Unstructured Finance

Sensex drops 292 points

MARKETS-SOUTHASIA/STOCKSIn pre-budget pessimism, investors booked profits on Tuesday shaving nearly 300 points off the benchmark.

The Sensex closed 1.97 pct down at 14,494, while the Nifty slipped 100 points to 4,291.

Losses in stocks like Reliance Industries, ICICI Bank and L&T weighed on the benchmark.

Top listed realty firm DLF dropped over 8 percent to end as the top Sensex loser, followed by Tata Motors which fell 7.2 percent.

Realty stocks took a beating in trade with their sectoral index slipping 7.4 percent. HDIL dropped over 12 percent, while Unitech was down 6.6 percent.

Private equity making Asia inroads

U.S. private equity firms are making further inroads in Asia.

Overnight, Carlyle announced it raised $1.04 billion for its fourth Asian growth capital fund — nearly double the size of its previous such fund.

The fund has already made investments into companies including the high-end Chinese women’s apparel maker Ellassay. Fundraising is exceptionally tough right now for private equity firms. Carlyle said nearly 40 percent of the fund’s investors are new and that it raised the fund in 14 months, reflecting improved investor sentiment towards China and India.

Blackstone, increasingly aggressive in Asia, on Monday hired an executive from Deutsche Asset Management to lead its capital raising efforts across the Asia-Pacific region. The firm has also been talking to the Shanghai city government to set up a wholly owned China subsidiary as it prepares to launch a local currency private equity fund, sources previously told Reuters.

Check Out Line: Retail joy in sunny days?

shop11Check out the welcome warm weather.

The long anticipated arrival of warm weather helped boost U.S. consumer spending 1.6 percent in the week that ended June 27, from a week ago – the strongest gain since matching its Jan. 31 results, according to a stody by the International Council of Shopping Centers and Goldman Sachs.

On a year-over-year basis, sales rose 0.6 percent.

“A bout of seasonally hot weather late in the week helped to trigger consumer spending,” ICSC chief economist Michael Niemira said in a statement. “This late June sales spark was a welcome sign for the industry and the economy. ”
However, he added, ”for the month as a whole, June sales continue on track for a ‘tough’ month with the early part of the month weighing heavy on its performance.”
Excluding Wal-Mart Stores, which has stopped reporting monthly sales, the ICSC expects June sales to be down by about 5 percent.

Investors, analysts and consumers are watching for signs the U.S. recession may be nearing an end.

Is Genentech taking over Roche?

Roche’s megabucks Genentech buy is looking more like a reverse takeover — in some ways, at least.

Roche headquartersThe Swiss drugmaker splashed out $47 billion to buy out its biotech partner to secure access to Genentech’s impressive new drugs. But Roche’s U.S. operations are to operate under the Genentech name and research, development and commercial operations are all being based at the U.S. group’s South San Francisco headquarters.

Now Roche doesn’t even consider itself Big Pharma. It says it will leave the industry group Pharmaceuticals Research and Manufacturers of America (PhRMA) but will retain Genentech’s membership of the Biotechnology Industry Organization (BIO).

Watch BlackRock’s Mark Lyttleton give his market view

Mark Lyttleton, manager of the 1.5 billion pound BlackRock UK Absolute Alpha fund, gives his view on the recent rebound in the equity market and his outlook for the rest of the year and beyond.

Deals du Jour

General Motors (GMGMQ.PK) is talking to rival suitors to sell a stake in Opel, the Financial Times says,  primarily Brussels-based RHJ International (RHJI.BR). Magna is still in pole position.

Japan’s Shinsei Bank and Aozora Bank are likely to announce plans to merge by next year, sources familiar with the matter say. The two loss-making lenders are backed by U.S. investors. Read the Reuters story here.

For more Reuters news on deals, click here. Below are two other stories we spotted in newspapers.

Starbucks to sell exclusive Rwanda coffee in UK

howardbeans1Starbucks will start selling a high-grade variety of fair trade-certified Rwandan coffee in Britain and Ireland next year as part of its effort to source more fair trade beans across East Africa. 

The world’s biggest coffee chain has pledged to have all coffee sold in its 700 British and Irish outlets fair trade-certified, which would make it the largest purchaser of such coffee in the world. 

Coffee represents Rwanda’s biggest foreign-exchange export earner in an economy which has been rebuilt following the 1994 genocide of 800,000 people.

Heading to the dollar store for groceries?

dollar1Ahead of the recession, dollar stores thought it would be a good idea to try to lure shoppers into their stores more frequently by stocking an increased selection of food. Many of them began installing refrigerated coolers in their stores so they could sell things like eggs, milk and dairy.

More recently Family Dollar added 200 more food products — including a bigger selection of pasta and Kraft salad dressings — to its shelves.

As the economic downturn persists, that decision to focus on food appears to be paying off as more shoppers seek low prices on food.

FirstGroup targets National Express

FirstGroup, the Aberdeen-based transport group led by its chairman Martin Gilbert, confirmed on Monday that it made an approach for smaller, embattled National Express on June 19.

But, National Express’s newly appointed chairman, John Devaney, and his chief executive, Richard Bowker, believe they can go it alone and have firmly rebuffed First Group. They are hoping, instead, to launch a £400 million rights issue.

This is not the first time the two companies have been linked as merger partners: there was talk three years ago of doing a £3 billion, nil-premium merger.

Missing CEO? He’s around here somewhere….

By Steve James

Although Enterprise Products Partners CEO Michael Creel could not join a conference call with analysts to dicuss his company’s planned $3.3 billion acquisition Teppco Partners, the energy pipeline company was quick to reassure investors all was well.

“He is not hiking the Appalachian Trail, he is not in Argentina and his wife IS with him,” Randy Burkhalter, Enterprise’s executive in charge of investor relations, told the call.

It was a joking reference to South Carolina Governor Mark Sanford, who last week admitted cheating on his wife with a woman in Argentina, where he had disappared for several days. His office had told reporters during his absence that Sanford was hiking the Appalachian Trail.