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					                                                                                                                                                                                                                                   ARAB TIMES, TUESDAY, JULY 19, 2011
    BUSINESS                                                                                                                                                                                                                                                                     37


                  Piraeus unit sale OK’d                                                                                                                                           Morocco says to sell part of telecom stake

    Egypt’s central bank said on Monday it had given prelim-                        The Moroccan government will sell part        61.53 million shares. French Vivendi             directed to investment funds run by the         expects its EBITDA to rise 1-2 percent
    inary approval for Standard Chartered to start due dili-                        of its 30 percent stake in Maroc              holds a 53 percent stake in the firm, the        state,” said a Casablanca-based fund            this year, so the growth potential is not
    gence with a view to buying the Egyptian unit of Greece’s                       Telecom after a spending push to calm         country’s biggest telecom company.               manager who asked not to be named               quite there. The market will expect the
    Piraeus Bank. Standard Chartered has said it is consid-                         street protests eroded its public                The ministry did not say when the             because his merchant bank plans to bid          government to offer a discount on
    ering buying the unit, a deal that would boost the Greek                        finances and raised concern over its          transaction would be completed but               to advise the ministry on the sale.             Friday’s closing price,” the manager said.
    bank as it seeks to strengthen its balance sheet in light of                    ability to fund key projects.                 market sources in Casablanca said it                At 144 dirhams a share, Maroc                   Maroc Telecom has subsidiaries in
    the downturn facing debt-laden Greece.                                             A source familiar with the plan told       would be before the end of the fourth            Telecom trades at 13.4 times its fore-          Mauritania, Burkina Faso, Gabon and
       Al-Mal newspaper, citing central bank sources, report-                       Reuters on Friday the government had          quarter of 2011.                                 cast 2011 earnings, but even though             Mali, but Morocco is its main source of
    ed on Monday that the central bank was in the process of                        revived plans to sell part of its stake.         The stake is worth 8.86 billion               the firm has no debt, its growth                profit. “Competition in Morocco is very
    setting a date to start due diligence for the Greek Bank.                          The finance and economy ministry           dirhams ($1.1 billion) based on Maroc            prospects are relatively modest, the            tough, the regulator here is all over tele-
       Hisham Ramez, the central bank’s deputy governor,                            said on Monday it will sell up to 7 per-      Telecom’s closing stock price on Friday.         manager said.                                   com companies,” added the manager.
    confirmed the report to Reuters. (RTRS)                                         cent of Maroc Telecom’s capital, or              “The receipts will most likely be                “It’s an expensive stock: The firm           (RTRS)



                                                                                   Political gridlock puts prized AAA credit grade in jeopardy


US bonds lose sheen as debt rating threatened
WASHINGTON, July 18, (RTRS): US                  founder of private equity giant                think that would mean giving a green         term loss of confidence in the United         questioning the stringency of the criteria.   buyers tax credit was put into place last
Treasury bonds could soon lose the               Blackstone, appeared to be getting wor-        light to additional government spending      States and possibly a new financial crisis.      “You go to give yourself an exam,          year.
privilege of being the only debt securi-         ried. He has spent many years and a lot        — rather than simply making good on             In Europe, meanwhile, euro zone            you prepare the questions, you answer            Housing starts, too, are also expected
ties in the world whose value actually           of money pushing for cuts in govern-           past promises, as is actually the case.      leaders will meet on Thursday to dis-         them, and you grade them and say,             to increase slightly, even if real estate
rises on the threat of a ratings down-           ment spending to cut US debt levels.              A downgrade of US government              cuss a second bailout package for             ‘Hey look, I’m pretty good!’” said John       activity is unlikely to rebound demon-
grade.                                              “The dangerous irony is that a              debt would have unpredictable and            Greece and the financial stability of the     Brady, a futures trader at MF Global          strably any time soon. The June
   That is because for the first time, the       refusal to compromise on a deal to             highly disruptive consequences in            euro area.                                    securities in Chicago.                        employment report, which pointed to a
United States’ top-notch debt rating is          reduce the nation’s debt now will only         financial markets and the broader econ-         With the region’s fiscal problems             As if the political hot-potato were        virtual stagnation of the job market in
in jeopardy.                                     serve to increase our debt,” Peterson          omy.                                         now threatening Italy, the bloc’s third       not sufficiently worrying, a thin US          May and June, showed the construction
   US Congressional leaders are refus-           said in a statement.                              Treasuries have long been used as a       largest economy, there is a pressing          economic data calendar features prima-        sector was again shedding jobs.
ing to lift the country’s debt ceiling,             Ironically, Peterson’s often flashy         global safe-haven for investors shun-        need on both sides of the Atlantic for        rily figures likely to show the country’s        A more forward-looking, if second-
preventing the Treasury from raising             anti-debt campaigns are partly to blame        ning risky assets. They serve as a           bold, comprehensive solutions to debt         housing market remains in a deep rut.         ary, indicator is the Philadelphia Fed’s
money it has already spent.                      for the impasse, since Republican lead-        benchmark for market interest rates          problems.                                        Existing home sales were seen rising       index of Mid-Atlantic manufacturing.
   The political deadlock is threatening         ers have the backing of a majority of          and investment portfolios.                      Europe’s latest round of bank “stress      modestly to around 4.9 million annual-        The index, among the first peeks into
the United States’ prized AAA credit             Americans on the issue, according to              Federal Reserve Chairman Ben              tests” appeared to calm some nerves as        ized units. Still, the level was a far cry    economic activity in the third quarter,
grade, which major rating agencies               recent polls.                                  Bernanke argued this week that failure to    fewer institutions — just eight out 90 —      from the bubble peaks of around 7.1           is forecast to have returned to positive
have warned could face near-term cuts.              Economists say many individuals             raise the statutory limit would have         failed than investors had expected. But       million, and still well below readings        territory at 2.0 following a reading of -
   Even billionaire Pete Peterson, co-           oppose the debt ceiling because they           “calamitous” results, including a long-      confidence remained shaky, with many          close to 6 million seen after a home-         7.7 in June.


             the     bottomline                                                                 US lawmakers working on debt
                                                                                                ‘Plan B’ as deadline approaches
  LONDON: UK Financial Investments,              because it not only reduces our waste bill
  the body tasked with managing the British      but also generates extra income. We give
  government’s stakes in bailed-out banks,       our collection crews 35 percent of that
  said it would step up its focus on selling     extra cash as a bonus. It’s a good motiva-
  the holdings, even though regulatory           tion and makes good business sense for
  changes look set to reduce their value.        us.” Scrap merchants around the world
     “We will increasingly also be focused       are clamouring for material to recycle,
  on the work of preparing for, and under-       given record high prices of industrial met-
  taking, a disposal of the Government’s         als such as copper, which hit $10,190 a                                                    Geithner optimistic, says default off the table
  investments,” UKFI chairman David              tonne on the London Metal Exchange in
  Cooksey said on Monday in the body’s           February. Any Junk’s main source of
  annual report.                                 income is charging its clients to clear and    WASHINGTON, July 18, (RTRS): With five days to go before                                   was possible.
     Cooksey said UKFI was waiting for a         dispose of bulky waste. Overall it earns
                                                                                                President Barack Obama’s deadline for a debt ceiling deal                                     “Despite what you hear, people are moving closer together,” Geithner, who met
  regulatory overhaul of the banking sector,     about £5 million ($8 million) a year.                                                                                                     with top House of Representatives Republicans on Friday, told CNBC television.
  including reforms drawn up by the              About 5 percent of that comes from sell-       and no agreement in sight, Republicans and Democrats on                                    “You have seen the leadership of the Republican Party ... take default off the table.
  Independent Commission on Banking, to          ing on the junk, and about half of that is     Monday were crafting a fallback plan to avert a US default.                                That’s encouraging.”
  take effect before recommending the start      accounted for by scrap metal. “It’s not
                                                 massive, but it is a relevant part of our         Both parties agree on the need to raise the US debt ceiling, which caps how                But the stalemate in Washington, along with debt problems in Europe, is unnerv-
  of a sale process.
     The ICB, due to issue a final reform        business,” Mohr said. “We’re a bit like a      much the United States can borrow, but are deeply divided along ideological                ing financial markets worldwide amid fears that they could spiral into a global cri-
  blueprint in September, said in April that     skip on wheels but more flexible and with      lines over how to do it.                                                                   sis. World stocks dipped and gold prices hit record highs above $1,600 an ounce as
  banks should “ringfence” their retail divi-    a greener focus.Each truck has two crew          Treasury Secretary Timothy Geithner, however, remained optimistic that a deal            nervous investors sought a safe haven.
  sions from their riskier investment bank-      members who do all the loading and                                                                                                                                                       “There’s a perfect storm happening
  ing arms by holding separate capital           sweep up for you, and we charge accord-                                                                                                                                               on a global macroeconomic basis with
  reserves for each unit.                        ing to the space taken up.”
                                                    AnyJunk’s clients include household-                                                                                                                                               no debt deal here and the ongoing
     UKFI’s Cooksey warned that the ICB’s                                                                                                                                                                                              issues in Europe, and the market is
  proposals and other planned regulatory         ers, office managers, building contrac-
  changes would hit bank valuations.             tors, housing associations, commercial                                                                                                                                                looking at all these things and is fairly
     “The cumulative effect of these             landlords and estate agents. “Basically                                                                                                                                               anxious,” said Oliver Pursche, presi-
  changes will also impact negatively on         anyone with stuff to get rid of that is too                                                                                                                                           dent of Gary Goldberg Financial
  the profitability of banks and therefore on    big for their regular bin collection,” Mohr                                                                                                                                           Services in Suffern, New York.
  the value of the taxpayer’s stakes,” he        said. Each of AnyJunk’s 10 depots across                                                                                                                                                 The top Republican in the Senate,
  said.                                          the UK contains an area for storing                                                                                                                                                   Mitch McConnell, has submitted a plan
     The British government, which has           reusables and recyclables, including                                                                                                                                                  that would essentially give Obama the
  said it aims to make a profit by selling its   metal. (RTRS)
                                                                                                                                                                                                                                       power to raise the debt limit and take
  bank stakes, was earlier this year reported                    ❑     ❑     ❑                                                                                                                                                         the political heat off Republicans.
  to be contemplating an initial disposal in
  early 2012.                                    LONDON: Tesco, the world’s No.3 retail-                                                                                                                                               Senate leader Harry Reid hopes to
     UKFI oversees the government’s 83           er, will test a version of its successful                                                                                                                                             begin debate on a modified version in
  percent stake in Royal Bank of Scotland        Clubcard loyalty card in the United States                                                                                                                                            the Democratic-led Senate this week.
  and its 41 percent share of Lloyds             as it battles to stem losses at its Fresh &                                                                                                                                              McConnell’s complicated plan to
  Banking Group, acquired in return for a        Easy chain.
                                                    The British supermarket group said on                                                                                                                                              increase the debt limit in three stages
  37 billion pound emergency capital injec-                                                                                                                                                                                            has moved to the forefront as efforts to
  tion in October 2008.. (RTRS)                  Monday it would trial the card, to be
                                                 called “Friends of Fresh & Easy,” in                                                                                                                                                  reach a comprehensive deficit-reduc-
                  ❑     ❑     ❑                  seven stores in central California, this                                                                                                                                              tion deal have hit a wall.
  LONDON: Hedge fund firm Man Group              autumn.                                                                                                                                                                                  Democrats and Republicans — with
  is to buy exposure to the estates of              If successful, it could be rolled out                                                                                                                                              an eye on 2012 elections — are digging
  defunct US bank Lehman Brothers from           across the chain by the end of February,                                                                                                                                              deeper into entrenched positions on
  funds run by its GLG unit for $355 mil-        the Financial Times newspaper said,                                                                                                                                                   taxes and entitlement programs such as
  lion, in an effort to clean up the funds’      quoting Fresh & Easy chief executive Tim                                                                                                                                              Social Security and the Medicare
  holdings and make them easier to sell to       Mason.
                                                    Fresh & Easy racked up 186 million                                                                                                                                                 healthcare program for the elderly.
  new investors.
     GLG — bought by Man Group last              pounds ($299 million) of losses in the                                                                                                                                                                    Deal
  year for $1.6 billion — was using              year ended February, more than analysts’                                                                                                                                                   Democrats want tax increases to be
  Lehman as its main prime broker at the         expected and putting a question mark
                                                 over Tesco’s goal, launched in 2007, to                                                                                                                                                 part of any final deficit reduction deal.
  time of the US. bank’s collapse at the
  nadir of the credit crisis in 2008, and        conquer the United States with dis-                                                                                                                                                     Republicans say that would hurt a sput-
  Monday’s move means Man will benefit           counter-style neighbourhood stores.                                                                                                                                                     tering economic recovery and have
  or bear the risk of any change in the value       New Chief Executive Phil Clarke has                                                                                                                                                  taken aim at entitlement programs that
  of the claims.                                 pledged a significant reduction in losses                                                                                                                                               Democrats have vowed to protect.
     The cash deal mainly affects GLG’s          this year and that the chain will break        A file picture taken on Nov 26, 2010 in Paris at the headquarters of the CPoR Devises company, shows some gold ingots                       McConnell’s plan, initially presented
  European Long Short fund, run by star          even towards the end of the 2012-3 finan-      and a coin of one euro. The price of gold surged on July 18, above $1,600 per ounce for the first time in history, as                    last week as a fallback option, is gain-
  manager Pierre Lagrange, and its North         cial year.                                                 investors bought the safe-haven metal amid deepening worries over the eurozone debt crisis. (AFP)                            ing traction as a viable solution in part
  American fund, which will share upside            MF Global analyst Mike Dennis, a                                                                See Markets – Page 42                                                                because it would allow Republicans to
  in “limited circumstances” in return for       long-standing critic of Fresh & Easy, said
  transferring the risk.                         earlier this month a loyalty card would be                                                                                                                                              avoid having to take a politically toxic
                                                                                                                                                                                                                                         vote on raising the debt limit.
     “These transactions will remove the
  remaining uncertainty from funds with
                                                 a high-risk strategy for a chain which has
                                                 relied heavily on money-off coupons to                                             Builders’ outlook rises in June                                                                         Democratic aides said Reid and
  residual claims against the Lehman             drive sales.                                                                                                                                                                            McConnell’s staff were still trying to
  estates, to the benefit of both existing and      “It could confuse shoppers who are                                                                                                                                                   work out details of the plan, including
  new investors,” Man Group Chief
  Executive Peter Clarke said in the state-
  ment.
     The deal, which was approved by
                                                 meant to believe that Fresh & Easy is a
                                                 already price competitive and could
                                                 impact sales in the change over process
                                                 from coupons to collecting loyalty
                                                                                                US hiring expected to pick up                                                                                                            spending cuts of about $1.5 trillion.
                                                                                                                                                                                                                                            “The plan is still tenuous. We don’t
                                                                                                                                                                                                                                         have the details yet. Everything is
                                                                                                                                                                                                                                         extremely fluid,” a Democratic aide said.
  directors of the funds rather than the         points,” he said. (RTRS)                       NEW YORK, July 18, (AP):                        What’s more, none of the 73 survey         global uncertainties, including the dis-         The Senate, where Democrats have a
  investors themselves, raises the question                       ❑     ❑      ❑                Economists expect US hiring to pick          participants said their firms planned         asters in Japan.”                             majority, is expected to approve the
  of whether investors would have benefit-                                                      up in the second half of the year but        significant layoffs, although 8 percent
  ed more from holding on to the claims.         LONDON: Shopping centre investor                                                                                                                      Also:                             final fallback plan but it is uncertain if
                                                 Plaza Centres N.V. said its bid for the        said overall American growth is likely       said they expected staff reductions                                                         the Republican-led House will go along.
     High-profile hedge fund manager John
                                                 $1.4 billion EDT Retail Trust, via a joint     to slow, partly due to the costs of          through attrition, an uptick from 4 per-      WASHINGTON: The outlook among US
  Paulson is an investor in Lehman                                                                                                                                                         homebuilders became a bit rosier in              “We (the Senate) are going to throw
  Brothers Holdings Inc, which last month        venture, had concluded and that it would       Japan’s earthquake and tsunami and           cent in the April survey. The manufac-                                                      it to them (House Republicans) and see
                                                 compulsorily acquire the 3.6 percent of        over uncertainty over the Middle East’s      turing sector had the strongest outlook       June but the future prospects for home
  upped its estimated payback for creditors                                                                                                                                                                                              what happens,” a Democratic aide said.
  to $65 billion.                                shares it does not already own.                upheaval.                                    for more hiring, with transportation,         construction are anything but promis-
                                                     Plaza said the off-market takeover bid                                                                                                ing.                                             Democratic aides note that last week
     Man Group declined to give details on                                                         The quarterly survey by the National      utilities, information and communica-                                                       House Speaker John Boehner, the top
  how far the GLG funds had written down         by its joint US subsidiary, EPN Holdings       Association for Business Economists          tions next.                                      An index of builders’ outlook for
  the value of their Lehman claims.              II, together with EPN GP, closed on July                                                                                                  their industry in June rose two points to     US Republican, declined to rule the
                                                 14. During the offer period EPN had            for the second time included a question         With high levels of unemployment                                                         McConnell plan in or out.
     “We ... assume that Man would not be                                                       on the impact of the March 11 earth-         among the biggest concerns in the             15, the National Association of Home
  taking on the risk if it did not expect to     increased its holding in EDT to 96.4 per-                                                                                                                                                  Obama had set a Friday deadline for
                                                 cent, from 47.8 percent.                       quakes and tsunami in Japan, and more        economy, any forecast for increased           Builders said Monday. Any reading
  gain or at least come out even,” said ana-                                                                                                                                               below 50 indicates negative sentiment         Congressional leaders from both par-
  lysts at Oriel Securities in a note.               EPN’s unconditional offer was at           than a third of the economists said the      hiring can be seen as a positive. Still, a                                                  ties to agree on a deal to raise the coun-
     “This has been in the works for some        A$0.078 ($0.083) a share.                      disasters have led to increased costs,       larger portion of survey participants, 49     about the housing market. The index
                                                     “EPN now plans to proceed with the                                                                                                    hasn’t reached 50 since April 2006, the       try’s debt ceiling. He said the July 22
  considerable time,” a source close to Man                                                     while 28 percent said their companies        percent, said they didn’t expect any                                                        deadline would give Congress enough
  Group told Reuters. “This is not some-         compulsory acquisition of the remaining        have lower sales expectations as a           change in their company’s hiring, a fac-      peak of the housing boom.
                                                 EDT units, under the terms of the offer,”                                                                                                                                               leeway to write and pass legislation
  thing that GLG could have done (by                                                            result.                                      tor that may have played in to their             In May, builder sentiment hit its low-     before Aug 2, when the government
  itself).”                                      it said in a statement on Monday.                                                                                                         est level in nine months. It’s still just
                                                     Once the joint venture owned all of           NABE said 48 percent of those sur-        view that economic growth will slow                                                         will run out of money to pay its bills.
     At 0929 GMT Man’s shares were down                                                         veyed lowered their GDP growth               through the end of the year.                  seven points above the lowest reading
  2.2 percent at 235.7 pence. (RTRS)             EDT’s shares Plaza said it expected to                                                                                                                                                     Failure to increase the debt ceiling
                                                 delist them from the Australian stock          expectations in part because of the             The organization, which is made up         on record, in January 2009.                   by then could send shockwaves
                  ❑      ❑     ❑                                                                                                                                                              Cash-strapped builders are strug-
                                                 exchange.                                      events in Japan.                             of business economists and others who                                                       through global financial markets and
  LONDON: UK-based junk removal firm                 The total cost of the 52.2 percent stake      The political upheavals in the            use economics in the workplace, said          gling to compete with deeply discount-        plunge the United States into another
  AnyJunk pays its collection teams a            was $242 million, of which Plaza’s share       Middle East also influenced results. As      76 percent of survey respondents              ed foreclosures and short sales, when         recession.
  bonus for the metal they can separate for      was about $57 million, Plaza said.             a result of the turmoil, 10 percent of       expect greater than 2 percent growth in       lenders allow borrowers to sell homes
  sale to scrap merchants to help cut its dis-       EDT is a listed real estate investment                                                                                                                                                 Credit rating agencies have signaled
                                                                                                respondents expect their input costs to      gross domestic product, down from 94          for less than what is owed on their           they may cut the top-notch AAA US
  posal costs and boost profits.                 trust that invests mostly in US community
     Chief Executive Jason Mohr told             shopping centres.                              be substantially higher this year, while     percent in April. The share that expect       mortgages. Lower-than-expected home           rating if the borrowing limit is not
  Reuters that part of AnyJunk’s ethos was           At March 31, EDT’s shopping centre         41 percent expect costs to be moderate-      GDP growth at 2 percent or below              appraisals are scuttling deals. And           raised and deficit reduction measures
  to encourage recycling wherever possible,      portfolio was valued at $1.4 billion and       ly higher. And 55 percent said the polit-    swelled to 23 percent, from 5 percent         loans are harder to come by, with             are not laid out.
  with about 79 percent of all materials it      was about 89 percent leased. EDT’s total       ical shifts have led them to lower their     three months ago.                             requirements that borrowers put 20               Fitch Ratings said on Monday if the
  collects avoiding landfill through reuse or    equity at the the same date was $529 mil-      expectations for GDP growth this year.          “NABE’s July 2011 Industry Survey          percent of a home’s cost as down pay-         debt ceiling is not raised before Aug. 2
  recycling. “Disposing of waste to landfill     lion.                                             In the survey released Monday, 43         indicates that the economic landscape         ment.                                         it would place the AAA rating on
  is bad for the environment and expensive,          Plaza and Elbit Imaging , through a        percent of respondents said their firms      is weakening and the recovery is soft-           “Basically, the market continues to
  so the more we can divert by recycling or      50:50 jointly controlled entity, control                                                                                                                                                “watch negative,” which means it
  reuse, the better,” Mohr said late last        about 45.5 percent of EPN, another 45.5        are likely to increase employment in         ening,” said Shawn DuBravac, chief            bounce along the bottom, with condi-          could downgrade it within a three-to-
  week.                                          percent being controlled by Eastgate           the next six months, up 3 percentage         economist for the Consumer                    tions in some locations beginning to          six-month period. This echoed similar
     “Separating scrap metal from the junk       Property and 9 percent controlled by           points from a similar survey done in         Electronics Association. “The econom-         improve,” said David Crowe, the trade         warnings from the other two big rating
  we collect is particularly beneficial,         Menora Mivtachim Insurance. (RTRS)             April and the highest number in a year.      ic picture continues to be clouded by         group’s chief economist.                      agencies, Moody’s and S&P, last week.

				
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