The following are the day's top business stories:
1. Asian Stocks Rise as U.S. Payroll, Factory Data Boost Recovery Confidence 2. Taxpayer Risk `Impossible' to Know for Some Fed Financial-Crisis Programs 3. Morgan Stanley Said to Sell Its 34.3% CICC Stake to TPG, Singapore's GIC 4. Singapore State Wealth Funds' $9.9 Billion Fundraising Beats Global Peers 5. Subbarao Relaxing Loan Curbs as Record Cash Shortage Bites: Indian Credit 6. Honda, Nissan, Hyundai U.S. Sales Climb; Toyota Drops on Recall Fallout 7. Reserve Primary Topped Users of Federal Reserve Aid to Money-Market Funds 8. Toyota Targets Maruti With `Aggressive' $10,900 Price for Etios in India 9. Barclays Took Biggest Loan, $48 Billion, From Fed's Credit Facility: Table 10.Acer's CEO Lanci Aims for 15% of Global Tablet Sales in Battle With IPad 11.Malaysia in `Year of M&A' Leads Asia Rebound as Najib Eases Takeover Rules 12.Bank of America Becoming Bank of Asia as Merrill Helps Boost Revenue 30%
1. Asian Stocks Rise as U.S. Payroll, Factory Data Boost Recovery Confidence
Asian stocks rose, with a regional benchmark climbing the most in almost two weeks, after U.S. economic reports and speculation that Europe´s debt crisis will be contained boosted confidence in a global recovery. Sony Corp., the Japanese maker of Bravia televisions that gets 70 percent of its sales abroad, rose 1.5 percent in Tokyo after reports showed U.S. payrolls and manufacturing climbed. James Hardie Industries SE, the biggest seller of home siding in the U.S., jumped 3.6 percent in Sydney. BHP Billiton Ltd., the world´s largest mining company climbed 2.3 percent as oil and metal prices increased. "We are seeing promising signs in the economy and market sentiment is improving globally," said Mitsushige Akino, who oversees about $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. "Improving market sentiment should boost money flow into risk assets." The MSCI Asia Pacific Index advanced 1 percent to 131.12 as of 9:10 a.m. in Tokyo, with about 10 times as many stocks rising as falling. Japan´s Nikkei 225 Stock Average gained 1.7 percent. Australia´s S&P/ASX 200 Index rose 1.7 percent and South Korea´s Kospi Index advanced 0.8 percent.
2. Taxpayer Risk `Impossible' to Know for Some Fed Financial-Crisis Programs
The Federal Reserve exposed U.S. taxpayers to risks that can´t be quantified based on information it made public today about the collateral posted by recipients of about $885 billion in emergency loans. The central bank released data on 21,000 transactions from $3.3 trillion in emergency lending to stem the financial crisis. July´s Dodd-Frank law required the Fed to disclose the names of borrowers, the size and interest rates of loans, and "information identifying the types and amounts of collateral pledged or assets transferred." For three of the Fed´s six emergency facilities, the central bank released information on groups of collateral it accepted by asset type and rating, without specifying individual securities. Among them was the Primary Dealer Credit Facility, created in March 2008 to provide loans to brokers as Bear Stearns Cos. collapsed. "This is a half-step," said former Atlanta Fed research director Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc. in Sarasota, Florida. "If you were going to audit the facilities, then would this enable you to do an audit? The answer is `No,´ you would have to go in and look at the individual amounts of collateral and how it was broken down to do that. And that is the spirit of what the requirements were in Dodd-Frank."
3. Morgan Stanley Said to Sell Its 34.3% CICC Stake to TPG, Singapore's GIC
Morgan Stanley is selling its 34.3 percent stake in China International Capital Corp. to Kohlberg Kravis Roberts & Co., TPG Capital, Singapore´s Great Eastern Holdings Ltd. and the island nation´s sovereign-wealth fund, four people with direct knowledge of the deal said. Morgan Stanley plans to sell stakes of about 10 percent each to TPG and KKR, and about a 5 percent stake to Great Eastern, the insurance company controlled by Oversea-Chinese Banking Corp., said the people, who declined to be identified because the matter isn´t public. Government of Singapore Investment Corp. will buy the remainder, the people said. The 34.3 percent stake is valued at about $1 billion, two of the people said. The plan moves New York-based Morgan Stanley closer to ending its 15-year involvement in China International, known as CICC, the first investment bank formed by Chinese and non- Chinese firms. The sale would open the way for Morgan Stanley to find a new local partner or build its own investment bank in China after being a shareholder in Beijing-based CICC without having management control. Great Eastern was originally in discussions with CICC to buy Morgan Stanley´s entire stake and the plan was blocked by Chinese regulators, said one of the people.
4. Singapore State Wealth Funds' $9.9 Billion Fundraising Beats Global Peers
Temasek Holdings Pte and Government of Singapore Investment Corp. raised about $9.9 billion from international investors over the past year, selling more debt and equity than any other state investment firm. Temasek, based in Singapore, sold almost $6 billion of bonds since October last year. Temasek-controlled Mapletree Industrial Trust and Global Logistic Properties Ltd., GIC´s overseas logistics unit, raised S$5.1 billion ($3.9 billion) selling shares in October, accounting for 10 percent of the record initial public offerings in the Asia-Pacific region that month, according to data compiled by Bloomberg. Sovereign investment firms with stakes in government-linked companies and real estate are increasingly turning to private investors for funds and are using debt to increase leverage as they reduce state exposure. Global Logistic´s IPO was the first listing by a firm majority-owned by GIC, while sovereign wealth funds in Bahrain and Qatar sold debt overseas for the first time. "There is a broader push among sovereign investors to diversify some of their funding sources," said Rachel Ziemba, London-based senior analyst at Roubini Global Economics LLC, who tracks state wealth funds. "For entities like Temasek, they can´t necessarily depend on new inflows of capital from their shareholder in the way that some of the other sovereign funds do."
5. Subbarao Relaxing Loan Curbs as Record Cash Shortage Bites: Indian Credit
India central bank Governor Duvvuri Subbarao is easing curbs on the supply of cash at banks as a record shortage of funds threatens to slow Asia´s second fastest-growing major economy. The cost of a one-month loan between banks rose for a fourth month in November, the longest stretch since 2008, to 7.8 percent, according to the National Stock Exchange. The average amount lenders borrowed every day from the Reserve Bank of India, a benchmark used to measure the availability of money, almost doubled to 966 billion rupees ($21.3 billion) last month, including a record 1.5 trillion on Nov. 23. The monetary authority, which this week relaxed a ruling that requires banks to invest in government bonds, may follow by cutting the cash-reserve ratio to increase the supply of funds, a finance ministry official who didn´t want to be identified said on Nov. 30. India´s stance contrasts with central banks in China and Brazil, which have been tightening monetary policy to tackle asset bubbles. "We cannot sustain any more significant tightening in the cash markets," said Killol Pandya, who manages the equivalent of $135 million in debt at Shinsei Asset Management Pvt. in Mumbai. "A cut in the cash-reserve ratio is the most effective short-term measure to tackle the current squeeze."
6. Honda, Nissan, Hyundai U.S. Sales Climb; Toyota Drops on Recall Fallout
Honda Motor Co., Nissan Motor Co. and Hyundai Motor Co. led U.S. sales gains for Asian carmakers last month on higher demand for light trucks, while Toyota Motor Corp. reported a second consecutive monthly decline. Honda, fourth in U.S. sales, had a 21 percent increase in November, Nissan´s grew 27 percent and Hyundai posted a 45 percent jump. Toyota, the world´s largest automaker, said yesterday that its sales fell 3.3 percent. "It´s a twofold issue for Toyota: The competition has come out with great products just as they were coming out of the recall impact," said James Bell, an analyst at forecaster Kelley Blue Book. Toyota "took a blow in terms of public perception because of the recalls and that´s given people a chance to stand back and take a look" at Hyundai´s Sonata, Nissan´s Altima and General Motors Co.´s Chevrolet Cruze. Industrywide light-vehicle sales continued at an annualized 12.3 million rate for a second month, the fastest pace since the U.S. government´s "cash for clunkers" program in 2009, said Autodata Corp. Demand for sport-utility vehicles, crossovers and pickups led the increase with light trucks rising 27 percent, compared a 7.4 percent gain for cars, the researcher said.
7. Reserve Primary Topped Users of Federal Reserve Aid to Money-Market Funds
Reserve Primary, the money-market mutual fund whose September 2008 collapse helped freeze global credit markets, was the biggest user of a government-backed program that enabled the industry to meet investor withdrawals during the financial crisis. Vanguard Group Inc. and Legg Mason Inc. were the only money-fund providers among the industry´s top 10 that didn´t utilize the Federal Reserve´s Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, or AMLF, according to data released today by the U.S. central bank. Funds run by JPMorgan Chase & Co. sold $17.7 billion in asset-backed commercial paper to banks under the program, more than any family except Reserve. The Fed opened the program on Sept. 19, 2008, when prices for commercial paper plunged following the bankruptcy of investment bank Lehman Brothers Holdings Inc. and as investors fled money-market funds that held corporate debt. The AMLF, administered by the Boston Fed, peaked at $152 billion in purchased assets on Oct. 1, 2008, and ended Feb. 1, 2010. The Dodd-Frank financial regulatory overhaul approved by Congress in July required the Fed to release information about its lending programs. The central bank has never before made public specific, transaction-level detail about its lending.
8. Toyota Targets Maruti With `Aggressive' $10,900 Price for Etios in India
Toyota Motor Corp.´s lower-than expected price for its new Indian-built Etios compact car may help the automaker escape a sales ranking of seventh in Asia´s second-fastest growing major economy. The model went on sale yesterday in the world´s second-most populous nation. Priced from 496,000 rupees ($10,900), it is Toyota´s cheapest offering in India and will sell for less than Honda Motor Co.´s 815,000 rupees City compact and Ford Motor Co.´s 589,030 rupees Fiesta. Maruti Suzuki India Ltd.´s rival Swift car sells from 405,300 rupees to 731,000 rupees. "The pricing is very aggressive. It´s a lot lower than what I was expecting," said Ashvin Chotai, London-based managing director of Intelligence Automotive Asia, an industry consultant. "The challenge is to maintain its very strong brand image. Value for money can destroy a strong premium image." President Akio Toyoda, 54, introduced the car yesterday in Bangalore, the first time he´s attended an overseas car presentation as chief executive. Toyota, with a market share of 2.8 percent in India during the first 10 months of 2010, needs to win customers from market leader Maruti as it seeks 10 percent of the market in five to seven years.
9. Barclays Took Biggest Loan, $48 Billion, From Fed's Credit Facility: Table
Barclays Plc´s securities unit took out the single biggest loan under the Federal Reserve´s Primary Dealer Credit Facility, a program created in March 2008 to provide loans as Bear Stearns Cos. collapsed. Barclays Capital Inc. took a $47.9 billion overnight loan on Sept. 18, 2008, the day after its London-based parent said it would acquire the North American investment-banking business of bankrupt Lehman Brothers Holdings Inc., data from the Fed show. Mark Lane, a spokesman for Barclays, declined to comment. Under orders from Congress, the Fed released data yesterday on 21,000 transactions from $3.3 trillion in emergency lending to stem the financial crisis. The Fed authorized its New York branch to establish the PDCF on March 16, 2008, the same day it made commitments to convince JPMorgan Chase & Co. to buy troubled dealer Bear Stearns. The PDCF ended Feb. 1 of this year. The last companies to use the program were Banc of America Securities LLC, which took out a $375 million loan on May 12, 2009, and Citigroup Global Markets Inc.-London, which borrowed $2 billion on April 28, 2009, according to Fed data.
10.Acer's CEO Lanci Aims for 15% of Global Tablet Sales in Battle With IPad
Acer Inc., the world´s second-largest computer maker, aims to capture 15 percent of the tablet market next year, vying against Research In Motion Ltd. and Samsung Electronics Co. to offer the most popular alternative to Apple Inc.´s iPad. Acer´s shipments of the tablet devices may account for 10 percent to 15 percent of global sales, which will be between 40 million to 50 million units next year, Chief Executive Officer Gianfranco Lanci said yesterday in an interview in Chongqing, China. Lanci said the push toward tablets is part of the Taipei- based computer maker´s "natural evolution." Selling as many as 7.5 million tablets next year, more than double JPMorgan Chase & Co. projections last month, would help Acer´s shipments challenge those estimated for RIM´s PlayBook and Samsung´s Galaxy Tab. "The company has talked aggressively about the tablet market but Apple is still very dominating," said Steven Tseng, an analyst at RBS Asia Ltd. "Aside from price it´s hard to tell what Acer has in their products to differentiate themselves and outperform. If they make cheap models like in the netbook area, they may have success. They´re really good at volume business."
11.Malaysia in `Year of M&A' Leads Asia Rebound as Najib Eases Takeover Rules
Malaysia is the fastest growing market for mergers and acquisitions in the Asia-Pacific region as companies seize on record valuations and relaxed takeover rules to catch up with rivals in India and Singapore. Acquisitions of Malaysian companies almost tripled so far this year compared with all of 2009 to $21.3 billion, the highest in three years, according to data compiled by Bloomberg. In November alone, Malaysian real estate developers announced three mergers worth almost a combined $3 billion. "This is a year of M&A for Malaysia," said Chay Wai Leong, managing director of Kuala Lumpur-based RHB Investment Bank Bhd., the top-ranked adviser on takeovers of Malaysian companies this year, according to Bloomberg data. "The sentiment is good and there is a recognition of the need for scale." The deal rebound came after Prime Minister Najib Razak last year eased rules governing takeovers, initial public offerings and property purchases as Malaysia faced its first economic contraction in a decade. Najib, 57, is pushing for consolidation after finding during a 2009 trip to New York that the relatively small size of Malaysian companies deterred U.S. investors.
12.Bank of America Becoming Bank of Asia as Merrill Helps Boost Revenue 30%
A black leather couch in Jayanti Bajpai´s 17th-floor Hong Kong office bears witness to Bank of America Corp.´s turn of fortune in Asia. Twenty months ago, Bajpai sat on the sofa with discouraged Merrill Lynch & Co. colleagues, asking them one at a time to focus on the benefits of the firm´s merger with Bank of America, the largest U.S. lender by assets, he said. By the end of last year, conversations held on the same couch, which overlooks Hong Kong Park, had turned to deals. Bank of America is headed for its best year advising on mergers and acquisitions in Asia-Pacific since 2005, and arranging initial public offerings since 2007, data compiled by Bloomberg show. The combined companies have generated 30 percent more revenue from traditional investment-banking businesses in the region than they did as separate entities, according to a person with knowledge of the matter who asked not to be identified because the figures aren´t public. "It´s basically getting the focus back," said Bajpai, 45, a 23-year Merrill Lynch veteran named co-head of Asia-Pacific corporate and investment banking in March 2009. "We spent five months stabilizing the ship, and then it turned. People were worried about the bank´s future, rather than worrying about the bank´s business."
-0- Dec/02/2010 00:35 GMT