Under The Radar News - Friday

Too Much of a Good Thing? The U.S. Senate has ordered an inquiry into so-called Sovereign Wealth Funds run by governments in Asia and the Middle East, after major U.S. and international banks such as Morgan Stanley (MS), Merrill Lynch (MER), Bear Stearns (BSC), Citigroup (C) and UBS AG (UBS) have received investments of about $35B over the past few weeks.

Help! UBS (UBS) said it can't predict the final impact of the subprime crisis, but said in a letter to shareholders Friday a capital injection would strengthen its position. It's looking for shareholder approval of a stake sale of 9% to the Singapore government and another 1.5% to a Middle East fund.

Chinese telecom restructuring approved? Citigroup (C) research quotes unconfirmed reports that the Chinese telecom industry restructuring proposal has been approved by senior government. Sina news reports that China Unicom (CHU) will merge with China Netcom (CN), and China Mobile (CHL) is going to take over Railcom. Thus, after the restructuring, there will be three primary telecom operators, China Mobile, China Telecom and Unicom. Citi says everyone should benefit from the move.

Downgrading Uncle Sam. The U.S. could lose its AAA credit rating within a decade unless it takes radical action to curb soaring healthcare and social security spending, Moody's warned Thursday. A downgrade of the world's financial "anchor" would have serious repercussions. The warning may put pressure on presidential would-be's to sharpen their views on welfare spending.

JPMorgan wants WaMu? A CNBC commentator says there are rumors that JP Morgan (JPM) is looking to acquire a regional bank, and has had very preliminary talks with WaMu (WM). Other possibilities include Suntrust (STI) and PNC Bank (PNC). Commentator believes the deal could happen over the next couple months. WaMu shares shot up 6% in pre-market.

Yahoo plays for eBay. Sources say Yahoo! (YHOO) has bid 1.76 of its own shares ($40-$41/share) for eBay (EBAY). Microsoft (MSFT) is also said to be bidding.

Microsoft/Logitech tie up hard to justify. Sources say strategic obstacles and antitrust reasons would make a Microsoft (MSFT) bid for Logitech (LOGI) "hard to justify." And because both are prominent PC peripheral makers, a merger would "raise issues."

$100 oil cheap? $100 crude oil is still "pretty cheap" because global oil demand shows no signs of abating and new energy sources are in short supply, oil analyst Matt Simmons says. Nor will a recession tame appetites: "Demand is far more durable than anyone ever thought." Simmons is an outspoken proponents of the "peak oil" theory.

Drivers prefer Prius. Americans bought more Toyota (TM) Prius hybrid gas/electric hatchbacks in 2007 than Ford (F) Explorers, the top-selling SUV for more than a decade. Americans still love powerful gas-guzzlers, but a slowing economy and high fuel prices are forcing buyers to think twice.

Credit Suisse wants into China. Credit Suisse (CS) wants form a JV with Chinese brokerage house Founder Securities. A deal would give CS a platform to engage in securities underwriting and financial services in the world's fastest-growing major economy.

AMD's debugs have bugs. A French website says that the "debugged" versions of AMD's (AMD) new Phenom B3 are still buggy. A "new spin" is thus necessary, which could push back Phenom to May, it says.

Gates (almost) badmouths Vista. In an interview with Gizmodo, Microsoft (MSFT) CEO Bill Gates was asked if he thought there any Microsoft product that "could have had more polish." "Ask me after we have shipped the next version of Windows,” he said. It seems Gates doesn't want to badmouth the OS yet, so as not to undermine its flagging sales.

Ackman bets on Borders. Activist shareholder Bill Ackman boosted his stake in Borders Group (BGP) to 22% from 17% in November, even as shares sit near 52-week lows. Investors have speculated Ackman might be angling for a merger between Borders and Barnes & Noble (BKS), in which Ackman also owns a stake.

Google dumps Incredimail. Google (GOOG) told Incredimail (MAIL) it is stopping its AdSense partnership with the company. AdSense powered search revenues made a significant contribution to the company's 2006 and 2007 results, it said. MAIL said it is "clarifying the matter with Google and simultaneously exploring alternative relationships."

Hasbro calls for global toy testing standards. Hasbro (HAS) chairman Alan Hassenfeld is urging the U.S., EU and other regulators to enforce global toy safety rules that would force both toy companies and suppliers to use different testing methods and manufacturing procedures. HAS was not involved in any of the toy recalls over the summer.

Shareholders want Nexen sale. Hedge fund managers want energy company Nexen (NXY) to break up or sell itself. Analysts say Nexen is trading at a 20% discount to its peers.

Aquila/Great Plains merger in jeopardy. There is growing skepticism over Aquila's (ILA) merger with Great Plains (GXP) and Black Hills (BKH). Great Plains is looking to revise its acquisition plan to address concerns over synergies and benefits. One lawyer says that the Missouri Public Service Commission may not even approve the deal.

Ford wants help to reopen plant. Ford (F) wants the Canadian federal and Ontario governments to pitch in $60M of a $300M revival plan of a previously closed Windsor, ON plant.

Layoffs at Magna. According to union officials, Magna International's (MGA) New Process Gear will lay off more than 1,650 workers over the next few weeks.

Teva to sell unit. Teva Pharmaceutical (TEVA) has decided its Abic Biological Laboratories unit is no longer strategic, and is seeking a buyer for the unit in a deal that could be worth tens of millions of dollars.

Comments

[granger:]

Great information as always. Thank you.

2008 Jan 12 09:03 AM

[kkin365:]

What's wrong with sovereign-wealth funds? When USA was buying up foreign banks, directly or indirectly funded by the government, no one raised any issues. Wake up. Let's have a level playing field.

2008 Jan 12 09:21 AM

[ericinNE:]

Level playing fields are great and all, but given the somewhat suspect (moral/ethical) value sytems of many of the sovereign-wealth sources, I'd prefer the level playing field that favors the U.S. just a little more than of late. I don't really see the U.S. striving to instigate the tenets of tyranny, through economic manipulation, or any other means. But I do see that as a possible consequence of many near/mid/far east capital injection sources.

2008 Jan 13 11:17 PM