Dec. 29 (Bloomberg) -- The following are the day's top business stories:
1. U.S. Files Insider Charges, Says Hedge Funds Got Data on Marvell, Nvidia 2. Japan's Stocks Fall After Dollar Weakens; Nomura Research Drops on Outlook 3. Indonesia Tightens Rules on Foreign Exchange Holdings, Overseas Borrowing 4. Blackstone Said Among Bidders Interested in Australia's Centro Properties 5. Pimco Says Dollar to Keep Reserve Status Amid Broad Demand for Treasuries 6. Construction Bank Unit to Challenge HSBC in Mutual Fund Sales in Hong Kong 7. Facebook, Twitter Trading in Private Spurs Questions About Financial Data 8. Consumers Opening Wallets May Prompt More Corporate Takeovers Next Year 9. Fee Squeeze Seen Continuing in 2011 by Top India Stock Arranger Citigroup 10.IBM, Oracle May Reap Sales as U.S. Safe-Food Law Pushes Computer Tracking 11.Verizon's IPhone Leaves AT&T Needing Subscribers `Happy Enough' to Stay 12.Shanghai Traders Pushing $1,600 Gold Thwart China Closing Silicosis Mines
1. U.S. Files Insider Charges, Says Hedge Funds Got Data on Marvell, Nvidia
U.S. prosecutors in Manhattan filed new charges as part of a national probe of insider trading, accusing a former Primary Global Research LLC expert-networking consultant with selling inside information to portfolio managers at three unidentified hedge funds. Winifred Jiau, arrested in Fremont, California, was accused of selling data on Nvidia Corp. and Marvell Technology Group Ltd., makers of computer components, through Primary Global, according to a filing today in Manhattan federal court. The hedge funds paid her $200,000 through the firm, prosecutors said. Jiau is the seventh person connected to Primary Global to be charged in a multiyear U.S. insider trading investigation that has ensnared company employees and consultants. Jiau, 43, is charged with one count each of conspiracy to commit securities fraud and securities fraud. The first count carries a maximum sentence of 20 years in prison. She appeared this morning in San Francisco federal court and was ordered held in custody by U.S. Magistrate Judge Nandor Vadas, who set a hearing for Jan. 12 on whether to transfer her to New York. The evidence against Jiau is "strong," Assistant U.S. Attorney Wilson Leung told the judge, adding that there is a "cooperating witness and audio recordings." When asked by Vadas if she understood the charges, Jiau said "I not have a chance to know until now." Barry Portman, her assigned public defender, said the complaint is a "lengthy document." She didn´t enter a plea to the charges.
2. Japan's Stocks Fall After Dollar Weakens; Nomura Research Drops on Outlook
Japanese stocks fell as the dollar weakened to a seven-week low against the yen, reducing the outlook for Japanese companies´ overseas earnings. Tokyo Electron Ltd., a maker of semiconductor equipment that derives more than 60 percent of its revenue abroad, lost 1 percent. Nissan Motor Co., Japan´s third-biggest automaker by sales, slid 0.5 percent. Nomura Research Institute Ltd., an information-technology provider, retreated 0.7 percent after the Nikkei newspaper said the company´s profit fell in the April- December period. "The yen´s appreciation will hang over the market" in Japan, said Mitsushige Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co. "I don´t think people are rushing to sell stocks to lock in profits, because there are strong expectations that stocks will rise next year." The Nikkei 225 Stock Average fell 0.4 percent to 10,299.38 as of 9:16 a.m. in Tokyo. The broader Topix index dropped 0.3 percent to 905.14. For the month, the Nikkei has risen 3.7 percent, while the Topix is up 5.1 percent, extending a rebound that began in November.
3. Indonesia Tightens Rules on Foreign Exchange Holdings, Overseas Borrowing
Indonesia said it will tighten rules on banks´ foreign-exchange holdings and overseas borrowing to cope with capital inflows that have pushed up inflation and strengthened the rupiah this year. Bank Indonesia will also reintroduce a 30 percent cap on lenders´ short-term overseas borrowing to minimize the risk of sudden capital outflows, it said today. Banks must set aside 5 percent of their total foreign-exchange holdings as reserves as of March 2011, from 1 percent currently, Deputy Governor Budi Mulya said at a press briefing in Jakarta yesterday. The reserve requirement will rise to 8 percent effective June. "These rules will ease pressure on the rupiah," said Anton Gunawan, chief economist at Jakarta-based PT Bank Danamon Indonesia. "The central bank wants to absorb excess liquidity in the banking system." Indonesia and its peers are grappling with increasing capital inflows as borrowing costs and growth rates that are higher than those of developed economies boost the appeal of emerging-market assets. Taiwan tightened curbs on exchange-rate derivatives this week and South Korea plans similar measures, according to an official at the country´s financial regulator.
4. Blackstone Said Among Bidders Interested in Australia's Centro Properties
Blackstone Group LP, the world´s largest private-equity firm, has made a preliminary bid for assets of Australian shopping-mall owner Centro Properties Group, according to a person briefed on the offer. Melbourne-based Centro -- which manages A$18.6 billion of shopping malls in Australia, New Zealand and the U.S. -- put its assets up for sale two years after its acquisition spree in the U.S. backfired as the world´s largest economy contracted and debt costs soared. Centro said on Dec. 22 it had received several expressions of interest. Lend Lease Group, Stockland, AMP Capital Investors Ltd. and Colonial First State Global Asset Management are among bidders for the malls, local media reports have said. Apollo Management International LLP has also joined the bidding, the Financial Times reported, without saying where it got the information. The person briefed on Blackstone´s plans asked not to be named because the information is private. Blackstone´s bid was earlier reported by the Wall Street Journal, which said the New York-based firm is mainly interested in the U.S. properties.
5. Pimco Says Dollar to Keep Reserve Status Amid Broad Demand for Treasuries
The U.S. dollar will keep its reserve-currency status in 2011 because China and other nations aren´t developed enough for their currencies to replace it, according to Pacific Investment Management Co., which runs the world´s biggest bond fund. "The U.S. will preserve its reserve status primarily because it remains the world´s preeminent power economically, politically, and militarily," Anthony Crescenzi, a money manager at Pimco in Newport Beach, California, wrote in a report yesterday. "The currencies of rising powers such as China are not yet ready to absorb the $9 trillion in reserve assets the world holds, particularly because their bond markets are immature and can´t house reserve assets as U.S. markets can." The U.S. currency headed for a gain in 2010 even as officials around the world said Federal Reserve policies to add $600 billion to the U.S. economy would debase the currency. IntercontinentalExchange Inc.´s U.S. Dollar Index gained 2.5 percent this year, after sliding 4.2 percent in 2009, according to data compiled by Bloomberg.
6. Construction Bank Unit to Challenge HSBC in Mutual Fund Sales in Hong Kong
China Construction Bank Corp.´s Hong Kong unit targets at least 20 percent annual growth in revenue from selling investment products in the city, where the number of millionaires doubled last year. China Construction Bank (Asia) Corp., the wholly owned subsidiary of China´s second-largest lender, wants to become one of Hong Kong´s five biggest sellers of mutual funds and other financial products, consumer banking head Huang Tao said in an interview. It currently ranks sixth or seventh, he said. "Wealth management is the area that we are strong at and the area that we want to grow," Huang said. CCB (Asia) vies with Citigroup Inc. and HSBC Holdings Plc for wealthy clients in Hong Kong, which has the second-highest proportion of millionaire households after Singapore, according to the Boston Consulting Group. Huang said he plans to boost headcount at CCB (Asia)´s consumer banking unit by a third within the next five years to help gain market share.
7. Facebook, Twitter Trading in Private Spurs Questions About Financial Data
Private trading that helped spur paper gains of 50 percent or more in companies such as Facebook Inc. and Twitter Inc. is raising questions about how much investors know about their financial condition. Facebook, Twitter and other venture-backed Internet companies have seen their combined value rise 54 percent since June, according to a report this month by Nyppex LLC that focused on so-called secondary transactions that involve buying stock from existing shareholders. The Wall Street Journal and New York Times reported that the Securities and Exchange Commission is seeking information about transactions in Facebook, Twitter, Zynga Game Network Inc. and LinkedIn Corp. While backers of venues such as New York-based SecondMarket Inc. that match buyers and sellers in private companies say they meet a demand where no public market exists, Frank Mazzola of Felix Investments says it makes sense regulators would want a clearer picture of trading. Dixon Doll, co-founder of the venture-capital firm DCM, says regulators may be studying how the venues affect rules related to how many people own companies that aren´t registered for trading. "Any time when you have something that´s growing and dealing with private investors, scrutiny is a good thing," said Mazzola, a partner at New York-based Felix Investments LLC, which arranges pools to invest in nonpublic companies. His firm´s rivals in that business include EB Exchange Funds LLC and GreenCrest Capital LLC.
8. Consumers Opening Wallets May Prompt More Corporate Takeovers Next Year
U.S. consumers put the brakes on dealmaking in 2010. They may be the accelerator next year. Chief executives maintained record levels of cash this year as the recession-weary consumer fueled doubts about an economic recovery. While mergers and acquisitions topped $2 trillion in 2010 -- the first increase in three years -- the amount failed to approach 2007´s $4 trillion peak in global takeovers. Shoppers may help bring 2011 closer to that total. Holiday sales jumped 5.5 percent in the U.S., the best performance in five years, on purchases of clothing and jewelry, according to MasterCard Advisors´ SpendingPulse. As spending rises, companies are more optimistic and willing to take on risk, according to Joseph Gromek, chief executive officer of New York-based Warnaco Group Inc., owner of the Calvin Klein and Speedo brands. "There will be a very aggressive approach," Gromek said. "The companies that have strong balance sheets with lots of cash on hand will try to be as opportunistic as possible."
9. Fee Squeeze Seen Continuing in 2011 by Top India Stock Arranger Citigroup
Fees for underwriting stock sales in India may remain near all-time lows as investment banks battle for market share, according to an executive at Citigroup Inc., the top-ranked adviser on equity offerings in the country. Indian companies paid bankers 0.92 percent of the record $24 billion they raised locally this year in initial public offerings and additional sales as fees, the lowest ratio since Bloomberg began compiling the data in 1999. That compares with 3.5 percent in the U.S. and 2.17 percent in Hong Kong, the largest markets for stock offerings in 2010, the data show. "On the top end of the deal pyramid, there is serious competition," Ravi Kapoor, head of Citigroup´s global banking operations in India, said in a Dec. 22 interview in Mumbai. "We will still see sub-optimal fees being charged just to gain market share." State-run enterprises that paid near-zero fees in 2010 will continue to dominate India´s equity capital market next year along with infrastructure, manufacturing and services companies, Kapoor said. Citigroup, ranked fifth in the world for share sales, and five rivals accepted fees of less than $6 each to arrange government-controlled Coal India Ltd.´s record IPO.
10.IBM, Oracle May Reap Sales as U.S. Safe-Food Law Pushes Computer Tracking
Changes to U.S. food-safety rules may generate sales for International Business Machines Corp., Oracle Corp. and other companies that can provide systems to track outbreaks of food-borne illness. The U.S. House of Representatives on Dec. 21 and the Senate last month passed a bill instructing the U.S. Food and Drug Administration to establish over the next two years how the tracking is to be accomplished. The study may lead to FDA requirements that farms and manufacturers buy computer systems to monitor and track shipments, according to agriculture trade groups that have started work on tracking technology. The bill, which awaits President Barack Obama´s signature, may lead to hundreds of millions of dollars in annual sales for companies that produce the labels and scanning devices to enable tracking systems, said Ray Connelly, general manager of closely held Truetrac, a developer of agricultural product-tracking software in Salinas, California. "That´s the free market," said Larry Sanders, a professor at Oklahoma State University´s Department of Agricultural Economics in Stillwater, Oklahoma. "The consumer is being heard because of the problems we have been having because of E. coli and salmonella."
11.Verizon's IPhone Leaves AT&T Needing Subscribers `Happy Enough' to Stay
Apple Inc. will likely introduce a new version of the iPhone that works on Verizon Communications Inc.´s network early next year, leaving AT&T Inc., until now the exclusive U.S. distributor of the device, with a challenge. While AT&T, ranked last in user satisfaction by a Consumer Reports survey this month, has reason to be concerned about losing the iPhone arrangement it has held since Apple introduced the device in 2007, the damage may not be as severe as anticipated, Bloomberg Businessweek reports in its Jan. 3 issue. At least initially, Verizon´s iPhone may have weaknesses compared to AT&T´s. The expense and hassle of changing carriers could also work to AT&T´s advantage, according to Charles Golvin, an analyst with Forrester Research in Cambridge, Massachusetts. "I´m sure some AT&T customers are sufficiently frustrated to switch, but the vast majority are at least happy enough," says Golvin.
12.Shanghai Traders Pushing $1,600 Gold Thwart China Closing Silicosis Mines
Yu Zudong rides an orange truck rattling down Xiaoqinling mountain in central China, past a landscape pockmarked with gold caves and the garbage-strewn tent homes of workers. "Everybody here wants to earn a fortune," says Yu, a migrant miner who is taking a 24-ton load of gray rocks to a grinder in the foothill town of Yuling. Nearby, sitting in one of the shanties, miner Li Shanchi waits for his next payday. He hasn´t worked for two months since officials closed some mines after a fire killed nine workers on the mountain, 800 kilometers (500 miles) southwest of Beijing. His lungs are filled with dust he inhaled during a decade of mining, he says, leaving him with silicosis, an incurable lung disease. The opposite fates of Li and Yu, both 31, show how China´s hunger for gold will both help drive the price of the metal higher, and at the same time undermine the country´s goal of gaining control of its Wild West mining industry, interviews with more than two dozen miners, analysts and labor activists show.
For the complete stories summarized here, and for more of the day's top news, see TOP <Go>.