Chinese company to buy Hummer A Chinese company is to buy Hummer, the General Motors brand known for its military-inspired, gas-guzzling off-road vehicles. Hummer's sale to Sichuan Tengzhong Heavy Industrial Machinery Company will close this year, marking one of the biggest overseas carmaking acquisitions by a Chinese group. GM on Tuesday confirmed the sale to Tengzhong, a privately-owned producer of road, construction and energy industry equipment. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56553/chinese-company-to-b
| US groups raise $7bn to repay Tarp loans US financial groups sold more than $7bn in fresh equity on Tuesday in a push to join the first wave of lenders to return government bailout funds, reports the FT. JPMorgan Chase, Morgan Stanley and American Express all raised equity they had claimed they did not need, to comply with targets set by the Fed and US Treasury. On Monday, Goldman Sachs raised $1.9bn - on top of $5bn from a previous share issue - by selling shares in Chinese bank ICBC. The capital raisings bring to $19bn the total raised by US banks to repay Tarp funds, adds Reuters. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56552/us-groups-raise-7bn-
| Merkel attacks central banks Angela Merkel, Germany's chancellor, on Tuesday voiced surprisingly strong criticism of the world's key central banks suggesting that the unconventional monetary policies of the Federal Reserve, Bank of England and the ECB could aggravate rather than ease the economic crisis. The attack by Merkel, who has strictly adhered to her country's tradition of never commenting on monetary policy, indicates that Berlin is far more concerned about the ECB's approach than has so far been apparent. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56551/merkel-attacks-centr
| Citi freezes executive severance pay Citigroup has frozen millions of dollars in severance payments to five former executives, including its once-leading deal-maker Michael Klein, in an effort to escape controversy over bankers' pay. Citi had told the executives, including Kevin Kessinger, the former head of technology, it had suspended payments that were part of their leaving packages, said people close to the situation. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56550/citi-freezes-executi
| Asian investors eye AIG asset management Singapore's Temasek and the Hong Kong tycoon Richard Li are close to joining a consortium led by Franklin Templeton, the US fund manager, that is the front-runner to buy AIG's asset management business for around $500m. The move by the two Asian investors would be a boost to the consortium, which is in exclusive negotiations to buy the insurer's asset management unit. AIG is selling the business, which has some $85bn in assets, to raise capital to repay government aid. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56549/asian-investors-eye-
| Pallotta to shut global hedge fund James Pallotta, the investment manager who split with longtime partner Paul Tudor Jones early this year, will shut his Raptor Global Funds, saying he doubted the hedge-fund industry could sustain its short-term focus, reports Bloomberg. Pallotta, who lost 20% last year and is little changed in 2009, will begin returning money to clients in July, according to a letter sent Tuesday to investors. He said he will take several months off to develop a new investment strategy. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56543/pallotta-to-shut-glo
| UK's Pearl to get £500m injection Hugh Osmond's Pearl Group has finalised a deal to cut the life assurer's £3bn debt load and get a £500m capital injection from a new investor, Liberty Acquisition Holdings, after weeks of negotiations. Liberty, a Cayman Islands-based investment company, is expected to announce on Wednesday a period of exclusivity to close the deal for a stake of about 60%. Osmond's Sun Capital investment vehicle and partners including buyout firm TDR will be left with a 30% holding in the recapitalised group. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56548/uks-pearl-to-get-500
| Macquarie Group raises A$1.2bn Macquarie Group has raised A$1.2bn ($983m) from institutional and retail shareholders in the latest sign of renewed confidence in the Australian investment bank, whose share price has more than doubled in the past three months. Macquarie shares jumped 12% on Monday, prompting a regulatory query. The bank said it knew of no specific reason for the surge but analysts said investors were encouraged by the group's liquid balance sheet and modest gearing. The shares ended at A$36.30, up from a 10-year low of A$15.75 in early March. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56547/macquarie-group-rais
| Barclays shares drop after stake sale Shares in Barclays fell 14% after one of the bank's largest Middle Eastern investors sold its entire shareholding in the UK bank in one of London's biggest-ever stock placings. International Petroleum Investment Company, the investment vehicle of Sheikh Mansour bin Zayed al-Nahyan, a member of Abu Dhabi's royal family, sold 1.3bn Barclays shares to 220 institutional investors at a price of 265p, a 17% discount to the previous closing price. Barclays shares closed Tuesday at 273.5p, down 42.75p. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56546/barclays-shares-drop
| Grupo Mexico in $2.9bn fight for Arsaco Grupo Mexico, Mexico's largest mining company, said Tuesday it is offering $2.9bn in a new reorganisation plan to take its US copper unit, Asarco, out of Chapter 11 bankruptcy, where it has languished since August 2005, reports the WSJ. Grupo Mexico's fight to regain control of Arsaco - now run by an independent board set up by the bankruptcy court - is part of a decades-long saga between international mining interests across the US-Mexico border. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56545/grupo-mexico-in-29bn
| HRE faces investor fury Hypo Real Estate's management and the head of the German government's bank bail-out fund faced angry shareholders in the stricken bank on Tuesday as they won investor approval for a state-led takeover. Many small investors are angry that they will be forced to sell their holdings under government plans for a "squeeze-out" of minority shareholders, after Berlin won support at an extraordinary meeting to raise its HRE stake to 90%. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56544/hre-faces-investor-f
| Wall Street to clear client credit swaps Big banks including JPMorgan Chase, Goldman Sachs and UBS will for the first time offer hedge-fund customers protection by backing credit-default swap trades with clearinghouses by Dec 15, reports Bloomberg. The dealers have also committed to report all trades not cleared in the credit swap market to a trade repository by July 17; for interest-rate swap trades by Dec 31; and for equity derivatives by July 31, 2010, the banks said in a letter sent Tuesday to the Federal Reserve Bank of New York. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56542/wall-street-to-clear
| Hedge funds poised for $50bn boost Pension funds, family trusts and other investors are expected to invest at least $50bn in hedge funds this year but will demand easy access to their money and will focus on the simplest investment strategies, according to a study by Barclays Capital. The report, based on interviews with investors and hedge fund managers representing $700bn of hedge fund assets, or half the global industry, found growing demand for more transparency in fee structures and better alignment of incentives. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56541/hedge-funds-poised-f
| SEC to require more pay disclosures The US Securities and Exchange Commission is set to propose that companies disclose in general terms how they compensate lower-ranking employees, expanding disclosures for the first time beyond the executive suite, reports the WSJ. The proposal – which could take effect next month - is part of a review of executive-pay policies at the SEC and other agencies, and could also require companies to explain their ties to compensation consultants who often negotiate lavish pay packages for top executives. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56540/sec-to-require-more-
| BBVA offers staff five years' leave BBVA, Spain's second-biggest bank, has asked some of its nearly 30,000 Spanish employees to take leave from work for up to five years in exchange for nearly a third of their usual salary and a guaranteed job when they return. The bank said on Tuesday that the key attraction of its idea - part of its latest cost-cutting drive - was the flexibility it offered staff. However, the labour minister in Spain's Socialist government and some trade unions were critical of BBVA's offer. See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56539/bbva-offers-staff-fi
| Overnight markets: Mixed Asian stocks gained for a fourth straight trading day on Wednesday, led by banks and consumer companies, as better- than-expected US homes sales and Australian economic growth reports fuelled optimism about the global economy. Futures on the S&P500 Index lost 0.3% on Wednesday after the gauge rose 0.2% onTuesday.
Asian markets (Wed)
03:10 BST
Nikkei up 34.95 (0.36%) at at 9,739.26
Topix up 1.61 (0.18%) at 915.17
Hang Seng up 318.62 (1.73%) at 18,707.70 US markets (Tues)
S&P500 up 1.87 (0.20%) at 944.74
DJIA up 19.43 (0.22%) at 8,740.87
Nasdaq up 8.12 (0.44%) at 1,836.80
European markets (Tues)
Eurofirst 300 down 0.39 (-0.04%) at 885.88
FTSE100 down 29.17 (-0.65%) at 4,477.02 Currencies
03:45 BST
€/$ 1.42910 (1.4155)
$/¥ 95.65 (96.30)
£/$ 1.6571 (1.6431) Commodities
04:00 BST
Brent Crude (ICE) down $0.41 at $67.76
Light Crude (Nymex) down $0.41 at $68.14
100 Oz Gold (Comex) up $1.90 at $986.30
Copper (Comex) up $0.50 at $230.25
10-year government bond yields (%)
04:05 BST
US 3.62 (3.66)
UK 3.90 (3.83)
Germany 3.67 (3.59)
Japan 1.55 (1.51) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/06/03/56536/overnight-markets-mi
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