- Wall Street Losing Competitive Edge, Must Take Action
- Paulson-Backed Group Seeks Reduced Business Penalties
- Grasso Appeals for Jury In Civil Case Over Pay
- Citigroup aims to manage $40bn in Gulf by 2012
- Carlyle Seeks $4 Billion Funding for Taiwan Buyout
- NYSE to scrap listing fees on transferring issuers
- FSA urges more price transparency on hedge funds
More headlines below
- Britain May Cut Tax on Oversees Exchange-Traded Funds
- New activist investor arm draws strong team into 3i
- China’s Buyout Backlash Stalls Investments by Carlyle, Ewing
- Private equity ownership raises default risk – Moody’s
- Hedge Fund Citadel Finds a Way To Keep Financial Independence
- Livingstone urges LSE bid inquiry
- Putnam auction in final stage
- Richard Li’s Bid to Sell PCCW Stake Rejected by Shareholders
- Greenspan: worst is over for housing
- Google CEO says Internet is key to campaign win
- HP shareholder lawsuit adds claims of insider trading
- Judge OKs $4.52 bln payout to WorldCom investors
- Scrushy to Pay HealthSouth $31 Million
- 30,000 Union Workers Accept Buyouts at Ford
- GM to make plug-in hybrid of Saturn Vue Green Line
- Greenberg Says He Has No Plans to Buy New York Times [Per the NY Times]
- Morgan Stanley refuses to bankroll billionaire’s purchase of NY Times
- Huffington Post Will Add Original Reporting to Its Blog
- Wal-Mart Trips as It Changes a Bit Too Fast
- Wal-Mart, You’ve Got India Now; Don’t Bungle It: Andy Mukherjee
- Wal-Mart Slowdown May Signal End to China Dividend
- Firm Plans Bid for Euro Disney, But Skepticism Greets Claim
Wall Street Losing Competitive Edge, Must Take Action – New York Sun
Wall Street is "losing its leading competitive position" compared to financial centers in other countries, and the federal government must take steps to curb lawsuits and overhaul market regulations to improve New York’s standing, a report to be released today by a blue-ribbon committee of business leaders and academics says.
The report from the bipartisan Committee on Capital Markets Regulation appears to be the most comprehensive study to date on how America needs to reposition itself as cities such as London and Hong Kong gain ground.
"The evidence presented here suggests that the United States is losing its leading competitive position as compared to stock markets and financial centers abroad," the 152-page document says. "A key measure of competitiveness, one particularly relevant to the growth of new jobs, is where new equity capital is being raised."…
Paulson-Backed Group Seeks Reduced Business Penalties – Bloomberg
U.S. lawmakers and regulators should reduce penalties on companies because American financial markets are losing ground to overseas competitors, a group of prominent executives and academics backed by Treasury Secretary Henry Paulson said.
The Committee on Capital Markets Regulation, led by former White House Economic Adviser Glenn Hubbard and former Goldman Sachs Group Inc. President John Thornton, in a report to be published tomorrow, called for a broad overhaul of securities regulation, saying the Justice Department should pursue corporate criminal indictments only as a last resort. The group’s recommendations may shape the debate about how to revise the Sarbanes-Oxley Act.
“Firms must choose to come to the United States: they do not have to come,” the group said in an advance copy of the 135- page report. “It is the committee’s view that in the shift of regulatory intensity, balance has been lost to the competitive disadvantage of U.S. financial markets.”…..
Grasso Appeals for Jury In Civil Case Over Pay – Wall Street Journal
The New York Stock Exchange’s former chairman, Richard Grasso, asked a state appeals court Wednesday to order that a civil case over his $187.5 million compensation package be heard by a jury, rather than having a portion of it decided at a bench trial.
At a hearing before the Appellate Division of the New York State Supreme Court, Gerson Zweifach, Mr. Grasso’s lawyer, said New York Attorney General Eliot Spitzer shouldn’t be allowed to carve out the "core" issue in the case — whether Grasso’s pay was excessive — and have it decided by a judge, rather than presenting those arguments to a jury.
"Mr. Grasso is promised by the Legislature the right to a jury trial," Mr. Zweifach said….
Citigroup aims to manage $40bn in Gulf by 2012 – Gulf Times
Citigroup’s private banking unit expects to be managing about $40bn on behalf of wealthy Gulf Arabs within five years as it expands into Saudi Arabia and Kuwait, a senior regional executive said yesterday.
Gulf investors, having ridden a wave of economic growth driven by a tripling of oil prices since 2001, are looking for new ways to invest, particularly in Asia, said Akbar Shah, Citigroup’s head of global wealth management for the Middle East.
Citigroup Private Bank expects the assets it manages of clients in the world’s top oil-exporting region to grow by about 25% a year, Shah said…..
NYSE to scrap listing fees on transferring issuers - Reuters
The New York Stock Exchange said on Wednesday it plans to scrap initial listing fees for companies transferring from another equities market amid rising competition from rival exchanges.
The elimination of the fees, which typically range from $150,000 to $200,000, applies to both U.S. and non-U.S. issuers and will be effective immediately pending regulatory approval, the NYSE said.
FSA urges more price transparency on hedge funds – Reuters
The Financial Services Authority (FSA) has recommended measures to make the hedge fund industry more open and transparent at a time when regulators have been stepping up scrutiny of the sector.
The watchdog is urging fund managers to spell out policies on pricing the instruments used in their funds and disclose these policies to firms such as prime brokers, the FSA said in a letter to the International Organisation of Securities Commissions (IOSCO).
Fund managers should have procedures for the day-to-day operation of a pricing process and these should be updated if a manager adopts instruments that are markedly different from those in an existing fund, the FSA letter, which was published by the FSA on Wednesday, said….
Britain May Cut Tax on Oversees Exchange-Traded Funds – Bloomberg
Britain may exempt exchange-traded funds registered outside the country from stamp taxes, a move that may boost London’s role in trading one of the world’s fastest- growing securities.
Chancellor of the Exchequer Gordon Brown may announce the change next week when he makes his 10th autumn statement on the economy. The so-called stamp duty on overseas funds works against London’s ability to develop a market for trading so-called ETFs, investment companies have said.
ETFs, designed by financial-services companies to track stocks, bonds, commodities or indexes, now have more than $500 billion in assets, up from $5.26 billion 10 years ago. They may have $2 trillion in assets within five years, according to Morgan Stanley. Hedge funds use ETFs to move in and out markets, and they’ve also caught on with non-professional investors….
New activist investor arm draws strong team into 3i – The TImes of London
The private equity company 3i has hired three big City names to head a new activist investor division that aims to acquire significant stakes in underperforming quoted companies across Europe and to try to turn them around.
The managing partner of the new business will be Bruce Carnegie-Brown, the former chief executive of the UK arm of Marsh & McLennan, the global insurance broker.
His three fellow founding partners are: Stephen Hill, who resigned as chief executive of Betfair, the online betting exchange, last year when it decided not to float; Richard Segal, the former head of PartyGaming; and Alan Mac-Kay, who is a senior 3i partner….
Carlyle Seeks $4 Billion Funding for Taiwan Buyout – Bloomberg
Carlyle Group plans to borrow $4 billion to fund the leveraged buyout of Advanced Semiconductor Engineering Inc., said three people with knowledge of the deal.
JPMorgan Chase & Co. and Citigroup Inc. are among banks that Washington-based Carlyle has approached, said the people, who declined to be identified before the takeover agreement is signed. Carlyle on Nov. 24 offered at least $5.4 billion for Advanced Semiconductor. Jason Chang, chairman of the Kaohsiung, Taiwan- based company, holds 18.5 percent of the manufacturer and is backing the Carlyle bid.
Carlyle has participated in more than $25 billion of technology-related takeovers this year, including the $17.6 billion acquisition of Freescale Semiconductor Inc. Buyouts in Taiwan reached an all-time high of $8.3 billion in 2006, almost half last year’s total for Asia outside Japan, according to data compiled by Bloomberg…..
China’s Buyout Backlash Stalls Investments by Carlyle, Ewing – Bloomberg
Dale Colling is learning just how serious economic security is for China.
The chairman of ALC Advisors earlier this year brokered the sale of a Chinese manufacturer to a U.S. buyout firm. Completion of the deal has been slowed because the company’s products contain glass, which may be classified as a strategic material.
“We’re told by the lawyers we may have to get special approval because the product uses a lot of glass,” says Colling, 55, who is based in Shanghai and wouldn’t name the companies involved since talks are continuing. “Larger, more visible deals are going to be more difficult to get done.”…..
Private equity ownership raises default risk – Moody’s – Reuters
Companies with a speculative-grade credit rating that are bought by private equity firms have more risk of default as the new owners add more debt after the purchase, said a research report published on Thursday.
"Among speculative grade issuers we find that issuers acquired by private equity sponsors do indeed typically experience much higher downgrade rates and default rates than other non-sponsored issuers," US credit rating agency Moody’s said in the report.
The study referred to North American speculative-grade, non-financial issuers….
Judge OKs $4.52 bln payout to WorldCom investors – Reuters
The Manhattan federal judge overseeing the main class-action lawsuit over WorldCom Inc.’s collapse on Wednesday authorized the payment of up to $4.52 billion to aggrieved investors.
U.S. Judge Denise Cote of the U.S. Court for the Southern District of New York said the distribution should be made "as soon as practicable."
More than one dozen investment banks, including Citigroup Inc. and JPMorgan Chase & Co., agreed to pay about $6.15 billion to resolve allegations that they helped WorldCom sell bonds when they should have known the phone company was concealing its true financial condition…..
Scrushy to Pay HealthSouth $31 Million – New York Times
Richard M. Scrushy, founder of the HealthSouth Corporation, has agreed to pay the company $31 million as part of a settlement of litigation over his bonuses and legal fees.
Mr. Scrushy dropped a lawsuit seeking $21 million for legal fees after HealthSouth agreed to credit that amount against the $52 million he owed for inflated bonuses, said Teresa Tomlinson, one of his lawyers. HealthSouth ousted Mr. Scrushy in 2003 after auditors uncovered a $2.7 billion accounting fraud at the chain of rehabilitation centers.
”We’re very pleased that this portion of the disputes between Mr. Scrushy and HealthSouth has been resolved,” Ms. Tomlinson said yesterday in a telephone interview….
30,000 Union Workers Accept Buyouts at Ford - New York Times
Thirty thousand Ford Motor Company workers — nearly half of the automaker’s unionized work force — have agreed to leave their jobs in exchange for a buyout or a package of early retirement benefits, the company said this morning.
All of the 75,000 Ford employees represented by the United Automobile Workers union were offered eight different deals worth as much as $140,000 in September, and had to decide by Monday whether to accept.
In all, 38,000 U.A.W. workers at Ford have now agreed to take buyouts this year, including 8,000 who accepted packages offered at specific plants earlier in the year, before the company made the deals available to its entire hourly work force….
Hedge Fund Citadel Finds a Way To Keep Financial Independence – Wall Street Journal
The citadel of Wall Street is under attack — by its customers. That’s one way to interpret Chicago hedge fund Citadel Investment Group’s plans to raise up to $2 billion through the sale of investment-grade bonds. The reason: A pool of cheap capital could allow Citadel to bypass the prime-brokerage arms of investment banks in leveraging up its $13 billion of investments. But think again before shorting the industry’s Big Three of Morgan Stanley, Bear Stearns and Goldman Sachs.
Citadel’s bond sale will surely be a landmark event. That a hedge fund can borrow money at rates substantially more favorable than can, say, Ford Motor, shows how far the industry has come in the past few years.
But Citadel is a breed apart. As odd as it may sound for a firm run by a 38-year-old, Citadel is an elder statesman among hedge funds. Founded by Ken Griffin 16 years ago, it has chalked up consistently high returns. This track record, and Citadel’s diversified investment strategies, are precisely why Fitch Ratings is giving the bonds a triple-B-plus credit profile…..
Livingstone urges LSE bid inquiry – Daily Telegraph
The Mayor of London is calling for a Competition Commission inquiry into Nasdaq’s £2.65bn bid for the London Stock Exchange.
In a letter hand-delivered to the Office of Fair Trading yesterday afternoon, Ken Livingstone demanded a full investigation into the offer.
Mr Livingstone wrote to Annette Baxter, the case officer for the bid. In the letter, a copy of which has been seen by The Daily Telegraph, he argues the tie-up of the LSE and Nasdaq would create a substantial lessening of competition….
Putnam auction in final stage – Financial Times
The auction of Putnam Investments, one of the oldest mutual fund companies in the US, is in its final stage and has attracted at least three foreign bidders.
However, it is possible that none of the three – Amvescap of the UK, UniCredit of Italy and Power Corp of Canada – has bid high enough to win the company, according to those close to the action. Putnam has been valued by analysts at about $4bn.
Putnam, which was once one of the largest and most successful fund groups, has largely failed to recover from the 2003 fund trading scandal, despite a payout of $190m to settle charges of wrong-doing, and an infusion of new management….
Richard Li’s Bid to Sell PCCW Stake Rejected by Shareholders – Bloomberg
Richard Li, the son of Hong Kong’s richest man, failed in an attempt to sell his stake in PCCW Ltd. for HK$9.2 billion ($1.2 billion) after shareholders rejected the bid as too low.
Stockholders of Pacific Century Regional Developments Ltd., Li’s Singapore-listed holding company, today voted against the offer for its 22.7 percent PCCW stake. Li, PCCW’s chairman, was barred from voting because of the involvement of his father, Li Ka-shing, in the group that was bidding for the stake.
The rejection blocks Richard Li’s effort to exit PCCW, Hong Kong’s largest phone company, after seven years in charge and a 95 percent slump in its market value. The breakup of Li’s stake would have left state-owned China Network Communications Group Corp. as the largest single shareholder, with a 20 percent holding…..
Greenspan: worst is over for housing – BusinessWeek
Former Federal Reserve Chairman Alan Greenspan said on Tuesday that the worst of the housing adjustment was over, and that he was preparing to publish an analysis of the "serious dispute" over the true effect of mortgage wealth on consumer spending.
Housing starts and other data indicated the dampening effect that a slow housing market had on gross domestic product was at its maximum in the third quarter, when growth slowed to a weaker-than-expected 1.6 percent annual rate, he said at an investor conference organized by investment bank Friedman, Billings, Ramsey Group Inc…..
Google CEO says Internet is key to campaign win – Reuters
Google’s chief executive offered some advice on Wednesday to Republicans looking ahead to the 2008 presidential contest: make better use of the Internet’s electioneering power if you want to win next time.
"The ones that take advantage of this most effectively will be the ones that will be the winners of the next election," Google (GOOG.O: Quote, Profile, Research) Chief Executive Eric Schmidt told Republican governors gathered in Miami.
He offered a few examples of how the Internet, especially video file-sharing sites like Google’s newly acquired YouTube, had changed the political landscape by enabling anyone to disseminate information widely and instantly…..
HP shareholder lawsuit adds claims of insider trading – Mercury News
A shareholder lawsuit over Hewlett-Packard Co.’s ill-fated boardroom spying probe added claims of insider trading on Wednesday, alleging that executives sold millions of dollars in stock just before the scandal broke.
The lawsuit, filed in Santa Clara County Superior Court on behalf of all HP shareholders, amended a September claim accusing the top brass at HP of breaching their fiduciary duties and causing substantial harm to the company.
It also consolidated other existing lawsuits within California over the media-leak probe at HP that led to criminal charges against former Chairwoman Patricia Dunn, former ethics chief Kevin Hunsaker and three private detectives – Ronald DeLia, Matthew DePante and Bryan Wagner…..
GM to make plug-in hybrid of Saturn Vue Green Line – Reuters
General Motors Corp. (GM.N: Quote, Profile, Research) on Wednesday said it plans to make a plug-in electric hybrid version of the Saturn Vue Green Line, which will have double the fuel efficiency of any current sport utility vehicle.
The Saturn Vue Green Line is GM’s first hybrid vehicle on the U.S. market. The world’s largest automaker also plans to expand the hybrid system to the Saturn Aura Green Line and Chevrolet Malibu sedans in 2007…..
Greenberg Says He Has No Plans to Buy New York Times – Bloomberg
Billionaire Maurice “Hank” Greenberg said he has no current plans to attempt a takeover of New York Times Co., damping speculation that prompted the biggest rally in the shares in almost six years.
Greenberg, the former chief executive officer of American International Group Inc., said he owns fewer than 100,000 shares in the publisher. His statement sent the shares down 3.9 percent to $23.80 in extended trading on the New York Stock Exchange. They earlier had risen 7.5 percent, the most since January 2001.
“He has no present intention of significantly increasing his holdings,” spokesman Mark Corallo said in an interview….
Morgan Stanley refuses to bankroll billionaire’s purchase of NY Times – The Guardian
The insurance billionaire Hank Greenberg has emerged as a possible buyer for the New York Times which is facing pressure on Wall Street because of its declining circulation and weak advertising income.
It emerged yesterday that Mr Greenberg, 81, a former boss of the insurer AIG, recently approached the head of the investment bank Morgan Stanley for help in pursuing a takeover.
But in an unusual development, Morgan Stanley’s chief executive, John Mack, rebuffed the approach citing conflicts of interest – including the publication of a series of negative personal stories about him in the broadsheet
Huffington Post Will Add Original Reporting to Its Blog – New York Times
The Huffington Post, which started about 18 months ago as a political Web site for celebrity bloggers, is preparing to venture into original reporting, with plans to cover Congress and, already, the 2008 presidential campaign.
Arianna Huffington, who started HuffingtonPost.com, said yesterday that the site had hired Melinda Henneberger, a print journalist most recently with Newsweek magazine, as its political editor. The site has about 2.3 million unique visitors a month, making it one of the more popular blog sites.
Ms. Huffington said Ms. Henneberger would hire a number of other journalists to begin producing original content, “with attitude.”
“Now is the time to generate our own original content,” Ms. Huffington said. “It was always our intention, once we had the money, to hire people to do reporting.”….
Wal-Mart Trips as It Changes a Bit Too Fast – New York Times
The most wonderful time of the year? Tell that to Wal-Mart.
The world’s largest retailer has long dominated the holiday shopping season, with eye-popping discounts that drew throngs of customers and made life miserable for competitors.
After fresh price cuts this month, few doubted they would own this season, too. But this heartwarming storyline for Wal-Mart has turned into heartburn for the company.
Today, the retailer is expected to announ
ce, based on its own estimates, that sales for November fell for the first time in a decade…..
Wal-Mart, You’ve Got India Now; Don’t Bungle It: Andy Mukherjee – Bloomberg
After abandoning disastrous forays in South Korea and Germany, Wal-Mart Stores Inc. is coming to India.
The opportunity is no doubt sizzling, though if Wal-Mart is not careful, it might end up making a hash of it.
The world’s largest retailer desperately wants to increase international sales to a third of its total from about a fifth at present. Wal-Mart has already announced plans to double its presence in China, where the number of large-format stores grew six-fold from 2000 to 2005.
India will be the next big frontier in the battle for shoppers’ wallets. The country ranks as the world’s most attractive destination in consulting firm A.T. Kearney Inc.’s Retail Development Index….
Wal-Mart Slowdown May Signal End to China Dividend - New York Sun
It was reported last week that for the first time in 10 years — 10 years! — Wal-Mart (WMT $47) suffered a drop in same-store sales in America. Today the company is set to release more information about the unusual decline. Naturally, there are numerous theories out there about the (possibly temporary) turnaround in the giant company’s stupendous growth history. The sheer size of the retailer makes the event notable, as does its position on the front lines of big box merchandising.
Here’s our theory. Just as the American economy profited from a "peace dividend" in the 1990s, in the past decade we have enjoyed a "China dividend." Imports of cheap products have lowered the cost of living in America, and plumped up real incomes. Today, that shift to lower-cost manufacturing areas is nearing completion. The booster rocket of cheap imports, which was so important to fueling Wal-Mart’s growth, may be about to fizzle…..
Firm Plans Bid for Euro Disney, But Skepticism Greets Claim – Wall Street Journal
Shares in Euro Disney SCA jumped Wednesday after a little-known Swiss company said it planned a hostile bid for the operator of the Disneyland theme park near Paris, but both Euro Disney and French stock market officials quickly cast doubt on the legitimacy of the overture.
Center-Tainment AG, which is registered in Zug, Switzerland, released a statement saying it had organized a press conference on Thursday in Paris to announce an all-share bid for Euro Disney. The company — which said it had recently been created in order to launch the Euro Disney bid and which is quoted on the Frankfurt Stock Exchange — said its goal was to unseat Euro Disney’s current management. In the statement, Center-Tainment said it planned to offer its own shares in exchange for Euro Disney stock, saying shareholders in the theme park operator had "no perspective to make profits."
Disney officials in both Europe and the U.S. said they had had no contact with Center-Tainment, though they were aware of the purported press conference…..
