Morgan Stanley is borrowing 225 billion yen ($2 billion) from Citigroup Inc., Shinsei Bank Ltd. and the Government of Singapore Investment Corp. to fund Japan's largest real estate deal, three people familiar with the transaction said.
Morgan Stanley will obtain senior loans from Citigroup and Tokyo-based Shinsei, and junior credit from GIC, the investment unit of the Singapore government, to fund its 281.3 billion yen purchase of All Nippon Airways Co.'s 13 Japanese hotels, said the people, who declined to be identified because the lending hasn't been announced.
Japan's commercial land prices rose for the first time in 16 years in the 12 months ended June 30, as international and domestic investors competed to buy properties. Citigroup and Shinsei are looking for buyers of the senior loans worth 180 billion yen after the collapse of the U.S. subprime mortgage market prompted more than $50 billion of writedowns at the world's biggest banks and pushed up borrowing costs.
``Japan's real-estate market is still hot but it is true banks are cautious about making exposure after seeing the absolute turmoil in the U.S. and Europe,'' said Koyo Ozeki, head of Asia-Pacific credit research at Pimco Japan Ltd. ``Debt investors have become more demanding in pricing as well.''
a-stockforum.com
четверг, 29 ноября 2007 г.
Treasuries Advance on Speculation U.S. Housing Slump to Deepen
Treasury notes rose before a government report that will probably show the U.S. real-estate slump deepened last month, bolstering the case for another reduction in interest rates by the Federal Reserve.
Fed fund futures today showed traders have increased bets on the central bank lowering the target rate by a quarter-point on Dec. 11 to spur the economy. Economists in a Bloomberg News survey predict purchases of new homes in the U.S. fell 2.6 percent to an annual pace of 750,000 in October. The report is due at 10 a.m. in Washington.
``It looks like the market will get what it wants from the Fed this month, and that's a rate cut,'' said Kornelius Purps, fixed-income strategist at Unicredit Markets & Investment Banking in Munich, the investment arm of Italy's biggest bank. ``I'm afraid we will see more negative headlines coming. Treasury yields will have to fall further.''
Five-year note yields fell 2 basis points to 3.49 percent as of 10:14 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 7/8 percent security due in October 2012 rose 2/32, or 63 cents per $1,000 face amount, to 101 24/32.
Five-year yields have climbed more than a quarter percentage point since the start of the week as the Treasury Department prepares to sell $13 billion of the notes today.
The 10-year note yield declined 1 basis point to 4.03 percent. It will fall to 3.90 percent by the end of the year, Purps predicted.
a-stockforum.com
Fed fund futures today showed traders have increased bets on the central bank lowering the target rate by a quarter-point on Dec. 11 to spur the economy. Economists in a Bloomberg News survey predict purchases of new homes in the U.S. fell 2.6 percent to an annual pace of 750,000 in October. The report is due at 10 a.m. in Washington.
``It looks like the market will get what it wants from the Fed this month, and that's a rate cut,'' said Kornelius Purps, fixed-income strategist at Unicredit Markets & Investment Banking in Munich, the investment arm of Italy's biggest bank. ``I'm afraid we will see more negative headlines coming. Treasury yields will have to fall further.''
Five-year note yields fell 2 basis points to 3.49 percent as of 10:14 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 7/8 percent security due in October 2012 rose 2/32, or 63 cents per $1,000 face amount, to 101 24/32.
Five-year yields have climbed more than a quarter percentage point since the start of the week as the Treasury Department prepares to sell $13 billion of the notes today.
The 10-year note yield declined 1 basis point to 4.03 percent. It will fall to 3.90 percent by the end of the year, Purps predicted.
a-stockforum.com
пятница, 23 ноября 2007 г.
U.S. Notes Have Longest Rally in 5 Years on Demand for Safety
Two-year Treasuries headed for their longest weekly rally in five years as tumbling stocks and credit-market losses increased demand for the relative safety of government debt.
The yield fell below 3 percent for the first time since December 2004, and the 10-year rate declined to less than 4 percent, the lowest since 2005. The dollar slid to a record against the euro and crude oil rallied to $99 a barrel, spurring expectations among traders that the Federal Reserve will cut its benchmark interest rate next month to support economic growth.
``You have the U.S. economy turning over, led by housing,'' said Adam MacKillop, who trades U.S. bonds at Barclays Capital Japan in Tokyo. ``You've got credit concerns. Equities are under pressure. This is why we had such a massive rally.''
Yields on the 3 5/8 percent Treasury due in October 2009 rose 3 basis points to 3.03 percent as of 9:34 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price fell 1/32, or 31 cents per $1,000 face amount, to 101 3/32.
The yield declined 32 basis points since Nov. 16, making this the sixth winning week. A basis point equals 0.01 percentage point.
The last time notes had such a long run of gains was in the period ended Oct. 4, 2002. The Fed was in the process of cutting its target for overnight loans between banks, taking the rate to a 45-year low of 1 percent by June 2003.
good-investor-idia.com
The yield fell below 3 percent for the first time since December 2004, and the 10-year rate declined to less than 4 percent, the lowest since 2005. The dollar slid to a record against the euro and crude oil rallied to $99 a barrel, spurring expectations among traders that the Federal Reserve will cut its benchmark interest rate next month to support economic growth.
``You have the U.S. economy turning over, led by housing,'' said Adam MacKillop, who trades U.S. bonds at Barclays Capital Japan in Tokyo. ``You've got credit concerns. Equities are under pressure. This is why we had such a massive rally.''
Yields on the 3 5/8 percent Treasury due in October 2009 rose 3 basis points to 3.03 percent as of 9:34 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price fell 1/32, or 31 cents per $1,000 face amount, to 101 3/32.
The yield declined 32 basis points since Nov. 16, making this the sixth winning week. A basis point equals 0.01 percentage point.
The last time notes had such a long run of gains was in the period ended Oct. 4, 2002. The Fed was in the process of cutting its target for overnight loans between banks, taking the rate to a 45-year low of 1 percent by June 2003.
good-investor-idia.com
Kospi Heads for Longest Losing Streak Since 2004
South Korea's stocks declined for the seventh day, with the benchmark heading to its longest losing streak in three years on concern that global economic growth will slow from credit market losses in the U.S.
Hyundai Heavy Industries Ltd. paced a decline among makers of capital goods on speculation slower global growth will weaken demand for machinery, power generators and ships.
SK Telecom Co. Ltd. led companies that rely on domestic spending higher on expectations slowing global growth will push investors to switch into stocks that rely on local demand. LG Electronics Inc. paced an advance among the nation's exporters of electronics as the won weakened for the seventh day.
``Equipment makers and manufacturers of machines are not attractive when global economic growth is weak because companies will not be expanding,'' said Kim Woo Sik, who manages $328 million at SH Asset Management Co. in Seoul. ``Telecoms are up because these are good domestic plays. A weak won is good for electronics exporters.''
The Kospi fell 47.64, or 2.7 percent, to 1,751.23 as of 1:05 p.m. in Seoul, after sliding 8.8 percent in the previous six days. The measure is heading to its longest losing streak since a seven- day slide in October 2004.
The Kosdaq decreased 3.7 percent to 695.31. Kospi 200 futures expiring in December declined 2.1 percent to 224.05, while the underlying index fell 2.1 percent to 223.30.
Hyundai Heavy, the world's largest shipbuilder, fell 16,500 won, or 4 percent, to 392,500. Doosan Heavy Industries & Construction Co., South Korea's biggest maker of electricity generators, lost 12,500 won, or 9.7 percent, to 116,500.
good-investor-idia.com
Hyundai Heavy Industries Ltd. paced a decline among makers of capital goods on speculation slower global growth will weaken demand for machinery, power generators and ships.
SK Telecom Co. Ltd. led companies that rely on domestic spending higher on expectations slowing global growth will push investors to switch into stocks that rely on local demand. LG Electronics Inc. paced an advance among the nation's exporters of electronics as the won weakened for the seventh day.
``Equipment makers and manufacturers of machines are not attractive when global economic growth is weak because companies will not be expanding,'' said Kim Woo Sik, who manages $328 million at SH Asset Management Co. in Seoul. ``Telecoms are up because these are good domestic plays. A weak won is good for electronics exporters.''
The Kospi fell 47.64, or 2.7 percent, to 1,751.23 as of 1:05 p.m. in Seoul, after sliding 8.8 percent in the previous six days. The measure is heading to its longest losing streak since a seven- day slide in October 2004.
The Kosdaq decreased 3.7 percent to 695.31. Kospi 200 futures expiring in December declined 2.1 percent to 224.05, while the underlying index fell 2.1 percent to 223.30.
Hyundai Heavy, the world's largest shipbuilder, fell 16,500 won, or 4 percent, to 392,500. Doosan Heavy Industries & Construction Co., South Korea's biggest maker of electricity generators, lost 12,500 won, or 9.7 percent, to 116,500.
good-investor-idia.com
среда, 21 ноября 2007 г.
Rigged Bids, SEC Give Dealers Edge as Auction-Rate Bonds Fail
More than a year after 15 securities firms settled claims of manipulating auction-rate bonds, the $360 billion market remains as opaque as ever.
Investors can't get basic information about trading in their securities, like the interest rate. Qwest Communications International Inc. and Synaptics Inc. haven't been able to unload the debt when they wanted to, regulatory filings show. Borrowing costs on the $270 billion of auction bonds sold by state and local governments have climbed an average 13 basis points compared with notes that aren't subject to periodic sales, according to the brokerage industry's trade group.
The collapse of debt backed by subprime mortgages that forced banks to report more than $50 billion of losses and writedowns this year is infecting the market for auction securities. Investors are concerned because brokers can advise bidders on what they should pay and the U.S. Securities and Exchange Commission allows dealers to use their inside information to compete with bondholders.
``When you buy auction securities, you are beholden to a broker,'' said Adam Dean, president at SVB Asset Management, a Santa Clara, California, firm that manages about $6 billion of corporate cash accounts. While Dean doesn't buy the debt because of the risk that they can't be readily converted to cash, ``our clients are constantly being solicited by brokers,'' he said.
Unlike Treasuries or stocks, there is no daily source of information about auction-rate bonds, floating-rate securities whose interest rate is reset though periodic bids, typically every seven, 25 or 28 days.
financial-stock.com
Investors can't get basic information about trading in their securities, like the interest rate. Qwest Communications International Inc. and Synaptics Inc. haven't been able to unload the debt when they wanted to, regulatory filings show. Borrowing costs on the $270 billion of auction bonds sold by state and local governments have climbed an average 13 basis points compared with notes that aren't subject to periodic sales, according to the brokerage industry's trade group.
The collapse of debt backed by subprime mortgages that forced banks to report more than $50 billion of losses and writedowns this year is infecting the market for auction securities. Investors are concerned because brokers can advise bidders on what they should pay and the U.S. Securities and Exchange Commission allows dealers to use their inside information to compete with bondholders.
``When you buy auction securities, you are beholden to a broker,'' said Adam Dean, president at SVB Asset Management, a Santa Clara, California, firm that manages about $6 billion of corporate cash accounts. While Dean doesn't buy the debt because of the risk that they can't be readily converted to cash, ``our clients are constantly being solicited by brokers,'' he said.
Unlike Treasuries or stocks, there is no daily source of information about auction-rate bonds, floating-rate securities whose interest rate is reset though periodic bids, typically every seven, 25 or 28 days.
financial-stock.com
Fed Forecasts Spur Traders to Ignore Warnings, Bet on Rate Cuts
The Federal Reserve's first set of quarterly economic forecasts fueled speculation that it will cut interest rates again, contrary to warnings by policy makers in the past two weeks.
The degree of ``uncertainty'' about the growth outlook is greater than that for inflation, officials said in a supplement to minutes of their October meeting released yesterday. While officials expressed confidence price increases will ease, they viewed markets as ``still fragile and were concerned that an adverse shock'' would worsen economic risks.
The wariness about a continued credit collapse pushed odds of a rate cut next month up to 92 percent, according to federal funds futures, from as low as 70 percent. Investors differ with Chairman Ben S. Bernanke and other officials, who have said this month that the dangers of a slower expansion and faster inflation were ``roughly'' balanced.
``Risks aren't balanced,'' said Michael Feroli, a former Fed board staff member who is now an economist at JPMorgan Chase & Co. in New York. ``Recent developments in financial markets increase the likelihood that they will ease.''
As part of its new release on the three-year economic estimates of Fed governors and district-bank presidents, the central bank discussed risks to the outlook. ``Most participants judged that the uncertainty attending'' their growth forecasts ``was above typical levels seen in the past,'' the Fed said.
financial-stock.com
The degree of ``uncertainty'' about the growth outlook is greater than that for inflation, officials said in a supplement to minutes of their October meeting released yesterday. While officials expressed confidence price increases will ease, they viewed markets as ``still fragile and were concerned that an adverse shock'' would worsen economic risks.
The wariness about a continued credit collapse pushed odds of a rate cut next month up to 92 percent, according to federal funds futures, from as low as 70 percent. Investors differ with Chairman Ben S. Bernanke and other officials, who have said this month that the dangers of a slower expansion and faster inflation were ``roughly'' balanced.
``Risks aren't balanced,'' said Michael Feroli, a former Fed board staff member who is now an economist at JPMorgan Chase & Co. in New York. ``Recent developments in financial markets increase the likelihood that they will ease.''
As part of its new release on the three-year economic estimates of Fed governors and district-bank presidents, the central bank discussed risks to the outlook. ``Most participants judged that the uncertainty attending'' their growth forecasts ``was above typical levels seen in the past,'' the Fed said.
financial-stock.com
понедельник, 19 ноября 2007 г.
U.S. Treasuries Are Little Changed Before Fed Releases Minutes
U.S. Treasuries were little changed on speculation the minutes of last month's Federal Reserve meeting will tomorrow show policy makers are reluctant to cut interest rates further.
Three weeks of gains have pushed two-year yields down to near the lowest since February 2005. Most investors surveyed by research company Ried, Thunberg & Co. in Jersey City, New Jersey, expect the Fed to keep borrowing costs unchanged on Dec. 11.
``Treasuries are beginning to look expensive and I think fair value is above today's yields,'' said Peter Lildholdt, a senior fixed-income analyst at Danske Bank A/S in Copenhagen. ``Our main scenario is for rates to be unchanged in December. Yields could go higher after the minutes.''
The two-year yield fell 1 basis point to 3.32 percent by 10:51 a.m. in London, according to bond broker Cantor Fitzgerald LP, after dropping to as low as 3.28 percent on Nov. 16.
The price of the 3 5/8 percent security due October 2009 rose 1/32, or 31 cents per $1,000 face amount, to 100 18/32.
Two-year notes yielded 1.18 percentage points less than the central bank's target for overnight lending, near the biggest deficit in two months.
Lildholdt said he expects two-year yields to climb to 3.5 percent by year-end.
The yield on two-year notes has fallen 60 basis points since the beginning of November. That compares with an average 16 basis-point drop in the first 19 days of June through October, according to data compiled by Bloomberg.
The yield on 10-year Treasury notes fell 2 basis points to 4.15 percent. Yields move inversely to bond prices. A basis point is 0.01 percentage point.
Interest-Rate Futures
Traders reined-in expectations the central bank will reduce its target rate next month, according to interest-rate futures.
Fed fund futures indicated a 90 percent chance the central bank will reduce its benchmark rate a quarter percentage point to 4.25 percent, down from 94 percent at the end of last week and 98 percent odds a week ago. The chances of another 25 basis-point cut in January were 67 percent, and there was a 43 percent likelihood of the rate falling to 3.75 percent in March.
microcapbooks.com
Three weeks of gains have pushed two-year yields down to near the lowest since February 2005. Most investors surveyed by research company Ried, Thunberg & Co. in Jersey City, New Jersey, expect the Fed to keep borrowing costs unchanged on Dec. 11.
``Treasuries are beginning to look expensive and I think fair value is above today's yields,'' said Peter Lildholdt, a senior fixed-income analyst at Danske Bank A/S in Copenhagen. ``Our main scenario is for rates to be unchanged in December. Yields could go higher after the minutes.''
The two-year yield fell 1 basis point to 3.32 percent by 10:51 a.m. in London, according to bond broker Cantor Fitzgerald LP, after dropping to as low as 3.28 percent on Nov. 16.
The price of the 3 5/8 percent security due October 2009 rose 1/32, or 31 cents per $1,000 face amount, to 100 18/32.
Two-year notes yielded 1.18 percentage points less than the central bank's target for overnight lending, near the biggest deficit in two months.
Lildholdt said he expects two-year yields to climb to 3.5 percent by year-end.
The yield on two-year notes has fallen 60 basis points since the beginning of November. That compares with an average 16 basis-point drop in the first 19 days of June through October, according to data compiled by Bloomberg.
The yield on 10-year Treasury notes fell 2 basis points to 4.15 percent. Yields move inversely to bond prices. A basis point is 0.01 percentage point.
Interest-Rate Futures
Traders reined-in expectations the central bank will reduce its target rate next month, according to interest-rate futures.
Fed fund futures indicated a 90 percent chance the central bank will reduce its benchmark rate a quarter percentage point to 4.25 percent, down from 94 percent at the end of last week and 98 percent odds a week ago. The chances of another 25 basis-point cut in January were 67 percent, and there was a 43 percent likelihood of the rate falling to 3.75 percent in March.
microcapbooks.com
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