Dimon sees a sign of recession Deals on ‘dark pools’ set to surge Blackstone to invest $275m in Indian media group NYSE, Tokyo exchange poised to detail far-reaching alliance Thain Wins A Delay In Trial Over IPO Notice Owner of Hedge Fund Firm Is Sentenced
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HSBC poaches Asia banker CME insists it can sustain high-margin growth Icahn seeks seat on Motorola board Cramer’s ‘Mad Money’ Recap: Short-Squeeze Seize Expect to See Google Clicking On All Cylinders Tata Steel wins Corus with $11.3bn offer US Airways chief won’t pursue Delta if it emerges from bankruptcy Delta lands $2.5 billion in exit financing Eleven bidders line up to compete for 30 per cent stake in Alitalia Bidders jostle for Aston Martin
Dimon sees a sign of recession – MarketWatch
Rising defaults in some of the riskiest home loans offered by J.P. Morgan Chase & Co. signal a recession may be looming, Jamie Dimon, the bank’s chief executive said Tuesday.
Dimon, speaking at Citigroup’s annual financial services conference, said high-risk loans – as measured by credit scores and loan-to-value ratios of 90% or more — make up 2% of the bank’s home equity portfolio, Dimon said according to a live webcast.
He also said defaults are rising at J.P. Morgan "a little bit," adding, "home equity is subject to deterioration" from a recession, but that the bank is well positioned to sustain a downturn in the economy. The bank has largely exited the subprime lending area…..
Deals on ‘dark pools’ set to surge – Financial Times
The volume of shares traded on private systems owned by investment banks, rather than on public exchanges, is set to surge, both in Europe and the US, a new report suggests.
Indeed, deals that occur on private inter-bank platforms – known as “dark pools of liquidity” – probably account for about 10 per cent of all shares trading in the US, a sharp increase from previous years, research by the Tabb consultancy suggests.
According to Tabb, “dark pools” and crossing networks captured nearly 10 per cent of the total US equity market last year, with an average of 420m shares traded per day, a number that will increase to 512m shares a day by the end of this year. In Europe, such systems accounted for 2 per cent of all equity trading and in Asia, less than 1 per cent, but both are growing steadily, according to the research….
Blackstone to invest $275m in Indian media group – Financial Times
Private equity firm Blackstone has agreed to invest $275m in Ushodaya Enterprises Limited, owner of one of India’s largest newspapers and television networks, marking the group’s largest deal so far in India.
Ushodaya owns Eenadu, India’s third largest newspaper based in the Telugu-speaking state of Andhra Pradesh, as well as the country’s fourth largest private television broadcasting network. Its ETV television franchise leads the market in several key states. The Ramoji Group, Ushodaya’s parent, owns Ramoji Film City, which is Asia’s largest studio.
Blackstone will take an undisclosed stake and hold a seat on Ushodaya’s board with its $275m investment and $190m worth of bank financing….
NYSE, Tokyo exchange poised to detail far-reaching alliance – AP via Boston Herald
The New York Stock Exchange and the Tokyo Stock Exchange are embarking on an alliance that could point the world’s two largest financial markets toward an eventual combination.
The broad agreement will allow both sides to cooperate on joint developments, such as financial products, mutual listings and technology. Further, it sets into motion the possibility of a true combination once Japan’s biggest stock exchange becomes a public company in 2009.
The pact between the two exchanges was confirmed by the Tokyo Stock Exchange late Tuesday, with details to be announced at a news conference Wednesday morning in New York….
Thain Wins A Delay In Trial Over IPO Notice – Bloomberg via New York Post
NYSE Group Inc. Chief Executive Officer John Thain won a seven-month delay in a trial of a suit by a former New York Stock Exchange member who accuses him of misleading her about taking the Big Board public.
Allison Wey, 46, is asking for $4.3 million in damages from Thain and the exchange for selling her seat too cheaply before the NYSE announced in April 2005 that it would go public by merging with Archipelago Holdings Inc. She blames Thain for saying in February 2005 that no merger was in the works.
New York Supreme Court Justice Charles Ramos rescheduled jury selection in the case, which could have started as early as today. He set a new date of Sept. 12, citing the "pretty adverse trial publicity" about the case in a Jan. 18 New York Post story….
Owner of Hedge Fund Firm Is Sentenced – New York Times
The owner of a hedge fund management firm was sentenced Tuesday to three years in prison and three years of supervised release, federal prosecutors said.
Scott Sacane, who owned and controlled Durus Capital Management, waived indictment in December 2005 and pleaded guilty to one count of violating the Investment Advisers Act of 1940, Kevin J, O’Connor, United States attorney, said.
FromNovember 2002 to July 2003, Mr. Sacane, of Weston, Conn., manipulated the price of two biotechnology stocks by concealing purchases of the stocks through false filings with the Securities and Exchange Commission, Mr. O’Connor said.
Mr. Sacane, 40, also failed to make required S.E.C. filings and made false statements to prevent others from selling stocks in the two companies, Mr. O’Connor said….
HSBC poaches Asia banker – Daily Telegraph
HSBC has poached a senior Citigroup banker to help build up its Asia Pacific investment banking division.
Frank Slevin has been appointed head of global banking, Asia-Pacific – a new post. He was chief operating officer of Citigroup’s Asia-Pacific investment banking unit.
He will report to Rhydian Cox, the head of corporate and investment banking and markets, and to Paul Hand and Robin Phillips, co-heads of global banking….
CME insists it can sustain high-margin growth – Financial Times
The Chicago Mercantile Exchange maintained on Tuesday that its high-margin business model was sustainable, in spite of grumblings from some users that a planned merger with the Chicago Board of Trade would give it monopoly pricing power.
The largest US derivatives exchange reported record sales and profits as it pumped higher volumes through its electronic platform. It said the CBOT deal was on track to close by mid-year, subject to shareholder and regulatory approval.
Craig Donohue, chief executive, said: “This is a very cheap place to do business.”…
Icahn seeks seat on Motorola board – Financial Times via MSNBC
Carl Icahn, the veteran activist investor, on Tuesday chose Motorola as his latest target, sending the company’s share price higher and increasing pressure on management at the struggling US telecommunications equipment maker.
On the last day available to submit a proxy challenge for 2007, Mr Icahn informed Motorola that he would seek a board seat for himself at the Illinois-based company.
The move, which comes a year after Mr Icahn waged a high-profile battle to break up Time Warner, follows a sharp drop in valuation at Motorola….
Cramer’s ‘Mad Money’ Recap: Short-Squeeze Seize – TheStreet.com
Jim Cramer introduced a new game with new rules on his "Mad Money" TV show Tuesday, called short-busting.
The shorts are the people who bet against a stock, and short-busting is betting that the shorts are wrong, he explained. In a heavily shorted stock, when all shorts try to cover their shares at once, we call it a short squeeze, which causes the stock to jump.
That’s where short-busters make money, Cramer said.
If you’re going to ride the short bust, you must eye the stock’s average daily volume, which reveals how hard it would be for shorts to close or cover their positions, he said. And if the shorts are deep, they’ll drive up the price to get out with profits….
Expect to See Google Clicking On All Cylinders – Wall Street Journal
Google is moving into print, radio and video advertising, but the company’s Web-search ad business still drives profits. That should please investors when Google reports fourth-quarter earnings today.
Analysts expect the search titan to report that earnings excluding one-time items rose 90% in the fourth quarter from a year earlier to $2.92 a share, according to Thomson Financial.
It shouldn’t be a surprise if Google beats expectations…..
Tata Steel wins Corus with $11.3bn offer – Financial Times
Tata Steel of India won the battle to control Anglo-Dutch steel maker Corus with a £5.75bn ($11.3bn) offer on Wednesday, after more than eight hours of head-to-head bidding against Companhia Siderúrgica Nacional of Brazil.
Tata was declared the winner with a bid of 608p a share in cash, against CSN’s highest bid of 603p a share. The Tata bid valued Corus at about £6.7bn including debt, said a spokesman for the company – far above earlier analysts’ and market estimates. Corus shares closed in London on Tuesday at 565p.
“This is a price that Corus shareholders will be happy with but also one that Tata is happy with,” said a banker working on the Tata bid. He added that the Tata camp was “pretty excited” about the victory, especially as CSN had been seen by many as the probable winner. “We kept a very low profile but we always knew Tata was very determined,” said the banker. Tata is expected to hold a press conference in Mumbai at about 10:15am local time….
US Airways chief won’t pursue Delta if it emerges from bankruptcy – AP via Boston Herald
Delta Air Lines creditors had better hurry if they want to fly out of Chapter 11 on US Airways. US Airways CEO Doug Parker said his buyout offer expires for good once Delta emerges from bankruptcy protection.
The first deadline is midnight Thursday. Parker said that’s the cutoff for Delta creditors to request a delay in a Feb. 7 bankruptcy hearing on the reorganization plan submitted by Delta managers, who are pressing to keep the airline independent.
Parker said Tuesday that he would hold Delta creditors to that deadline. US Airways Group Inc. has declined to comment on whether it would make other offers for Delta after that, but Parker was firmer in stating that he would not pursue Delta after it emerges from bankruptcy….
Delta lands $2.5 billion in exit financing - AP via Philadelphia Inquirer
Delta Air Lines Inc., the nation’s third-largest carrier, said yesterday that it had obtained a commitment for $2.5 billion in financing as part of its plan to emerge from bankruptcy by the middle of this year as a stand-alone company.
The Atlanta company said the financing would be led by six financial groups – JPMorgan Chase & Co., the Goldman Sachs Group Inc., Merrill Lynch & Co. Inc., Lehman Bros. Holdings Inc., UBS AG, and Barclays Capital.
Delta said the financing would be secured by collateral in its existing financing for its operations while in bankruptcy.
The airline said the money was a key ingredient that would help it meet its goal for exiting bankruptcy…..
Eleven bidders line up to compete for 30 per cent stake in Alitalia – The Times of London
The Italian Treasury said last night that it had been approached by 11 potential buyers for a 30 per cent stake in Alitalia held by the Government.
However, Air France-KLM was not among the bidders for the stake.
Air France-KLM said in a statement that it would continue to develop its Sky team partnership with Alitalia, but that “the conditions did not exist” for it to purchase the stake offered by the Italian Government.
The deadline for bidders to “express interest” in buying a stake expired yesterday at 6pm. Paolo Alazraki, the Milanese businessman, was the first to announce his intentions, saying that he was prepared to buy the entire 49.9 per cent government holding….
Bidders jostle for Aston Martin – Financial Times
Ford Motor is on Wednesday expected to receive revised offers from a handful of remaining bidders left in the auction for Aston Martin, the sports carmaker it is attempting to sell for more than £450m.
These are thought to include Simon Halabi, the property tycoon, and buy-out group Doughty Hanson. Magna, the Canadian car parts group, and a consortium including James Packer, the Australian media billionaire, may also lodge bids.
However, the continuing involvement of Permira is uncertain, while rival buy-out groups that have dropped out include Alchemy, Texas Pacific Group and One Equity, the JPMorgan private equity business that counts Jac Nasser, former Ford chief executive, as a senior partner….
