Frontrunning: August 9
- Gu Kailai Trial Has Ended, verdict imminent (WSJ)
- Greek unemployment rises to 23.1 pct in May, new record (Reuters)
- Greece’s Power Generator Tests Euro Fitness Amid Blackout Threat (Bloomberg)
- Fannie Mae, Freddie Mac Results May Ease Wind-Down Push (Bloomberg)
- Monti takes off gloves in euro zone fight (Reuters)
- U.S. Fed extends comment period for Basel III (Reuters)
- HP in $8bn writedown on services arm (FT) - must be good for +10% in the stock
- News Corp in $2.8bn writedown (FT) - must be good for +10% in the stock
- Japan to Pass Sales Tax Bill After Noda Avoids Election Push (Bloomberg)
- China May Set New Property Controls This Month, Securities Says (Bloomberg)
- Trade Deficit in U.S. Probably Narrowed in June on Cheaper Oil (Bloomberg)
- Singapore Trims Growth Forecast On Global Slowdown Risks (Bloomberg)
Overnight media digest:
* Hewlett-Packard Co said it would write down the value of its technology-services business by about $8 billion, underscoring both industry changes and singular pressures plaguing the company.
* News Corp reported a $1.55 billion loss for its fiscal fourth quarter on a multibillion-dollar write-down primarily of its publishing businesses, most significantly those in Australia.
* Yahoo Inc's rookie Chief Executive Marissa Mayer has made one thing clear to employees at the outset of her bid to revive the internet company: product comes first. She has also told employees that she wants to rewire Yahoo to develop or acquire web services.
* Zynga Inc said its Chief Operating Officer John Schappert has left the company, a week after the social games maker took away some of his responsibilities.
* UK officials moved to defend Standard Chartered Plc , stoking the controversy over charges that it broke New York state banking rules in a decade long campaign to hide its financial dealings with Iran.
* In a move to repair its flagging bond-trading business, Morgan Stanley is scrambling to replace some of its well-paid bond traders with computers.
* Knight Capital Group Inc was holding about $7 billion of stocks at one point on Wednesday last week -- a far bigger figure than previously known -- as a result of errant trades that forced it to seek emergency funding, according to people familiar with the matter.
* China's Jiangling Motors Corp Ltd, which is 30 percent owned by Ford Motor Co, will acquire Taiyuan Changan Heavy Truck Co, marking the U.S. car maker's first entry into the world's largest heavy-truck market.
* McDonald's Corp global same-store sales in July were as flat as a single burger patty, stirring up jitters about consumer sentiment. McDonald's same-store sales edged down 0.1 percent in the United States and 0.6 percent in Europe.
* New York Times Co has reached a preliminary agreement to sell its struggling how-to website About.com to rival site Answers.com for $270 million, according to a person familiar with the matter.
* Wanxiang Group Corp, one of China's biggest parts makers, offered a $450 million lifeline to A123 Systems Inc a maker of advanced batteries for electric vehicles that received U.S.-government backing.
* U.S. prosecutors have agreed to shield several former UBS AG employees from criminal charges in return for their cooperation with the escalating investigation of suspected interest-rate manipulation, according to a person close to the probe.
STAN CHART SEEKS ADVICE OVER COUNTERSUIT
Standard Chartered has sought advice about whether it can pursue a legal action against the U.S. regulator.
MAOIST PROTESTERS SHOW SUPPORT FOR BO
A small group of Maoist protesters from all over China met near the courthouse to demonstrate their support for the wife of Bo Xilai.
HP IN $8 BILLION WRITEDOWN ON SERVICES ARM
Hewlett Packard raised its third-quarter earnings forecast on Wednesday and said it was writing down the value of its services business by $8 billion.
MAN UTD DUAL CLASS SHARES RAISE CONCERNS
The initial public offering of Manchester United is on track to be finalised by Thursday evening.
CARLYLE RAISES MOST FUNDS SINCE 2008
The Washington-based private equity group Carlyle Group has had its best quarter for fundraising since 2008.
KING QUESTIONS STAN CHART PROBE
BOE Governor Mervyn King has questioned the approach of the U.S. regulator that accused Standard Chartered of breaching sanctions.
BANK OF ENGLAND CUTS GROWTH FORECAST
The Bank of England signalled that economic recovery will be slower and weaker than expected since the beginning of the crisis.
BRAZIL'S CENTRAL BANK STAFF GO ON STRIKE
Employees at Brazil's central bank are striking for a 23 percent pay rise to keep pace with rising prices.
NY TIMES NEARS DEAL TO SELL DIGITAL UNIT
The New York Times Co is nearing a deal to sell its flagging About Group, the digital unit housing the consumer how-to website.
NEWS CORP IN $2.8 BLN PUBLISHING WRITEDOWN
News Corp has written down the value of its publishing businesses by $2.8 billion and taken a $224 million charge to cover the costs of hacking investigations.
* Hewlett-Packard Co, the technology giant, disclosed that it would have to take an $8 billion charge related to the acquisition of Electronic Data Systems, a $13.9 billion purchase it made four years ago.
* A write-down on News Corp's underperforming publishing unit contributed to the company's loss of $1.6 billion, or 64 cents a share, in the quarter that ended June 30.
* Mervyn King, the central bank governor, seemed to defend Standard Chartered Plc against the New York allegation that it had schemed with the Iranian government to launder billions of dollars for the potential support of terrorist activities.
* The Bank of England lowered its growth forecast, predicting an even slower exit from recession than foreseen just three months earlier.
* The New York Times Co is preparing to sell the About Group, the unit that includes the About.com online resource guide, to Answers.com, a question-and-answer site, for $270 million, a person familiar with the deal said.
* One of India's fastest-growing financial exchanges, Multi Commodity Exchange of India, is suing a prominent economist, Ajay Shah, claiming defamation.
* James Cameron, director of the global hit films "Titanic" and "Avatar," said he was setting up shop in the Chinese city of Tianjin to bring his cutting-edge 3-D technologies and production services to a high-technology industrial park.
* Banks are making unusually large gains on mortgages because they are taking profits far higher than the historical norm, analysts say.
* In the latest sign that the worst might be over for the battered American housing market, the two government-controlled mortgage finance giants, Fannie Mae and Freddie Mac, this week reported some of their best quarterly results since the real estate collapse.
* A study, which is expected to be published in a peer-reviewed medical journal soon, found that a new technique, microarray, surpassed standard testing in detecting chromosomal abnormalities that can cause problems like autism or mental retardation
THE GLOBE AND MAIL
* With the Alberta government under fire over a health spending scandal, its chief rival has turned to an age-old opposition tactic -- calling for the minister's resignation.
Official Opposition Leader Danielle Smith on Wednesday called for Premier Alison Redford to turf her Health Minister, Fred Horne, after revelations that lavish expenses were paid to a former health executive, Allaudin Merali.
* Economists are arriving at something of a consensus where Canada's housing market is concerned, projecting a drop in prices of 10 per cent to 15 per cent over the next few years, and notably in Toronto and Vancouver.
And while they're not expecting a U.S.-style meltdown, they are warning about the risks to the real estate market. And going forward, the market will largely stagnate.
Report in the business section:
* South Korea's Samsung Electronics Co said on Thursday it has not considered acquiring Research In Motion Ltd or licensing the embattled BlackBerry phone maker's new mobile operating system.
A lack of support from potential partners such as Samsung could mean more trouble for RIM, which is seeking various options to turn around its embattled business.
* Ottawa will allow Alberta to use its own greenhouse-gas rules - rather than federal regulations being drafted - to corral the soaring carbon emissions of the oil sands, as the Conservative government moves to assure the energy industry that it will not take steps to slow the sector's growth.
Industry and government sources say the federal regulations being drafted will essentially mimic one of the most controversial parts of Alberta's greenhouse-gas regulations, placing limits on the emissions from each barrel of oil, but not on the sector - an approach that would clear the way for the oil sands to double production.
* Undercover government-contracted observers will be taking notes this fall in eight airports across the country to ensure Canadians can get service in both official languages.
The "anonymous agents," as Canada's official languages commissioner calls them, will pose as travelers, going through airport security, perhaps stopping for a coffee at Tim Hortons, then proceeding to Air Canada's waiting lounge.
* Kinross Gold Corp is looking at a plan to downsize initial production from its troubled Tasiast mine in Mauritania, as it tries to mitigate the impact of major cost pressures on the operation.
New chief executive Paul Rollinson also said the company is implementing a new company-wide cost-reduction initiative as its capital and operating costs continue to escalate.
European economic update:
- UK Total Trade Balance (GBP/Mln) -£4308 – lower than expected. Consensus -£3100. Previous -£2717. Revsied -£2718.
- Sweden Average House Prices (SEK) 2078M. Previous 2032M. Revised 2017M.
- Spain House Transactions -11.4% y/y. Previous -11.6% y/y.
- Netherlands CPI – EU Harmonized 0.4% m/m 2.6% y/y – higher than expected. Consensus 2.5% y/y. Previous -0.6% m/m 2.5% y/y.
- Italy Trade Balance EU 997M – higher than expected. Previous 691M. Revised 697M.
- Russia Gold & Forex Reserve (USD) 507.4B. Previous 505.5B.
- Czech Republic CPI -0.1% m/m 3.1% y/y – lower than expected. Consensus 0.2% m/m 3.4% y/y. Previous 0.2% m/m 3.5% y/y.