Archive for August, 2010

Sinochem and Vale approach BHP’s target Potash Corp: report (Reuters)

Sunday, August 22nd, 2010 | Finance News

MELBOURNE (Reuters) – Potash Corp (POT.TO) has been contacted by China's Sinochem Group and Brazil's Vale (VALE5.SA) as the Canadian firm battles a hostile $39 billion takeover offer from BHP Billiton (BHP.AX), Bloomberg reported.

Citing a person with knowledge of the matter, Bloomberg said Sinochem and Vale had made inquiries with Potash Corp's board late last week about the possibility of holding talks.

(Reporting by Sonali Paul; Editing by Balazs Koranyi)

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Japan stocks slip on yen worries (Reuters)

Sunday, August 22nd, 2010 | Finance News

HONG KONG (Reuters) – Japanese shares extended losses on Monday amid worries a strong yen would derail the fragile economic recovery, while the Australian dollar recovered after falling to a one-month low on inconclusive weekend elections.

Broad investor concerns about the global economic recovery are weighing on regional stocks which fluctuated through positive and negative territory following a string of weak economic data releases from the United States last week.

Political uncertainty pulled the Australian dollar down initially to a one month trough of $0.8833 but the unit made a quick rebound to trade at $0.8905, down 0.4 percent.

Australian stocks also rebounded after an early fall to trade flat, led almost entirely by a rally in miners on expectations that Prime Minister Julia Gillard would fail to form a government, spelling the end of her 30 percent tax on major iron ore and coal mines. The conservatives have vowed to scrap the mining tax.

The reversals in the Aussie and Australian stocks also followed a media report the country's largest brewer Foster's Group (FGL.AX) was selling its beer operations to SABMiller (SAB.L)(SABJ.J) for about 7 billion pounds ($10.9 billion). Foster's shares rose as much as 6.5 percent.

Investors likely face a week's wait before they know who will form a national government and how independents will sway key policies like the mining tax and a planned broadband network.

"There is the mining tax and the broadband issue but there are not too many economic differences," said Simon Burge at ATI Asset Management which oversees A$500 million. "But with no party having a clear majority it makes it hard for them to get any of their mandates through."

YEN STRENGTH EYED

Japan's benchmark Nikkei (.N225) was down 0.4 percent adding to Friday's 2 percent fall as corporate performance jitters grew in the wake of the yen's strength against the dollar.

"Governments around the world are allowing their currencies to weaken, and if Japan doesn't do anything about the strength in the yen it could appreciate further and that would put pressure on Japanese stocks," said Masahiko Sato, an executive director at Nomura Securities' equity marketing department.

Investors are focused on whether central bank Governor Masaaki Shirakawa and Prime Minister Naoto Kan will meet to discuss any official action in the face of the yen's strength.

News that Kan and Shirakawa talked over the phone on Monday about the currency and the economy and agreed to work closely, which came during the mid-day break, was unlikely to have a big impact as it remained undecided whether the two will hold a meeting.

The dollar was down 0.3 percent at 85.35 yen. The U.S. currency fell as low as 84.72 yen earlier this month, its lowest since July 1995.

Investors expect Kan to pressure the central bank for action in the face of the yen's strength, but Jiji news agency reported the government is considering postponing the meeting, which had been expected on Monday, to avoid giving the impression that it is intervening in the BOJ's policy decisions.

Meanwhile, the doubts about the global economic recovery weighed on investor sentiment.

"A growing trend seems to be that signs of a weak global economic recovery are prompting some funds to close, and cash-out moves as a result of that are weighing on stocks. That money is likely flowing into U.S. bonds and JGBs," said Hajime Nakajima, deputy general manager at Cosmo Securities.

The MSCI index of Asia Pacific ex-Japan stocks (.MIAPJ0000PUS) eked out gains, rising 0.3 percent and hauled up by advances in sectors such as resources (.MIAPJMT00PUS) and technology (.MIAPJIT00PUS).

Oil rebounded to above $74 a barrel but stayed close to six week lows amid concerns about a global economic recovery.

(Additional reporting by Aiko Hayashi in TOKYO; Editing by David Fox)

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Blackstone, Great Eagle in China housing deal: report (Reuters)

Sunday, August 22nd, 2010 | Finance News

HONG KONG (Reuters) – U.S. private equity firm Blackstone Group (BX.N) has agreed to a deal with Great Eagle to build high-end apartments in China, where the housing market is booming, the Financial Times said.

Blackstone will back Great Eagle's plan to develop more than 1,000 new homes in the north-eastern port city of Dalian, its first significant investment in China, the newspaper said on Monday, without citing sources.

The paper did not specify whether Hong Kong-headquartered Great Eagle Group or its Hong Kong-listed unit Great Eagle Holdings Ltd (0041.HK) was involved in the deal.

Blackstone and Great Eagle executives were unavailable for comment.

Great Eagle Group posted a core profit after tax of about HK$1.276 billion ($164 million) and had a net asset value of around HK$22 billion in financial year 2009, according to its web site www.greateagle.com.hk.

Foreign companies have been trying to tap the Chinese housing market, which has seen prices rise sharply over the past year mainly due to healthy domestic consumption as the economy grew strongly and the country lacks investment products.

However, the government has been trying to curb rises, unveiling a slew of measures earlier this year and requiring banks to conduct stress tests to ensure the sector, a key pillar of the Chinese economy, does not suffer from overheating.

(Reporting by Lee Chyen Yee and Megan Davis in New York; Editing by Jonathan Hopfner)

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