Archive for June, 2009

World stocks eye best quarterly gain (Reuters)

Tuesday, June 30th, 2009 | Finance News

LONDON (Reuters) –
The MSCI world equity index looked set on Tuesday for its best quarterly gain since its 1988 launch and oil was on course for its strongest quarter since 1990, as recovery talk fired up markets in the past three months.

Investors have taken heart from lower global interest rates and signs central banks' quantitative easing policies have been effective in kick-starting economies, and China and other countries' stimulus packages have boosted demand for raw materials.

Lower volatility, as measured by the VIX index (.VIX), is also suggesting markets are no longer in crisis mode.

"The first half of 2009 is ending on a far more positive note than it began," said Mitul Kotecha, head of global foreign exchange strategy at Calyon, in a client note.

"Confidence has improved, data releases especially in Q2 2009 have revealed a much smaller pace of deterioration...risk appetite is set to improve further in H2 2009 but, as with economic recovery, the improvement will be gradual and prone to setbacks."

The world equity index has risen over 22 percent in the past three months, and is up 9 percent on the year, after suffering its worst quarter on record in the last three months of 2008.

Risky emerging stocks (.MSCIEF) have put in an even stronger performance, gaining over 34 percent on the quarter and around the same amount on the year.

The world index gained 0.4 percent on Tuesday and the emerging market index edged up 0.16 percent.

The FTSEurofirst 300 index (.FTEU3) was steady on Tuesday, but at a rise of over 17 percent in the last three months was eyeing its best quarterly gain since Q4 1999.

"We are still living under a credit crunch and the central banks have very little choice but to keep interest rates quite low for some time. That may be one of the major fundamental reasons why asset markets have a tendency to remain underpinned," said Luc Van Hecka, chief economist at KBC Securities in Paris.

"Today we could have some volatility tied to the second quarter ending."

Oil prices leapt more than 2 percent to an eight-month high above $73 a barrel before trimming gains, on quarter-end positioning as oil coasted toward its best quarterly gain in 19 years.

Trading volume in both Brent and U.S. crude oil futures surged to more than 10 times the norm for the Asian time zone.

The safe haven U.S. dollar was weaker, dropping 0.3 percent against an index of currencies (.DXY) and down 7 percent on the quarter.

The pound hit its highest in 8 months above $1.6740 after Nationwide data showed UK house prices surprisingly rose a second month in June.

The euro gained 0.2 percent to $1.4106 and the dollar fell 0.6 percent to 95.57 yen.

Euro zone government bond futures fell 4 ticks to 121.11.

(Additional reporting by Atul Prakash; editing by Chris Pizzey)


General Motors close to Opel deal with RHJ: report (Reuters)

Tuesday, June 30th, 2009 | Finance News

(Reuters) –
Belgium-based RHJ International (RHJI.BR) is close to a deal to buy a stake in Opel after talks between parent General Motors (GMGMQ.PK) and preferred bidder Magna International (MGa.TO) hit snags, the Financial Times reported.

Citing a person close to the sale, the report said holding company RHJ and GM could sign a memorandum of understanding this week, and noted GM was seeking bids from rival suitors despite a preliminary deal with Canadian auto parts group Magna.

The FT said RHJ had improved an earlier bid and GM was "taking it very seriously."

Despite having been named in media reports as a potential Opel buyer, RHJ has never confirmed or denied that it made an initial bid for the troubled carmaker, let alone a second, improved one.

"I'm not going to comment on this current speculation," RHJ spokesman Arnaud Denis told Reuters on Tuesday.

Bank Degroof analyst Hans D'Haese said the frequency and detail of media reports naming RHJ as an Opel suitor led him to think the firm had made a bid, though he added RHJ has said its strategy going forward was to focus on financial rather than industrial buys.

"It was very explicit - that the cash they have on their accounts now will be used for acquisitions of financial assets in Europe," said D'Haese.

The Financial Times reported that RHJ's new offer was said to be more sensitive to job losses in Germany, which is providing $2.1 billion of bridge financing to keep the carmaker afloat as GM goes through bankruptcy proceedings in the U.S.

Another sticking point in the negotiations with Magna is access to the Detroit carmaker's global technology, which the Canadian firm wants to secure on behalf of its Russian partners, the newspaper said.

The FT report comes one day after German magazine Focus quoted an unnamed RHJ spokesman as saying the group had been "kicked out of the bidding process." Denis also declined to comment on that report.

RHJ's stock was up 1.2 percent at 4.4 euros at 0806 GMT (4:06 a.m. EDT).

RHJ's holdings include Japan's automotive components company Asahi Tec (5606.T), American media group Columbia Music (6791.T) and Belgian automotive component company Honsel International, according to its website.

General Motors could not be reached immediately for comment and an Opel spokesman declined immediate comment on Tuesday's report. Fiat (FIA.MI), another potential suitor, declined to comment, as did Magna.

(Reporting by Anne Jolis in Brussels and Hezron Selvi in Bangalore; additional reporting by Christiaan Hetzner, Boris Groendahl and Jo Winterbottom; writing by Anne Jolis; Editing by Lincoln Feast and Erica Billingham)


SEC wants financier’s assets frozen before trial (AP)

Tuesday, June 30th, 2009 | Finance News

LOS ANGELES – The Securities and Exchange Commission is seeking to permanently freeze the assets of a California financier accused of bilking investors until his fraud trial is over.

Judge Philip S. Gutierrez said Monday he would rule next week on the assets of Danny Pang, who is accused of bilking investors in his Private Equity Management Group companies.

Gutierrez temporarily froze Pang's assets in April, when he also ordered the financier to repatriate any assets sent overseas and turn over his passports.

Investigators say Pang falsely portrayed returns as coming from investments in timeshare real estate and life insurance policies of seniors.

Pang has denied wrongdoing through his attorneys.