China

ALSO NOTED: More on Citigroup's new mortgage model;More on Goldman's planned investment in a China PE fund; and much more...

Thu, 10 Jan 2008 06:59:50 -0500

Company News:
> Goldman Sachs forms venture to invest in housing projects. Article
> Rumors about Countrywide heat up. Article
> More on Citigroup's new mortgage model. Article
> MBIA plans to maintain its ratings. Article
> E*Trade sells more asset-backed debt. Article
> Countrywide loan volume rises. Article
> Countrywide delinquencies rise. Article
> More on Goldman's planned investment in a China PE fund. Article
> NYSE Euronext attractively valued. Article
> Apollo completes $1 billion investment in Norwegian Cruise Line. Article

Industry News:
> Ackman ups bet on borders. Article

And Finally... The case of the exploding laptop. Article

SPOTLIGHT: Merrill Lynch's quest for Capital

Wed, 02 Jan 2008 06:59:52 -0500

How bad is the capital crunch at Merrill Lynch? Well, even after news of its $6.2 billion infusion from Temasek and Davis Selected Advisers, it is apparently looking for more capital from investors in China and the Middle East. Article | More on Temasek and Merrill Lynch. Article

Blackstone's bid reflects China link

Mon, 05 Nov 2007 06:59:55 -0500

It was big news when the Blackstone Group announced it had sold a $3 billion stake in its management company to China's state investment agency. The thought was that the move would also open up new opportunities. Looks like it's paying off. According to the Financial Times, Blackstone has teamed up with China National BlueStar to bid for Australian chemicals maker Nufarm. This appears to be the first time a U.S. private equity firm and a Chinese firm have partnered to buy a company. We'll likely see more of these kinds of arrangements in the future. There's a lot of wealth in China that has to be recycled so to speak back through the financial systems.

For more:
- here's the Financial Times article

Related articles:
- Concern in China over Blackstone investment
- China bank to bid for Bear Stearns
- More on China and Blackstone

Dealmaking in China: buying high

Thu, 25 Oct 2007 06:59:54 -0400

Deal-meisters sense a huge opportunity in China, and some are starting to act in gutsy ways. The Blackstone Group certainly has jumped on the opportunity. Not only has it inked a deal to sell a 9.4 percent stake in itself to a Chinese sovereign wealth fund, but has committed $600 million to the chemicals company China National BlueStar Group. It's also staffing up quickly.

Investment Dealers' Digest notes that a feeding frenzy of sort is developing among private equity firms and investment banks. One contrarian view of all this is that they are rushing in at an iffy time. True, the market is only now opening up. But I just hope the timing works out. There's one view out there that China is setting itself up for a big crash, financial and economic, along the lines of the great Japanese bubble pop that took place in the 1990s.

For more:
- here's the Investment Dealers' Digest article
- here's a Financial Times article on the chances of crash

Related articles:
- State-owned China banks on the rise?
- More on China and Blackstone

ALSO NOTED: Primer on SIVs; More on Citigroup's plans for research unit; and much more...

Thu, 25 Oct 2007 06:59:50 -0400

Company News:
> More on Citigroup's plans for research unit. Article
> Countrywide to work with activists. Article
> Moody's cut Merrill's ratings. Article
> Fitch also downgrades Merrill. Article | And S&P too. Article
> Wachovia shares hit new low. Article

Industry News:
> Primer on SIVs. Article
> Good sign: European high-yield market revives. Article
> Investment bank stock under pressure. Article
> Glitch for NYSE Euronext. Article
> More on China parallels with Japan of yesteryear. Article

Regulatory News:
> CFTC wants more oversight of exchanges. Article

And Finally... Fuh-get-about-it! Corruption hurting business in New Jersey? Article

State-owned China banks on the rise?

Thu, 18 Oct 2007 06:59:54 -0400

There was a time when Japanese banks struck fear into the hearts of U.S. competitors. That era passed when the Japanese bubble popped. Is the same happening now with Chinese banks? Most of the news has been about the likes of Citigroup and Bank of America yearning to set up shop in the mainland. But Industrial and Commercial Bank of China, a state-owned bank, is making a bid toward becoming a global force. According to the AP, it is seeking approval to open a U.S. branch, to go with the ones it operates everywhere from Macau to the Middle East to Russia. These banks are certainly bent on global growth. But then again aren't we all? This may alarm some, but others will see it as another predictable instance of globalization.

For more:
- here's an AP update

Related articles:
- China bank to bid for Bear Stearns
- More on China and Blackstone

Read more on: Citigroup l Bank of America

China bank to bid for Bear Stearns

Wed, 17 Oct 2007 06:59:55 -0400

No one was surprised at the recent news that Bear Stearns was looking for an investor to buy up to 20 percent of the bank. No one should be all that surprised that China Citic Bank, owned by China Citic Group, is vying to be that investor.

According to the AP, Citic Group is "a multibillion-dollar trust controlled by China's cabinet, with investments in a wide range of industries, including airlines and banks." This would count as another investment by a sovereign wealth entity in a top Wall Street institution. The best example is the investment by China into Blackstone Group. Other funds have bought into stock exchanges around the world. The Qatar Investment Authority, for example, bought a 30 percent stake in the London Stock Exchange. Apollo Management was also rumored recently to be in talks to sell a stake to an Abu Dhabi government affiliate.

For more:
- here's the AP brief

Related articles:
- Blackstone IPO terms set
- The globalization of savings continues
- Apollo mulls a private placement

ALSO NOTED: Prudential sues State Street over bond funds; Goldman Sachs, Morgan Stanley tops in Asia; and much more...

Tue, 09 Oct 2007 06:59:50 -0400

Company News:
> Prudential sues State Street over bond funds. Article
> Goldman Sachs, Morgan Stanley tops in Asia. Article
> UBS targets Chicago. Article

Industry News:
> Another big China IPO. Article

Regulatory News:
> SEC looking at bank writedowns. Article

And Finally...Most powerful women by decade. Article

Emerging market private equity booming?

Wed, 03 Oct 2007 06:59:56 -0400

Private equity investing has become global. Witness the investment by China in the Blackstone group and the Carlyle Group. The international fund raising effort, despite a difficult climate, is going strong. Morgan Stanley just announced it had lined up commitments for a $1.5 billion Asia fund, its third such fund. According to Financial News Online, private equity funds that invest mainly in emerging markets raised $29 billion as of the end of August, compared with $33.2 billion in all of 2006. So we're on track for another record. Of course this amount is a mere pittance compared with domestic funds, where fund raising has not fallen off. So there is little chance that overseas gains will offset whatever losses the industry racks up here over the next few years. Still, I would expect more funds to sell stakes to overseas entities.

For more:
- here's the Financial News Online article
- here's more on Morgan Stanley

Read more on: The Blackstone Group l The Carlyle Group l Morgan Stanley l private equity l China

SPOTLIGHT: Private Equity Market in China

Mon, 01 Oct 2007 06:59:52 -0400

Over the last year and half, 11 renminbi-denominated private equity funds have been approved in China. The total value is just over $10 billion but that could grow. The deal landscape may change for players like TPG. Article