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Anglo American Offers $5B, UK Stocks Fell
Jan 17, 6:31 PM EST |
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| Anglo American has agreed to pay $5.5 billion to acquire a stake of controlling stakeholder in two iron ore mines in Brazil. |
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| Anglo American offered $5.5 billion for two iron ore mines from controlling shareholder of MMX Mineracao e Metalicos in Brazil. Anglo American with the acqusition will increase its capacity of seaborne iron ore to 150 million tons per annum by 2017. SAB Miller released its third quarter trading update. In London trading stocks fell on the ongoing global credit market malaise. UK housing stocks gained after JP Morgan and Morgan Stanley recommended the sector. |
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U.S. Recession Fears Drive Global Markets Lower
Jan 17, 5:04 PM EST |
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| Rating agencies are considering to lower rating of bond insurers as subprime mortgage market continues to weaken. Ambac plunged 52%. |
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| Large losses at banks and talks of downgrade of bond insurance companies and inadequate response from the Whitehouse to the ongoing credit market turmoil left most investors nervous. The coming recession in the economy is already felt in the earnings of banks and other companies. Merrill Lynch reported revenue decline of 66% to $11 billion in 2007 and reported a loss of $12.8 billion compared to profit of $9.8 billion in 2006. |
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Ambac and MBIA Plung on Risk of Defaults
Jan 17, 4:36 PM EST |
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| Bond insurers Ambac and MBIA fell more than 30% after investors worried that companies may have to raise more capital. |
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| Ambac plunged 51% and MBIA lost 33% of its value in the morning trading after investors worried that companies may need to raise capital soon. The declines in subprime mortgage markets are only accelerating and with that exposure of these companies. Ambac has now lost nearly 85% of its value in six months of trading. The PMI Group and MBIA fell in sympathy as well. |
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Hong Kong Recovers 2.4%
Jan 17, 11:56 AM EST |
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| China to stem the economic growth asked banks to increase reserve ratio to 15% from 14.5%. |
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| Hong Kong stocks rebounded after four days losses. Hang Seng Index added 2.7% or 664.13 or 25,114.98. China asked banks to increase the reserve ratio to 15% from 14.5% effetive of January 25. HSBC rebounded after declining for six days in a row. Mobile phone operator China Mobile jumped 3.4% to HK$122.5, while China Life edged up 6.1% to HK$35.5. |
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Large Loan Losses at Merrill Lynch
Jan 17, 10:23 AM EST |
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| December housing starts fell 14% from November and 38% from a year ago. Merrill Lynch stock fell 5%. |
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| U.S. stocks came under pressure at the opening after Merrill Lynch reported a sharply higher sub-prime related losses and new home construction and completion fell in December. Merrill reported a loss of $10.73 per share or $8.6 billion from continuing operations in the fourth quarter a reversal from a profit of $7.1 billion a year ago. Proforma book value declined to $30.30 from $41.35 at the end of December including the investments received by the end of the year. |
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Reliance Ind and Energy Profit Gains
Jan 17, 10:51 AM EST |
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| Sensex in india fell for the fourth day in a row. TCS earnings rose 7% to 1,331 crore rupees. |
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| Stocks in India fell for the fourth day in a row. Ssensex index declined 0.8% or 167.30 to 19,700.82. Reliance Industries fell 3% after it reported 162% rise in net income on 23% rise in net sales. Reliance Energy fell 2.4% to 2,212 after it reported proft rise of 50% on 1.8% rise in sales. TCS fell 2.3% after it posted 7% increase in profit. |
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Nikkei in Japan Rebounds 2%
Jan 17, 8:44 AM EST |
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| The Bank of Japan in a report said that the consumer spending is on a decline as wages have failed to rise with rising food and energy prices. |
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| Stocks in Japan rebounded after four days of decline. Nikkei 225 index increased 2% or 278.94 to 13,783 and Topix index added 27.21 to 1,329.58. property stocks rallied on the hopes that housing industry will rebound in January. Exporters advanced after yen fell to 105.90. Sony Corporation rose 2.72%, Toyota Motor soared 3%, and Honda Motor Corporation climbed 3.90%. Retail stocks declined after the Bank of Japan said that the consumer sentiment is on the decline. |
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