RPT-UPDATE 1-Deutsche Bank Q2 in line, bad loan provisions fall

July 28, 2010 By Leave a Comment

FRANKFURT, July 27 (Reuters) – Deutsche Bank (DBKGn.DE) posted second-quarter pretax profit in line with expectations, helped by lower loan loss provisions amid weaker industry trends in investment banking.

Deutsche’s corporate banking and securities division, which posted 779 million euros ($1.01 billion) in pretax profit, and global transaction banking with 478 million euros, accounted for the lion’s share of 1.52 billion in group pretax ea¦rnings, Germany’s biggest lender said on Tuesday.

Both divisions are now run by 47-year old Anshu Jain, who took sole control of the investment bank on July 1.

Deutsche performed less strongly than in the first quarter, but 16 percent stronger than during the year-earlier period, mirroring a trend among U.S. peers like Goldman Sachs (GS.N) and Morgan Stanley (MS.N). [ID:nN19193014] [ID:nN21197777] [ID:nSGE66K0EM]

Deutsche’s other divisions, which include a wealth management and an asset management unit, turned a profit but failed to counterbalance the German lender’s dependence on the division run by cricket fanatic Jain.

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Analysts polled by Reuters had estimated that Germany’s biggest lender would earn 1.6 billion euros in pretax profit in the quarter ended in June. [ID:nLDE66M15I]

Deutsche Bank, which posted a second-quarter net profit of 1.2 billion euros and revenues of 7.2 billion, reiterated it aims to achieve 10 billion in pretax profit at the group level next year. [ID:nLDE5BD25R]

According to Thomson Reuters StarMine, Deutsche Bank trades at 6.6 times 12-month forward earnings, a discount to Swiss peers Credit Suisse (CSGN.VX) and UBS (UBSN.VX), which trade at multiples of 7.8 and 8.8, and to U.S. rivals Morgan Stanley (MS.N) and Goldman Sachs (GS.N), which trade at multiples of 8.4 and 8.7.

UBS also published forecast beating results on Tuesday. [ID:nLDE66P0CS] (Reporting by Edward Taylor)

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Daiwa posts Q1 loss on underwriting slump

July 28, 2010 By Leave a Comment

July 27 (Reuters) – Daiwa Securities Group (8601.T), Japan’s second-biggest brokerage, posted a second consecutive quarterly loss, hit by a drop in fees to manage share and bond offerings.

Daiwa, which competes with Nomura Holdings Inc (8604.T), posted a 1.19 billion yen ($13.7 million) net loss in April-June, compared with a 2.8 billion yen loss in the previous quarter and a 17.9 billion yen profit in the same period a year earlier.

The result was roughly in line with market expectations. The average of three analysts surveyed by Thomson Reuters I/B/E/S had estimated a loss of 410 million yen.

Daiwa’s earnings mirrored those of bigger U.S. rivals, including Goldman Sachs (GS.N) and JPMorgan Chase & Co (JPM.N), which also suffered from lower trading revenue and investment banking fees in the latest quarter.

Japanese companies sold $5.2 billion worth of shares in the quarter, less than half the $13.8 billion in the same period a year earlier, according to Thomson Reuters data, cutting into underwriting fees across the investment banking industry.

Prior to the announcement, shares of Daiwa rose 0.3 percent to 375 yen, in line with the securities sector subindex .ISECU.T, which gained 0.5 percent. (Reporting by Junko Fujita; Editing by Lincoln Feast)

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UBS seeks 2,200 new hires in Asia-region chief

July 26, 2010 By Leave a Comment

ZURICH, July 25 (Reuters) – Swiss bank UBS (UBSN.VX)(UBS.N), the top wealth manager in Asia, plans to hire 2,200 new staff in the region, the head of UBS in Asia Pacific said in an Swiss magazine interview, a move that would return it to its pre-crisis splendour.

Chi-Won Yoon, who became Chief Executive of UBS Group Asia Pacific in June 2009, also said the euro’s gyrations could influence UBS’ second quarter results, according to an article on the website of trade magazine “Schweizer Bank”. “The defensive phase, in which we tried to mantain our standing and contain any loss of position, is behind us. We are now back on the offensive,” Yoon, who joined UBS in 1997 and is also a UBS executive board member, was quoted as saying in an interview.

“We have 7,300 employees in the region. In three years they should be 9,500, the same level we had in mid-2007.” Yoon said UBS’ expansion would go beyond the private banking business.

“We remain the leading wealth manager in the region but we also have a strong position in investment banking and securities trading. Here we are going to continue to expand,” he said.

Yoon said UBS was, together with U.S. investment bank Goldman Sachs (GS.N), already a leader in securities trading and investment banking in China. Right now, most of the business was done outside mainland China, like stock listings in Hong Kong.

But he said that banking activity in China itself would become more and more attractive.

“The private banking business of our UBS Securities division in four big Chinese cities is growing vigorously,” he said.

China is already the seventh country in the world in terms of millionaires. However, Yoon said bureaucracy and administrative procedures remained a challenge.

Beyond China, UBS is focusing on India, HongKong, Singapore, South Korea and Australia, Yoon said. (Reporting by Lisa Jucca; editing by Karen Foster)

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Highstreet agrees rent compromise on Karstadt-paper

July 26, 2010 By Leave a Comment

July 25 (Reuters) – Property group Highstreet has agreed to a compromise on rents with insolvent retailer Karstadt, a move which will help investor Nicolas Berggruen rescue the department store operator, according to German daily Bild am Sonntag.

A disagreement on store rents had prevented Berggruen from striking a deal with the highstreet consortium, which consists of Goldman Sachs (GS.N), Deutsche Bank (DBKGn.DE) and Pirelli Real Estate (PCRE.MI). [ID:nLDE60D1U8]

“We have paved the way to an agreement, we made some concessions on the rental contract,” Alexander Dibelius, the head of Goldman Sachs in Germany, Austria, Russia, Central and Eastern Europe, told the paper.

Highstreet had warned Berggruen that Karstadt, which owns the famous KaDeWe department store in Berlin, could still be liquidated if an accord on rents did not emerge soon.

Berggruen, the billionaire son of a German art collector, has said he wants to save the Karstadt brand and the 25,000 jobs at stake, but demanded further concessions from property owners like Highstreet. (Editing by Sugita Katyal)

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Market Chatter — Corporate finance press digest

July 23, 2010 By Leave a Comment

July 22 (Reuters) – The following corporate finance-related stories were reported by media on Friday:

* Spain’s Santander (SAN.MC) is preparing to list its UK operations on the London market as early as this autumn, the Financial Times said, in a deal that could raise an estimated 3 billion pounds ($4.55 billion) to fund growth by the bank. [ID:nLDE66L007]

* Paulson & Co, the hedge fund linked to civil fraud charges against Goldman Sachs (GS.N), will launch a new fund open to retail investors, the Financial Times said. [ID:nLDE66L00M] (Compiled by Tresa Sherin Morera)

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Nikkei slips 0.9 percent but off earlier lows

July 21, 2010 By Leave a Comment

TOKYO, July 20 (Reuters) – Japan’s Nikkei average fell 0.9 percent but was off earlier lows on Tuesday, with tech shares hit by worry over the pace of U.S. economic recovery, disappointing U.S. corporate results and a strong yen.

Traders returned from a three-day weekend and were playing catch-up with other Asian markets that fell on Monday due to a sharp drop in U.S. consumer sentiment.

Charts suggested a further dip may still lie ahead, with the Nikkei’s MACD, a measure of market momentum, nearing a bearish cross while its slow stochastic — a measure of how oversold the market is and whether it is in a short-term up or down trend — continued to fall.

On Monday, Wall Street rose on hopes for earnings from Texas Instruments (TXN.N) and fellow tech firm International Business Machines (IBM.N), but shares of both slumped in after-hours trade as Texas Instruments’ revenue failed to impress and IBM’s revenue missed expectations. [ID:nN19191611] [ID:nN19215910]

But the dollar edged up against the yen JPY= after falling to a seven-month low on Friday, helping the Nikkei pare losses as short-covering emerged after the benchmark sustained its worst one-day percentage fall in over a month on Friday. [FRX/]

“It’s a sign that the economic recovery is slowing down when companies report profits that are above market expectations but their sales figures remain sluggish,” said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.

“Still, the market had risen on expectations towards strong profits, and things about sales numbers could have been used as an excuse to sell for now. Companies are at least in a position to produce profits now and hopes for the earnings season are continuing.”

Eyes remain on moves in the currency markets and U.S. earnings results, market players said, with Goldman Sachs (GS.N), Apple Inc (AAPL.O) and Yahoo Inc (YHOO.O) set to report later on Tuesday.

The benchmark Nikkei .N225 shed 81.09 points to 9,327.27 after earlier falling as much as 1.7 percent, while the broader Topix lost 0.8 percent to 834.22.

Japanese markets were closed on Monday for a holiday and on Friday the Nikkei fell nearly 3 percent as investors took profits.

On Monday, the NAHB/Wells Fargo Housing Market index fell more than expected in July to its lowest level since April 2009 after a popular tax credit for homebuyers expired in April, underlining fears about the economic recovery ahead of housing data including housing starts on Tuesday.

“There’s a slight ebbing of risk avoidance but some of the U.S. results are cause for concern, especially some not very good forecasts for later in the year, and this is affecting the Nikkei,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities.

“A substantial break below 9,200 would leave us with few real support levels until around 9,000, but we’d probably need a substantial drop in either overseas stock markets or a surge in the yen for this to happen.”

Market players said support for the Nikkei was likely to hold for now at 9,200, just under its July 1 close, which was a seven-month closing low.

While charts look bearish, the benchmark is also approaching oversold levels on some fronts. Its relative strength index (RSI) hit 40, its lowest in roughly two weeks, with anything from 30 and below considered oversold, and its slow stochastic was approaching oversold territory.

TECH TROUBLES

Tech shares were hit by disappointment over U.S. corporate results, but pared earlier losses. The dollar was up 0.3 percent against the yen at 86.98 yen.

Chip gear manufacturer Tokyo Electron (8035.T) lost 2.6 percent to 4,695 yen and electronic components maker TDK Corp (6762.T) shed 2 percent to 5,000 yen. Sony Corp (6758.T) fell 2.5 percent to 2,344 yen.

Other exporters also fared poorly. Investors fret about a stronger yen since it eats into exporters’ profits when they are repatriated.

Toyota Motor Co (7203.T) slid 2.2 percent to 3,065 yen and Honda Motor Co (7267.T) fell 2 percent to 2,600 yen.

Shares of Daiwa Securities Group (8601.T), Japan’s second-largest brokerage, declined 2.6 percent to 378 yen after the Nikkei business daily reported the company likely suffered a loss in April-June, as financial market turmoil stemming from the Greek debt crisis took a toll.

The loss was likely between several billion yen and 10 billion yen ($115 million), marking a second consecutive loss for the company, which trails Nomura Holdings Inc (8604.T) in Japan’s mature brokerage market, the Nikkei said.

But shares of Leopalace21 Corp (8848.T) rose 2.7 percent to 232 yen after Credit Suisse lifted its rating on the developer and operator of apartments and hotels to “neutral” following its tumble close to the broker’s target price of 230 yen.

Leopalace’s stock had lost more than half its value over the past three months. Credit Suisse attributed the recent slide to a deterioration in occupancy rates, dwindling orders and unrealised losses on apartments. (Editing by Joseph Radford)

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GDF working on $9.8 bln bid for Int’l Power-paper

July 19, 2010 By Leave a Comment

July 18 (Reuters) – French energy group GDF Suez (GSZ.PA) is working on a 6.4 billion pound ($9.8 billion) cash bid for Britain’s International Power (IPR.L), in the latest twist in a long-running courtship, the Mail on Sunday said.

The newspaper, citing unnamed sources, said GDF had met advisers NM Rothschild [ROT.UL], Goldman Sachs (GS.N) and BNP Paribas (BNPP.PA) over the move, adding it had the backing of the French government, its 35 percent shareholder.

Talks between the two groups over the 420 pence a share proposal were at an initial stage after discussions that lasted several months broke down in January, the Mail on Sunday added.

GDF Suez, International Power and Goldman Sachs declined to comment. NM Rothschild was not immediately available for comment, while BNP Paribas could not immediately be reached. (Reporting by Mark Potter and Victoria Howley; Editing by David Holmes) ($1=.6519 Pound)

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UPDATE 1-Goldman Sachs to sell Japan’s Teibow-sources

July 15, 2010 By Leave a Comment

TOKYO, July 14 (Reuters) – Goldman Sachs (GS.N) is planning to sell its stake in Japan’s Teibow Co, a maker of felt pen nibs, in a deal that could be worth about 10 billion yen ($113 million), according to five people with direct knowledge of the matter.

Goldman bought an 86 percent stake in Teibow, a Shizuoka-based company which also has an office in Shanghai, in 2006, when the private equity market peaked in Japan, for an undisclosed amount.

Goldman is among a number of firms trying to sell investments they made around that time, with some struggling to find buyers.

A spokeswoman in Tokyo for Goldman Sachs declined to comment.

Japanese private equity firms Advantage Partners, Wise Partners and Polaris Principal Finance, as well CITIC Capital Partners, which is backed by the Chinese government, are bidding for Teibow, the sources said, asking not to be identified because the process is not public.

The deal emerges as Daiwa SMBC Capital is looking for a buyer for vegetable juice maker Q’sai Co and as CVC Capital Partners tries to sell shoe repair chain Minit Asia Pacific Co. [ID:nTFA006628] [ID:nTKX006709]

“These investments that were made in 2006 and 2007 are certainly are not having an easy time getting sales as the stock market is still in the doldrums,” said Rita Springett, president of consulting firm Delfino Capital’s Tokyo office.

“And obviously depending on the deals some of them were evidently bought at quite steep prices.”

Mizuho Securities (8606.T) is acting as an adviser on the Teibow sale, the sources said. (Reporting by Junko Fujita and Wakako Sato; Editing by Joseph Radford)

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Infosys Q1 disappoints and Europe woes dampen outlook

July 14, 2010 By Leave a Comment

(Reuters) – Infosys Technologies (INFY.BO) edged up its forecast on a revival in outsourcing demand from its mainstay financial clients, but its shares fell as markets worried a weak European economy could curb orders.

India’s No. 2 outsourcer reported a surprise 2.6 percent drop in April-June profit and its sales contribution from Europe fell to about 20 percent from nearly 25 percent a year ago and 23 percent in January-March.

The company, a trendsetter in the country’s showpiece IT services sector, added 1,026 staff in April-June, its slowest pace of addition in four quarters.

The lower-than-expected profit and hiring triggered concerns of a slowdown in growth, sending its shares 2.8 percent lower in a flat market .BSESN. The stock hit a record high on Monday.

“There are still concerns lingering over Europe’s debts and if the economy there is weak, consumption should be weak too,” said Huey Yang, a fund manager with HSBC in Taipei.

Infosys and local rivals Tata Consultancy Services (TCS.BO) and Wipro (WIPR.BO) have raised salaries by 10 to 20 percent on average to keep staff from being poached by global rivals in a strong market.

India’s export-driven software services firms, however, face uncertainty on orders from Europe, the second-biggest market for the industry after the United States.

Infosys, which counts Goldman Sachs (GS.N), BT Group (BT.L) and BP (BP.L) among its more than 550 customers, forecast its 2010/11 dollar revenue to rise 19 percent to 21 percent, higher than 16-18 percent projected in April.

UNCERTAIN ENVIRONMENT

“While the global economic environment remains uncertain, we continue to see greater demand for services from our clients,” said Infosys chief executive S. Gopalakrishnan.

“The challenge for the industry is to enhance the investment to grow the business, given the uncertainty in the environment.”

In a report this month research firm Forrester said Europe’s volatile economic situation and uncertainty about corporate IT budgets would result in possible delays or cancellations of some outsourcing projects.

Growing competition from IBM (IBM.N), Accenture (ACN.N) and Hewlett-Packard (HPQ.N) also pose a risk to the sector, which manages complex computer networks and maintains technology operations for Fortune 500 customers.

“The numbers are really bad at operating levels, they are 40-50 bps down than what we had expected,” said Shradha Agarwal, analyst at Batlivala & Karnani Securities in Mumbai.”The numbers would not see a significant upgrade from these levels.”

Infosys, known for its conservative outlook, has raised its full-year revenue growth forecast in dollar terms in the last three consecutive quarters.

The company expects earnings per American depositary share to rise 5.2 percent to 9.6 percent for the year, up from its previous forecast of 4.3 percent to 8.6 percent.

Nasdaq-listed Infosys (INFY.O) said net profit in its fiscal first quarter ended June 30 fell to 14.9 billion rupees ($318 million) from 15.3 billion rupees a year ago.

A Reuters poll of brokerages had forecast a profit of 15.56 billion rupees.

Infosys reported under the International Financial Reporting Standards for the second successive quarter.

(Writing by Sumeet Chatterjee; additional reporting b Baker Li in Taipei, Reuters India company news team; Editing by Ranjit Gangadharan and Anshuman Daga)

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TPG, Goldman set to buy Candover’s Ontex -sources

July 6, 2010 By Leave a Comment

July 5 (Reuters) – TPG and Goldman Sachs’s private equity arm are close to a deal to buy Ontex, the European private-label diaper maker, from buyout firm Candover for 1.2 billion euros ($1.5 billion) or more, people familiar with the matter said.

The parties hope to conclude a deal this week, although talks could still break down, the people added.

The possible sale of Ontex, which competes with Procter & Gamble’s (PG.N) Pampers diaper brand, was first reported by the Sunday Telegraph.

TPG [TPG.UL], the U.S. buyout firm, has all but held off from European dealmaking for several years, but last month struck a 300 million pound ($464 million) deal to buy British fashion retailer Republic. [ID:nLDE65K0IZ] People familiar with the matter say TPG is also working on a joint bid with Clayton, Dubilier & Rice for Royal Bank of Scotland’s 2.5 billion pound payment-processing business, known by its WorldPay brand. [ID:nLDE65F2BF]

Candover (CDI.L), Goldman Sachs (GS.N) and TPG declined to comment.

($1=.6465 Pound)

($1=.8172 Euro)

(Reporting by Quentin Webb, editing by Michael Shields)

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UPDATE 4-Banks win fund exemption in toughened Volcker rule

June 26, 2010 By Leave a Comment

WASHINGTON, June 24 (Reuters) – Banks would face stricter limits on risky trading and investing, but could make small investments in private equity and hedge funds under a modified “Volcker rule” backed by U.S. lawmakers on Thursday.

In a victory for banks that had lobbied for a limited loophole on fund investing to be included in landmark Wall Street reform legislation, a Senate-House of Representatives panel agreed to make changes to the controversial rule.

Senator Christopher Dodd proposed that up to 3 percent of a bank’s Tier 1 capital could be invested in private equity and hedge funds, and that a bank’s investment in any single fund not exceed 3 percent of the fund’s total ownership interest.

Those thresholds were backed by both the Senate and House delegations to the “conference committee” and will be included in the final bill if it is finally approved. It was still being debated into the wee hours on Friday morning by the panel.

Banks would have considerable time to sell off stakes in such funds that exceed the new caps, and to make other changes to adjust to the Volcker rule, which is named after White House economic adviser Paul Volcker and backed by the White House.

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For full coverage of U.S. Financial Regulation [nFINREG]

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Some of Wall Street’s largest financial institutions, such as Goldman Sachs (GS.N), JPMorgan Chase (JPM.N), Credit Suisse (CSGN.VX) and Citigroup (C.N) have been deeply involved in private equity deals and could face changes, analysts said.

“The Volcker rule could have been a lot worse for the banking sector than the version distributed this evening. This version will still hurt profitability and impact business decisions. But it is not the knock-out blow some had feared,” said Concept Capital policy analyst Jaret Seiberg.

Lobbyists for Bank of New York Mellon (BK.N), State Street Corp (STT.N) and Northern Trust Co (NTRS.O) were especially active in pressing for exemptions to let their asset management units continue to make small, or ‘de minimis,’ investments in private equity and hedge funds, congressional aides said.

COMPLETION TARGETED

Lawmakers hoped to finish the overall bill on Friday. If they can, the bill would need to pass both the Senate and the House before it could go to President Barack Obama to be signed into law. Democrats want that to happen before July 4.

Dodd’s proposal toughened the rule along lines suggested by Democratic senators Jeff Merkley and Carl Levin that would give regulators less leeway in implementing it and require non-bank firms that do risky trading to hold more capital.

The rule would bar banks from doing “proprietary trading” for their own accounts that is unrelated to the needs of their customers. Its aim is to insulate core banking operations from riskier trading operations at financial institutions that are backed by government deposit insurance and in other ways.

Democratic Senator Jack Reed said the rule would insulate the core bank from investments in private equity and hedge funds. “We’ve built in some strong protections,” Reed said.

A new interagency Financial Stability Oversight Council, also proposed as part of the overall legislation, would have to study the Volcker rule and regulators would have nine months after that to implement it. Financial services firms would have a year to comply with the new rules after they are issued.

“This proposal addresses the underlying concern of putting depository funds at risk. … It puts a stop to proprietary trading, but also recognizes that there are legitimate hedging activities that banks need to engage in,” Dodd said.

Dodd had said earlier in the negotiating session on Thursday that the cap on banks’ fund investments be 3 percent of tangible common equity. Later, he changed it to Tier 1 capital, a measure of a bank’s core capital strength. (Reporting by Kevin Drawbaugh, Andy Sullivan, Kim Dixon and Rachelle Younglai, editing by Jackie Frank)

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UPDATE 1-ING raises $175 mln from Kotak stake sale-sources

June 25, 2010 By Leave a Comment

MUMBAI, June 24 (Reuters) – Dutch financial services group ING (ING.AS) raised $175 million by selling its entire 3.1 percent stake in India’s Kotak Mahindra Bank (KTKM.BO), two sources with direct knowledge of the deal said on Thursday.

The sale of 10.8 million shares in stock market block deals was done at 750 rupees a share, the sources told Reuters. Another source had told Reuters on Wednesday that shares would be sold in the range of 730-750 rupees each. [ID:nSGE65M0HB]

The final sale price represent a 4.2 percent discount to Wednesday’s close price of 783.20 rupees.

Anneloes Geldermans, a spokeswoman for ING in Amsterdam confirmed that the Dutch group had sold its 3.1 percent stake in the Indian lender, but refused comment on the price at which the deal was struck. [ID:nWEA7349]

ING’s decision to sell its stake in Kotak was taken after “careful consideration” and is part of the bank’s “back to basics” programme announced in April 2009, which included a planned 8 billion euros in asset sales, she said.

Shares in Kotak Mahindra, which the market values at roughly $6 billion, fell as much as 3.4 percent after the block deal to their lowest in a week. By 0550 GMT, shares in Kotak Mahindra were down 2.2 percent at 766 rupees. Citibank (C.N) was the sole adviser to the deal, the sources said.

On Tuesday, another Dutch lender, Rabobank [RABO.UL], moved a step closer to setting up its own banking unit in India as it cut its stake in mid-sized local lender Yes Bank (YESB.BO) for about $213 million.

Citi was also the adviser on that deal, a separate source had said on Tuesday. [ID:nSGE65L05H]

Standard Chartered (STAN.L), Credit Suisse (CSGN.VX) and Citibank are expanding their services and Goldman Sachs (GS.N) has applied for a banking licence in India, whose economy is forecast to grow more than 8 percent this fiscal year. ($1=46.3 rupees) (Reporting by Sumeet Chatterjee and Tony Munroe; additional reporting by Amsterdam newsroom; Editing by Unnikrishnan Nair)

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UPDATE 1-AgBank picks banks to lead $23 bln IPO -sources

June 21, 2010 By Leave a Comment

HONG KONG, June 20 (Reuters) – The Agricultural Bank of China has chosen the banks to lead its more than $23 billion initial public offering, sources involved with the process said on Sunday, a move that finally sorts out the key roles for the deal.

AgBank’s selection of its top banks came as key investors swooped in on the offering while its underwriters market the dual listing to institutional investors. Qatar has agreed to invest $2.8 billion into AgBank’s IPO, according to a report on Sunday.

AgBank, China’s third largest lender, has selected its internal securities unit, as well as CICC, Goldman Sachs (GS.N) and Morgan Stanley (MS.N) as joint global coordinators for the offering, granting these banks top status for the IPO’s handling among the 11 banks picked to underwrite the Shanghai-Hong Kong deal.

The joint global coordinators take on the most responsibility for an IPO and also stand to earn the biggest fee, which in the case of AgBank could be one of the largest fee pools ever for an IPO. Should the offering exceed $21.9 billion, it would be the largest IPO in history, shedding around $450 million in fees to the banks at an estimated 2 percent charge.

AgBank had taken the rare approach of waiting until well into the process to select it’s joint coordinators, a move that some people involved said was beginning to cause frustration [ID:nLDE65G0LH].

The appointing of the coordinators is a key step for the deal as it enters a critical phase, with underwriters and executives reaching out to institutional investors in Asia and worldwide to convince them to invest in the company ahead of a planned July 6 pricing date, and July 15 debut.

One way to convince institutions to invest is by revealing a list of funds or corporations that have agreed to back the IPO at the start of the process.

Reuters reported on Friday that of the seven cornerstone investors so far, two Middle East sovereign wealth funds, Kuwait and Qatar, were among those that agreed to invest in AgBank, with each expected to invest around $1 billion each [ID:nTOE65H034].

Bloomberg reported on Sunday that Qatar has agreed to invest $2.8 billion, which would make up a significant portion of the roughly 40 percent of the Hong Kong offering that the company is granting to cornerstone investors.

AgBank hopes to raise up to $14.4 billion through its Hong Kong offering, according to a term sheet previously reported by Reuters, an amount that includes an over-allotment of shares to be used after the stock trades. Excluding that, AgBank plans to raise around $12 billion for its H-share offering.

The IPO is a key step for the bank to raise capital and become the last of China’s Big Four banks to go public. AgBank, which at 320 million has more customers than the population of the United States, has suffered in the past from a large book of loans that went bed.

The bank has since cleaned up that book, and will use the capital from the IPO to secure its balance sheet.

AgBank and the Qatar Investment Authority were not available for comment. The banks mentioned either declined to comment or were not immediately available. (Reporting by Michael Flaherty and Kennix Chim; Additional reporting by Dinesh Nair in Dubai; Editing by Jon Loades-Carter)

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AgBank picks banks to lead more than $23 bln IPO-sources

June 21, 2010 By Leave a Comment

June 20 (Reuters) – The Agricultural Bank of China has chosen the banks to lead its more than $23 billion initial public offering, sources involved with the process said on Sunday, a move that finally sorts out the key roles for the deal.

Stocks | IPOs | Global Markets

CICC, Goldman Sachs (GS.N), Morgan Stanley (MS.N) and AgBank’s securities unit were chosen as joint global coordinators for the offering, granting these banks top status for the IPO’s handling among the 11 banks picked to underwrite the deal.

The joint global coordinators take on the most responsibility for an IPO and also stand to earn the biggest fee, which in the case of AgBank could be one of the largest fee pools ever for an IPO. (Reporting by Michael Flaherty; Editing by Jon Loades-Carter)

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German stocks – Factors to watch on June 8

June 9, 2010 By Leave a Comment

June 8 (Reuters) – The following are some of the factors that may move German stocks on Tuesday.

Industrials

DAIMLER (DAIGn.DE)

Nigeria’s anti-corruption agency said on Monday it was investigating the involvement of Nigerian officials in alleged bribes paid by Daimler and a local vehicle assembly company. [ID:NLDE6562AZ]

Related news [DAIGn.DE-E]

BASF (BASF.DE)

Pemex, Mexico’s state oil company, sued BASF and several oil trading companies on Monday, alleging they illegally profited from processing stolen oil. [ID:nN07201794]

Related news [BASF.DE-E]

KARSTADT (AROG.DE)

Billionaire Nicolas Berggruen, the son of a well-known art collector, appears to have won a key victory in the bidding for Karstadt, the German department store chain that collapsed a year ago. A committee of Karstadt creditors chose Berggruen’s bid over rival offers from German-Swedish financial investor Triton and the Highstreet consortium, owned by Goldman Sachs (GS.N), Deutsche Bank (DBKGn.DE) and Pirelli Real Estate. [ID:NLDE6560RM] [ID:nWEA5178]

Related news [AROG.DE-E]

BILFINGER BERGER (GBFG.DE)

The German construction group’s Australian unit hopes to raise between A$1.2 billion ($971.7 million) to A$1.4 billion ($1.13 billion) via an IPO, two sources with direct knowledge of the deal said. Earlier on Tuesday, the company said a prospectus for the initial public offer had been lodged. [ID:nSYU010044] [ID:nSYU010046]

Related news [GBFG.DE-E]

KUKA (KU2G.DE)

The robotics maker has tapped the capital market for the second time in eight months. The supervisory board approved to increase the company’s share capital by issuing around 4.65 million shares at a ratio of six new shares for every one currently held by shareholders, it said late Monday. The subscription price is 9.75 euros per share with the subscription period on June 9-22.

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OPEL [GM.UL]

A senior German politician representing the interests of Opel workers in eastern Germany on Monday said the Berlin government was suppressing information that could bolster the case for granting state aid to the carmaker.[ID:nLDE656140]

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OVERSEAS STOCK MARKETS

Dow Jones .DJI down 1.16 pct, S&P 500 .SPX down 1.35 pct, Nasdaq .IXIC down 2.04 pct at Monday’s close. [ID:nN07214322]

Nikkei .N225 up 0.21 4 pct at 0517 GMT. [ID:nTOE657020]

EUROPEAN FACTORS TO WATCH [WATCH/EU]

DIARIES [DE/DIA] [WEU/EWQUITY]

REUTERS TOP NEWS [ID:NTOPNEWS]

(Reporting by Marilyn Gerlach)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Profits still hold key; Greece’s debt

April 26, 2010 By Leave a Comment

(Reuters) – Wall Street is heading into another earnings blitz this week and the prospects of strong results from bellwethers like Caterpillar Inc and 3M Co should propel indexes to new recovery highs.

Another round of strong earnings would be more evidence that the U.S. economic recovery is gaining strength and may help temper some of the risk associated with Greece’s debt woes after Athens formally requested aid from the European Union and the International Monetary Fund on Friday.

Of the 172 S&P 500 companies that have already reported earnings for the quarter, some 83 percent have beaten analyst expectations, well above the 61 percent in a typical quarter and above the 79 percent record set in the third quarter of 2009, according to Thomson Reuters data.

“Fundamentals are continuing to look great, earnings look great. But some market players continue to underestimate how strong this economy is. They continue to fight it, particularly in the retail and consumer sectors,” said Paul Zemsky, head of asset allocation at ING Investment Management in New York.

“We continue to think that the economy is going to perform better than consensus. We have turned the corner on job growth.”

Although there are other events in the coming week that could play on sentiment, earnings are still seen as the driving factor — unless other events offer surprises.

The Federal Reserve also has a two-day policy meeting this week, but analysts widely expect the central bank will keep interest rates near zero and stick to its pledge of low rates for an extended period to foster the recovery.

And top executives from Goldman Sachs (GS.N) are scheduled to testify before a U.S. Senate panel of on Tuesday.

The testimony of Goldman Sachs Chief Executive Lloyd Blankfein and the bond trader at the center of a high-profile civil fraud case promises to be a major spectacle after the Securities and Exchange Commission leveled charges against the bank and the trader, Fabrice Tourre, a week ago.

The Senate Permanent Subcommittee on Investigations has said it was using Goldman to probe the role of investment banks in the securitization of mortgage products and the “development, marketing and trading” of products such as collateralized debt obligations.

Although the hearing will command attention and put Goldman in the spotlight, corporate earnings are expected to support evidence of the economic recovery and drive the market higher.

“Looking for continued economic improvement and first-quarter corporate reports is more tangible in terms of gleaning the strength and direction of this recovery” as opposed to the noise of Goldman and financial reform,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.

Besides Caterpillar and 3M Co, other earnings highlights this week will include U.S. Steel Corp (X.N); chipmaker Texas Instruments (TXN.N); chemical maker DuPont (DD.N) and credit and debit payments network Visa Inc (V.N).

Energy heavyweights Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N) are also on the earnings scoreboard. For a full earnings diary, see

There are also plenty of economic indicators to wade through, including the government’s advance reading on first-quarter gross domestic product on Friday.

“I think you could see some folks throwing in the towel right there, realizing that this economy is recovering and growing a lot more strongly than the perma-bears believe,” Orlando said on the upcoming GDP report.

A Reuters poll of economists forecast GDP, the broadest measure of the U.S. economy, grew at an annualized 3.4 percent rate in the first quarter, after a 5.6 percent increase in the prior quarter.

In addition, reports on consumer sentiment and consumer confidence are due on Tuesday and on Friday, respectively. For a full economic diary, see

One big question facing investors in the coming week on Greece is whether its formal request for EU and IMF aid will calm fears of default. The clamor among investors for something to be done about Greece’s debt had reached a crescendo before Prime Minister George Papandreou announced on Friday he was asking for aid.

U.S. stocks, nonetheless, have shrugged off worries over Greece, propelling both the benchmark S&P 500 .SPX and the Dow Jones industrial average .DJI to 19-month highs.

Technically, the S&P 500 .SPX, up 80 percent since the March 2009 bottom, has spent the past week building a base in the 1,200 area.

The S&P on Friday close at 1,217.28 points.

According to John Schlitz, chief U.S. market technician at Instinet in New York, the S&P 500′s next upside target is the 1,225-1,235 area. “We could be testing those levels soon if the earnings and macro data continue to pleasantly surprise,” he said.

(Additional reporting by Leah Schnurr; Editing by Leslie Adler and Maureen Bavdek)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

RPT-Wall St Week Ahead: Profits still hold key; Greece’s debt

April 26, 2010 By Leave a Comment

NEW YORK, April 23 (Reuters) – Wall Street is heading into another earnings blitz this week and the prospects of strong results from bellwethers like Caterpillar Inc and 3M Co should propel indexes to new recovery highs.

Another round of strong earnings would be more evidence that the U.S. economic recovery is gaining strength and may help temper some of the risk associated with Greece’s debt woes after Athens formally requested aid from the European Union and the International Monetary Fund on Friday.

Of the 172 S&P 500 companies that have already reported earnings for the quarter, some 83 percent have beaten analyst expectations, well above the 61 percent in a typical quarter and above the 79 percent record set in the third quarter of 2009, according to Thomson Reuters data.

“Fundamentals are continuing to look great, earnings look great. But some market players continue to underestimate how strong this economy is. They continue to fight it, particularly in the retail and consumer sectors,” said Paul Zemsky, head of asset allocation at ING Investment Management in New York.

“We continue to think that the economy is going to perform better than consensus. We have turned the corner on job growth.”

Although there are other events in the coming week that could play on sentiment, earnings are still seen as the driving factor — unless other events offer surprises.

The Federal Reserve also has a two-day policy meeting this week, but analysts widely expect the central bank will keep interest rates near zero and stick to its pledge of low rates for an extended period to foster the recovery.

And top executives from Goldman Sachs (GS.N) are scheduled to testify before a U.S. Senate panel of on Tuesday.

The testimony of Goldman Sachs Chief Executive Lloyd Blankfein and the bond trader at the center of a high-profile civil fraud case promises to be a major spectacle after the Securities and Exchange Commission leveled charges against the bank and the trader, Fabrice Tourre, a week ago.

The Senate Permanent Subcommittee on Investigations has said it was using Goldman to probe the role of investment banks in the securitization of mortgage products and the “development, marketing and trading” of products such as collateralized debt obligations.

Although the hearing will command attention and put Goldman in the spotlight, corporate earnings are expected to support evidence of the economic recovery and drive the market higher.

“Looking for continued economic improvement and first-quarter corporate reports is more tangible in terms of gleaning the strength and direction of this recovery” as opposed to the noise of Goldman and financial reform,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.

Besides Caterpillar and 3M Co, other earnings highlights this week will include U.S. Steel Corp (X.N); chipmaker Texas Instruments (TXN.N); chemical maker DuPont (DD.N) and credit and debit payments network Visa Inc (V.N).

Energy heavyweights Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N) are also on the earnings scoreboard. For a full earnings diary, see [RESF/US]

There are also plenty of economic indicators to wade through, including the government’s advance reading on first-quarter gross domestic product on Friday.

“I think you could see some folks throwing in the towel right there, realizing that this economy is recovering and growing a lot more strongly than the perma-bears believe,” Orlando said on the upcoming GDP report.

A Reuters poll of economists forecast GDP, the broadest measure of the U.S. economy, grew at an annualized 3.4 percent rate in the first quarter, after a 5.6 percent increase in the prior quarter.

In addition, reports on consumer sentiment and consumer confidence are due on Tuesday and on Friday, respectively. For a full economic diary, see [ECI/US]

One big question facing investors in the coming week on Greece is whether its formal request for EU and IMF aid will calm fears of default. The clamor among investors for something to be done about Greece’s debt had reached a crescendo before Prime Minister George Papandreou announced on Friday he was asking for aid.

U.S. stocks, nonetheless, have shrugged off worries over Greece, propelling both the benchmark S&P 500 .SPX and the Dow Jones industrial average .DJI to 19-month highs.

Technically, the S&P 500 .SPX, up 80 percent since the March 2009 bottom, has spent the past week building a base in the 1,200 area.

The S&P on Friday close at 1,217.28 points.

According to John Schlitz, chief U.S. market technician at Instinet in New York, the S&P 500′s next upside target is the 1,225-1,235 area. “We could be testing those levels soon if the earnings and macro data continue to pleasantly surprise,” he said. (Wall St Week Ahead runs every Sunday. Questions or comments on this one can be e-mailed to: ellis.mnyandu(at)thomsonreuters.com) (Additional reporting by Leah Schnurr; Editing by Leslie Adler and Maureen Bavdek)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

AgBank selects banks for $20 bln IPO-sources

April 15, 2010 By Leave a Comment

HONG KONG, April 14 (Reuters) – Agricultural Bank of China, the country’s fourth-largest lender, has chosen the roster of banks to handle its upcoming IPO, sources said, an offering expected to raise more than $20 billion.

Stocks | IPOs | Global Markets | Funds News | ETFs News

A “kick off” meeting for the IPO, which if successful could be the world’s largest-ever initial public offering, is expected to begin on Thursday, sources with direct knowledge of the matter said on Wednesday.

CICC, Citic Securities, Galaxy and Guotai Junan Securities were handling the Shanghai exchange A-share portion of the offering, the sources said. Haitong Securities and China Merchants Securities were the financial advisers.

CAF Securities, CICC, Deutsche Bank (DBKGn.DE), Goldman Sachs (GS.N), Macquarie MQG.N and Morgan Stanley (MS.N) were handling the Hong Kong exchange H-share portion of the offering. J.P. Morgan (JPM.N) was also said to be involved in the offering as well, sources said. CAF Securities is AgBank’s securities division.

UBS (UBSN.VX) and Citic Securities were the financial advisers for the H-share offering, the sources said.

The total IPO could produce more than $400 million in fees to be split among the banks who participate.

The various roles and the banks involved could change at any time, sources cautioned.

AgBank could not immediately be reached for comment. (Additional reporting by Denny Thomas)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Wall Street-backed Chinese dairy firm collapses

April 15, 2010 By Leave a Comment

(Reuters) – Chinese dairy products maker Taizinai, which counts Goldman Sachs (GS.N) and Morgan Stanley (MS.N) among its investors and Citigroup (C.N) among its lenders, has collapsed, leaving around 3 billion yuan ($440 million) in unpaid debt, sources familiar with the matter said on Wednesday.

Morgan Stanley, Goldman and private equity firm Actis Capital had paid $73 million for a 31 percent stake in Cayman Islands-registered Taizinai in 2007, with Morgan Stanley providing $18 million, Goldman $15 million and Actis Capital $40 million, sources said.

The Grand Court of the Cayman Islands appointed Hong Kong accountant Borrelli Walsh as provisional liquidator of the former high flyer, the South China Morning Post reported on Wednesday, citing documents it had reviewed.

The paper was first to report the company’s collapse.

Citigroup is Taizinai’s biggest lender, while the company also owed money to Singapore’s DBS (DBSM.SI) and other banks, according to the sources.

Taizinai and Actis could not be reached for comment. The banks declined to comment. The sources have direct knowledge of the matter but are not authorized to speak publicly about the matter.

Once an IPO candidate, Taizinai, best known for its probiotic yoghurt drinks, expanded quickly, but was hit hard by China’s tainted milk scandal, which hurt dairy sales across the country.

Hunan-based Taizinai did not sell any contaminated products, but was hit by the industry downturn, one of the sources said.

With the tainted milk scandal and the over-expansion of its business, Taizinai was struggling, prompting the Hunan provincial government to take over the company in December 2008, according to a source familiar with the matter.

The local government had been managing and trying to stabilize the company since then, but was unable to make any real progress finding a solution, or a buyer.

The source said the liquidators have taken over the company, and will continue to try and seek a buyer.

As recently as the middle of last year, Taizinai was cited in Chinese media as a takeover target for Nestle SA (NESN.VX), the world’s biggest food group. A Nestle spokesman in China declined to comment about the matter at that time.

(Additional reporting by Denny Thomas and Doug Young)

(Editing by Michael Flaherty and Muralikumar Anantharaman)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

UPDATE 1-Wall St-backed Chinese dairy firm collapses

April 15, 2010 By Leave a Comment

HONG KONG, April 14 (Reuters) – Chinese dairy products maker Taizinai, which counts Goldman Sachs (GS.N) and Morgan Stanley (MS.N) among its investors and Citigroup (C.N) among its lenders, has collapsed, leaving around 3 billion yuan ($440 million) in unpaid debt, sources familiar with the matter said on Wednesday.

Morgan Stanley, Goldman and private equity firm Actis Capital had paid $73 million for a 31 percent stake in Cayman Islands-registered Taizinai in 2007, with Morgan Stanley providing $18 million, Goldman $15 million and Actis Capital $40 million, sources said.

The Grand Court of the Cayman Islands appointed Hong Kong accountant Borrelli Walsh as provisional liquidator of the former high flyer, the South China Morning Post reported on Wednesday, citing documents it had reviewed.

The paper was first to report the company’s collapse.

Citigroup is Taizinai’s biggest lender, while the company also owed money to Singapore’s DBS (DBSM.SI) and other banks, according to the sources.

Taizinai and Actis could not be reached for comment. The banks declined to comment. The sources have direct knowledge of the matter but are not authorised to speak publicly about the matter.

Once an IPO candidate, Taizinai, best known for its probiotic yoghurt drinks, expanded quickly, but was hit hard by China’s tainted milk scandal, which hurt dairy sales across the country.

Hunan-based Taizinai did not sell any contaminated products, but was hit by the industry downturn, one of the sources said.

With the tainted milk scandal and the over-expansion of its business, Taizinai was struggling, prompting the Hunan provincial government to take over the company in December 2008, according to a source familiar with the matter.

The local government had been managing and trying to stabilize the company since then, but was unable to make any real progress finding a solution, or a buyer.

The source said the liquidators have taken over the company, and will continue to try and seek a buyer.

As recently as the middle of last year, Taizinai was cited in Chinese media as a takeover target for Nestle SA (NESN.VX), the world’s biggest food group. A Nestle spokesman in China declined to comment about the matter at that time. (Additional reporting by Denny Thomas and Doug Young) (Editing by Michael Flaherty and Muralikumar Anantharaman)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,
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