HSBC looks to sell $9.2B stake in Chinese insurer. HSBC (HBC) is in talks to sell its 15.6% holding in Ping An Insurance, China's second-largest insurer, as the U.K. bank continues its strategy of selling non-core assets. Chinese analyst Wilson Li says HSBC can reinvest the proceeds in its organic business in China and generate a better return than the Ping An stake, which is worth $9.19B.
Yahoo, Facebook in alliance talks. Yahoo (NASDAQ:YHOO) CEO Marissa Mayer and Facebook (NASDAQ:FB) COO Sheryl Sandberg have reportedly held talks about forming an alliance. The companies already work together on small projects and recently settled a patent spat, although a deepening of their relationship could be complicated by Yahoo's problematic search partnership with Microsoft (NASDAQ:MSFT).
BP to buy back up to £3.7B in shares. BP (NYSE:BP) reportedly intends to repurchase up to £3.7B ($5.9B) in shares despite last week agreeing to pay $4.5B to settle civil and criminal claims over the 2010 Gulf oil spill and possibly being liable for billions more. Still, BP, whose stock is worth about a third of its pre-spill value, is due to receive $12.3B from the sale of its stake in TNK-BP. The U.K company's shares were +2% premarket in the U.S.
Top Stock News
Cisco to buy cloud-networking firm Meraki for $1.2B. Cisco Systems (NASDAQ:CSCO) has agreed to pay $1.2B in cash and retention incentives to acquire Meraki, a startup that provides cloud-based Wi-Fi technology, switching, security and mobile device management, with a focus on mid-sized companies. Of note is that one of Meraki's investors is Google (NASDAQ:GOOG).
GM closes in on Ally Financial international ops. General Motors (NYSE:GM) will reportedly announce a $4B deal today to acquire Ally Financial's European, Latin American and Chinese assets. The allure of the move for GM is the ability for it to expand its global financing options.
Illinois Tool Works CEO David Speer dies. Illinois Tool Works (NYSE:ITW) Chairman and CEO David Speer has died of cancer at the age of 61 after going on medical leave last month to battle the disease. Acting CEO Scott Santi will replace Speer in the top job, while Acting Chairman Robert Morrison will retain the title on a permanent basis. Speer joined ITW in 1978 and became CEO in 2005.
Lowe's Q3 profit rises to $396M. Lowe's (NYSE:LOW) shares jumped 5% premarket after the retailer's Q3 net profit soared 76% to $396M, EPS of $0.35 met expectations, and revenue rose 1.9% to $12.1B and beat forecasts. A highlight is a 26 bps improvement in margins, while last year's figures include charges of $368M. Lowe's increased its FY guidance and said sales would be flat on FY 2011's $50.2B, although EPS of $1.64 would miss consensus.
ING gets more time to repay bailout, sell insurance ops. The European Commission has given ING (NYSE:ING) a two-year extension until 2015 to repay the remaining €3B of state aid the Dutch bank received in its 2008 bailout, although it will have to pay a 50% premium. ING, which received a total of €10B in its rescue, also got more time - until 2018 - to divest all of its insurance operations. The sale of the businesses were a condition of the bailout.
Government gave A123 almost $1M when it filed for Chapter 11. A123 Systems (AONE) received a $946,830 grant payment from the government on the day it filed for Chapter 11 last month. The money, which was was part of $115.8M in funds that the electric-car battery producer has received, will add fuel to criticism about the government's support of green-energy programs. What won't help is that a court has approved bonuses of up to $4.2M for 10 employees who have stayed on while A123's assets are sold.
Top Economic & Other News
White House eyes slashing $150B in tax breaks. The Obama Administration has reportedly proposed axing $150B of tax breaks over ten years as part of negotiations to avert the fiscal cliff. These include $28B for fossil fuel companies, $77B connected to inventory valuation, and $13B in low capital-gains rates for P-E funds, VC firms, and real-estate transactions.
Shadow banking industry balloons to $67T. The Shadow Banking industry, which includes money market funds and off-balance sheet investment vehicles, jumped to $67T in 2011 from $62T in 2007, the G20's Financial Stability Board (FSB) said yesterday. To mitigate "systemic risks" that the size of the industry can create, the FSB recommends new regulations such as limiting the assets that money-market funds can invest in.
PBOC to focus on convertibility. The PBOC's next step in reforming the yuan is likely to be its convertibility, Governor Zhou Xiaochuan said at the weekend. "We are moving in this direction, we need to go further, we will have some deregulation," Zhou declared. He also said the bank needs to be particularly alert to inflation as China transitions to a more market economy. "The risks of overheating are always bigger than the risks of an economic downturn," he said.
Bad loans at Spanish banks rise again. Non-performing loans held by Spanish banks increased to yet another record high of 10.7% of their outstanding portfolios in September from 10.5% in August. The bad debt increased by over €3B to €182.3B, while total loans edged up to €1.7T, or 170% of Spain's GDP.
Massachusetts provides best economic opportunity - survey. Massachusetts ranks first for economic opportunity, a survey from Harvard and Pennsylvania universities shows, while Maryland and Minnesota come in the top five. The study measures unemployment, household income and the ability of residents to increase their income. “The states that invest in their citizens...(have) better economies, which would go counter to the idea that we should strip down the size of government,” says one of the authors of the study.
In Asia, Japan +1.4% to 9153.2. Hong Kong +0.5% to 21262. China +0.1% to 2017. India +0.2% to 18339.
In Europe, at midday, London +1.2%. Paris +1.65%. Frankfurt +1.6%.
Futures at 7:00: Dow +0.5%. S&P +0.6%. Nasdaq +0.7%. Crude +2.4% to $87.95. Gold +0.5% to $1723.50.
Today's economic calendar:
10:00 Existing Home Sales
10:00 NAHB Housing Market Index
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