Dec. 14 (Bloomberg) -- The following are the day's top business stories:
1. Japan Manufacturer Confidence Deteriorates First Time Since End of Crisis 2. CLP, Origin Buy NSW Power Assets for $5.3 Billion, Outbidding AGL Energy 3. Dollar Maintains Gain Versus Yen Before U.S. Production Data, BOJ's Tankan 4. Swaps Doubling Signal Traders Prepared for January Rate Rise: India Credit 5. New York Fed Derivatives Reformer Lubke Joining Goldman Sachs, Memo Shows 6. Singapore Exchange Bid for ASX Cleared by Australian Competition Regulator 7. Yahoo Cutting 600 Jobs, or 4% of Workforce, as Part of Turnaround Effort 8. South Korea Unemployment Unexpectedly Reaches Lowest Level in Six Months 9. Hedge Funds Gain as Arctic Weather Increases Nordic Power: Energy Markets 10.Rio, Xstrata Dig for More Mining Deals as M&A Shifts to Emerging Markets 11.Dubai Property Prices May Continue to Fall for Two Years as Supply Grows 12.Yale Joins Duke in March to Singapore as Asia Pours Money Into Education
1. Japan Manufacturer Confidence Deteriorates First Time Since End of Crisis
Confidence among Japan´s largest manufacturers worsened for the first time since the end of the global financial crisis last year as export gains slow and the effect of government stimulus measures fades. The quarterly Tankan index of sentiment at large manufacturers dropped to 5 in December from 8 in September, the Bank of Japan said in Tokyo today. A positive number means optimists outnumber pessimists. Sentiment is expected to fall to minus 2 in March, the report showed. Today´s report adds to concern that Japan´s economy may contract in the fourth quarter, and buttresses the case for the Bank of Japan to add more monetary stimulus. Data for October showed industrial output fell by the most since February 2009, export growth moderated and the jobless rate rose. "The economy has entered a lull-like condition," Ryutaro Kono, chief economist at BNP Paribas in Tokyo, said before the report. "The mood in the manufacturing sector has been undermined by slowing exports and the end of stimulus programs, with yen appreciation being just a secondary factor."
2. CLP, Origin Buy NSW Power Assets for $5.3 Billion, Outbidding AGL Energy
CLP Holdings Ltd. and Origin Energy Ltd. agreed to buy New South Wales electricity assets for A$5.3 billion ($5.3 billion), outbidding AGL Energy Ltd. to gain customers in Australia´s most-populous state. TRUenergy Holdings Pty, a unit of CLP, Hong Kong´s biggest power company, is buying assets including the retailer EnergyAustralia for A$2.04 billion, the state said today. Origin gains Country Energy and Integral Energy, plus the right to trade output from the Eraring power station, for A$3.25 billion. The purchases will double the number of retail customers CLP has in Australia to 2.8 million, while Sydney-based Origin´s customers will jump more than 50 percent. The deal is the culmination of a process that has lasted 12 years and helped bring down two state premiers since 2008. New South Wales has said the sale will strengthen its finances and help ensure "scarce" resources for education, health and transport. "A lot of people said this day would never come," New South Wales Treasurer Eric Roozendaal said at a press conference in Sydney. The transactions produced a "strong result" for the state he said.
3. Dollar Maintains Gain Versus Yen Before U.S. Production Data, BOJ's Tankan
The dollar maintained yesterday´s gain against the yen before a report that economists said will show U.S. industrial production expanded last month, adding to signs the economic recovery is gathering pace. The greenback reversed losses against a basket of major currencies yesterday as Treasury yields surged after Federal Reserve policy makers said the U.S. recovery is continuing and maintained a $600 billion program of debt purchasing. Movement in the yen was limited after a report showed sentiment among Japan´s large manufacturers declined. "The dollar will enjoy steady support in the short-term based on the economic outlook," said Daisaku Ueno, president of Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan´s largest currency margin company. "The market is done with the dollar sell-off due to quantitative easing for now." The dollar traded at 83.82 yen as of 8:52 a.m. in Tokyo from 83.66 yen in New York yesterday, when it gained 0.3 percent. The U.S. currency was at $1.3361 per euro from $1.3378. The yen was at 111.97 per euro from 111.92.
4. Swaps Doubling Signal Traders Prepared for January Rate Rise: India Credit
India´s central bank will probably resume Asia´s fastest round of interest-rate increases next month, after pausing tomorrow, on signs money-market traders are bracing for a revival in inflation. The difference between one-year interest-rate swaps and the benchmark repurchase rate doubled to a six-week high of 73 basis points yesterday from 35.5 basis points when India last lifted rates on Nov. 2. The Reserve Bank of India may raise the repurchase rate to 6.5 percent from 6.25 percent on Jan. 25 after keeping it unchanged at noon tomorrow, according to 11 of 16 economists in Bloomberg News survey. Only three of 15 polled last week saw a January move. Governor Duvvuri Subbarao, who has boosted the repurchase rate by 1.5 percentage point in 2010, the most in Asia, needs to gain control over costs in a nation where 828 million people live on less than $2 a day. While a report yesterday showed wholesale-price inflation slowed to an 11-month low of 7.48 percent in November from 8.58 percent in October, the rate is still higher than the 5.1 percent in China and 5.6 percent in Brazil. "The central bank isn´t done yet with rate tightening," said Rajeev Malik, a senior economist at CLSA Asia Pacific Markets. "The RBI will come back in January and hike rates to contain inflation."
5. New York Fed Derivatives Reformer Lubke Joining Goldman Sachs, Memo Shows
Theo Lubke, who served for 15 years at the Federal Reserve Bank of New York and headed its efforts to reform the private derivatives market, joined Goldman Sachs Group Inc., according to a memo obtained by Bloomberg News. Lubke, 44, started this month as chief regulatory reform officer in Goldman Sachs´ securities division, the memo said. The newly-created role will allow Lubke to "work closely with divisional and firm-wide leadership to implement regulatory reform legislation," according to the memo. Michael DuVally, a spokesman for Goldman Sachs in New York, confirmed the document. The most profitable securities firm in Wall Street history is hiring Lubke five months after Congress mandated the regulation of the $583 trillion over-the-counter derivatives market after swaps complicated efforts to resolve the financial crisis. The reforms threaten to cut the profit at dealers such as Goldman Sachs because they will make swaps prices known to the public. In 2007, Lubke was appointed to his former role by Timothy Geithner, now Treasury Secretary, who was then president of the New York Fed. The central bank has pushed for changes in the credit-default swap market since 2005, when Geithner became concerned that an explosion of trading was threatening the ability of banks and regulators to manage and monitor risks that posed a threat to the financial system.
6. Singapore Exchange Bid for ASX Cleared by Australian Competition Regulator
Singapore Exchange Ltd.´s bid for ASX Ltd., operator of the Australia´s main bourse, has been cleared by the nation´s competition regulator. The deal wouldn´t adversely affect competition in exchange services, the Australian Competition and Consumer Commission said in a statement today. A key focus of its investigation was whether the acquisition of ASX would deter entry into the Australian market of rival Chi-X Australia Pty and other competitors due to SGX´s links with Chi-X Global Inc., it said. The ACCC said last month that it intended to undertake a review aimed at scrutinizing the deal´s impact on "the development of competition between exchanges and associated products or services." The bid still needs clearance from the Foreign Investment Review Board, Reserve Bank of Australia and Australian Securities and Investments Commission, while some lawmakers have raised national-interest concerns. "The ACCC approval is clearly a necessary ingredient," said Angus Gluskie, who manages about $350 million at White Funds Management Pty in Sydney. "Nevertheless, the outcome appears to have been expected, with investors more concerned about the other hurdles."
7. Yahoo Cutting 600 Jobs, or 4% of Workforce, as Part of Turnaround Effort
Yahoo! Inc., owner of the largest U.S. Web portal, is cutting about 600 jobs, or about 4 percent of its workforce, part of an almost two-year turnaround effort. The notification process began today and most of the cuts will come from the product group, said Kim Rubey, a spokeswoman for Sunnyvale, California-based Yahoo. The company plans to offer workers severance packages and outplacement services. "Today´s personnel changes are part of our ongoing strategy to best position Yahoo for revenue growth and margin expansion and to support our strategy to deliver differentiated products to the marketplace," the company said in an e-mailed statement. "We´ll continue to hire on a global basis to support our key priorities." Chief Executive Officer Carol Bartz, who joined Yahoo in January 2009, made a larger round of cuts last year, in addition to shutting underperforming websites. The company has struggled to stanch a migration of users and advertising dollars to Facebook Inc., which Yahoo now sees as its biggest rival. Facebook passed Yahoo as the top seller of online display ads in the U.S. a year ago, based on the number of times an ad is viewed, according to Reston, Virginia-based ComScore Inc.
8. South Korea Unemployment Unexpectedly Reaches Lowest Level in Six Months
South Korea´s unemployment rate unexpectedly fell to a six-month low as the nation´s economic expansion encouraged manufacturers to hire more workers, increasing the central bank´s scope to raise borrowing costs. The jobless rate fell to 3.2 percent in November from 3.6 percent in October, Statistics Korea said in Gwacheon today. The reading was below the 3.6 percent median forecast in a Bloomberg News survey of eight economists. Lee Sung Kwon, an economist at Shinhan Investment Corp in Seoul, said before the release that temporary hiring for a census likely influenced the data. A strengthening job market risks adding to price pressures, prompting the Bank of Korea to keep raising rates. Governor Kim Choong Soo refrained from policy tightening last week after quarter percentage-point increases in July and November from a record-low 2 percent. "The central bank will likely feel more tempted to raise rates as soon as in February," said Kong Dong Rak, a fixed- income analyst at Taurus Investment & Securities Co. in Seoul, said. "The job data is surprisingly strong."
9. Hedge Funds Gain as Arctic Weather Increases Nordic Power: Energy Markets
Arctic weather, water shortages and halted reactors drove Nordic power prices to the biggest monthly gain in three years, boosting profits at hedge funds investing in European energy markets. Electricity across four Nordic countries for next quarter jumped to its highest since 2006 on Dec. 13 after advancing 27 percent last month. The surge gave Nordic Power Trading F.M.B.A. a 29 percent return in November and Norwatt Energy AS´s fund rose 6.6 percent, topping a Bloomberg survey this week of nine funds that together manage at least $268 million. "When there´s high volatility, I earn money," said Bjarne Walbech, owner and fund manager at Nordic Power Trading. "You can bet it is going to be a really volatile winter, because of the lack of water," he said in an interview from Kolding, Denmark, declining to provide details about his strategy. Scandinavian temperatures dropped as much as 7 degrees Celsius (12.6 Fahrenheit) below seasonal norms last month, the biggest deviation in the Northern Hemisphere, according to the Swedish Meteorological and Hydrological Institute. The weather reduced rain and snow available for hydroelectric stations.
10.Rio, Xstrata Dig for More Mining Deals as M&A Shifts to Emerging Markets
Mining takeovers, heading for the second best year on record, are shifting to emerging markets of Africa and Asia as BHP Billiton Ltd., Rio Tinto Group and Xstrata Plc look to seal cheaper deals in less-explored areas. As prices for most commodities rise, global mining acquisitions have more than doubled in value this year to $132 billion, boosting advisory fees for banks such as Credit Suisse Group AG, according to data compiled by Bloomberg. For those deals, buyers paid an average 23 percent premium, more than twice as high as margins in Latin America, Africa and the Middle East. BHP and Rio lead a list of possible buyers as the top eight mining companies generate an estimated $132 billion in earnings next year, according to Sanford C. Bernstein & Co. Coal, copper and gold are favored, with Africa among the "hotspots," said Mark Carlile, head of resources investment banking in Australia at Credit Suisse, this year´s top ranked adviser on emerging market mining deals. "Larger-cap miners are cash-rich and looking for new revenue pipelines," said James Holt, who helps manage about A$40 billion ($40 billion) at BlackRock Investment Management (Australia) Ltd., including BHP and Rio shares. Africa could be a focus, he said.
11.Dubai Property Prices May Continue to Fall for Two Years as Supply Grows
Dubai property prices may drop for the next two years, extending a decline in the Persian Gulf sheikhdom that´s already cut values by more than 60 percent since the 2008 peak. Residential values may fall as much as 20 percent more by the end of 2012 if new homes are built as planned, according to broker Landmark Advisory in Dubai. Cluttons LLP, a London-based property consultant, and Jones Lang LaSalle Inc., the second- largest publicly traded commercial property broker, also forecast further declines. About 48,000 homes will come on to the market in the next two years, or about 12 percent of existing supply, according to Jesse Downs, director of research at Landmark. An influx of foreign buyers sparked a construction boom as prices rose by 79 percent to mid-2008 from 2007 before the financial crisis caused lenders to tighten credit and speculators left the market. "There is still no parity between supply and demand," said Paul Richard, associate director at Cluttons in Dubai, which estimates that 35,000 homes will be completed through 2012. "You´re looking at a good two years" for Dubai´s market to reach bottom, he said.
12.Yale Joins Duke in March to Singapore as Asia Pours Money Into Education
The first Chinese citizen to earn a degree at a Western college went to Yale in 1850, according to the university. Now Yale is joining the return trip to Asia. Yale University plans to set up its first foreign campus in Singapore to gain a foothold in a region that provides some of its brightest students, while the liberal-arts institution brings the Yale brand in Singapore´s quest to build a regional center of learning, Peter Salovey, Yale´s provost, said in an interview. Three of every 10 higher-education students worldwide now enroll in Asian colleges, according to the United Nations. "There is no doubt that the future of Yale and other great universities is to have a global presence," Salovey said. "We would like to be in parts of the world that represent important crossroads with increasingly thriving intellectual cultures." Yale would join Duke University, the University of Chicago, Imperial College London and France´s INSEAD among colleges to set up a campus in Singapore, a nation that restricts public speech and controls information in the media and on the Internet. The city-state of 5 million people, with an area smaller than New York City, wants to attract 150,000 international students by 2015, increasing the contribution education makes to Singapore´s gross domestic product to 5 percent, from 3.2 percent last year.
For the complete stories summarized here, and for more of the day's top news, see TOP <Go>.