtschaft.
The Bryan Disk, a polyurethane and titanium implant to replace worn-out spinal disks, could be on the market by the beginning of 2008, said the report.
Medtronic is expected to see sales of around 200 mln usd by 2010, the report added.
On Monday, Medtronic won FDA approval for Prestige, a steel version of the disk.
Medtronic now has a headstart on Synthes, as FDA approval for Synthes’ Prodisc is not expected before the end of 2007 or beginning of 2008.
sarah.fenwick@thomson.com
ckj/hjp
COPYRIGHT
Copyright AFX News Limited 2007. All rights reserved.
The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

  • bitcoinBitcoin (BTC) $ 99,570.00 1.23%
  • ethereumEthereum (ETH) $ 3,673.09 1.06%
  • xrpXRP (XRP) $ 2.41 0.33%
  • tetherTether (USDT) $ 1.00 0.04%
  • bnbBNB (BNB) $ 714.11 0.4%
  • solanaSolana (SOL) $ 214.63 0.93%
  • usd-coinUSDC (USDC) $ 1.00 0.04%
  • cardanoCardano (ADA) $ 1.08 0.92%
  • staked-etherLido Staked Ether (STETH) $ 3,670.98 1.04%
  • tronTRON (TRX) $ 0.264893 0.14%
  • avalanche-2Avalanche (AVAX) $ 43.67 3.31%
  • the-open-networkToncoin (TON) $ 5.71 0.32%