November 2009

Video: Redeker Says Dubai Fallout May Hit U.K. Property, Pound

November 27, 2009

Nov. 27 (Bloomberg) — Hans-Guenter Redeker, head of global currency strategy at BNP Paribas SA, talks with Bloomberg’s Mark Barton about the impact of Dubai’s proposal to delay debt repayments on the pound and the U.K. commercial property market.

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Video: Redeker Says Dubai Fallout May Hit U.K. Property, Pound

November 27, 2009

Nov. 27 (Bloomberg) — Hans-Guenter Redeker, head of global currency strategy at BNP Paribas SA, talks with Bloomberg’s Mark Barton about the impact of Dubai’s proposal to delay debt repayments on the pound and the U.K. commercial property market.

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CalPERS Considers Showing Blackrock The Door

November 26, 2009

The WSJ is reporting that CalPERS is considering dropping Blackrock as an investment advisor to the pension fund after a disastrous year. Amongst the investments Blackrock steered CalPERS into was the Stuyvesant Town/Peter Cooper Village deal in NY Here is the original:  CalPERS Considers Showing Blackrock The Door

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Murray Asks `What’s Going On?’ as ATP Finals Campaign Ends in Confusion

November 26, 2009
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NFL History Being Made With 35% Chance Colts, Saints to Start Season 11-0

November 26, 2009
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Palm Pixi Price War Means Teen-Tech Gift Grab: Rich Jaroslovsky

November 26, 2009
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Google, EBay Wanted as Prisoners of Privacy Wars: Ann Woolner

November 26, 2009
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Diabetics in U.S. May Double in 25 Years Tripling Health Cost, Report Says

November 26, 2009
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Beijing Auto, Merbanco, Renco Said to Make Approaches About GM’s Saab Unit

November 26, 2009

By Serena Saitto, Ola Kinnander and Jeff Green Nov. 27 (Bloomberg) — Beijing Automotive Industry Holding Co., Merbanco Inc. and Renco Group Inc. have made approaches about General Motors Co. ’s Saab unit after a sale to Koenigsegg Group collapsed, two people familiar with the situation said. No written proposals have been submitted and any new bids or other options for the Swedish unit will be reviewed by Detroit-based GM’s board at a meeting on Dec. 1, said one of the people, who asked not to be identified because the discussions are confidential. Koenigsegg said Nov. 24 it pulled out of talks to acquire Saab, saying it ran out of time to complete the transaction. Beijing Automotive was a partner in the investor group. While GM directors might opt to keep Saab, as they did with the Opel division this month, GM has a contingency plan that calls for winding down the brand, people familiar with the plan have said. “Saab’s future is uncertain,” said Koji Endo , managing director of Advanced Research Japan, a Tokyo-based equity research company. “It may remain if there are buyers or some kind of support from governments, or if GM keeps it. Otherwise, the brand will disappear.” Beijing Automotive said Nov. 25 it will “cautiously” reconsider plans to buy a stake in the unprofitable Swedish carmaker. A Beijing Auto spokesman couldn’t be reached for comment. Saab’s Survival Merbanco is a Wyoming-based investor group. President Christopher Johnston said in an interview yesterday that Merbanco would be willing to help Saab. When asked whether that could include acquiring a majority stake in the carmaker, he said: “that could be one way.” “I do not believe that the company should be closed,” Johnston said. “Whoever buys Saab, or if GM keeps Saab, there’s a lot of work ahead but I believe that the company should survive.” Renco spokesman John Dillard didn’t return a phone call. Chris Preuss , a GM spokesman, and Saab’s Eric Geers declined to comment. Koenigsegg’s pullout thrusts Saab in jeopardy again after the automaker sought protection from creditors in February following a decision by GM to cut it off by year-end. Saab, which exited reorganization in August, had expected the sale to be completed by the end of this month, allowing fresh funds to finance a ramp-up of production of older models and start production of new car types. Chinese Automakers The collapse marked another setback for Chinese automakers’ attempts to expand overseas by purchasing established brands. Beijing Auto was rebuffed by GM in July when it bid for GM’s Ruesselsheim, Germany-based Opel unit. SAIC Motor Corp., China’s biggest domestic automaker, bought control of South Korea’s Ssangyong Motor Co., only to have the unit go into receivership after sales plunged. Saab is retooling its Trollhaettan, Sweden plant to begin production of the 9-5 sedan, the company’s first new model in seven years, by the end of this year. The carmaker reported a 59 percent slump in European sales and a 62 percent drop in the U.S. in the first 10 months of 2009. The Swedish government has ruled out taking over Saab to keep the company and its suppliers afloat. Saab’s survival hinges on a new private buyer, Joeran Haegglund , state secretary at the Industry Ministry, said Nov. 24. Merbanco was among suitors that lost the bidding in June to Koenigsegg, a person familiar with the process said at the time. Renco, owned by billionaire Ira Rennert , had also expressed interest. Saab traces its roots to aircraft company Svenska Aeroplan AB, founded in 1937 to secure production of Swedish warplanes. The first car left the factory a decade later. GM bought half of Saab in 1990 and took full ownership a decade later. To contact the reporters on this story: Ola Kinnander in Stockholm at okinnander@bloomberg.net ; Serena Saitto in New York at ssaitto@bloomberg.net ; Jeff Green in Southfield, Michigan, at Jgreen16@bloomberg.net

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Treasuries Jump on Demand for Safer Assets After Dubai Asks to Delay Debt

November 26, 2009

By Theresa Barraclough Nov. 27 (Bloomberg) — Treasuries rose the most in almost two weeks after a Dubai proposal to delay debt payments set off a slide in stocks and higher-yielding assets worldwide. Ten-year Treasury yields fell to the lowest level in seven weeks as the yen strengthened to a 14-year high versus the dollar, boosting speculation the Bank of Japan will intervene in the currency markets. Treasuries headed for a third weekly gain as economists forecast the Federal Reserve will avoid raising interest rates until the third quarter of next year. U.S. markets were shut yesterday for the Thanksgiving holiday. “The Dubai issue has caused a flight-to-quality move, which is positive for Treasuries,” said Hiromasa Nakamura , a senior investor in Tokyo at Mizuho Asset Management Co., which oversees the equivalent of $21 billion and is part of Japan’s second-largest bank. “The Fed will keep low interest rates for a long time due to low inflation and the continuing credit crunch. That’s supportive for shorter-zone Treasury notes.” The yield on the benchmark 10-year note fell seven basis points, the most since Nov. 16, to 3.20 percent as of 1:50 p.m. in Tokyo, according to BGCantor Market Data. The 3.375 percent security due November 2019 rose 5/8, or $6.25 per $1,000 face amount, to 101 15/32. The yield earlier declined to 3.18 percent, the lowest level since Oct. 8. Dubai World, the government investment company burdened by $59 billion of liabilities, will ask all creditors for a “standstill” agreement as it negotiates to extend debt maturities, Dubai’s Department of Finance said yesterday in an e-mailed statement. Stocks Slide Europe’s Dow Jones Stoxx dropped 3.3 percent yesterday and the MSCI World Index slumped 1.4 percent, the largest decline in a week. Credit-default swaps tied to debt sold by Dubai rose to 541 basis points yesterday from 313 points at the end of last week, according to CMA DataVision, indicating costs rose to insure against a default. The MSCI Asia Pacific index slid 2.3 percent today. Japan’s currency rose as high as 84.83 per dollar today, the strongest since July 1995, increasing concern the nation’s monetary authorities will intervene to curb further appreciation of the currency. “People are scared and concerned about possible intervention,” said Yasutoshi Nagai , chief economist at Daiwa Securities SMBC Co. in Tokyo. The BOJ may sell the yen “and buy Treasuries, which will be a plus for Treasuries.” Yen Intervention Japan’s most recent intervention took place on March 16, 2004, when the central bank sold the yen. Finance Minister Hirohisa Fujii said on Nov. 26 the government needs to take action on “abnormal” currency movements and Prime Minister Yukio Hatoyama said the same day the yen’s appreciation was due to weakness in the dollar. Demand for Treasuries increased this week as Fed policy makers indicated the benchmark lending rate would remain near zero “for an extended period” as long as inflation expectations are stable and unemployment fails to decline. “Most members projected that over the next couple of years, the unemployment rate would remain quite elevated and the level of inflation would remain below rates consistent over the longer run with the Federal Reserve’s objectives,” according to minutes of the Fed’s November meeting released Nov. 24. The difference between rates on 10-year notes and Treasury Inflation Protected Securities, or TIPS, which reflects the outlook among traders for consumer prices, narrowed to 2.14 percentage points, from 2.19 percentage points last week. Real Yield Ten-year notes have a real yield, or what investors get after accounting for costs in the economy, of 3.4 percent, compared with the five-year average of 1.51 percent. The difference between two- and 10-year rates, known as the yield curve, was at 2.54 percentage points today from 2.53 percentage points yesterday, according to data compiled by Bloomberg. Two-year year yields tend to follow what the Fed does with interest rates, while those on longer-maturity securities are more influenced by the outlook for inflation. Treasuries of all maturities have gained 1 percent so far in November, according to indexes compiled by Merrill Lynch & Co. The securities have handed investors a loss of 1.5 percent this year. They are heading for the first decline since 1999 as President Barack Obama borrows record amounts to fund spending programs and service deficits. U.S. marketable debt totaled $6.95 trillion in October, after climbing to a record $7.01 trillion in September. “People are concerned about debt supply and the budget deficit, which has put a huge amount of pressure on the Obama administration,” said Hideo Shimomura , who helps oversee the equivalent of about $55.4 billion in Tokyo as chief fund investor at Mitsubishi UFJ Asset Management Co., a unit of the nation’s largest bank. As a result “there’s little room for extra budget, which limits the issuance” going forward, he said. Ten-year yields are likely to fall toward 3 percent by year-end, Shimomura said. Should his predictions prove accurate, investors who buy today would make a return of 2 percent, calculations by Bloomberg show. To contact the reporter on this story: Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net .

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Mobius Says Dubai Debt Concern May Trigger Emerging-Markets `Correction’

November 26, 2009

By Reinie Booysen Nov. 27 (Bloomberg) — Templeton Asset Management’s Mark Mobius said “we should be ready” for a correction and this “may be the trigger” for markets to “pull back.” Mobius was speaking by telephone from Hanoi, on Bloomberg Television.

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Fujii Says Japan May Contact U.S., Europe After Yen’s Jump to 14-Year High

November 26, 2009

By Toru Fujioka Nov. 27 (Bloomberg) — Japanese Finance Minister Hirohisa Fujii said he may contact the U.S. and Europe to act on currencies, signaling his growing concern that the yen’s rise to a 14-year high will hamper the economic recovery. “I will establish contact if necessary,” Fujii told reporters in Tokyo today, when asked whether the government has raised the issue of taking action in currency markets. When asked if the Group of Seven nations will consider issuing a statement, Fujii said, “We will do what is necessary.” Japan may be closer to selling yen in foreign-exchange markets for the first time in five years as the currency’s gain threatens to erode exporters’ profits and deepen deflation in the wake of the country’s worst postwar recession. Renewed concern about the strength of the global recovery is enhancing the allure of the yen as a refuge. “At a time when the recovery is expected to be gradual, an appreciating yen is of extreme concern,” said Yoshiki Shinke , a senior economist at Dai-Ichi Life Research Institute in Tokyo. “I think the government will take some kind of action.” The yen rose to 86.05 per dollar at 11:03 a.m. in Tokyo, after climbing to 84.83, the highest since July 1995. The Nikkei 225 Stock Average slid 1.8 percent to a four-month low. Take Action Since yesterday, Fujii has said at least three times that the government may take “action” on any “abnormal” currency movements, language officials have used to try to curb the yen’s advance. “I’m very nervously watching” foreign-exchange markets, he said today. Prime Minister Yukio Hatoyama said yesterday that currency movements were “due to a decline in the dollar rather than strength in yen.” The U.S. Dollar Index’s 7.8 percent decline against a basket of currencies this year reflects speculation the U.S. Federal Reserve will keep interest rates near zero. Manufacturers are contemplating shifting operations abroad because the yen’s gains make it costlier to run factories at home. A stronger yen would be a “huge risk” to producing autos in Japan, Nissan Motor Co. Chief Operating Officer Toshiyuki Shiga said this month. “There’s no mistake the harm is much greater” than the benefits, Fujii said, when asked about the strong yen. Those comments contrast with when he came into office in September saying a stronger currency can be good for an economy because it enhances the wealth of consumers. ‘Very Severe’ The yen at 85 “is a very severe level,” said Shinke at Dai-Ichi Life. “Few companies set their expected foreign exchange rate at 85. Profits will be squeezed” and export volumes will be affected in coming months, he said. The currency’s 8.6 percent advance over the past three months has also added to Japan’s deflationary pressure by driving import costs lower. Consumer prices excluding fresh food slid 2.2 percent in October from a year earlier, close to a record 2.4 percent decline in August, the statistics bureau said today. Financial Services Minister Shizuka Kamei today urged an international response to halt the currency’s gain. G-7 nations haven’t intervened together in currency markets since September 2000, when they bought euro to strengthen that currency. The last time the group bought dollars was in 1995. Japanese authorities haven’t stepped into the currency market since the first three months of 2004, when they sold a record 14.8 trillion yen ($172 billion). Last October, when the yen was close to a 13-year high against the dollar, the G-7 issued an unscheduled statement expressing concern about the yen’s “excessive volatility” at Japan’s request. “We continue to monitor markets closely, and cooperate as appropriate,” the statement said on Oct. 27, after the yen rose 14 percent against the dollar that month. To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

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Yen Strengthens to 14-Year High, Prompting Speculation Japan to Intervene

November 26, 2009

By Yasuhiko Seki Nov. 27 (Bloomberg) — The yen strengthened to a 14-year high against the dollar, climbing past 85 to the greenback and prompting speculation Japan will intervene in markets to preserve the nation’s export-led economic recovery. Japan’s currency pared some of its advance after Finance Minister Hirohisa Fujii told reporters in Tokyo he will contact officials in the U.S. and Europe about exchange rates if needed. The yen and dollar rose against all their main counterparts after a Dubai proposal to delay debt payments sparked investor flight from riskier assets. “The cross currencies look like they nearly collapsed today as the Dubai issue revived fears over credit woes,” said Daisaku Ueno , chief currency analyst at Gaitame.Com Research Institute Ltd., a unit of Japan’s largest currency margin company. “The yen was bought against everything as people rushed to unwind positions on higher-yielding currencies.” The yen climbed as high as 84.83 per dollar, the strongest since July 1995, before trading at 86.27 as of 1:30 p.m. in Tokyo from 86.59 yesterday in New York. The currency advanced to 128.75 per euro from 130.03, after reaching 126.91, the highest since April 29. The euro fell to $1.4922 from $1.5019. New Zealand’s currency slid as much as 3.3 percent to 59.91 yen, the lowest since July 16, and has dropped 6 percent this month. The so-called kiwi dollar weakened to 71.06 U.S. cents from 71.54 cents yesterday, trading near an eight-week low. The greenback headed for the worst month since December against the yen before a report next week that economists said will show U.S. business activity declined, supporting the case for the Federal Reserve to keep borrowing costs near zero. Factory Index The Institute for Supply Management-Chicago Inc.’s business barometer declined to 53 in November from 54.2 the previous month, according to a Bloomberg News survey of economists before the Institute releases the survey on Nov. 30. Adding to signs that the recovery is losing traction, the Institute for Supply Management’s factory index fell to 54.8 in November from 55.7 in October, according to a separate Bloomberg News survey before the data is released next week. Futures contracts on the Chicago Board of Trade showed yesterday a 30 percent chance the Fed will raise interest rates by June, down from 67 percent odds a month ago. Three-month yen London interbank offered rates, or Libor, stood at 0.296 percent yesterday, higher than the 0.254 percent rate for dollar loans, according to British Bankers’ Association data. Dollar loans became cheaper than those in yen in August. ‘Benign Neglect’ “Unless the U.S. drops its benign-neglect policy on the weakness of the dollar and until its interest-rate outlook improves, the yen will remain hostage to appreciation risk,” said Koichi Kurose , chief strategist in Tokyo at Resona Bank Ltd. Fed officials said in minutes of their Nov. 3-4 meeting released on Nov. 24 that the dollar’s decline has been “orderly” and that they would watch for any signs that the depreciation is pushing up people’s expectations for inflation. Shizuka Kamei , Japan’s financial services minister, today urged for an international response to halt the yen’s rise, while Trade Minister Masayuki Naoshima said the stronger currency “is threatening the competitiveness of Japanese exporters.” Fujio Mitarai , head of Japan’s biggest business lobby and chief executive officer of Canon Inc., said Japan needs “urgent steps to counter this critical situation.” hamper the economic recovery. Fujii said today he would “establish contact if necessary” with U.S. and European officials in regard to possible intervention. ‘Stronger Warning’ “The market showed some respect to a stronger warning from the government today and bought back the dollar,” said Takashi Kudo , director of foreign-exchange sales in Tokyo at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp. “The impact of verbal intervention will not last so long unless the government takes actual action.” Japan hasn’t sold its currency since March 16, 2004, when it traded around 109 per dollar. The Bank of Japan sold 14.8 trillion yen ($172 billion) in the first three months of 2004, after record sales of 20.4 trillion yen in 2003. Japan last bought the currency in 1998, purchasing 3.05 trillion yen as the rate fell as low as 147.66. “At a time when the recovery is expected to be gradual, an appreciating yen is of extreme concern,” said Yoshiki Shinke , a senior economist at Dai-Ichi Life Research Institute in Tokyo. “I think the government will take some kind of action.” Japan Iron & Steel Federation Chairman Shoji Muneoka yesterday called on the government to take action on the yen. The yen’s level was a “problem” for steel mills and their customers, Shoji Muneoka said. He is also the president of Tokyo-based Nippon Steel Corp., Japan’s largest mill. Stock Slide Japan’s Nikkei 225 Stock Average sank 2 percent today, on course for an 8.3 percent slide this month. The MSCI Asia Pacific of regional shares lost 2.3 percent. “The stability of the yen is indispensable to reinvigorating the stock market,” said Haruki Takahashi , general manager of equity dealing at Mitsubishi UFJ Securities Co. “Stock investors are now crying for a help. If the current situation continues, Kabuto-cho will become a ghost town.” Kabuto-cho is the region in the capital where the Tokyo Stock Exchange is located. 　The New Zealand dollar headed for the biggest monthly drop among the 16 most-traded currencies as global equities slid after Dubai’s attempt to reschedule debt. Dubai World, with $59 billion of liabilities, has sought a “standstill” agreement from creditors. “Coming into November month-end and then year-end, we are going to see more pressure on equity markets and the European banking sector is particularly vulnerable,” said Ray Attrill , global research director at Forecast Ltd. in Sydney. “Because the Aussie and kiwi have been the outperforming currencies on the way up, we’d expect them to suffer in this kind of mood.” To contact the reporters on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net ; Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net .

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Stocks Fall as Treasuries, Yen, Swaps Rise on Dubai Attempt to Delay Debt

November 26, 2009

By Shani Raja and Yasuhiko Seki Nov. 27 (Bloomberg) — Stocks dropped around the world, Treasuries jumped and credit default swaps climbed after Dubai’s attempt to reschedule its debt rattled investors. The dollar briefly fell below 85 yen, a 14-year low, before erasing its losses on speculation Japan will intervene. The MSCI Asia Pacific Index slid 2.3 percent to 114.86 as of 1:30 p.m. in Tokyo, the biggest drop since Aug. 17. Standard & Poor’s 500 Index futures dived 2.3 percent. Ten-year Treasury yields fell seven basis points to 3.20 percent, the lowest level in seven weeks. The yen climbed as high as 84.83 per dollar, the strongest since July 1995, before paring its advance to 86.46. Dubai World, the government investment company burdened by $59 billion of liabilities, sought to delay repayment on much of its debt. Japan’s Finance Minister Hirohisa Fujii said he may contact the U.S. and Europe to act on currencies, signaling his growing concern that the yen’s ascent will hurt the economy. “If Dubai has to default, that could start a wave of defaults in other areas,” Mark Mobius , Chairman of Templeton Asset Management Ltd. said in an interview on Bloomberg Television from Hanoi. “This may be the trigger to allow for the market to take a rest and pull back.” Banks were the biggest drag on the MSCI Asia Pacific Index today. HSBC Holdings Plc, Europe’s largest lender, tumbled 6.1 percent to HK$88.40, while Standard Chartered Plc sank 5.8 percent to HK$191.30. Goldman Sachs analysts led by Roy Ramos estimated potential credit losses at HSBC will be $611 million, and $177 million for Standard Chartered, according to a research report today. Exporters Slump Makers of electronics and cars contributed the most to the Topix index’s drop in Japan as the yen’s gain threatened to erode overseas earnings. Sony Corp., which makes the PlayStation 3 game machine, fell 3.6 percent to 2,285 yen. Honda Motor Co. , a carmaker that gets 47 percent of its sales in North America, lost 2.9 percent to 2,685 yen. Dubai concerns yesterday drove Europe’s Dow Jones Stoxx 600 Index down by 3.3 percent, the most since April 20. The MSCI World Index sank 0.5 percent today after yesterday’s 1.4 percent drop. The Morgan Stanley Emerging Markets Index , which has gained 67 percent this year, fell 1.8 percent, adding to a 2.1 percent drop yesterday. The U.S. markets were closed yesterday for the Thanksgiving holiday. Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world’s steepest property slump in the first global recession since World War II. Home prices fell 50 percent from their 2008 peak, according to Deutsche Bank AG. ‘Contagion Effect’ “People are worried about the contagion effect from Dubai,” said Nader Naeimi , a Sydney-based strategist at AMP Capital Investors, which holds $75 billion in assets. “Events like this bring back all the bad memories from the global financial crisis.” Shares of building companies fell on concern may lose revenue from Dubai. Obayashi Corp. fell 11 percent to 276 yen, while Kajima Corp. , Japan’s biggest listed construction company, slid 9 percent to 172 yen. The companies may lose “tens of billions of yen” should they fail to receive revenue from their projects, Hiroki Kawashima , an analyst at Daiwa Securities Group Inc., said in a Japanese-language report today. The MSCI Asia Pacific Index has climbed 63 percent from a more than five-year low on March 9 amid signs stimulus measures were reviving economies following the worst financial crisis since the Great Depression. Writedowns and losses stemming from the crisis have risen to more than $1.7 trillion since 2007, according to Bloomberg data. Intervention Risk Japan’s Fujii said Group of Seven nations “will do what is necessary.” Financial Services Minister Shizuka Kamei urged an international response to halt the currency’s gain. “People are scared and concerned about possible intervention,” said Yasutoshi Nagai , chief economist at Daiwa Securities SMBC Co. in Tokyo. The Bank of Japan may sell the yen “and buy Treasuries, which will be a plus for Treasuries.” Treasuries rose the most in almost two weeks and the yield on the benchmark 10-year note touched 3.18 percent, the lowest since Oct. 8. Yields on five-year Japanese government bonds sank to the lowest since 2005, while yields on 10-year Australian government bonds lost eight basis points. The yield on South Korea’s 4 percent bond due June 2012 fell 16 basis points to 4.07 percent. Dollar, Yen The yen and the dollar rose against all of the rest of the 17 most-active currencies as investors exited high-yielding assets. The Australian dollar fell 1 percent to 90.46 U.S. cents and the Korean won declined 1.2 percent to 1,169 per dollar. Commonwealth Bank of Australia recommended buying Australia’s currency on declines in a note released today, describing Dubai’s payment delay as a “storm in a teacup.” The United Arab Emirates, which is forecast to return to its long-term average current account surplus of 13.7 percent of gross domestic product, probably won’t let the investment company default, wrote Richard Grace , chief currency strategist in Sydney for the bank. “Dubai has prompted a wave of risk aversion globally,” said Mitul Kotecha , head of global foreign-exchange strategy at Calyon in Hong Kong. “This might prompt a short sell-off in the won but I think that’s what it will be. It’s not going to be a huge fallout because Asia looks more solid in terms of fundamentals.” Asia bond risk climbed today. The Markit iTraxx Japan index jumped as much as 23.5 basis points, according to Morgan Stanley. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan added 9 basis points to 126 basis points in Hong Kong, according to ICAP Plc. Crude oil dropped 2.7 percent to $75.87 a barrel in New York and is poised for a weekly decline. Gold for immediate delivery fell 0.2 percent to $1,186 an ounce. Copper in London gained 0.3 percent to $6,841 a metric ton after slumping 2.4 percent yesterday. To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net . Yasuhiko Seki in Tokyo at yseki5@bloomberg.net ;

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International banks assess Dubai loan exposure

November 26, 2009

Institutional Partners is the silent partner to commercial real estate companies, private equity firms, distressed debt companies, loan sale advisors, hedge funds and family offices. Institutional Partners provide companies with access …

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Help for homebuyers (Mankato Free Press)

November 26, 2009

Real estate pros in the area think the extension will help bolster home sales this winter.

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Daily Commercial

November 26, 2009

Real estate agents, among others, can serve as excellent sources of information on distressed sales comps, but have been hindered in their communication with appraisers. In the first meeting of the appraisal summit on Sept. …

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Greenspoon Marder Reveals 'Secret Weapon' in Attack on Distressed …

November 26, 2009

Finance); Greencrossing Real Estate Companies Re-Enters the Market for Distressed Properties (Marketwire via Yahoo! Finance); AllianceBernstein Builds a Presence in Commercial Real Estate (PR Newswire via Yahoo! Finance)

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Black Friday 2009: Will Consumers Show Up On Key Shopping Day?

November 26, 2009

2008 had the worst holiday shopping season in decades–will this year be any different? Retailers are hoping deep price cuts , social media specials , and early sales leaks will lure consumers in as the holiday shopping season kicks off. Analysts predict a heavy turn out despite the recession, in part because there’s less competition (45 retailers have gone under since last year’s shopping season) and in part because of the promise of big bargains. But with unemployment in double digits will people buy or browse? Market research firm IBISWorld predicts retail sales will rise 2.8 percent over this weekend to $42.9 billion, while others give much bleaker estimates saying retail sales may DIP 1%. While this weekend does not always predict accurately spending for the next month, a weak Black Friday is a bad omen. Even if consumers are on the hunt will lowered expectations from major retailers come back to bite them? Having failed to sell large parts of their supply last year some companies like J. Crew and the Gap have cut back between 10 and 20% on inventory , meaning popular items many not have a chance to become runaway successes. This hasn’t stopped retail giants from throwing open doors early with massive sales to lure consumers in starting as early as midnight, but it might affect the overall sales.

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Dubai’s Request For Debt ‘Standstill’ Shakes World Markets

November 26, 2009

DUBAI, United Arab Emirates — Just a year after the global downturn derailed Dubai’s explosive growth, the city is now so swamped in debt that it’s asking for a six-month reprieve on paying its bills – causing a drop on world markets Thursday and raising questions about Dubai’s reputation as a magnet for international investment. The fallout came swiftly and was felt globally after Wednesday statement that Dubai’s main development engine, Dubai World, would ask creditors for a “standstill” on paying back its $60 billion debt until at least May. The company’s real estate arm, Nakheel – whose projects include the palm-shaped island in the Gulf – shoulders the bulk of money due to banks, investment houses and outside development contractors. In total, the state-backed networks nicknamed Dubai Inc. are $80 billion in the red and the emirate needed a bailout earlier this year from its oil-rich neighbor Abu Dhabi, the capital of the United Arab Emirates. Markets took the news badly – with the Dubai woes and the continued fall of the U.S. dollar giving investors twin worries. Dubai’s move raised concerns about debt across the Gulf Region. Prices to insure debt from Abu Dhabi, Qatar, Saudi Arabia and Bahrain all rose by double-digit percentages Thursday, according to data from CMA DataVision. In Europe, the FTSE 100, Germany’s DAX and the CAC-40 in France opened sharply lower. Earlier in Asia, the Shanghai index sank 119.19 points, or 3.6 percent, in the biggest one-day fall since Aug. 31. Hong Kong’s Hang Seng shed 1.8 percent to 22,210.41. Wall Street was closed for the Thanksgiving holiday and most markets in the Middle East were silent because of a major Islamic feast. “Dubai’s standstill announcement … was vague and it remains difficult to discern whether the call for a standstill will be voluntary,” said a statement from the Eurasia Group, a Washington-based research group that assesses political and financial risk for foreign investors interested in Dubai. “If it is not, Dubai World will be going into default and that will have more serious negative repercussions for Dubai’s sovereign debt, Dubai World and market confidence in the UAE in general,” the statement added. Dubai became the Gulf’s biggest credit crunch victim a year ago. But its ruler, Sheik Mohammed bin Rashid Al-Maktoum, had continually dismissed concerns over the city-state’s liquidity and claims it overreached during the good times. When asked about the debt, he confidently assured reporters in a rare meeting two months ago that “we are all right” and “we are not worried,” leaving details of a recovery plan – if such a plan exists – to everyone’s guess. Then, earlier this month, he told Dubai’s critics to “shut up.” “He needs to produce a recovery plan that will be respected by those who want to do business with Dubai,” said Simon Henderson, a Gulf and energy specialist at the Washington Institute for Near East Policy. “If he does not do it right, Dubai will be a sad place.” After months of denial that the economic downturn even touched the glitzy city-state, the Dubai government earlier this year showed signs of trying to deal with the financial fallout that has halted dozens of projects and touched off an exodus of expatriate workers. In February, it raised $10 billion in a hastily arranged bond sale to the United Arab Emirates central bank, which is based in Abu Dhabi. The deal – seen by many as Abu Dhabi’s bailout of Dubai – was part of a $20 billion bond program to help Dubai meet its debt obligations. On Wednesday, the Dubai Finance Department announced the emirate raised another $5 billion by selling bonds – all taken by two banks controlled by Abu Dhabi. Abu Dhabi’s ruling Al Nahyan family has been more conservative with its spending, investing oil profits into infrastructure, culture and state institutions. During Dubai’s real estate bonanza, the Nahyans saw their flashy neighbor race ahead with development plans and tourism plans that had plenty of hype but few details on how they would be pulled off. Some did materialize. The more than 2,600-foot (800-meter) Burj Dubai is scheduled to open in January as the world’s tallest building. But many other projects, including a tower even taller than the Burj Dubai and satellite cities in the desert, are still just blueprints. The standstill will likely not immediately affect CityCenter, an $8.5 billion casino complex opening next month in Las Vegas that is half-owned by Dubai World. A Dubai World subsidiary and casino operator MGM Mirage agreed with banks in April to fully fund and finish the six-tower, 67-acre development of plush resorts, condominiums, a retail mall and one casino on the Las Vegas Strip. However, the standstill’s effect may be felt on the famous Keeneland thoroughbred horse auctions near Lexington, Ky., where Sheik Mohammed is a prominent bidder. Last week, Sheik Mohammed demoted several prominent members of Dubai’s corporate elite and replaced them with members of the ruling family, including his two sons, one of whom is Mohammed’s designated heir. Businessmen who fell out of favor were closely associated with Dubai’s phenomenal success. They include the head of Dubai World, Sultan Ahmed bin Sulayem, and Mohammed Alabbar, the chief of Emaar Properties, developer of the Burj Dubai and hundreds of other projects. “He is trying to shake things up,” said Christopher Davidson, a lecturer on the Gulf at Britain’s Durham University and an author of two books on the UAE. However, Davidson added, Mohammed’s decision to replace those who helped put Dubai on the world map with his relatives might be “read as an increase in autocracy which does not look good internationally.” Not everyone is upset at Dubai Inc.’s transformation into a family business, analysts say. Mohammed’s latest moves may have pleased Abu Dhabi more than the foreign investors, but it is Abu Dhabi that still has the strongest incentives to save Dubai from its financial misery. “By shifting the power base back to the family things are as they should be as far as Abu Dhabi is concerned,” said Mohammed Shakeel, a Dubai-based analyst for the Economist Intelligence Unit. After an expensive adventure in doing things the Western way, it’s “going back to basics” for Dubai, Shakeel added. ___ Associated Press writer Oskar Garcia in Las Vegas contributed to this report.

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Dubai World troubles threaten Palm Jumeirah project

November 26, 2009

Paul Waldie Globe and Mail Update L Mr. Hassan is a real estate agent who buys and sells properties on Palm Jumeirah, the man-made, palm-tree-shaped island where celebrities like David Beckham and Brad Pitt have bought luxury homes. When villas on the

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Del Potro Beats Federer to Edge Murray for Semifinal Berth at ATP Finals

November 26, 2009
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Cowboys Beat Raiders 24-7, Pakers Defeat Lions in NFL Thanksgiving Games

November 26, 2009
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Japan’s Unemployment Rate Unexpectedly Falls to a Six-Month Low of 5.1%

November 26, 2009
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Greenhouse-Gas Pledges by China, U.S. May Drive Climate Deal in Copenhagen

November 26, 2009

By Alex Morales

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Siemens Hearing-Aid Division Said to Draw Interest From KKR, BC Partners

November 26, 2009

By Aaron Kirchfeld Nov. 27 (Bloomberg) — Siemens AG’s hearing aid business, valued at as much as 3 billion euros ($4.5 billion), is drawing interest from private-equity firms including KKR & Co. L.P. and BC Partners Ltd., two people familiar with the matter said. Several financial investors have contacted the Munich-based company about buying the unit, said the people, who requested anonymity because the process isn’t public. Siemens has been in contact with investment banks about options, and hasn’t decided whether to sell the unit or conduct an initial public offering, though an exit from the business is likely, the people said. Siemens claims the No. 1 position in the global hearing aid market by units manufactured. It trails Sonova Holding AG of Switzerland and William Demant Holding A/S of Denmark by market share, according to Sonova. Siemens, Europe’s largest engineering company, is weighing a retreat from the industry to sharpen its focus on energy, transport and infrastructure, as well as on medical diagnostics tools, the people said. In addition to private-equity firms, makers of medical equipment may also be interested, the people said. Antitrust hurdles would bar Sonova and William Demant from a takeover, the people said. Siemens spokesman Constantin Birnstiel declined to comment, as did spokespeople for KKR and BC Partners in Germany. High Margins “Siemens hearing aids is attractive because the sector has relatively high margins and the business could be further improved by a new owner,” said Daniel Jelovcan , a Zurich-based health-care products analyst at Helvea AG. He estimates the unit could be valued at 2.5 billion euros to 3 billion euros, based on estimated sales of 680 million euros and peer valuation. Siemens, which also makes high-speed trains, power grids and medical scanners, doesn’t disclose sales for its hearing aids. The company has been making the products for more than 100 years , and the business is based in Erlangen in southern Germany, home to some of Siemens’s largest production sites. The unit may fetch 2 billion euros to 3 billion euros in a sale, the people said. The engineering company will likely pursue a so-called dual-track process of seeking a buyer while simultaneously preparing an IPO for 2010, the people said. The company followed a similar strategy with its VDO automotive division, which it sold to Continental AG for 11.4 billion euros in 2007 after simultaneously holding sales talks and preparing an IPO. Past Deals KKR has done deals with Siemens in the past. The private- equity firm run by Henry Kravis and George Roberts bought Wincor Nixdorf AG, a maker of bank machines, in 1999 from Siemens, as well as seven engineering units for 1.69 billion euros, including Demag Cranes AG, in 2002. Sonova Chief Executive Officer Valentin Chapero said on Nov. 14 it “wouldn’t be surprising” if Siemens sold its hearing-aid unit because it’s not “well adapted” to the rest of the German company’s business. The Swiss company has gained 87 percent so far this year, valuing Sonova at 7.77 billion Swiss francs ($7.74 billion). William Demant has a market value of 21.3 billion Danish kroner ($4.3 billion) after doubling in value in the last year. Other competitors include closely held Kind Hoergeraete, based in Hanover, Germany, and Fielmann AG , the German eyeframe manufacturer, which is branching out into hearing aids as an ageing population and ear damage caused by loud music increase the number of people with hearing disabilities. Hermann Requardt , the chief executive officer of Siemens’s health-care division, said on Sept. 29 at a meeting with analysts and investors that the hearing aids are “a very solid business and a strong contributor.” To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

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Asian Citrus Surges, Then Plunges, in Hong Kong Trading Debut `Travesty’

November 26, 2009

By Mark Lee Nov. 27 (Bloomberg) — Asian Citrus Holdings Ltd. jumped eightfold, then tumbled, on its first day of trading in Hong Kong after the city’s stock exchange published data that may have led investors to overvalue the shares. Hong Kong Exchanges & Clearing Ltd. halted trading of the stock “to maintain an orderly market,” spokesman Henry Law said by phone yesterday. Asian Citrus, China’s biggest orange plantation owner, said it wasn’t aware of reasons for the “volatility” in its shares, according to a regulatory filing to the exchange. Shareholder activist David Webb said trading information displayed by the Hong Kong exchange’s computers misled investors because the data failed to reflect a 10-for-1 split in Asian Citrus’s stock. The bourse made a “mistake” and should cancel yesterday’s transactions involving almost 12 million of the fruit producer’s shares, according to investor Brook McConnell . “It is a travesty,” said McConnell, the Hong Kong-based president of South Ocean Management Ltd., which owns Asian Citrus’s London-listed shares. “Somebody really messed up there. Nothing like this has happened.” Asian Citrus opened at HK$51.25 ($6.61) in Hong Kong yesterday, compared with the Nov. 25 closing price of 45.75 British pence (76 cents) for the London-traded shares. The stock in Hong Kong later fell to HK$19.94 when it was suspended at 11:57 a.m. local time, according to exchange data. Not Worth HK$50 Asian Citrus is “not a HK$50 stock,” South Ocean’s McConnell said. The company’s net tangible asset value per share was 37.3 yuan ($5.46) on June 30, according to its listing prospectus. By displaying this figure without noting the stock split, Hong Kong Exchange’s computers may have led investors to “think that their investment is backed by 10 times more assets than it really is,” Webb said. Asian Citrus’s prospectus, published on Nov. 23, included details about the stock split, which was completed earlier this month, the company said yesterday. It applied for its shares to resume trading in Hong Kong today. Hong Kong exchange didn’t make a mistake because its information was from Asian Citrus’s prospectus, with data as of June 30, Law said. The listing by introduction was managed by CLSA Ltd., whose spokeswoman, Mandy Ho, declined to comment. Asian Citrus is “ultimately responsible for the prospectus not being false or misleading,” Webb said. Still, the Hong Kong exchange and the Securities and Futures Commission , the city’s stock market regulator, “should have spotted the problem,” he said. To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

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Japanese Stocks Drop as Dollar Weakens Below 85 Yen, Commodities Decline

November 26, 2009

By Masaki Kondo and Satoshi Kawano Nov. 27 (Bloomberg) — Japanese stocks fell after commodity prices declined and the dollar depreciated to a 14-year low against the yen, dimming the overseas earnings prospects at exporters of cars and electronics. Inpex Corp. , Japan’s largest oil and gas explorer, sank 1.8 percent, and Mitsui Mining & Smelting Co. slid 3.2 percent. Toyota Motor Corp. lost 2.1 percent after the U.S. currency weakened below 85 yen. Shimizu Corp. was set to fall after Daiwa Securities Group Inc. said Japanese builders may fail to receive part of revenue from Dubai as the Middle Eastern nation’s state- owned company asked to postpone debt payments. “Commodity prices are seen as a barometer of investors’ appetite for risk,” said Juichi Wako , a senior strategist at Tokyo-based Nomura Holdings Inc. “Dubai’s debt problem ignited concern credit turmoil will break out again. People paid too much attention to foreign exchange yesterday and somehow neglected news about Dubai.” The Nikkei 225 Stock Average declined 1.4 percent to 9,256.69 as of 9:04 a.m. in Tokyo. The broader Topix index fell 1.1 percent to 820.11. This morning, Japan’s statistics bureau released its reports on the nation’s unemployment rate and consumer prices. Prices excluding fresh food fell 2.2 percent last month year-on- year, while the joblessness rate declined to 5.1 percent in October from 5.3 percent a month earlier. U.S. markets were closed yesterday for the Thanksgiving holiday. Europe’s Dow Jones Stoxx 600 Index dived 3.3 percent, the most since April 20, after Dubai World, the state-owned holding company, sought to delay debt payments. Dubai borrowed $80 billion in a four-year construction boom that reduced its reliance on falling oil supplies and created the region’s tourism and financial hub. The dollar depreciated to as low as 84.83 per yen today, the weakest since July 1995. A weaker dollar reduces the value of overseas sales at Japanese companies when repatriated. Crude oil for January delivery fell 1.7 percent to $76.23 a barrel in electronic trading in New York yesterday, while copper dropped 2.3 percent. Gold for immediate delivery declined 0.3 percent to $1,188.38 an ounce in London. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Satoshi Kawano in Tokyo skawano1@bloomberg.net .

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Treasuries Surge, Set for Third Weekly Gain, on Dubai Debt, Stock Slump

November 26, 2009

By Theresa Barraclough Nov. 27 (Bloomberg) — Treasuries rose, heading for a third weekly gain, after a Dubai proposal to delay debt payments set off a slide in stocks and riskier assets worldwide. Ten-year Treasury yields were near the lowest level in seven weeks as European stocks dropped the most in seven months. U.S. securities also headed for a monthly gain on increasing expectations the Federal Reserve will avoid raising interest rates until the third quarter of next year. U.S. markets were closed yesterday for the Thanksgiving holiday. “The Dubai issue has caused a flight to quality move, which is positive for Treasuries,” said Hiromasa Nakamura , a Tokyo-based senior investor at Mizuho Asset Management Co., which oversees the equivalent of $21 billion and is part of Japan’s No. 2 bank. “The Fed will keep low interest rates for a long time due to low inflation and the continuing credit crunch. That’s supportive for shorter-zone Treasury notes.” The yield on the benchmark 10-year note fell nine basis points to 3.18 percent as of 8:57 a.m. in Tokyo, according to Bloomberg data. The 3.375 percent security due November 2019 rose 25/32, or $7.81 per $1,000 face amount, to 101 21/32. The yield is at the lowest level since Oct. 8. Dubai World, the government investment company burdened by $59 billion of liabilities, will ask all creditors for a “standstill” agreement as it negotiates to extend maturities, Dubai’s Department of Finance said in an e-mailed statement. Europe’s Dow Jones Stoxx dropped 3.3 percent yesterday and the MSCI World Index slumped 1.4 percent, the largest decline in a week. Credit-default swaps tied to debt sold by Dubai rose to 541 basis points yesterday from 313 points at the end of last week, according to CMA DataVision. Fed Policy Demand for Treasuries increased this week as Fed policy makers indicated the benchmark lending rate would remain near zero “for an extended period” as long as inflation expectations are stable and unemployment fails to decline. “Most members projected that over the next couple of years, the unemployment rate would remain quite elevated and the level of inflation would remain below rates consistent over the longer run with the Federal Reserve’s objectives,” Fed November meeting minutes released this week said. The earliest policy makers will increase rates is in the third quarter of next year, according to a Bloomberg survey. The difference between two- and 10-year rates, known as the yield curve, fell to 2.53 percentage points from 2.64 percentage points at the end of last week, according to data compiled by Bloomberg. Two-year year yields tend to follow what the Fed does with interest rates, while rates on longer-maturity securities are more influenced by the outlook for inflation. To contact the reporter on this story: Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net .

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Fujii Says He’ll Contact U.S., Europe on Currencies If Needed as Yen Jumps

November 26, 2009

By Toru Fujioka Nov. 27 (Bloomberg) — Japanese Finance Minister Hirohisa Fujii said he will contact authorities in the U.S. and Europe about currencies if necessary. He was speaking to reporters in Tokyo today. To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

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Yen Strengthens to 14-Year High, Passes 85 Versus Dollar, on Risk Aversion

November 26, 2009

By Yasuhiko Seki and Bo Nielsen Nov. 27 (Bloomberg) — The yen rose to a 14-year high against the dollar on speculation renewed risk aversion will enhance the allure of the Japanese currency as a refuge. The greenback headed for the worst month since December against the yen before a report next week that economists say will show U.S. business activity declined, supporting the case for the Federal Reserve to keep borrowing costs near zero. New Zealand’s dollar dropped to a four-month low versus the yen as stocks fell after property developer Dubai World shook investor confidence with its proposal to delay debt payments. “Euphoria is waning,” said Kosei Fujita , a foreign- currency dealer in Tokyo at SBI Liquidity Markets Co., a unit of financier SBI Holdings Inc. “The yen is likely to be bought as a safe haven.” The yen climbed as high as 84.83 per dollar, the strongest since July 1995, before trading at 85.16 as of 8:57 a.m. in Tokyo from 86.59 yesterday in New York. Japan’s currency advanced to 126.91 per euro, the highest since July 8, from 130.03 yesterday. The euro was at $1.4969 from 1.5019. New Zealand’s currency declined to 60.36 yen, near the lowest since July 17, and has dropped nearly 7 percent this month. The so-called kiwi dollar bought 70.94 U.S. cents from 71.54 cents, near a three-week low. The Institute for Supply Management-Chicago Inc’s business barometer declined to 53 in November from 54.2 the previous month, according to a Bloomberg News survey of economists before the Institute releases the survey on Nov. 30. Factory Index Adding to signs that the recovery is losing traction, the Institute for Supply Management’s factory index fell to 54.8 in November from 55.7 in October, according to a separate Bloomberg News survey before the data is released next week. Futures contracts on the Chicago Board of Trade showed yesterday a 30 percent chance the Fed will raise interest rates by June, down from 67 percent odds a month ago. Three-month yen London interbank offered rates, or Libor, stood at 0.296 percent yesterday, higher than the 0.254 percent rate for dollar loans, according to British Bankers’ Association data. Dollar loans became cheaper than those in yen for the first time in August. European stocks fell the most in seven months yesterday and bonds jumped as Dubai’s attempt to reschedule debt rattled investors seeking higher returns in emerging markets. U.S. financial markets were closed yesterday for Thanksgiving. Dubai World, with $59 billion of liabilities, has sought a “standstill” agreement from creditors. Intervention The yen also rose on speculation Japanese monetary authorities will tolerate further appreciation of the currency. “As the situation is beginning to assume the tone of yen appreciation from dollar weakness, the government should consider taking action to stem the development which may worsen deflation,” said Norihiro Tsuruta , chief strategist at Shinko Research Institute Ltd. “Unfortunately, there is no clear signal yet from the government.” Finance Minister Hirohisa Fujii said on Nov. 26 the government needs to take action on “abnormal” currency movements and Prime Minister Yukio Hatoyama said the same day yen’s appreciation was due to weakness in the dollar. To contact the reporters on this story: Yasuhiko Seki in Tokyo at yseki5@bloomberg.net ; Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net .

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Analyst’s CMBS Euro ‘timebomb’ warning

November 26, 2009

transactions. “As measured by the degree of erosion of borrowers’ equity in property portfolios, the distress in commercial real estate markets in the last 12 months explains both the volume of Fitch’s downgrades and the severity of rating

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Madoff Investor Claims in Luxembourg Case `Simply Wrong,’ UBS Lawyers Say

November 26, 2009

By Stephanie Bodoni Nov. 26 (Bloomberg) — UBS AG and Ernst & Young LLP said Luxembourg lawsuits filed by investors who lost millions of dollars in mutual funds linked to Bernard Madoff’s Ponzi scheme are invalid and should be thrown out. Private and institutional investors who lost money through Access International Advisors LLC’s LuxAlpha Sicav-American Selection have no right to bring direct claims against the fund’s custodian bank, its auditor and other institutions linked to the fund, lawyers for UBS and Ernst & Young told a Luxembourg court today. They said arguments by the investors are “vague” and “simply wrong.” “Yesterday we were not told a great deal in terms of arguments,” Marc Elvinger, a lawyer representing UBS, told a three-judge panel today. “And the few things that we were told, were wrong.” French investors who lost money through LuxAlpha are suing UBS and the fund’s auditor Ernst & Young for “seriously neglecting” their supervisory duties. The court is reviewing in at least four days of hearings whether the investors can be regarded as shareholders of the fund and whether they have the right to bring such direct claims. The Luxembourg commercial court in April decided to use a small group of LuxAlpha claims out of about a hundred to review the issue. LuxAlpha, which invested 95 percent of its assets with Madoff, had $1.4 billion in net assets a month before his arrest. The fund was dissolved and is being liquidated. A ruling in favor of the investors “could set the course for some 100 pending cases and many more to come,” Pierre Reuter, who represents clients in six of the lawsuits being reviewed, said by telephone before the hearings. ‘Incorrect’ Claims Investors’ arguments yesterday that they weren’t allowed to put their names on the company register, which would help them to be recognized as the fund’s shareholders “are incorrect,” Elvinger said. “Investors do have the right and they had the choice also here to subscribe directly to the fund and to give instructions to the bank to do so not only for the investor’s account but to also subscribe in the investor’s name,” Elvinger said. Madoff, 71, pleaded guilty in March in federal court in Manhattan and was sentenced on June 29 to 150 years in prison for using money from new clients to pay earlier investors. He directed a multibillion-dollar Ponzi scheme from his now-defunct New York money-management firm. To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

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Siemens Hearing Aids Unit Said to Attract Interest From KKR, BC Partners

November 26, 2009

By Aaron Kirchfeld Nov. 26 (Bloomberg) — Siemens AG’s hearing aid business, valued at as much as 3 billion euros ($4.5 billion), is drawing interest from private-equity firms including KKR & Co. L.P. and BC Partners Ltd., two people familiar with the matter said. Several financial investors have contacted the Munich-based company about buying the unit, said the people, who requested anonymity because the process isn’t public. Siemens has been in contact with investment banks about options, and hasn’t decided whether to sell the unit or conduct an initial public offering, though an exit from the business is likely, the people said. Siemens claims the No. 1 position in the global hearing aid market by units manufactured. It trails Sonova Holding AG of Switzerland and William Demant Holding A/S of Denmark by market share, according to Sonova. Siemens, Europe’s largest engineering company, is weighing a retreat from the industry to sharpen its focus on energy, transport and infrastructure, as well as on medical diagnostics tools, the people said. In addition to private-equity firms, makers of medical equipment may also be interested, the people said. Antitrust hurdles would bar Sonova and William Demant from a takeover, the people said. Siemens spokesman Constantin Birnstiel declined to comment, as did spokespeople for KKR and BC Partners in Germany. High Margins “Siemens hearing aids is attractive because the sector has relatively high margins and the business could be further improved by a new owner,” said Daniel Jelovcan , a Zurich-based health-care products analyst at Helvea AG. He estimates the unit could be valued at 2.5 billion euros to 3 billion euros, based on estimated sales of 680 million euros and peer valuation. Siemens, which also makes high-speed trains, power grids and medical scanners, doesn’t disclose sales for its hearing aids. The company has been making the products for more than 100 years , and the business is based in Erlangen in southern Germany, home to some of Siemens’s largest production sites. The unit may fetch 2 billion euros to 3 billion euros in a sale, the people said. The engineering company will likely pursue a so-called dual-track process of seeking a buyer while simultaneously preparing an IPO for 2010, the people said. The company followed a similar strategy with its VDO automotive division, which it sold to Continental AG for 11.4 billion euros in 2007 after simultaneously holding sales talks and preparing an IPO. KKR has done deals with Siemens in the past. The private- equity firm run by Henry Kravis and George Roberts bought Wincor Nixdorf AG, a maker of bank machines, in 1999 from Siemens, as well as seven engineering units for 1.69 billion euros, including Demag Cranes AG, in 2002. Sonova Chief Executive Officer Valentin Chapero said on Nov. 14 it “wouldn’t be surprising” if Siemens sold its hearing-aid unit because it’s not “well adapted” to the rest of the German company’s business. The Swiss company has gained 87 percent so far this year, valuing Sonova at 7.77 billion Swiss francs ($7.74 billion). To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

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European Options Index Jumps Most Since October 2008 on Dubai Debt Concern

November 26, 2009

By Julie Cruz Nov. 26 (Bloomberg) — The benchmark index for European stock options jumped the most in a year as Dubai’s proposal to delay debt payments roiled equity markets worldwide. The Vstoxx Index , which gauges the cost of using options to protect against declines in the Dow Jones Euro Stoxx 50 Index , rallied 28 percent to close at 30.35, the steepest gain since Oct. 16, 2008, when it reached a record at 87.51. The measure has averaged 26 over the past decade. “I can’t see what’s going to drive the market upside especially given this Dubai situation which a lot of people didn’t see coming,” said Ian Murrell , a London-based broker at Wills & Co. “I wouldn’t want to risk any of this year’s gains especially with what’s going on in Dubai. Fund managers have had a fantastic year, and would not buy into this market.” The Dubai government’s attempt to reschedule debt triggered declines in stocks worldwide that had been rebounding from the worst financial crisis since the Great Depression. The Euro Stoxx 50, which has rallied 55 percent since this year’s low in March, slumped 3.4 percent to 2,799.44 today. That’s the biggest drop since April for the euro region’s benchmark index. The cost of protecting government notes from Abu Dhabi to Bahrain rose, extending the steepest increase since February as Dubai World, with $59 billion of liabilities, sought a “standstill” agreement from creditors. Today’s closing level of the Vstoxx compares with 20.48 for the Chicago Board Options Exchange Volatility Index yesterday. The VIX, also known as the “fear gauge,” measures the cost of using options as insurance against declines in the Standard & Poor’s 500 Index. It reached a low for the year on Nov. 24 amid speculation the worst of the global economic crisis is over. U.S. markets are closed today for the Thanksgiving Holiday. — With assistance from Alexis Xydias in London. Editor: Christiane Lenzner To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net ;

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Huntingdon REIT Announces Unitholder Approval of Proposed Combina…

November 26, 2009

Companies: Huntingdon Real Estate Investment Trust (HNT.UN), Huntingdon Real Estate Investment Trust (HURSF), IAT Air Cargo Facilities Income Fund (ACFUF) Huntingdon Real Estate Investment Trust (“HREIT”) (TSX: HNT.UN) announced that at

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Bondholders reject Scorpio offer, for now: Scorpio Real Estate controlling shareholder Benny Steinmetz offered to list the company’s shares on the…

November 26, 2009

Sources inform “Globes” that bondholders of Benny Steinmetz-controlled Scorpio Real Estate Ltd. (TASE: SCRP.B1) have rejected, for now, the proposed debt settlement structure. The financial institutions are demanding that Steinmetz improve nearly all of

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Huntingdon REIT Announces Unitholder Approval of Proposed Combination with IAT Air Cargo Facilities Income Fund

November 26, 2009

Source: Huntingdon Real Estate Investment Trust Buzz up! WINNIPEG, Nov. 26 /CNW/ – Huntingdon Real Estate Investment Trust (‘HREIT’) (TSX: HNT.UN – News) announced that at the special meeting of its unitholders

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World Food Funds Franchisor (PRWeb via Yahoo! News)

November 26, 2009

Jorgan’s Foods, Inc. turned to World Food Association Organization to secure $12.6 million to refinance existing loans. The financing extinguishes 25 existing loan agreements before their scheduled maturity and is secured by existing real estate and business value.

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U.S. Demand For Cheap Wine Buoys Global Market Despite Economy

November 26, 2009

PARIS — Is the world drowning its sorrows in cheap wine? An industry group said Thursday that more wine could be consumed globally this year thanks to crisis-fueled demand for cheaper or discounted tipples. While that might benefit some low-end producers, the organization’s director cautioned wine growers to resist what he called the “massive pressure on prices,” which erodes profits. “If you cut too much, it’s difficult to go back to your original price,” Federico Castellucci told The Associated Press. The International Organization of Vine and Wine predicts that world wine consumption should rise by 4 percent to 246.3 million hectoliters (6.5 billion gallons) in 2009 from an estimated 244.9 hectoliters last year. “People who want to keep drinking are buying cheaper wines,” said Castellucci, noting that holiday season purchasing has not been tallied, and consumption could yet fall. He said that the United States, second only to France in terms of wine consumption, has “continued to import but with a strong attention to prices.” The market for wine sold in bulk is growing, he also noted. Global wine production is expected to remain flat this year at 268 hectoliters, the same level as 2008.

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Dubai World’s Nakheel May Need Further $2 Billion to Finish Developments

November 26, 2009

By Chris Bourke Nov. 26 (Bloomberg) — Nakheel PJSC, the Dubai-owned developer whose parent is seeking to delay debt payments, may need a further $2 billion to finish residential developments, according to an analyst based in the sheikhdom. Nakheel may be liable for about 20 percent of an estimated $11 billion required to build 40,000 homes that it and other Dubai developers have started, said Saud Masud , a real estate analyst at UBS AG . That amount represents the cost, or “funding gap,” required to complete and hand over the properties, on which investors are now defaulting, by the end of 2010. Dubai World, the company’s state-owned parent, will ask creditors for a “standstill” agreement on debt including $3.5 billion in Nakheel bonds that mature on Dec. 14. It’s the biggest maturity for a Dubai entity since credit markets froze last year. Dubai and its state-controlled entities amassed $80 billion of debt during a five-year property boom. “There may be a potential key risk stemming from Nakheel’s funding gap and I think it goes beyond the $3.5 billion that the company owes in three weeks,” Masud said by telephone. “That may be the least of what their liabilities look like.” No one at Nakheel nor Dubai World was immediately available when Bloomberg telephoned the companies for comment. Today is the start of Eid Al-Adha, a religious holiday in the United Arab Emirates. Worst Market Masud said in April that Dubai house prices might drop as much as 70 percent from their peak last year. They’ve already fallen by more than 50 percent, making the emirate the worst-hit market in the global real estate slump. Around half of the investors in the 40,000 unfinished homes may default by the end of next year, said Masud, who covers companies including Emaar Properties PJSC and Aldar Properties PJSC, the U.A.E.’s largest developers. The Dubai government said yesterday it borrowed $5 billion from state-owned banks based in Abu Dhabi, half the $10 billion Dubai ruler Sheikh Mohammed Bin Rashid Al-Maktoum said he planned to raise by the end of this year. The debt raised yesterday may not be enough, said Masud. “One of the main off-balance sheet liabilities in Dubai’s property market is the funding gap to finish properties that are already started and which investors are defaulting on,” he said. “The fundamental liabilities are much larger.” There is no certainty that Dubai World will successfully postpone debt payments because creditors have to vote on the proposal, Masud said. To contact the reporter on this story: Chris Bourke in London at cbourke4@bloomberg.net .

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Philippines Prosecutors Prepare Murder Charges Against Mayor in 57 Deaths

November 26, 2009

By Francisco Alcuaz Jr. Nov. 27 (Bloomberg) — Philippine prosecutors are preparing to file murder charges today against a mayor allegedly linked to the killing of at least 57 people on the southern island of Mindanao, the nation’s worst act of election-related violence. “I believe we have a very strong case,” Justice Secretary Agnes Devanadera told reporters in Manila after escorting Andal Ampatuan Jr., mayor of the town of Datu Unsay, from the Mindanao province of Maguindanao to the National Bureau of Investigation in the capital. The Ampatuan clan controls the province, the scene of the Nov. 23 massacre in which about 100 gunmen ambushed and killed backers of a politician intending to challenge the family for the post of provincial governor in elections next year. Journalists traveling with the group were among the dead. The Ampatuans helped President Gloria Arroyo win election in 2004, when she took more than 75 percent of the vote in the province. The charges will be filed in Cotabato City in Maguindanao, the justice secretary said late yesterday. She asked the Supreme Court for the trial to be held in Manila for security reasons. “The tension in the area is very high,” Local Government Secretary Ronaldo Puno said yesterday. Ampatuan turned himself in to authorities yesterday, according to officials. He denied involvement in the killings. After he was flown to Manila, traffic was stopped as he was taken to the National Bureau of Investigation in a speeding motorcade. He was shown on television inside the building, sometimes smiling. Militiamen Held Authorities detained 347 Maguindanao militiamen for questioning about their possible involvement in the killings and suspended civilians’ permits to carry firearms in the province, officials said at a briefing in Manila. “Why wasn’t this done before the massacre happened?” said Rey Trillana , a fellow at the Center for Civic Education and Democracy in Manila. “It’s common knowledge that warlords like the Ampatuans have hordes of bodyguards. Ever since the massacre happened the government has been in reactionary mode.” While militias are armed to help police and the army fight Muslim and communist insurgents, they are often used by local leaders as private security forces in feuds with rivals. Muslim rebel groups are waging a separatist war in Mindanao and the al-Qaeda-linked militant group Abu Sayyaf is active in the region. The communist New People’s Army has been fighting the state in several parts of the country, including Mindanao, since the late 1960s. ‘Fawning’ Meeting The Makati Business Club yesterday described as “fawning” a meeting of a representative of Arroyo and members of the Ampatuan clan, whom it described as “staunch” allies of the president. The magnitude of the crime is a result of “the warlord politics the current administration allowed to flourish in Maguindanao and exploited for its political ends,” the Manila- based association of the nation’s biggest businesses said in a statement. In 2007, while all except three of Arroyo’s 12 candidates for the national Senate lost, they swept the vote in Maguindanao. “That is the root of the political debt of the president to the Ampatuans,” Trillana said. It took four days to arrest Ampatuan in part because Maguindanao militiamen surrounded the main government building in the province, said Puno, the local government secretary. “The capitol was becoming a garrison,” he said. “The military and police had to prepare. We had to make sure that in addressing this crime, we won’t lose control of the area. They are political allies but we were directed to uphold the law.” Politician Unharmed The ambushed convoy was mostly made up of supporters of Buluan City Vice Mayor Esmael Mangudadatu, on their way to file his candidacy for Maguindanao governor. Mangudadatu, who wasn’t in the convoy, told local media his wife and two sisters were among the dead and that some of the women in the group were raped before they were murdered and buried in mass graves. Eleven bodies were recovered two days ago, two of them inside vehicles that were also buried. A backhoe with provincial government markings was found at the site, local media reported. Arroyo on Nov. 24 put Maguindanao and neighboring Sultan Kudarat province under a state of emergency to prevent further violence in the region. The helicopter that transported Ampatuan was shot at on its way to pick up the mayor, Puno said. Police are on alert for “spillover attacks” on the homes of Ampatuan and Mangudadatu family members outside the province, including Manila, said Andres Caro, national police operations chief. Philippine elections are often marred by bloodshed. About 126 candidates and supporters were killed in the months leading to the 2007 elections and 186 in 2004, according to the Philippine Daily Inquirer . To contact the reporter on this story: Francisco Alcuaz Jr . in Manila at falcuaz@bloomberg.net .

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Sarkozy Government to Remain Neutral on Sale of Areva Unit, Official Says

November 26, 2009

By Helene Fouquet Nov. 26 (Bloomberg) — French President Nicolas Sarkozy’s government will decide the sale of state-controlled Areva SA’s power-grid equipment unit on commercial grounds and won’t favor the French bidding team, said a government official. The official, who declined to be named because the talks are confidential, said the government has remained neutral in a contest pitting a partnership between France’s Alstom SA and Schneider Electric SA against General Electric Co. and a joint offer from Toshiba Corp. and Innovation Network Corp. The official declined to say how the decision would be announced, only that it would come before the end of the month. All three bids are for about 4 billion euros ($6 billion), people familiar with the transaction have said. Areva, the biggest builder of nuclear reactors, is seeking to use the funds from the sale of its transmission and distribution division, to expand in the growing atomic-power market. To contact the reporters on this story: Helene Fouquet in Paris at Hfouquet1@bloomberg.net

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Deutsche Bank’s Thomas Mayer to Succeed Norbert Walter as Chief Economist

November 26, 2009

By Rainer Buergin Nov. 26 (Bloomberg) — Thomas Mayer, 55, chief European economist at Deutsche Bank AG’s Global Markets Division, will succeed Norbert Walter as chief economist of Germany’s biggest bank effective Jan. 1, the lender said today in an e-mailed statement. Walter, 65, will retire at the end of the year, Deutsche Bank said. To contact the reporter on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net

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Obama Weekly Radio Address: What Still Needs To Be Done (VIDEO)

November 26, 2009

WASHINGTON — President Barack Obama and a top House Republican acknowledged in holiday messages Thursday the economic struggles facing Americans this Thanksgiving but offered starkly different recipes for relief. Obama and Rep. Mike Pence, R-Ind., singled out U.S. service members at home and abroad for special thanks before saying what they think should be done to fix the economy. “As much as we all have to be thankful for, we also know that this year millions of Americans are facing very difficult economic times,” Obama said in his weekly radio and Internet address. “Many have lost jobs in this recession — the worst in generations. Many more are struggling to afford health care premiums and house payments, let alone to save for an education or retirement. Too many are wondering if the dream of a middle-class life — that American dream — is slipping away.” Obama said his administration has acted by cutting taxes for nearly all working men and women and for small businesses and by extending unemployment benefits and health coverage for millions out of work. He trumpeted other administration initiatives, including the health care overhaul, before saying more needs to be done, particularly for those without jobs. Obama said he will meet next week with business owners, labor leaders and nonprofit officials to talk about additional efforts to spur job creation. “It is my fervent hope — and my heartfelt expectation — that next Thanksgiving we will be able to celebrate the fact that many of those who have lost their jobs are back at work and that as a nation we will have come through these difficult storms stronger and wiser and grateful to have reached a brighter day,” he said. Pence, the chairman of the House Republican Conference, said in the GOP’s weekly address that Obama had promised that the $787 billion economic stimulus package would keep unemployment, now at 10.2 percent, below 8 percent. Yet, Pence said, the administration insists the stimulus plan is working. “In the city and on the farm, as millions of American families struggle to balance their checkbooks this holiday season, they watch in astonishment as Washington spends billions of dollars it doesn’t have,” he said. “And what is the White House’s answer to our struggles? Another meeting next week. A ‘jobs summit,’ and most likely another proposal to grow government, raise taxes and place more debt on the shoulders of our children and grandchildren.” Pence said Obama and the Democratic Congress have taken the economy “from bad to worse with their failed economic agenda and big government plans” and now want the government to take over the nation’s health care system. “The way to stimulate this economy and help working families is to let Americans keep more of their hard-earned money, not taking more from their wallets,” he said. “Republicans have proposals to get our economy moving again, to achieve energy independence and lower the cost of health care.”

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Fed Tightens Rules On Regional Directors

November 26, 2009

WASHINGTON — The Federal Reserve, under attack in Congress for being too entwined with big banks, closed a loophole on Wednesday that allowed a director at Goldman Sachs to be a director of the New York Fed as the agency was bailing out Wall Street during the financial crisis.

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STOCKS NEWS EUROPE-UK property shares fall on Dubai worries

November 26, 2009

UK property stocks fall on concerns Dubai’s debt problems will dampen prospects for Britain’s recovering commercial real estate market due to potential firesale by the emirate and lower investments from the Middle East. The Dubai government could

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Rise in global distressed sales

November 26, 2009

Over 80% of key real estate markets around the world have seen a rise in distressed sales in the commercial property market, according to new research – the survey by the Royal Institution of Chartered

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7 Things Wall Street Can Be Thankful For This Year (PHOTOS, POLL)

November 26, 2009

A little more than one year after the financial crisis brought the economy to a standstill — threatening nearly every firm on Wall Street — one thing is clear: the Street should be thanking its lucky stars. From the taxpayer-funded $700 billion TARP program to the assorted forms of financial goodies the Treasury Department and the Federal Reserve have tossed to bankers and financiers, the Street is doing quite well. As the industry’s profits have rebounded and as the stock market has rallied — and as unemployment now exceeds 10 percent — it’s worth noting that, if there’s been one early winner in the financial crisis, it’s probably the financial industry. As the vaunted bonus season approaches for many a trader, the degree to which Wall Street has outpaced the larger economy has come under an increasing amount of scrutiny. To that end, we decided to compile a handful of the many blessings Wall Street can be thankful for during this holiday season. (HINT: most of them involve the use of government funds, debt guarantees or other windfalls to generate profits.) Check our photos below, and vote for exactly what Wall Street should be most thankful for. Get HuffPost Business On Facebook and Twitter !

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Toronto stock market opens lower amid fears of Dubai World default

November 26, 2009

TORONTO – The Toronto stock market opened sharply lower over debt problems at Dubai World, the country’s flagship holding company which has developed a slew of extravagant real estate projects

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