Dec. 21 (Bloomberg) -- The following are the day's top business stories:
1. Japan's Export Growth Accelerates for First Time in Nine Months on Rebound 2. Banks Dumping JGBs as Only Peripheral Europe Bonds Do Worse: Japan Credit 3. Japanese Stock Futures, Australia Shares Rise on Commodities, S&P Recovery 4. Chrysler Financial Value Jumped 33% After U.S. Exit, Cerberus's Sale Shows 5. Bank of America's Hogan Leaves After Knox Promoted to Head Retail Branches 6. Australia Luxury Home Prices Fall, Listings Increase as Rates Dent Demand 7. Indonesian Antitrust Authorities Are Evaluating Temasek Assets for Seizure 8. Banks Best Basel as Global Regulators Dilute or Postpone New Capital Rules 9. Deutsche Bank Agrees to Pay $553.6 Million to Settle U.S. Tax-Shelter Case 10.American Airlines Wins Court Order Allowing It to Pull Flights From Orbitz 11.Fuel-Oil Loss in Asia Set to Jump to Two-Year High on Glut: Energy Markets 12.Deutsche Bank's Ackermann Bets Investors Will Choose Returns Over Capital
1. Japan's Export Growth Accelerates for First Time in Nine Months on Rebound
Japan´s export growth accelerated for the first time in nine months as a rebound in global demand helped the nation´s economy withstand an advance in the yen. Overseas shipments increased 9.1 percent in November from a year earlier, compared with October´s 7.8 percent, the Finance Ministry said in Tokyo today. The median estimate of 19 economists surveyed by Bloomberg News was for a 10.3 percent gain. The rebound in exports eases concern that Japan is losing its main driver for a recovery from the worst postwar recession as increasing global demand spurs manufacturing expansions in China and the U.S., the country´s biggest customers. Komatsu Ltd. and Honda Motor Co. are forecasting sales will grow in China. "We may see signs of a bottoming out of the deterioration in exports since May, given a rebound in Asian demand" and a letup in the yen´s retreat from a 15-year high, Masayuki Kichikawa, chief economist at Merrill Lynch Japan Securities Co. in Tokyo, said before the report.
2. Banks Dumping JGBs as Only Peripheral Europe Bonds Do Worse: Japan Credit
Japan´s banks, which bought record amounts of government debt as demand for loans dropped, are selling the bonds for the first time this year as prices tumble. Lenders trimmed Japanese government debt holdings to 142.2 trillion yen ($1.7 trillion) as of Oct. 31 from a record 143.2 trillion yen a month earlier, Bank of Japan data show. They added bonds in each of the previous nine months as loans outstanding fell 2.1 percent to 391.9 trillion yen, the lowest since May 2008. Government bonds lost 1.5 percent since Sept. 30, set for the worst quarter in seven years, indexes compiled by Bank of America Merrill Lynch show. "Banks may make some changes to their strategies as declining bond prices trim trading profits," said Yoshinobu Yamada, a Tokyo-based analyst at Deutsche Bank AG. Lending will extend its longest slump since 2005 as "the economic outlook is weak, companies are building reserves and avoiding capital spending, and manufacturing is hollowing out and moving abroad," he said. The double whammy means earnings at Japan´s biggest banks Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. will drop at least 4.3 percent, while profit will rise at U.S. rivals including JPMorgan Chase & Co. and Citigroup Inc., according to analysts surveyed by Bloomberg. Japan´s government bonds are performing worse this year than all but the European countries swept up in the sovereign debt crisis, among developed nations.
3. Japanese Stock Futures, Australia Shares Rise on Commodities, S&P Recovery
Japanese stock futures and Australian shares rose as higher oil and metal prices boosted commodity shares, and the Standard & Poor´s 500 Index recovered to its level before the collapse of Lehman Brothers Holdings Inc. American depositary receipts of Toyota Motor Corp., the world´s biggest carmaker, gained 0.5 percent from the closing share price in Tokyo. Komatsu Ltd., the world´s second-largest maker of earthmoving machines, climbed 0.6 percent in Tokyo. BHP Billiton Ltd., the world´s No. 1 mining company and Australia´s biggest oil producer, advanced 0.5 percent in Sydney today. "U.S. economic indicators continue to exceed expectations and the U.S. economy is on a recovery trend," said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. "The global economic recovery, surplus money and confidence in government measures are boosting commodity prices." Futures on Japan´s Nikkei 225 Stock Average expiring in March closed at 10,380 in Chicago yesterday, compared with 10,350 in Osaka, Japan. They were bid in the pre-market at 10,370 in Osaka at 8:05 a.m. local time today. Australia´s S&P/ASX 200 Index gained 0.3 percent today and New Zealand´s NZX 50 Index both climbed 0.2 percent.
4. Chrysler Financial Value Jumped 33% After U.S. Exit, Cerberus's Sale Shows
Cerberus Capital Management LP´s sale of Chrysler Financial Corp. values the lender at least 33 percent more than when the U.S. Treasury Department sold its holding to the buyout firm seven months ago. In a deal that valued the auto lender at $4.75 billion, the Treasury got $1.9 billion from Cerberus in May to pay off Chrysler Financial´s bailout debt. Yesterday´s purchase by Toronto-Dominion Bank values it at $6.3 billion. After the Treasury´s exit, Cerberus injected about $500 million into Chrysler Financial, and plans to keep about $900 million of the lender´s assets, people briefed on the deal said. Without those moves, the firm´s value would be 41 percent higher than in May. The Treasury´s $700 billion Troubled Asset Relief Program is likely to suffer the "bulk" of its losses from aiding the auto industry, American International Group Inc. and homebuyers, the Congressional Oversight Panel said in a September report. The Treasury, which last week called TARP "one of the most effective crisis-response programs ever," has said the main focus was to stabilize the financial system. "We´re not a private-equity fund," said Tim Massad, the Treasury´s acting assistant secretary for financial stability, about the agency´s management of TARP in an interview last month. "We believe that promoting financial stability means we should exit as soon as we can."
5. Bank of America's Hogan Leaves After Knox Promoted to Head Retail Branches
Bank of America Corp. said that Mark Hogan, in charge of East Coast branches of the biggest U.S. bank, is departing after Katy Knox was promoted to supervise all locations. Hogan "is leaving the company," said Anne Pace, a spokeswoman for the Charlotte, North Carolina-based company. Knox, who joined Bank of America through its 2004 purchase of FleetBoston Financial Inc., will be in charge of banking centers and claims and fraud divisions. Bank of America Chief Executive Officer Brian T. Moynihan has installed other former FleetBoston colleagues in top posts. Terry Laughlin was made a senior executive in the bank´s money- losing mortgage unit. Mike Lyons joined as a strategy and planning executive to help shrink the bank´s balance sheet. Moynihan also promoted Lauren Mogensen to deputy general counsel and corporate secretary. Knox will report to consumer banking head Joseph Price, according to the Wall Street Journal, which reported Hogan´s resignation today.
6. Australia Luxury Home Prices Fall, Listings Increase as Rates Dent Demand
The number of Australian homes worth A$1 million ($1 million) or more listed for sale is about 40 percent higher than average for this time of year, Real Estate Institute of Australia estimates, suggesting price cuts in 2011. "There´s about a 5 percent gap in what sellers expect and what buyers are willing to pay," said Perth-based David Airey, president of the institute. "In the first and second quarters of 2011, there will be a rise in activity as sellers adjust prices down." Australia´s house prices may be overvalued by 5 percent to 10 percent, the International Monetary Fund said last week. An 11 percent advance in the Australian dollar this year, the second biggest among Group of 10 nations, is deterring foreign and expatriate buyers, while the most aggressive tightening of monetary policy in the developed world raised borrowing costs. Prices of the most expensive 10 percent of Sydney properties dropped 7.5 percent in the six months to September, compared with an average 1.1 percent increase in the rest of the market, according to real estate researcher RP Data. Melbourne´s top end property prices fell 10.8 percent in the period, compared with an average 2.5 percent price climb for the remaining homes.
7. Indonesian Antitrust Authorities Are Evaluating Temasek Assets for Seizure
Indonesia´s anti-monopoly agency is evaluating Temasek Holdings Pte´s assets in the country and said the government has the right to seize them if a court-imposed fine isn´t paid. The Singapore state-owned investment company lost its final appeal in the Supreme Court on May 24 for violating antitrust laws, the Indonesian court said on its website at the time. A fine of 150 billion rupiah ($17 million), which includes 15 billion rupiah for each of 10 Temasek-linked companies involved in the case, was set, the anti-monopoly agency said. "We´re now inventorying Temasek´s assets and expect to complete that in 2011, and they will be seized if the fine isn´t paid," Tresna Soemardi, the agency´s chairman, said in a phone interview yesterday. The Indonesian competition regulator KPPU has said Temasek breached antitrust laws by using indirect stakes in PT Telekomunikasi Selular, known as Telkomsel, and PT Indosat, the country´s top two mobile-phone service providers, to fix prices.
8. Banks Best Basel as Global Regulators Dilute or Postpone New Capital Rules
More than 500 representatives from 27 nations, including top regulators and central bankers, met dozens of times this year to hammer out 440 pages of new rules to govern the world´s banks. What´s not in the documents published by the Basel Committee on Banking Supervision, and the escape hatches that are, may have more impact on how financial institutions will operate following a global credit crisis that led to $1.8 trillion in bank losses and writedowns. The committee´s most significant achievement, members say, an agreement to increase the amount of capital banks need to hold, won´t go into full effect for eight years. Other measures that regulators had hoped would prevent future crises -- liquidity standards, a capital surcharge on the biggest lenders and a global resolution mechanism for failing firms -- were postponed, allowing banks to escape the toughest rules that would force them to change the way they do business. "There will be changes, but not fundamental changes to the banking model," said Sheila Bair, who as chairman of the U.S. Federal Deposit Insurance Corp. sits on the Basel committee´s top decision-making body. "Hopefully there´ll be some pressure for banks to get smaller and simpler."
9. Deutsche Bank Agrees to Pay $553.6 Million to Settle U.S. Tax-Shelter Case
Deutsche Bank AG, Germany´s largest bank, admitted criminal wrongdoing and agreed to pay $553.6 million to avoid prosecution in the U.S. over fraudulent tax shelters that generated $29 billion in "bogus" tax losses. The U.S. Justice Department, under an agreement yesterday, won´t prosecute the Frankfurt-based bank for fraud or tax evasion for enabling wealthy U.S. citizens to avoid $5.9 billion in taxes, after the bank admitted criminal wrongdoing. The settlement includes a $149 million civil penalty, the fees that Deutsche Bank generated from the shelters, and the taxes and penalties the Internal Revenue Service was unable to collect from taxpayers because of the misconduct, according to the agreement. From 1996 to 2002, "Deutsche Bank assisted high net worth United States citizens, who, through 2005, reported approximately $29.3 billion in bogus tax benefits on their tax returns," according to the agreement. "DB acknowledges that it was wrong and unlawful to have engaged in these transactions and regrets having done so."
10.American Airlines Wins Court Order Allowing It to Pull Flights From Orbitz
AMR Corp.´s American Airlines said it will immediately stop displaying and selling tickets through Orbitz Worldwide Inc. after winning court permission to pull its listings from the online travel site. Today´s decision by an Illinois state court in Chicago lifted a temporary restraining order granted last month that prevented American from dropping Orbitz, according to the Fort Worth, Texas-based airline. American has developed a system of its own called Direct Connect that provides fare pricing and options directly to larger online travel agencies. The carrier also is trying to drive more bookings through its own website at AA.com. "In today´s competitive marketplace, it is important for American to be free to customize its product offerings to improve the customer experience, as well as distribute its products in a way that does not result in unnecessary costs," Ryan Mikolasik, a spokesman for American Airlines, said in an e-mailed statement.
11.Fuel-Oil Loss in Asia Set to Jump to Two-Year High on Glut: Energy Markets
Refining losses from producing fuel oil in Asia may widen 30 percent to the most in two years in the next month as an increase in crude processing leads to a glut. The loss from turning crude into the fuel, the so-called crack spread, may rise to $13 a barrel by the end of January from about $10 this month, a Bloomberg News survey of four traders showed. The last time it was at that level was in November 2008, when crude traded below $60 a barrel, compared with almost $90 today, according to data compiled by Bloomberg. The supply of fuel oil, a residue from crude refining that is used mainly to power ships and industrial plants, is increasing as Asian refiners raise processing rates to boost returns from gasoil, or diesel. Companies typically accept a loss from selling residues because they can offset it against the profit from more valuable products. "I don´t see any factors that could narrow the crack spread now," said Yasuhito Imaizumi, a Singapore-based manager at Petro Summit Pte, a unit of Sumitomo Corp., the third-largest trading company in Japan. "The crack would remain weak for a while."
12.Deutsche Bank's Ackermann Bets Investors Will Choose Returns Over Capital
Deutsche Bank AG Chief Executive Officer Josef Ackermann may be betting concern about capital at the biggest banks will give way to a race for higher returns. Deutsche Bank´s core capital ratio, a buffer against possible losses, may fall to the lowest level among eight competitors under new Basel III rules in 2012, even after it raised 10.2 billion euros ($13.4 billion) in a share sale in October, according to Christopher Wheeler, an analyst at Mediobanca SpA. Ackermann, who shunned German government aid during the credit crisis, warned at a Frankfurt conference in September against a "dangerous race to the top" among banks seeking to lift reserves above Basel III requirements years before the rules kick in. Deutsche Bank, the largest German bank, may be able to hold less capital than peers, and borrow more to enhance returns, because its clients are convinced the government would never let it fail, analysts and investors said. "Deutsche is taking a slightly more commercial view on capital, which probably only they can," said London-based Wheeler, who has a "neutral" rating on the stock. "Deutsche is one of the too-big-to-fail banks, so why on earth if you´re a client would you be worried about the counterparty risk?"
For the complete stories summarized here, and for more of the day's top news, see TOP <Go>.