news blog from Essie

October 17, 2011 at 9:18pm

UPDATE 1-New World Development says plans $1.6 bln rights issue

* Rights issue price at more than 30 pct discount to previous close (Add details)HONG KONG, Oct 18 (Reuters) - Property group New World Development Co Ltd and its unit New World China Land Ltd plan to raise up to a total of $2.15 billion via rights issues to fund development and investment of property projects and for working capital.In a filing with the Hong Kong exchange on Tuesday, New World Development said it planned to raise up to HK$12.34 billion ($1.6 billion) via a rights issue of up to 2.17 billion rights shares on the basis of one rights share for every two shares held at HK$5.68 each.The issue price represented a discount of 36.9 percent to the previous close, it said.New World Development, which also is involved in infrastructure, hotel operation, department store operation, services, telecommunications and technology, said the net proceeds of the rights issue will strengthen its capital base and enhance its financial resilience.The company said part of the proceeds would be used to fund subscriptions of the rights issue of its New World China Land Ltd unit, which plans to raise up to HK$4.35 billion.New World China plans to issue up to 2.92 billion rights shares on the basis of one rights share for every two shares held at HK$1.49 each, representing a 33.5 percent discount to the previous close.Shares of New World Development have fallen 38.4 percent so far this year to end at HK$9 on Monday, while New World China Land have lost 23.3 percent so far to HK$2.24. That compares with a 18.1 percent fall in benchmark Hang Seng Index so far this year.

October 13, 2011 at 3:01am

Tokio Marine Capital eyeing $906 mln sale of drugmaker-sources

Tokyo-based Showa Yakuhin Kako is 50 percent owned by Tokio Marine Capital. Polaris Capital Group, another Japanese buyout firm, owns 23 percent, and a private equity arm of Pine Bridge Investments has another 23 percent; these two also plan to sell their stakes, the people said.Officials at Tokio Marine Capital declined to comment.The sale comes as Tokio Marine Capital raises money for a new fund. The firm said in August it had obtained 10 billion yen from investors in Japan and overseas and was continuing to raise money.

October 12, 2011 at 11:31am

Europe highlights urgency for new U.S. swaps rules

* Investors embrace clearing in boon for CME, LCH, ICE* CFTC inundated with thousands of industry lettersBy Jonathan Spicer and Ann SaphirCHICAGO, Oct 12 (Reuters) - Europe’s debt problems are increasing anxiety about the vulnerability of global markets because too many new U.S. derivatives rules intended to prevent a repeat of the 2008 crisis have yet to be defined.Investors have responded in recent months by embracing the clearing of swaps, essentially beating regulators to the punch, to protect themselves in volatile markets.Clearing allows investors to avoid the credit risk of trading with banks that appear newly vulnerable amid Europe’s debt crisis. In 2008-2009 banks’ worries about the health of their trading partners resulted in a widespread freezing of credit, which nearly sank the global economy.Executives at a futures industry conference here urged regulators to speedily adopt rules for trading and clearing in the over-the-counter swaps market. The longer we wait, they said, the more dangerous it becomes.”If we were the five senior staff on the Titanic, I’d like to think we wouldn’t be standing back, looking at the safety boats and thinking about whether we can design them better,” CME Group Inc chief executive Craig Donohue said at the Futures Industry Association.”We’d be thinking about how to get people on the boats and get them to safety, and maybe we can improve on that in the future,” he said.It has been three years since a U.S. financial crisis sent the global economy into a tailspin, and more than a year since lawmakers passed a bill designed to prevent a new crisis from taking down the financial system in similar fashion. Regulators are scrambling to finish writing the rules.Now, with Europe’s debt crisis showing some of the same signs as the United States’ meltdown, investors have rushed into clearing credit and interest rate swaps, a boon in volatile markets for companies like CME and Europe’s LCH.Clearnet.The Commodity Futures Trading Commission, which must make final about 50 new rules under the Dodd-Frank law, has struggled to keep up with the rule-making process, having finished only about a dozen of the rules.Several key rules, including capital and margin requirements, will be pushed into the first quarter of 2012, putting the agency well behind a July 2011 deadline Congress had set.Regulators have benefited from public meetings that provided input for the rules-writing, said CFTC Chairman Gary Gensler. “But the American public needs us to move forward and get the job done and finish these rules,” he told reporters.”The crisis emanating from Europe reminds us that the public is still unprotected.“‘FISH OR CUT BAIT’Investor appetite for CME’s cleared swaps soared last month, with trading in credit default and interest rate swaps rising to $42 billion in September, from less than $1 billion about a month earlier.CME’s futures business has also benefited, as swaps users seek safer alternatives to their bilateral dealings with banks. Asset managers are increasingly shifting their trades to CME, doubling their use of CME’s short-term interest rate futures in the past year for instance, and trading in currency futures rose to records in September as investors sought safety through clearing.”The trend is there,” said Jeffrey Sprecher, chief executive of IntercontinentalExchange Inc , which began clearing CDS in early 2009 and saw an 11 percent jump in credit-related revenues from the second to the third quarter of this year.”It’s obviously a very complicated global environment right now for global exchange risk, and you are seeing a migration towards futures more than the OTC market.”Despite delays by the CFTC and other agencies in defining the Dodd-Frank rules, the expectation that they will eventually come into force has allowed investors to begin clearing products they never had before.In a global market of some $480 trillion in clearable interest rate swaps, an estimated $180 trillion has yet to be cleared.Yet some, including Donohue and Sprecher, cautioned in interviews that it was important the CFTC takes the time to sift through the thousands of comment letters and get the rules right. “I think it’s well intentioned,” Sprecher said.There is also the real threat of lawsuits from the industry once the rules — from limits on excessive speculation to real-time reporting of trades to end-user exemptions — are formally adopted.But based on interviews with several traders and industry executives, the euro zone crisis is giving a new urgency to the need to define how exactly regulators want to safeguard the market.”Let’s fish or cut bait,” said Chris Hehmeyer, chief executive of Chicago-based proprietary trading firm HTG Capital Partners. “It’s time for them to go ahead and get the definitions out there so that we can get on with it.”