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.
IMF to Raise Global Growth Forecast; CIC Investing $1 Billion in Oaktree; Yen Highest in Eight Months; Bombardier JV Wins China Contract; World Bank President Wary of Fed's Power; Trichet: Don't Stop Stimulating; Germany Election Sparks Stock Rally; India Auctioning Billions of Oil and Gas Areas
The International Monetary Fund (IMF) will bump up its global growth forecast in the next few days, Reuters reported. According to Murilo Portugal, the fund's deputy managing director, the IMF will raise its forecast for 2010 global growth from 2.5% to 3.0%. The change will account for a faster recovery than anticipated in major economies.
China Investment Corp., China's sovereign-wealth fund, said it will invest about $1 billion in Oaktree Capital Management LP, The Wall Street Journal reported. Oaktree, a Los Angeles-based asset management firm that oversees more than $60 billion in assets, was one of the nine firms picked by the U.S. Treasury Department to help the government get rid of toxic assets. Oaktree is expected to invest the CIC's money in distressed debt and other fixed-income assets, sources told The Journal.
The yen yesterday (Monday) reached an eight-month high against the dollar amid speculation that Japan's government will allow its currency to appreciate, Bloomberg News reported. "The Japanese finance minister talked down the risk of currency intervention, and that is a red flag to the bulls," Paul Robson, a currency strategist at Royal Bank of Scotland Group PLC (NYSE ADR: RBS) in London, told Bloomberg. "I expect the yen to move stronger against the dollar."
Shares of Bombardier, Inc. yesterday (Monday) rallied after the aircraft and rail manufacturer said its joint venture in China had been selected to supply 80 trains for China's growing high-speed railroad network, MarketWatch reported. Bombardier said the contract from the Chinese government is worth about $4 billion, and it will receive about half of that.
World Bank President Robert Zoellick said he is wary about the power attained by the U.S. Federal Reserve during the financial crisis, as well as the future of the dollar, Reuters reported. "It should not be a surprise that American democracy is hesitating about authorizing the Fed to supervise systemic banking as well as operating monetary policy, adding to its power," Zoellick said in a speech prepared for delivery at Johns Hopkins University's School of Advanced International Studies.
Jean-Claude Trichet, European Central Bank (ECB) president, said emergency economic measures shouldn't be geared down as the global economy begins emerging from the financial crisis, Bloomberg reported. "It would be premature to declare the crisis over," Trichet told the European Parliament in Brussels. "Now is not the time to exit. However, at some point in time an exit strategy will have to be implemented. The ECB has an exit strategy and stands ready to put it into action when the time comes."
Germany's stock market, particularly its nuclear power plant operators, rose after Chancellor Angela Merkel's conservative CDU/CSU bloc won 33.8% of the vote in Sunday's election, MarketWatch reported. The pro-business Free Democratic Party captured 14.6% of the vote, leading investors to believe a center-right coalition will be formed.
India's largest auction of oil and gas areas may attract as much as $5 billion in work commitments from energy titans, Bloomberg reported. According to V.K. Sibal, India's oil regulator, explorers may bid for more than 90% of the 70 areas being auctioned. India is trying to cut its oil imports, and may soon shift to an open acreage policy for awarding oil and gas areas, one where explorers would bid on areas after looking at seismic data, Sibal said.