Oil Rises More Than $4 After Central Banks Act to Spur Growth
Dec. 12 (Bloomberg) -- Crude oil rose more than $4 a barrel, the biggest gain since January, on speculation a decision by central banks to provide cash to financial institutions will spur economic growth.
The Federal Reserve, European Central Bank and three other central banks moved to end a credit squeeze that's threatened to slow the global economy and reduce energy consumption. U.S. crude-oil supplies fell as fuel use increased last week, an Energy Department report showed.
``The energy markets have been interconnected with the global capital markets for some time now,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York. ``The renewed outlook for energy demand has us back in rally mode; $100 is squarely back on the table and within reach before year end.''
Crude oil for January delivery rose $4.37, or 4.9 percent, to settle at $94.39 a barrel at 3:03 p.m. on the New York Mercantile Exchange, the highest close since Nov. 27. Oil had the biggest one-day gain since Jan. 30. Futures rose to a record $99.29 on Nov. 21.
Brent oil for January settlement rose $4.03, or 4.5 percent, to $94.02 a barrel on London's ICE Futures Europe exchange, the highest close since Nov. 26. Futures touched $94.15, the highest since Nov. 27.
The rise accelerated after a state report showed that Exxon Mobil Corp., the world's largest oil company, had a fire yesterday at its Beaumont, Texas, refinery.
Combination of Factors
``There are a combination of factors moving prices higher,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``Central banks have reached a consensus to spur growth, which should spur demand. The DOE report showed that consumption is strong despite the high prices, this shows there's been no demand destruction.''
Total implied fuel demand in the U.S. averaged 21 million barrels a day in the four weeks ended Dec. 7, up 1.4 percent from a year earlier, according to the department. Gasoline demand averaged 9.3 million barrels a day over the period, up 0.4 percent from a year earlier. The department measures shipments from refineries, pipelines and terminals to calculate demand.
Crude-oil supplies fell 722,000 barrels to 304.5 million barrels last week, the report showed. The drop left inventories 1.1 percent higher than the five-year average for the week. A 750,000 barrel decline was expected, according to the median of responses in a Bloomberg News survey.
Economic Concerns
``There was no eye-catching number today to change anyone's opinion about the market,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Tilburg, the Netherlands. ``Concerns about the economy are the primary driver of the market.''
The Fed said in a statement it will make as much as $24 billion available to the European Central Bank and Swiss National Bank to increase the supply of dollars in Europe. The Fed also plans four auctions, including two this month that will add as much as $40 billion, to increase cash in the U.S.
``Central bankers want to make the impression that they are doing something,'' Mueller said. ``The actual effect of this action is limited. There are still a lot of big problems for the economy down the road.''
Goldman Sachs Group Inc., the world's largest securities firm, raised its forecast for crude oil prices next year on concern that investment costs and weaker demand may prompt producers to limit supply. West Texas Intermediate crude oil will average $95 a barrel in 2008, up from a previous forecast of $85, the Goldman report showed.
WTI, which is traded in New York, may rise to as much as $105 a barrel by the end of next year, according to Goldman.
Goldman's Credibility
``Goldman has credibility because they were the first to predict that crude would spike to $100,'' Barakat said. ``A sharp increase in their forecast catches everyone's attention.''
Arjun Murti, a New York-based Goldman Sachs analyst who covers oil producers and refiners, roiled markets in March 2005 with a report saying prices could touch $105 a barrel during a ``super spike'' because demand was stronger than anticipated. Prices might also go as low as $50, Murti said at the time.
Norway said about 24,100 barrels of oil spilled into the North Sea when a tanker was loading during rough weather about 200 miles offshore, in the country's second-largest leak. The spill near the Statfjord A platform operated by StatoilHydro ASA occurred at 12:40 p.m. local time today. Norway is the world's fifth-largest oil exporter.
BLOOMBERG
Economy | Business | Social | Leaked | Opinions
Wednesday, December 12, 2007
GLOBAL INDEXES
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1682.21 ( -1.15%)
ΓΕΝΙΚΟΣ ΔΕΙΚΤΗΣ
4910.55 ( -1.18%)
Όγκος: € 6,218,129
---
FTSE 100 INDEX 6,559.80 22.90 0.35%
CAC 40 INDEX 5,743.32 18.56 0.32%
DAX INDEX 8,076.12 66.70 0.83%
---
DOW JONES INDUS. AVG 13,473.90 41.13 0.31%
S&P 500 INDEX 1,486.59 8.94 0.61%
NASDAQ COMPOSITE INDEX 2,671.14 18.79 0.71%
Fed, ECB, Central Banks Work to Ease Credit Crunch
Fed, ECB, Central Banks Work to Ease Credit Crunch
Dec. 12 (Bloomberg) -- The Federal Reserve, European Central Bank and three other central banks moved in concert to alleviate a credit squeeze threatening global growth, in the biggest act of international economic cooperation since the Sept. 11 terrorist attacks.
The Fed said in a statement it will make up to $24 billion available to the ECB and Swiss National Bank to increase the supply of dollars in Europe. The Fed also plans four auctions, including two this month that will add as much as $40 billion, to increase cash in the U.S.
Central bankers took the action after interest-rate reductions in the U.S., U.K. and Canada failed to allay concerns that banks will reduce lending, sending the U.S. into recession and hobbling growth abroad. Borrowing costs have climbed as mounting losses on securities linked to subprime mortgages caused lenders to conserve cash.
``This is shock and awe,'' said Fred Goodwin, a fixed- income strategist at Lehman Brothers Holdings Inc. in London. ``The fact that it's coordinated means they have joined together in the war to attack the problem, which is that banks don't trust each other.''
A Fed official told reporters that the U.S. central bank's efforts won't add net liquidity to the banking system. The plans are aimed at buttressing so-called term funding markets, such as for one-month loans, rather than overnight cash. The Fed will balance its various operations, including daily repurchases of Treasury notes and direct loans to banks.
Bank of England
The Bank of England increased the size of reserves it will auction in money market operations and widened the range of collateral it will accept on three-month loans.
After rallying earlier, stocks surrendered their gains. The Standard & Poor's 500 Index fell 0.12 percent to 1,475.68 at 3:11 p.m. in New York, retreating from an increase of as much as 2.3 percent. The S&P 500 tumbled 2.5 percent yesterday as investors expressed disappointment at the Fed's quarter-point reduction in its benchmark rate. Treasury notes fell and the dollar strengthened against the yen.
``Ultimately the problems we're facing go beyond illiquidity,'' said Larry Hatheway, chief economist at UBS AG in London and a former researcher at the Fed ``It's another step in the healing process, but we have some way to go.''
The Fed official said on condition of anonymity that today's announcement wasn't a reaction to the slump in stocks yesterday. The agreement was reached with central banks abroad last week and was announced today at a time when markets were open in Europe and the U.S., he said.
`Elevated Pressures'
The measures are ``designed to address elevated pressures in short-term funding markets,'' the Fed said in a statement in Washington. The U.S. central bank said it's considering setting up a permanent arrangement to provide funds to banks through so- called term auction facility operations.
``The interbank market isn't working very well, and when the interbank market doesn't work very well globally, this creates some problems,'' Bank of Canada Governor David Dodge said in an interview today. ``It's part of our normal role as central banks to try to, if you will, unblock that.''
Fed Vice Chairman Donald Kohn and other officials have expressed frustration that banks haven't made more use of direct loans from the U.S. central bank. Policy makers reduced the so- called discount rate to half a percentage point more than the benchmark rate in an effort to stimulate use of the resource.
Banks' Struggle
The world's major central banks have been struggling to restore liquidity since the market for assets backed by U.S. subprime mortgages collapsed because of rising foreclosures. In August, the Fed was forced to cut its discount rate and join the European Central Bank and Bank of Japan in pumping billions of dollars into the banking system.
``They had to do something,'' said Goodwin at Lehman. ``Now that this has happened we can spend less time adding up the numbers and instead think of this as a sentiment-changing moment, when central banks tackled the problem aggressively.''
The Fed has lowered its benchmark rate three times, and was joined last week by the Bank of England and Bank of Canada. The ECB has shelved planned rate increases. On Wall Street, the chief executive officers of Merrill Lynch & Co. and Citigroup Inc. lost their jobs. Confidence among U.S. consumers, whose spending accounts for more than half of gross domestic product, has weakened.
``The central banks have been behind the curve on the coordination front,'' said Marco Annunziata, chief economist at Unicredit MIB in London. ``It's striking that only now we get a coordinated response to what has been a common problem.''
Auction Schedule
The first U.S. auction, of 28-day funds, will be $20 billion on Dec. 17. The second, on Dec. 20, will provide up to $20 billion. The central bank plans two more auctions, Jan. 14 and Jan. 28, with possible additional operations thereafter, the Fed said. Officials will consider the results and effects of the auctions as they determine whether to proceed with more and how long to set the maturities.
The Fed official said the central bank won't reveal the names of those bidding for the funds. The auctions aren't aimed at helping particular banks, he added. Officials don't expect there will be any ``stigma'' attached to lenders bidding for the funds, the official said.
``By allowing the Federal Reserve to inject term funds through a broader range of counterparties and against a broader range of collateral than open market operations, this facility could help promote the efficient dissemination of liquidity,'' the Fed statement said.
Difference From Repos
The Fed's New York branch conducts repos most days to steer the federal funds rate, the overnight lending rate between banks, to the target set by policy makers. Only primary dealers, authorized to trade directly with the New York Fed, participate.
By contrast, all ``generally sound'' deposit-taking institutions can participate in the term auction facility, the Fed said. The Fed's 12 district banks will accept the same ``wide variety'' of collateral that is used for discount-rate loans, the statement said. The regional banks determine the haircuts on the assets submitted.
The Federal Open Market Committee also authorized ``temporary reciprocal currency arrangements,'' or swap lines, for up to six months, with the ECB of as much as $20 billion and $4 billion to the SNB ``for use in their jurisdictions.''
Six years ago, the Fed sold $50 billion to the ECB after the destruction of the World Trade Center restricted foreign banks' access to dollars.
Yesterday, U.S. stocks had their biggest drop in a month and two-year Treasury yields plummeted after the Federal Open Market Committee lowered the benchmark rate by a quarter-point to 4.25 percent and said cumulative cuts of 1 percentage point this year should promote ``moderate growth.''
Some investors expected a larger reduction of a half-point to stave off a recession. The Fed's board also reduced the discount rate, covering direct loans to banks, by a quarter point to 4.75 percent, half of what many economists predicted.
BLOOMBERG
Dec. 12 (Bloomberg) -- The Federal Reserve, European Central Bank and three other central banks moved in concert to alleviate a credit squeeze threatening global growth, in the biggest act of international economic cooperation since the Sept. 11 terrorist attacks.
The Fed said in a statement it will make up to $24 billion available to the ECB and Swiss National Bank to increase the supply of dollars in Europe. The Fed also plans four auctions, including two this month that will add as much as $40 billion, to increase cash in the U.S.
Central bankers took the action after interest-rate reductions in the U.S., U.K. and Canada failed to allay concerns that banks will reduce lending, sending the U.S. into recession and hobbling growth abroad. Borrowing costs have climbed as mounting losses on securities linked to subprime mortgages caused lenders to conserve cash.
``This is shock and awe,'' said Fred Goodwin, a fixed- income strategist at Lehman Brothers Holdings Inc. in London. ``The fact that it's coordinated means they have joined together in the war to attack the problem, which is that banks don't trust each other.''
A Fed official told reporters that the U.S. central bank's efforts won't add net liquidity to the banking system. The plans are aimed at buttressing so-called term funding markets, such as for one-month loans, rather than overnight cash. The Fed will balance its various operations, including daily repurchases of Treasury notes and direct loans to banks.
Bank of England
The Bank of England increased the size of reserves it will auction in money market operations and widened the range of collateral it will accept on three-month loans.
After rallying earlier, stocks surrendered their gains. The Standard & Poor's 500 Index fell 0.12 percent to 1,475.68 at 3:11 p.m. in New York, retreating from an increase of as much as 2.3 percent. The S&P 500 tumbled 2.5 percent yesterday as investors expressed disappointment at the Fed's quarter-point reduction in its benchmark rate. Treasury notes fell and the dollar strengthened against the yen.
``Ultimately the problems we're facing go beyond illiquidity,'' said Larry Hatheway, chief economist at UBS AG in London and a former researcher at the Fed ``It's another step in the healing process, but we have some way to go.''
The Fed official said on condition of anonymity that today's announcement wasn't a reaction to the slump in stocks yesterday. The agreement was reached with central banks abroad last week and was announced today at a time when markets were open in Europe and the U.S., he said.
`Elevated Pressures'
The measures are ``designed to address elevated pressures in short-term funding markets,'' the Fed said in a statement in Washington. The U.S. central bank said it's considering setting up a permanent arrangement to provide funds to banks through so- called term auction facility operations.
``The interbank market isn't working very well, and when the interbank market doesn't work very well globally, this creates some problems,'' Bank of Canada Governor David Dodge said in an interview today. ``It's part of our normal role as central banks to try to, if you will, unblock that.''
Fed Vice Chairman Donald Kohn and other officials have expressed frustration that banks haven't made more use of direct loans from the U.S. central bank. Policy makers reduced the so- called discount rate to half a percentage point more than the benchmark rate in an effort to stimulate use of the resource.
Banks' Struggle
The world's major central banks have been struggling to restore liquidity since the market for assets backed by U.S. subprime mortgages collapsed because of rising foreclosures. In August, the Fed was forced to cut its discount rate and join the European Central Bank and Bank of Japan in pumping billions of dollars into the banking system.
``They had to do something,'' said Goodwin at Lehman. ``Now that this has happened we can spend less time adding up the numbers and instead think of this as a sentiment-changing moment, when central banks tackled the problem aggressively.''
The Fed has lowered its benchmark rate three times, and was joined last week by the Bank of England and Bank of Canada. The ECB has shelved planned rate increases. On Wall Street, the chief executive officers of Merrill Lynch & Co. and Citigroup Inc. lost their jobs. Confidence among U.S. consumers, whose spending accounts for more than half of gross domestic product, has weakened.
``The central banks have been behind the curve on the coordination front,'' said Marco Annunziata, chief economist at Unicredit MIB in London. ``It's striking that only now we get a coordinated response to what has been a common problem.''
Auction Schedule
The first U.S. auction, of 28-day funds, will be $20 billion on Dec. 17. The second, on Dec. 20, will provide up to $20 billion. The central bank plans two more auctions, Jan. 14 and Jan. 28, with possible additional operations thereafter, the Fed said. Officials will consider the results and effects of the auctions as they determine whether to proceed with more and how long to set the maturities.
The Fed official said the central bank won't reveal the names of those bidding for the funds. The auctions aren't aimed at helping particular banks, he added. Officials don't expect there will be any ``stigma'' attached to lenders bidding for the funds, the official said.
``By allowing the Federal Reserve to inject term funds through a broader range of counterparties and against a broader range of collateral than open market operations, this facility could help promote the efficient dissemination of liquidity,'' the Fed statement said.
Difference From Repos
The Fed's New York branch conducts repos most days to steer the federal funds rate, the overnight lending rate between banks, to the target set by policy makers. Only primary dealers, authorized to trade directly with the New York Fed, participate.
By contrast, all ``generally sound'' deposit-taking institutions can participate in the term auction facility, the Fed said. The Fed's 12 district banks will accept the same ``wide variety'' of collateral that is used for discount-rate loans, the statement said. The regional banks determine the haircuts on the assets submitted.
The Federal Open Market Committee also authorized ``temporary reciprocal currency arrangements,'' or swap lines, for up to six months, with the ECB of as much as $20 billion and $4 billion to the SNB ``for use in their jurisdictions.''
Six years ago, the Fed sold $50 billion to the ECB after the destruction of the World Trade Center restricted foreign banks' access to dollars.
Yesterday, U.S. stocks had their biggest drop in a month and two-year Treasury yields plummeted after the Federal Open Market Committee lowered the benchmark rate by a quarter-point to 4.25 percent and said cumulative cuts of 1 percentage point this year should promote ``moderate growth.''
Some investors expected a larger reduction of a half-point to stave off a recession. The Fed's board also reduced the discount rate, covering direct loans to banks, by a quarter point to 4.75 percent, half of what many economists predicted.
BLOOMBERG
ΠΡΟΣΟΧΗ (ΜΕΙΩΣΗ ΕΠΙΤΟΚΙΩΝ...ΚΑΙ ΑΝΟΔΙΚΕΣ ΤΑΣΕΙΣ)
ΠΡΟΣΟΧΗ!!
Η ΧΘΕΣΙΝΗ ΠΤΩΣΗ ΣΤΑ ΑΜΕΡΙΚΑΝΙΚΑ ΧΡΗΜΑΤΙΣΤΗΡΙΑ ΣΕ ΣΥΝΔΙΑΣΜΟ ΜΕ ΤΗΝ ΜΕΙΩΣΗ ΤΩΝ ΕΠΙΤΟΚΙΩΝ ΔΕΝ ΕΧΕΙ ΤΙΠΟΤΑ ΝΑ ΚΑΝΕΙ ΜΕ ΤΑ ΟΙΚΟΝΟΜΙΚΑ ΣΤΟΙΧΕΙΑ ΚΑΙ ΜΕΓΕΘΗ ΤΗΣ ΑΜΕΡΙΚΑΝΙΚΗΣ ΟΙΚΟΝΟΜΙΑΣ.
ΑΝΑΜΕΝΩ ΑΝΟΔΙΚΟ ΚΥΜΜΑ ΣΤΙΣ ΕΠΙΚΕΙΜΕΝΕΣ ΣΥΝΕΔΡΙΑΣΕΙΣ.
Η ΧΘΕΣΙΝΗ ΠΤΩΣΗ ΣΤΑ ΑΜΕΡΙΚΑΝΙΚΑ ΧΡΗΜΑΤΙΣΤΗΡΙΑ ΣΕ ΣΥΝΔΙΑΣΜΟ ΜΕ ΤΗΝ ΜΕΙΩΣΗ ΤΩΝ ΕΠΙΤΟΚΙΩΝ ΔΕΝ ΕΧΕΙ ΤΙΠΟΤΑ ΝΑ ΚΑΝΕΙ ΜΕ ΤΑ ΟΙΚΟΝΟΜΙΚΑ ΣΤΟΙΧΕΙΑ ΚΑΙ ΜΕΓΕΘΗ ΤΗΣ ΑΜΕΡΙΚΑΝΙΚΗΣ ΟΙΚΟΝΟΜΙΑΣ.
ΑΝΑΜΕΝΩ ΑΝΟΔΙΚΟ ΚΥΜΜΑ ΣΤΙΣ ΕΠΙΚΕΙΜΕΝΕΣ ΣΥΝΕΔΡΙΑΣΕΙΣ.
China Retail Sales Grow at Fastest Pace Since 1999 (+18.1%)
China Retail Sales Grow at Fastest Pace Since 1999 (Update2)
By Nipa Piboontanasawat
Dec. 12 (Bloomberg) -- China's retail sales increased at the quickest pace in at least eight years on rising incomes, aiding government efforts to curb the economy's dependence on exports and investment for growth.
Sales climbed 18.8 percent to 810.5 billion yuan ($110 billion) in November from a year earlier, the statistics bureau said today, after rising 18.1 percent in October. That was the biggest gain since 1999, according to Bloomberg data.
Stronger domestic consumption may help the world's fourth- largest economy weather weaker demand for exports in a global slowdown. Automobile sales climbed 35 percent, a boost for companies such as Geely Automobile Holdings Ltd., and furniture spending soared almost 60 percent.
``Today's number signals that there is strong growth in household demand,'' said Stephen Green, senior economist at Standard Chartered Bank Plc in Shanghai. ``This can help pick up some of the slack as export growth slows next year.''
Inflation boosted the sales figure, which topped the 18 percent median estimate of 21 economists in a Bloomberg News survey. Consumer prices rose 6.9 percent in November, the quickest pace in 11 years.
Household spending accounted for 36 percent of China's gross domestic product last year compared with more than 50 percent in the U.S., Japan and India.
Export Slowdown
China's economic growth is likely to slow to 10.7 percent in 2008 from 11.4 percent this year on reduced demand for exports, according to the Organization for Economic Co-operation and Development.
A significant global slowdown may reduce the need for economic tightening in China, ``creating a healthier environment that would foster the needed shift toward more sustainable, domestically-driven growth,'' said Frank Gong, chief China economist at JPMorgan Chase & Co. in Hong Kong.
Cosmetics sales rose 33 percent. Avon Products Inc., the world's largest door-to-door cosmetics seller, said sales of skin cream and lipstick in China helped to boost third-quarter profit.
For the first 11 months, retail sales rose 16.4 percent from a year earlier to 8.02 trillion yuan, the statistics bureau said. Sales in urban areas jumped 19.2 percent in November from a year earlier, while rural spending climbed 18 percent.
Inflation's Role
A ``large part'' of this month's spending growth was due to inflation, said Kevin Lai, senior economist at Daiwa Institute of Research in Hong Kong.
Food and fuel costs are driving consumer-price gains. Spending on meat, poultry and eggs jumped 45 percent in November from a year earlier. For grains and edible oils, the gain was 48 percent. Spending on petroleum products climbed 22 percent.
China has raised minimum wages and reduced a tax on interest income to fatten consumers' wallets. Disposable incomes among urban households, after adjusting for inflation, rose 13.2 percent to 10,346 yuan in the first nine months from the same period a year earlier.
Earnings in rural areas climbed 14.8 percent to 3,321 yuan.
Wal-Mart Stores Inc., the world's biggest retailer, this week said it had won approval to open its 100th store in the Asian nation.
BLOOMBERG
By Nipa Piboontanasawat
Dec. 12 (Bloomberg) -- China's retail sales increased at the quickest pace in at least eight years on rising incomes, aiding government efforts to curb the economy's dependence on exports and investment for growth.
Sales climbed 18.8 percent to 810.5 billion yuan ($110 billion) in November from a year earlier, the statistics bureau said today, after rising 18.1 percent in October. That was the biggest gain since 1999, according to Bloomberg data.
Stronger domestic consumption may help the world's fourth- largest economy weather weaker demand for exports in a global slowdown. Automobile sales climbed 35 percent, a boost for companies such as Geely Automobile Holdings Ltd., and furniture spending soared almost 60 percent.
``Today's number signals that there is strong growth in household demand,'' said Stephen Green, senior economist at Standard Chartered Bank Plc in Shanghai. ``This can help pick up some of the slack as export growth slows next year.''
Inflation boosted the sales figure, which topped the 18 percent median estimate of 21 economists in a Bloomberg News survey. Consumer prices rose 6.9 percent in November, the quickest pace in 11 years.
Household spending accounted for 36 percent of China's gross domestic product last year compared with more than 50 percent in the U.S., Japan and India.
Export Slowdown
China's economic growth is likely to slow to 10.7 percent in 2008 from 11.4 percent this year on reduced demand for exports, according to the Organization for Economic Co-operation and Development.
A significant global slowdown may reduce the need for economic tightening in China, ``creating a healthier environment that would foster the needed shift toward more sustainable, domestically-driven growth,'' said Frank Gong, chief China economist at JPMorgan Chase & Co. in Hong Kong.
Cosmetics sales rose 33 percent. Avon Products Inc., the world's largest door-to-door cosmetics seller, said sales of skin cream and lipstick in China helped to boost third-quarter profit.
For the first 11 months, retail sales rose 16.4 percent from a year earlier to 8.02 trillion yuan, the statistics bureau said. Sales in urban areas jumped 19.2 percent in November from a year earlier, while rural spending climbed 18 percent.
Inflation's Role
A ``large part'' of this month's spending growth was due to inflation, said Kevin Lai, senior economist at Daiwa Institute of Research in Hong Kong.
Food and fuel costs are driving consumer-price gains. Spending on meat, poultry and eggs jumped 45 percent in November from a year earlier. For grains and edible oils, the gain was 48 percent. Spending on petroleum products climbed 22 percent.
China has raised minimum wages and reduced a tax on interest income to fatten consumers' wallets. Disposable incomes among urban households, after adjusting for inflation, rose 13.2 percent to 10,346 yuan in the first nine months from the same period a year earlier.
Earnings in rural areas climbed 14.8 percent to 3,321 yuan.
Wal-Mart Stores Inc., the world's biggest retailer, this week said it had won approval to open its 100th store in the Asian nation.
BLOOMBERG
Packer's Crown Buys Cannery Casino for $1.75 Billion
Packer's Crown Buys Cannery Casino for $1.75 Billion
Dec. 12 (Bloomberg) -- Crown Ltd., Australian billionaire James Packer's gaming company, agreed to buy Cannery Casino Resorts LLC for $1.75 billion cash, doubling its gambling investments in North America.
The acquisition will add to earnings per share and be funded with existing cash reserves, Melbourne-based Crown said in a statement today.
The purchase of three casinos in the Las Vegas region and a racetrack in Pittsburgh comes less than two weeks after Packer, Crown's biggest shareholder and Australia's richest man, split his media assets into a separate company to focus on the faster growing casino business. The 40-year-old has led more than $3 billion of gaming acquisitions in North America this year, adding to assets in Australia, Macau and the U.K.
``They've been looking to expand in the U.S. and this is where they see their opportunity,'' said Sean Fenton, who helps manage the equivalent of $832 million at Jenkins Investment Management in Sydney.
Crown shares rose 3 cents to A$13.83 at the 4:10 p.m. close of trading in Sydney. The stock has fallen 2.5 percent since the split of Publishing & Broadcasting Ltd. into Crown and Consolidated Media Holdings on Dec. 4.
The assets being acquired include the Cannery Casino and Hotel in North Las Vegas, Nevada Palace Casino on the Boulder Strip in East Las Vegas and the Meadows Racetrack & Casino in Pittsburgh. Cannery also operates the Rampart Casino in Summerlin, West Las Vegas, under a management contract.
``Locals'' Market
Cannery is also developing the East Side Cannery in East Las Vegas to replace the Nevada Palace Casino and a permanent facility for the Meadows Racetrack, which when completed will give it control of 8,400 slot machines, 75 gaming tables and 720 hotel rooms.
Cannery developed the venues as ``locals'' casinos, seeking to attract residents of the area rather than tourists. The company is 58 percent owned by founders Bill Paulos and Bill Wortman's Millennium Gaming Inc., with the rest held by buyout firm Oaktree Capital Management LLC which bought a stake in 2006.
They ``have created first-class locals properties located in markets with attractive, long-term growth prospects,'' Packer said in the statement. ``Crown's skills and experience in operating successful locals casinos will enable us to grow the Cannery Casino business further.''
Crown's existing North American investments include a 19.6 percent stake in Fontainebleau Resorts LLC, which is developing a Las Vegas casino, and a half share of Canada's Gateway Casinos Income Fund.
American Expansion
In May, the company agreed to pay $22.5 million for a 37.5 percent stake in LVTI LLC., which is building the Crown Las Vegas, neighboring the Fontainebleau property.
As well as Melbourne's Crown casino, Australia's biggest, the company owns Burswood in Perth and 50 percent of U.K. operator Aspinall's.
Crown also has a 37.9 percent stake in Melco PBL Entertainment (Macau) Ltd., which opened its first casino in May and is developing others in the former Portuguese colony.
The Cannery acquisition is subject to regulatory approval, which is expected to take at least 12 months, Crown said.
Macquarie Group Ltd. and Global Leisure Partners LLP advised Crown on the deal.
Packer, who inherited Publishing & Broadcasting in December 2005 after the death of his father Kerry, raised A$4.5 billion ($3.9 billion) last year selling the company's media assets into PBL Media, a joint venture with buyout firm CVC Asia Pacific Ltd.
In June, he sold a further 25 percent stake to CVC. He returned A$2 billion of cash to shareholders through the split, freeing up the remaining cash for acquisitions.
BLOOMBERG
Dec. 12 (Bloomberg) -- Crown Ltd., Australian billionaire James Packer's gaming company, agreed to buy Cannery Casino Resorts LLC for $1.75 billion cash, doubling its gambling investments in North America.
The acquisition will add to earnings per share and be funded with existing cash reserves, Melbourne-based Crown said in a statement today.
The purchase of three casinos in the Las Vegas region and a racetrack in Pittsburgh comes less than two weeks after Packer, Crown's biggest shareholder and Australia's richest man, split his media assets into a separate company to focus on the faster growing casino business. The 40-year-old has led more than $3 billion of gaming acquisitions in North America this year, adding to assets in Australia, Macau and the U.K.
``They've been looking to expand in the U.S. and this is where they see their opportunity,'' said Sean Fenton, who helps manage the equivalent of $832 million at Jenkins Investment Management in Sydney.
Crown shares rose 3 cents to A$13.83 at the 4:10 p.m. close of trading in Sydney. The stock has fallen 2.5 percent since the split of Publishing & Broadcasting Ltd. into Crown and Consolidated Media Holdings on Dec. 4.
The assets being acquired include the Cannery Casino and Hotel in North Las Vegas, Nevada Palace Casino on the Boulder Strip in East Las Vegas and the Meadows Racetrack & Casino in Pittsburgh. Cannery also operates the Rampart Casino in Summerlin, West Las Vegas, under a management contract.
``Locals'' Market
Cannery is also developing the East Side Cannery in East Las Vegas to replace the Nevada Palace Casino and a permanent facility for the Meadows Racetrack, which when completed will give it control of 8,400 slot machines, 75 gaming tables and 720 hotel rooms.
Cannery developed the venues as ``locals'' casinos, seeking to attract residents of the area rather than tourists. The company is 58 percent owned by founders Bill Paulos and Bill Wortman's Millennium Gaming Inc., with the rest held by buyout firm Oaktree Capital Management LLC which bought a stake in 2006.
They ``have created first-class locals properties located in markets with attractive, long-term growth prospects,'' Packer said in the statement. ``Crown's skills and experience in operating successful locals casinos will enable us to grow the Cannery Casino business further.''
Crown's existing North American investments include a 19.6 percent stake in Fontainebleau Resorts LLC, which is developing a Las Vegas casino, and a half share of Canada's Gateway Casinos Income Fund.
American Expansion
In May, the company agreed to pay $22.5 million for a 37.5 percent stake in LVTI LLC., which is building the Crown Las Vegas, neighboring the Fontainebleau property.
As well as Melbourne's Crown casino, Australia's biggest, the company owns Burswood in Perth and 50 percent of U.K. operator Aspinall's.
Crown also has a 37.9 percent stake in Melco PBL Entertainment (Macau) Ltd., which opened its first casino in May and is developing others in the former Portuguese colony.
The Cannery acquisition is subject to regulatory approval, which is expected to take at least 12 months, Crown said.
Macquarie Group Ltd. and Global Leisure Partners LLP advised Crown on the deal.
Packer, who inherited Publishing & Broadcasting in December 2005 after the death of his father Kerry, raised A$4.5 billion ($3.9 billion) last year selling the company's media assets into PBL Media, a joint venture with buyout firm CVC Asia Pacific Ltd.
In June, he sold a further 25 percent stake to CVC. He returned A$2 billion of cash to shareholders through the split, freeing up the remaining cash for acquisitions.
BLOOMBERG
Fed: Μείωση επιτοκίων στο 4,25%
Fed: Μείωση επιτοκίων στο 4,25%
Η ΝΑΥΤΕΜΠΟΡΙΚΗ ON LINE
Τρίτη, 11 Δεκεμβρίου 2007 21:17
Τελευταία Ενημέρωση : 12/12/2007 00:11
Σε μείωση των επιτοκίων της για τρίτη φορά από την αρχή του έτους προέβη σήμερα η Fed, προκειμένου να δώσει ώθηση στην οικονομική ανάπτυξη, όπως αναφέρει στο συνοδευτικό της κείμενο.
Το βασικό επιτόκιο μειώθηκε κατά 25 μονάδες βάσης, στο 4,25%, όπως ευρέως αναμενόταν, ενώ ένα μέλος της αρμόδιας επιτροπής τάχθηκε υπέρ επιθετικότερης μείωσης.
Παράλληλα, μειώνεται άμεσα και το προεξοφλητικό επιτόκιο για δάνεια εμπορικών τραπεζών προς αυτήν, στο 4,75% (μείωση επίσης κατά 0,25%).
Η κεντρική τράπεζα των Ηνωμένων Πολιτειών εμφανίζεται λιγότερο αισιόδοξη για τις προοπτικές της οικονομίας, καθώς διαπιστώνει εξασθένηση των καταναλωτικών δαπανών, επιδείνωση των συνθηκών στην αγορά κατοικίας και επιβράδυνση της ανάπτυξης.
Επισημαίνει ακόμη ότι οι πληθωριστικοί κίνδυνοι παραμένουν.
Οι 50 στους 52 οικονομολόγους που συμμετείχαν σε έρευνα της WSJ θεωρούσαν αναμενόμενη τη σημερινή απόφαση της Fed, προκειμένου να αποφευχθεί ο κίνδυνος ύφεσης [Βλέπε άρθρο] .
Πτώση πάνω από 2% στη Wall Street
Απώλειες πάνω από 2% κατέγραψαν την Τρίτη οι χρηματιστηριακοί δείκτες στη Νέα Υόρκη, καθώς διαψεύσθηκαν οι προσδοκίες για γενναία μείωση των επιτοκίων κατά 50 μονάδες βάσης από τη Fed.
Οι επενδυτές φοβούνται ότι η μείωση των αμερικανικών επιτοκίων κατά 25 μονάδες βάσης δεν θα σταθεί ικανή να αποτρέψει την ύφεση, ενώ προβληματισμό προκάλεσε το γεγονός ότι το συνοδευτικό κείμενο της απόφασης δεν εμπεριέχει σαφές μήνυμα ότι θα ακολουθήσουν νέες μειώσεις.
Ο Dow Jones [.DJI] υποχώρησε κατά 2,14% και έκλεισε στις 13.432,77 μονάδες. Μεγαλύτερες απώλειες, της τάξεως του 2,53%, κατέγραψε ο S&P 500, ενώ ο Nasdaq [.IXIC] διαμορφώθηκε στις 2.652,35 μονάδες μειωμένος κατά 2,45%.
Πρόκειται για τη μεγαλύτερη ημερήσια ποσοστιαία πτώση των δεικτών Dow Jones και S&P 500 από τις 7 Νοεμβρίου.
Οι μετοχές των Bank of America και Citigroup υποχώρησαν κατά 4,3% και 4,2% αντιστοίχως.
Aνοδος του δολαρίου
Μικρή άνοδο σημείωσε το δολάριο έναντι των βασικών του ανταγωνιστών καθώς δεν επιβεβαιώθηκαν οι ανησυχίες ορισμένων επενδυτών για επιθετική μείωση των επιτοκίων από τη Fed.
Στις 21:39 η ισοτιμία του ευρώ έναντι του δολαρίου διαμορφωνόταν στα 1,4687 δολάρια έναντι 1,4712 δολαρίων αργά χθες το βράδυ.
Την ίδια ώρα, το δολάριο ισοδυναμούσε με 110,89 γιεν [JPY=X] έναντι 111,7 γιεν χθες.
NAFTEMPORIKI
Η ΝΑΥΤΕΜΠΟΡΙΚΗ ON LINE
Τρίτη, 11 Δεκεμβρίου 2007 21:17
Τελευταία Ενημέρωση : 12/12/2007 00:11
Σε μείωση των επιτοκίων της για τρίτη φορά από την αρχή του έτους προέβη σήμερα η Fed, προκειμένου να δώσει ώθηση στην οικονομική ανάπτυξη, όπως αναφέρει στο συνοδευτικό της κείμενο.
Το βασικό επιτόκιο μειώθηκε κατά 25 μονάδες βάσης, στο 4,25%, όπως ευρέως αναμενόταν, ενώ ένα μέλος της αρμόδιας επιτροπής τάχθηκε υπέρ επιθετικότερης μείωσης.
Παράλληλα, μειώνεται άμεσα και το προεξοφλητικό επιτόκιο για δάνεια εμπορικών τραπεζών προς αυτήν, στο 4,75% (μείωση επίσης κατά 0,25%).
Η κεντρική τράπεζα των Ηνωμένων Πολιτειών εμφανίζεται λιγότερο αισιόδοξη για τις προοπτικές της οικονομίας, καθώς διαπιστώνει εξασθένηση των καταναλωτικών δαπανών, επιδείνωση των συνθηκών στην αγορά κατοικίας και επιβράδυνση της ανάπτυξης.
Επισημαίνει ακόμη ότι οι πληθωριστικοί κίνδυνοι παραμένουν.
Οι 50 στους 52 οικονομολόγους που συμμετείχαν σε έρευνα της WSJ θεωρούσαν αναμενόμενη τη σημερινή απόφαση της Fed, προκειμένου να αποφευχθεί ο κίνδυνος ύφεσης [Βλέπε άρθρο] .
Πτώση πάνω από 2% στη Wall Street
Απώλειες πάνω από 2% κατέγραψαν την Τρίτη οι χρηματιστηριακοί δείκτες στη Νέα Υόρκη, καθώς διαψεύσθηκαν οι προσδοκίες για γενναία μείωση των επιτοκίων κατά 50 μονάδες βάσης από τη Fed.
Οι επενδυτές φοβούνται ότι η μείωση των αμερικανικών επιτοκίων κατά 25 μονάδες βάσης δεν θα σταθεί ικανή να αποτρέψει την ύφεση, ενώ προβληματισμό προκάλεσε το γεγονός ότι το συνοδευτικό κείμενο της απόφασης δεν εμπεριέχει σαφές μήνυμα ότι θα ακολουθήσουν νέες μειώσεις.
Ο Dow Jones [.DJI] υποχώρησε κατά 2,14% και έκλεισε στις 13.432,77 μονάδες. Μεγαλύτερες απώλειες, της τάξεως του 2,53%, κατέγραψε ο S&P 500, ενώ ο Nasdaq [.IXIC] διαμορφώθηκε στις 2.652,35 μονάδες μειωμένος κατά 2,45%.
Πρόκειται για τη μεγαλύτερη ημερήσια ποσοστιαία πτώση των δεικτών Dow Jones και S&P 500 από τις 7 Νοεμβρίου.
Οι μετοχές των Bank of America και Citigroup υποχώρησαν κατά 4,3% και 4,2% αντιστοίχως.
Aνοδος του δολαρίου
Μικρή άνοδο σημείωσε το δολάριο έναντι των βασικών του ανταγωνιστών καθώς δεν επιβεβαιώθηκαν οι ανησυχίες ορισμένων επενδυτών για επιθετική μείωση των επιτοκίων από τη Fed.
Στις 21:39 η ισοτιμία του ευρώ έναντι του δολαρίου διαμορφωνόταν στα 1,4687 δολάρια έναντι 1,4712 δολαρίων αργά χθες το βράδυ.
Την ίδια ώρα, το δολάριο ισοδυναμούσε με 110,89 γιεν [JPY=X] έναντι 111,7 γιεν χθες.
NAFTEMPORIKI
US INDEXES
DOW JONES INDUS. AVG 13,432.77 -294.26 -2.14%
S&P 500 INDEX 1,477.65 -38.31 -2.53%
NASDAQ COMPOSITE INDEX 2,652.35 -66.60 -2.45%
S&P 500 INDEX 1,477.65 -38.31 -2.53%
NASDAQ COMPOSITE INDEX 2,652.35 -66.60 -2.45%
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