Sterlite Buys Asarco’s U.S. Copper Mines; Petrobras Award Tupi Rig Contracts; Russian Inflation to Hit 14% in 2008; South Korean Economy Outpaces Estimates; Toyota Sees U.S. Consumers Braking; Manufacturing Inches Up; NetSuite Snaps Up OpenAir
India’s largest copper and zinc producer, Sterlite Industries Ltd. (ADR:SLT), agreed to buy assets of recently bankrupted miner Asarco LLC for $2.6 billion, Bloomberg reported. Asarco has three copper mines, a smelter and refinery Asarco is the third-largest copper maker in the U.S., producing 235,000 tons in 2007, and Sterlite said it plans to make it the largest.
Petroleo Brasileiro SA (ADR:PBR), better known as Petrobras, doled out six-year deepwater oil rigging contracts to Scorpion Offshore Ltd. and Sevan Marine ASA. The rigs are for Petrobras’ November discover of the Tupi field, which hold between 5 million and 8 million barrels of oil, but underneath as much as 3,000 meters of water, Bloomberg reported.
Russia's inflation rate could reach 14% by the end of the year, the head of the International Monetary Fund said yesterday (Monday). “Inflationary pressures are likely to remain high,” Poul Thomsen said in a statement. “Absent policy changes aimed at slowing growth in demand, we expect inflation to be running at about 14% by end-2008.”
South Korea has raised its first-quarter growth estimate from 0.7% to 0.8% from the previous quarter, TheAssociated Press reported. The economy grew 5.8% in the January-March quarter year-over-year, beating the April estimate of 5.7%, the Bank of Korea said on its web site. South Korea, Asia’s fourth largest economy, expanded by 5% in 2007.
Toyota Motor Corp. (ADR: TM) may downgrade its U.S. sales forecast to account for a bleak outlook for pick-up trucks and other big vehicles, the Financial Times reported yesterday (Monday). Katsuaki Watanabe, Toyota’s president, told the FT that while the company hoped to make up for the lost truck and sport utility vehicle sales by selling more smaller cars including its Prius hybrid, he was “not sure” this would be enough to offset the drop in large vehicle sales. The company, which is America’s second top-selling carmaker and the global sales leader in the first quarter, originally planned to sell just over 2.64 million vehicles in the U.S. market this year.
Standard & Poor’s did the financial services sector no favors yesterday (Monday) when it cut the credit ratings on a number of major U.S. securities firms including Lehman Brothers Inc. (LEH), Merrill Lynch & Co. Inc. (MER), and Morgan Stanley (MS). “The outlooks on the large financial institutions sector in the U.S. are now predominantly negative,” the credit rating agency said in a statement. Financial institutions have already written down over $350 billion in subprime mortgage related losses globally and S&P said they face more write-offs, Reuters reported.
The Institute for Supply Management’s Manufacturing Survey increased 1.0 to 49.6 in May, its highest level since January. The bulk of the increase was due to strong exports fueled by a weak dollar. “Manufacturing may not be growing, but it is not falling apart either,” Joel Naroff, president and chief economist of Naroff Economic Advisors Inc.said yesterday (Monday) in a note to clients.
Business software firm NetSuite Inc. (N) announced yesterday (Monday) that it intends to purchase privately held OpenAir Inc. for $26 million in cash, Forbes reported. The acquisition could cause a 1-cent to 2-cent quarterly loss in the short-term, but should help NetSuite to speed development of products aimed at professional service companies.