Dec. 23 (Bloomberg) -- The following are the day's top business stories:
1. Goldman Adopts Long-Term Incentive Plan to Deter `Imprudent' Risk-Taking 2. Japanese Stocks Drop for Second Day as Metal Prices Fall, Yen Strengthens 3. India's ICVL Hires Citigroup to Study Countering Rio's Bid for Riversdale 4. Dim Sum Bond Leading Underwriters See Sales Doubling on Yuan: China Credit 5. New Zealand Economy to Get Lift From Quake Rebuilding, Rugby Fans in 2011 6. Irish Government Takes Control of Allied Irish, Fourth Bank in Two Years 7. Boeing to Resume 787 Dreamliner Test Flights Today After Electrical Fire 8. Apollo Said to Pay $1.2 Billion for Credit Suisse Distressed Property Debt 9. Toyota Disappointed $10 Million Crash Settlement With Family Made Public 10.Deposit `War' Fails to Ease Record Cash Crunch at SBI, HDFC: India Credit 11.Nippon Yusen to Triple India Capesize Fleet on Demand for Coal, Iron Ore 12.Shooting Gold Diggers at Barrick African Mine Coincides With Record Prices
1. Goldman Adopts Long-Term Incentive Plan to Deter `Imprudent' Risk-Taking
Goldman Sachs Group Inc., weighing 2010 pay packages for a year that could rank as Wall Street´s second best, said it may grant bonuses that depend on future earnings, in addition to stock performance. The awards would go to "key employees" and be tied to a variety of financial measures including revenue, net income and return on equity, a gauge of profitability, the New York-based company said yesterday in a regulatory filing. Awards may consist of cash, securities or other equity-linked components, and carry provisions allowing their cancellation or return. The plan "is a tool the compensation committee may use to further align incentive compensation with long-term performance," said Stephen Cohen, a company spokesman. Cohen declined to provide figures on potential payouts, saying that awards haven´t been set. Regulators have pushed banks to design pay packages for top employees that would discourage excessive risk-taking, after a financial crisis wiped out firms including Lehman Brothers Holdings Inc. and led to government bailouts. Most firms have interpreted the guidance to emphasize deferred stock awards over cash bonuses.
2. Japanese Stocks Drop for Second Day as Metal Prices Fall, Yen Strengthens
Japanese stocks fell for a second day as metal prices declined and the dollar weakened against the yen, damping the outlook for export earnings. Nissan Motor Co., a carmaker that earns about 75 percent of its revenue overseas, lost 1 percent. Canon Inc., a camera maker that gets about 80 percent of its sales abroad, sank 0.9 percent. Mitsubishi Materials Corp., Japan´s third-largest copper producer, slid 0.8 percent. "The stronger yen will likely lead investors to sell shares to lock in profits," said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. The Nikkei 225 Stock Average fell 0.6 percent to 10,284.08 as of 9:05 a.m. in Tokyo. The broader Topix lost 0.3 percent to 902.73, with more than twice as many shares declining as advancing. Both gauges are headed for the biggest drop and the lowest close since Dec. 20.
3. India's ICVL Hires Citigroup to Study Countering Rio's Bid for Riversdale
International Coal Ventures Ltd., a state-run joint venture, is studying an offer for Riversdale Mining Ltd. to counter a A$3.9 billion ($3.9 billion) bid from Rio Tinto Group. ICVL appointed Citigroup Inc. to examine a possible takeover offer for the Sydney-based coal company with mines in Mozambique, the venture´s chairman C.S. Verma said yesterday. London-based Rio yesterday bid A$16 a share for Riversdale, securing 14.9 percent of the company in pre-bid agreements. Indian companies are seeking coal mines overseas to ensure raw material supplies for producing steel and electricity. Brazil´s Vale SA or Eurasian Natural Resources Corp. may make bids, according to Sanford C. Bernstein & Co., as Tata Steel Ltd., Riversdale´s biggest holder, said it will study Rio´s offer "in the context of other alternatives" available to Tata. "The A$16 cash offer is unlikely to secure acceptance from all of Riversdale´s shareholders," analysts led by Hayden Bairstow at CLSA Asia-Pacific Markets, said yesterday in a report, raising his price target for Riversdale by 3 percent to A$18. Riversdale´s "Benga and Zambeze coal projects are world class and we believe other suitors may show an interest in Riversdale now a formal bid has been tabled," he said.
4. Dim Sum Bond Leading Underwriters See Sales Doubling on Yuan: China Credit
HSBC Holdings Plc and Standard Chartered Plc, the biggest foreign underwriters of yuan bonds sold in Hong Kong, say sales will double in 2011 as demand outstrips supply and the yuan appreciates. New issues may increase to a record 80 billion yuan ($12 billion) next year, with as much as 30 billion yuan of sales in the first quarter, according to HSBC, the No. 2 underwriter of so-called dim sum bonds. Standard Chartered, the fourth largest, says sales could top as much as 100 billion yuan as Moscow-based United Co. Rusal and BP Plc plan issues. Offerings this year total 40.7 billion yuan, data compiled by Bloomberg show. "We´re likely to see strong growth to around 80 billion yuan in 2011," Sean Henderson, HSBC´s head of Asia debt syndicate, said in a telephone interview. The dim sum market has grown 10-fold since 2008 as China seeks to use the city as an international center to promote the use of the yuan beyond its borders for trade and finance. Forecasts of currency gains spurred a 45 percent month-on- month jump in yuan deposits in Hong Kong to a high of 217.1 billion yuan in October, according to the latest data from the Hong Kong Monetary Authority, creating an investor base seeking yuan-denominated securities. Bond issuers can save about 197 basis points, or 1.97 percentage point, in interest payments selling yuan bonds in Hong Kong rather than in Shanghai.
5. New Zealand Economy to Get Lift From Quake Rebuilding, Rugby Fans in 2011
New Zealand´s economy will likely rebound from the verge of a recession and expand next year, buoyed by earthquake reconstruction and a tourism boost from the Rugby World Cup. Gross domestic product fell 0.2 percent in the third quarter, as the Sept. 4 temblor damaged houses, businesses and roads, Statistics New Zealand said in Wellington yesterday. Finance Minister Bill English said the recovery won´t be derailed, citing falling unemployment and rising prices for commodity exports. Rebuilding work after the magnitude 7 earthquake rocked Christchurch city is underpinning demand and helping prevent a recession, economists said. Another catalyst may be the rugby tournament´s 85,000 visitors next year to the country of 4.4 million and an estimated NZ$500 million ($372 million) in tourism spending in the second half of 2011. "The Rugby World Cup is going to have a significant positive impact on growth in the third quarter and thereafter," said Helen Kevans, economist at JPMorgan Chase & Co in Sydney. "Positives on the radar" include reconstruction, strong economic growth for New Zealand´s trading partners and elevated commodity prices, she said.
6. Irish Government Takes Control of Allied Irish, Fourth Bank in Two Years
Ireland´s High Court said Allied Irish Banks Plc can be taken over by the government without shareholder approval as the lender became the fourth bank to fall under state control since 2008. Finance Minister Brian Lenihan secured approval from the Dublin-based court today to inject 3.7 billion euros ($4.8 billion) into the lender by Dec. 31 and raise its stake to 92 percent from 19 percent, the Finance Ministry said in a statement. Allied Irish, Ireland´s largest company by market value in 2007, recorded its biggest share price drop in 22 months in Dublin trading. Valued at almost 21 billion euros at its peak, the bank´s market capitalization today was 347 million euros. "We wouldn´t have had Allied Irish Banks on the 1st of January if this investment wasn´t made," Lenihan said in an interview with Dublin-based broadcaster RTE Radio after the ruling. Irish banks are grappling with loan losses after the collapse of a decade-long real-estate boom. The state has already taken control of Anglo Irish Bank Corp., Irish Nationwide Building Society and EBS Building Society. Irish Life & Permanent Plc, the only Irish lender to avoid a bailout, will try to meet new capital requirements from its own and from market resources early next year, Lenihan said. So will Bank of Ireland Plc, which is 36 percent state-owned, he said.
7. Boeing to Resume 787 Dreamliner Test Flights Today After Electrical Fire
Boeing Co. said one of its 787 Dreamliner test jets will be allowed to resume limited flights today after an electrical fire grounded the fleet and added to delays for a plane already running three years behind schedule. The 787s will fly for the company´s purposes only, with efforts toward certification by the U.S. Federal Aviation Administration to be restarted later, Chicago-based Boeing said today in a statement. Flights by the six test aircraft were suspended after an electrical fire broke out Nov. 9 in a 787´s power panel and knocked out some controls, forcing an emergency landing in Laredo, Texas. The Dreamliner´s scheduled entry into commercial service has been postponed six times and was targeted for the first quarter of 2011 before the blaze. "As we return to flight test and determine the pace of that activity, we remain focused on developing a new program schedule," Scott Fancher, the 787 program chief, said in the statement. "We expect to complete our assessment of the program schedule in January."
8. Apollo Said to Pay $1.2 Billion for Credit Suisse Distressed Property Debt
Apollo Global Management LLC, a New York-based private-equity firm, agreed to pay $1.2 billion for distressed property loans held by Credit Suisse Group AG, according to a person with knowledge of the deal. The mortgages are backed by buildings in Europe, said the person, who asked not to be named because the agreement hasn´t been made public. Demand for commercial property loans has increased as banks around the world strengthen balance sheets and begin to sell non-core property assets. Private-equity firms including TPG Capital and KKR & Co. have vied for ING Groep NV´s real estate investment unit, according to people familiar with the matter. Morgan Stanley said last month that European real estate stocks will probably outperform the broader market into 2011. Apollo last month completed the purchase of the real estate investment unit of Citigroup Inc., adding more than $3 billion to its assets under management.
9. Toyota Disappointed $10 Million Crash Settlement With Family Made Public
Toyota Motor Corp., saying it reached an out-of-court settlement with the family of a California Highway Patrol officer who together with three others died when their car sped out of control and crashed, said it was disappointed that the amount of the settlement was made public. Toyota, based in Toyota City, Japan, agreed to settle with the family for $10 million, said Larry Willis, an attorney for Bob Baker Lexus, the San Diego car dealership that loaned the Lexus ES350 to Mark Saylor and isn´t part of the settlement. A court order barring the parties involved from discussing the settlement terms, which must be approved by a state court judge in Los Angeles, expired yesterday. "These parties agreed to keep the amount confidential, in part to protect the families from unwanted solicitations and to allow them to move on from this difficult period," the Toyota City, Japan-based automaker said today in an e-mailed statement. "Mr. Baker now wants the amount publicized in an apparent effort to shift the focus away from his dealership as he continues to litigate this case with the families."
10.Deposit `War' Fails to Ease Record Cash Crunch at SBI, HDFC: India Credit
India´s biggest banks are battling for deposits as they fall behind demand for loans amid the nation´s worst cash crunch on record. State Bank of India raised one-year rates by 175 basis points, or 1.75 percentage point, since July 30 to a 20-month high of 7.75 percent, while Housing Development Finance Corp. added 75 to 7.95 percent. The average deposit growth of 15.3 percent during the period lagged behind a 21.1 percent increase in lending, according to data from the monetary authority. One-month interbank lending rates in Asia´s third-biggest economy increased 142 basis points to 8.37 percent this quarter and 167 basis points in China to 5.18 percent. The rates banks offer are still too low, robbing the economy of a source of funds to fuel growth, Reserve Bank of India Governor Duvvuri Subbarao, who has overseen six increases in benchmark borrowing costs this year, told a bankers´ conference on Dec. 3. "The process of raising deposit rates has begun, but it hasn´t progressed far enough to ease the cash shortage," said Krishnamurthy Harihar, the Mumbai-based treasurer at FirstRand Ltd., a unit of South Africa´s second-largest bank. "Deposit rates will have to rise much more to help banks garner sufficient liquidity."
11.Nippon Yusen to Triple India Capesize Fleet on Demand for Coal, Iron Ore
Nippon Yusen K.K., Japan´s second- largest operator of dry-bulk ships, plans to more than triple its fleet of capesizes serving India because of demand for coal and iron ore in the world´s fastest-growing major steel market. The shipping line expects to have 15 capesizes hauling the commodities to India by 2015, close to the fleet size currently serving China, Kazuo Ogasawara, general manager of its bulker group, said in an interview in Tokyo. The company plans to expand its total capesize fleet to 120 from 95 by 2012-2013. Indian imports of coal may surge nearly seven-fold to 200 million metric tons a year by 2015 as the growing economy drives demand for metal and electricity, Ogasawara said. The nation´s steel consumption may also jump 14 percent next year, compared with a 3.5 percent increase in China and a decline in Japan, according the World Steel Association. "Crude steel output in India is set to surpass the level of Japan," Ogasawara said in a Dec. 21 interview. "In addition, electricity demand is coming in."
12.Shooting Gold Diggers at Barrick African Mine Coincides With Record Prices
Barrick Gold Corp.´s North Mara mine near the Tanzanian border with Kenya disgorges millions of pounds of waste rock each week, piled high around communities where almost half the people live on less than 33 cents a day. Children in school uniforms scurry across the rubble to reach their classes. Women with water pails atop their heads skirt past the heaps. The piles grow as the longest bull market for gold in at least 90 years pushes Barrick, the world´s largest miner of the precious metal, to increase production. Villagers, too, are hunting the ore on the North Mara land that their ancestors worked for decades, sometimes paying with their lives. Security guards and federal police allegedly have shot and killed people scavenging the gold-laced rocks to sell for small amounts of cash, according to interviews with 28 people, including victims´ relatives, witnesses, local officials and human-rights workers.
For the complete stories summarized here, and for more of the day's top news, see TOP <Go>.