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With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Banks Considering Bailing Out FDIC; Potash Corp. Lowers Guidance; Sources: Ford Building Third China Plant; CIC Nabs 15% Stake in Noble; Sun Losing Money as EU Regulators Deliberate; Singapore Gov't Cashes in Citi Stake; Citi Upgrades Macy's to Buy; July Home Prices Up 0.3%
- Senior regulators told The New York Times that they are considering a plan where the nation's healthiest banks lend billions to prop up The Federal Deposit Insurance Corporation (FDIC), the insurance fun that protects bank depositors. The FDIC, which is low on funds, has permission to tap a $100 billion credit line from the U.S. Treasury but sources said Sheila Bair, chairwoman of the FDIC, isn't keen on borrowing from the government. "Sheila Bair would take bamboo shoots under her nails before going to [Treasury Secretary] Tim Geithner and the Treasury for help," Camden R. Fine, president of the Independent Community Bankers, told the Times.
- Potash Corp. of Saskatchewan (NYSE: POT) cut its full-year 2009 earnings guidance to between $3.25 and $3.75 a share from a range of $4 to $5 a share, simply saying there isn't as much potash in the soil around the world. "While the immediate impact has been masked by good weather and residual soil nutrient levels in markets with healthy long-term fertilization and agronomic practices, such as in the U.S. and Australia, yields for key crops in several other major growing regions are expected to be substantially below 2008 levels," the company said in a press release.
- Sources told Bloomberg News that Ford Motor Co. (NYSE: F) will build a third car manufacturing plant in China to meet the nation's growing auto demand. The new plant will be Ford's second in Chongqing, in southern China, and will have a capacity of 150,000 vehicles a year, one of the sources said. In the first eight months of the year, Ford-brand car sales in China have growth 30%, Bloomberg reported.
- China Investment Corp., the country's sovereign wealth fund, paid $850 million for a 15% stake in Noble Group Ltd., a Hong Kong-based supplier of commodities such as coal, iron ore and soybeans. CIC's stake will be in shares – new and old – bought at an 8.1% discount than the last traded price. "CIC started accelerating its overseas investment pace in the most recent three to six months, they are showing a clear direction, that is from paper assets to commodities," Zhang Zhiming, director of asset allocation research at HSBC Holdings Plc (NYSE ADR: HBC) in Hong Kong, told Bloomberg. "If they hold long-term positions in commodity assets, they need a trading house."
- Every month European regulators take to approve Oracle Corp.'s (NASDAQ: ORCL) April purchase of rival Sun Microsystems Inc. (NASDAQ: JAVA), the latter loses $100 million because customers are uncertain about its future, Oracle Chief Executive Larry Ellison said at a speaker's forum, Reuters reported. "The longer this takes, the more money Sun is going to lose," Ellison said at the Churchill Club.
- The Singapore government's investment fund reduced its share in Citigroup Inc. (NYSE: C) from more than 9% to 5%, and in the process it bagged a $1.6 billion profit. "There is clear evidence that the financial stimulus by central banks are bearing fruit," Singapore-based Roger Groebli, head of financial market analysis at LGT Capital Management, which oversees about $75 billion in assets, told Bloomberg.
- Citigroup Inc. (NYSE: C) analyst Deborah Weinswig upgraded Macy's, Inc. (NYSE: M) to buy from hold and doubled her price target on the stock to $30 – a vote of confidence in the retailer despite dour consumer confidence in the wider retail market. Weinswig said the company's "My Macy's" localization plan continues gaining traction and should lead to improved sales and margins, especially in the beginning of 2010, MarketWatch reported.
- U.S. single-family home prices rose a seasonally adjusted 0.3% in July from June, but were still down 4.2% from the year earlier, the Federal Housing Finance Agency (FHFA) said. Home prices are down 10.5% from their April 2007 peak, Reuters reported. Its monthly home price index rose to 200.1 in July from 199.4 in June. The index measures purchase prices on houses financed with mortgages sold or guaranteed by Fannie Mae (NYSE: FNM) or Freddie Mac (NYSE: FRE).