Archive for August, 2011

Asian stocks up after Fed chief speech

Sunday, August 28th, 2011 | Finance News

BANGKOK – Asian stock markets rose Monday, after Federal Reserve chief Ben Bernanke's prediction of long-term U.S. economic growth fueled a Wall Street rebound.

Japan's Nikkei 225 index rose 0.5 percent to 8,845.19. Australia's S&P ASX 200 gained 1.5 percent to 4,264.20 and New Zealand's NZX 50 rose 0.6 percent to 3,313.85.

South Korea's Kopsi index jumped 2.7 percent to 1,826.35. Hyundai Heavy Industries Co. soared 8.4 percent. Hynix Semiconductor Inc. jumped 5.9 percent.

Gold-related shares rose after prices of the precious metal rebounded Friday after a volatile week. Newcrest Mining Ltd., Australia's largest gold miner, rose 1 percent.

Other Australian metals shares rose on the back of higher commodities prices. BHP Billiton Ltd., the world's largest mining company, rose 1.5 percent. Rio Tinto Ltd. gained 1.7 percent.

On Friday in New York, gold for December delivery rose $34.10 to finish at $1,797.30 an ounce after nearly hitting $1,900 an ounce as Monday's trading ended.

The euro was slightly down at $1.4482 from $1.4484 in late trading in New York. The dollar fell to 76.73 yen from 76.66 yen.

Market optimism was fueled Friday by a highly anticipated speech by Fed chief Bernanke at a conference in Jackson Hole, Wyoming. While he announced no new economic stimulus measures, as some investors had hoped, he did leave open the possibility of more action if another recession looks likely — and he also emphasized the strengths of the U.S. economy.

The Dow Jones industrial average rose 1.2 percent to close at 11,284.54. The Standard & Poor's 500 index rose 1.5 percent to 1,176.80. The technology-heavy Nasdaq composite index rose 2.5 percent to 2,479.85.

The Fed has said it plans to keep short-term interest rates low until mid-2013. Low rates on investments like bonds make higher-risk bets such as stocks more attractive.

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Wells Fargo, JPMorgan, Loan Star win Anglo Irish loans: sources

Sunday, August 28th, 2011 | Finance News

NEW YORK (Reuters) – Wells Fargo & Co, JPMorgan Chase & Co and Lone Star Funds were the winners of the $9.5 billion pool of U.S. commercial real estate loan sold by failed lender Anglo Irish Bank Corp, two sources familiar with the deal said.

The sale marks one of the biggest since the downturn in U.S. commercial real estate four years ago.

It attracted more than two dozen buyers, said a source who was not authorized to speak on the record. The total price paid for all the loans was between $7 billion and $8 billion, the source said.

To attract a large pool of potential buyers, the portfolio was broken into eight separate pools according to the performance of the loans and the length to maturity.

The first three pools contained performing loans. JPMorgan was the winner of the first tranche comprising loans with a balance of about $1 billion to $1.5 billion, the source said.

Wells Fargo won the second and third tranches valued at about $3 billion to $3.5 billion, the source said. Wells Fargo recently bought a $1.4 billion performing loan portfolio from the failed Bank of Ireland for about par, another source said.

Global distressed debt and equity investor Lone Star won the remaining five pools of sub-performing and non-performing loans. The five pools have a face value of about $5 billion.

Those loans, which could lead to the buyer either getting the property or restructuring the loans, had attracted other private equity firms, such as TPG Capital LP and Blackstone Group LP.

The winners were notified Thursday night, another source said. Bloomberg first reported the story.

The sales are expected to close in October.

The pools have also been split along the lines of real estate types -- hotels, apartments, condominiums, offices and warehouses, according to an information sheet obtained by Reuters.

Anglo Irish and a spokesman for JPMorgan declined to comment. Representatives from Loan Star and Wells Fargo could not be reached for comment.

Other bidders who were either part of the first or second round of bids included Goldman Sachs Group Inc, Deutsche Bank AG, Vornado Realty Trust, Starwood Capital, and Torchlight Investors, an independent adviser focused on commercial real estate debt investments.

Anglo Irish was one of the most aggressive lenders during the U.S. commercial real estate boom of 2003-2007, but its risk strategy brought it and the Irish economy to the brink of collapse and forced Dublin to seek an 85 billion euros EU-IMF bailout last year.

Once the darling of the Irish stock market, Anglo Irish was nationalized in 2009 and is being wound down, after selling its deposits to former rivals and having ceased lending.

Its U.S. portfolio is its premium stock of assets, and a successful sale would represent a huge boost for the Irish government, which has vowed to radically shrink its banking sector and reduce its reliance on emergency funding from the European Central Bank (ECB).

The loans to be sold are secured by a diverse group of more than 280 properties, including office buildings in Massachusetts and retail properties in New Hampshire, South Carolina and Florida.

It also includes apartment buildings in New York City and Boston, warehouses and gas stations in the Midwest, and hotels from Florida to Maine.

(Additional reporting by Carmel Crimmins an Padraic Halpin in Dublin; Editing by Vinu Pilakkott)

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U.S. small business hiring slows in August, wages dip

Sunday, August 28th, 2011 | Finance News

WASHINGTON (Reuters) – Hiring by U.S. small businesses slowed in August and employers reduced hours, an independent survey showed on Sunday, suggesting the recent stock market turmoil may have dampened job creation.

Intuit, a payrolls processing company, said small businesses added 35,000 jobs after increasing employment by 40,000 in July.

The survey is based on responses from about 66,000 employers at businesses with fewer than 20 employees that use the Intuit Online Payroll system and covered the period from July 24 to August 23.

"There was plenty of bad news this month and the Intuit small business employment figures show this," said Susan Woodward, the economist who helped to develop the survey. "From this month's numbers, we don't see a new recession, but we don't see a robust recovery either."

A sharp drop in share prices after Standard & Poor's stripping the nation of its top AAA credit rating knocked down consumer and business confidence. Sentiment also soured as the sovereign debt crisis in Europe spread.

There are fears the month's stock market rout could make businesses hesitant to hire new workers.

The government will release its employment report for August on Friday, which will be gleaned for clues on whether the economy is sliding back into recession.

According to a Reuters survey, nonfarm payrolls probably increased 80,000 this month after July's 117,000 gain.

Three of the 62 economists polled predicted a contraction in nonfarm employment this month, citing the erosion of business confidence and a strike by 45,000 Verizon Communications workers during the payrolls survey period.

They cautioned, however, that a drop in August employment should not be interpreted as a sign the economy was back in recession. The economy grew at a 1 percent annual rate in the second quarter after expanding only 0.4 percent in the January to March period.

The average work week for small business employees fell 0.3 percent to 24.9 hours, according to the Intuit survey, while the average monthly salary eased 0.08 percent to $2,649.

"With a soft labor market, employers no longer need to pay more to get help," said Woodward.

This is a worrying trend for consumer spending, which accounts for more than two-thirds of U.S. economic activity. Consumer spending grew at an anemic 0.4 percent annual rate in the second quarter, slowing sharply from 2.1 percent in the first three months of 2011.

(Reporting by Lucia Mutikani; Editing by Dan Grebler)

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