US Fund Third Point buys stake in Japan's Seven & I Holdings

Daniel S. Loeb, Founder, Third Point LLC. 

PHOTO: BLOOMBERG

NOV 2, 20153:51 PM

[TOKYO] US hedge fund Third Point, which has a reputation for aggressively pushing for change at target firms including Sony, has bought a stake in the Japanese operator of 7-Eleven convenience stores, it has said in a letter to investors.

The letter, written in Japanese, was unclear how much of an investment the fund set up by billionaire Daniel Loeb made and when.

But it said that Seven & I Holdings was undervalued compared to global competitors, and urged its chief executive to "spin off Ito Yokado supermarkets and rebuild it as an independent firm", referring to the firm's grocery chain.

"The future of Seven & I Holdings is an important test to show the success of Japan's reform in corporate governance," it said in the letter, dated Friday.

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Competition among "konbini" stores - a Japanese abbreviation of the English word convenience - is fierce, with two of the biggest players, Family Mart and Uny Group, announcing a merger aimed at challenging 7-Eleven last month.

A staggering 1.5 billion people pass through the well-stocked, brightly lit stores every month in Japan, with some 55,000 outlets throughout the country, including more than 7,000 in Tokyo alone.

Late last year, Mr Loeb said Third Point had sold its stake in Sony after failing to push the company into spinning off part of its US-based entertainment division - which includes a Hollywood movie studio and music label - in a bid to boost its bottom line.

The Sony spin-off call was widely portrayed as a clash of corporate cultures, pitting a hard-charging foreign billionaire against one of the bedrocks of Japan's staid corporate sector.

Unlike Europe and the United States, shareholder activism is not firmly entrenched in Japan, and many local firms are suspicious of foreign private equity firms and dig in to resist their advances.

Third Point appeared undeterred by the Sony rebuff, however, revealing in February an investment in Japanese robot maker Fanuc.

It said the technology company was sitting on $8.5 billion in cash and had no debt, "which is hard to understand given the company's business quality, growth opportunities and low capital intensity".

Third Point pointed to Fanuc's "focus on producing only a limited number of products that are technically superior with the lowest possible cost structure".

AFP

    
 

Mubadala, Temasek sale of Abu Dhabi finance firm said to stall

NOV 2, 20154:47 PM

[DUBAI] Mubadala Development Co and Singapore's Temasek Holdings's sale of Dunia Finance LLC has stalled after bids for the Abu Dhabi consumer finance firm failed to meet shareholder expectations, according to four people with knowledge of the matter.

Some interested parties have withdrawn from the sale process, the people said, asking not to be identified as the matter is private. The company may instead consider an initial public offering next year, one of the people said. Shareholders were seeking about four to five times book value for the company, valuing it at as much as US$1 billion, people with knowledge of the matter said in July.

Dubai's Majid Al Futtaim Holding LLC was among those interested in Dunia, chief executive officer Alain Bejjani said in an interview last month. Morgan Stanley was hired to explore a sale of the business, people familiar also said in July.

"Given the strength of the business and growth potential, the management and shareholders continue to explore a number of strategic options for Dunia," the company said in an e-mailed response to questions. Temasek declined to comment, while Mubadala didn't respond to requests for comment.

Dunia is run by former Citigroup banker Rajeev Kakar, who is also regional chief executive officer of the central and Eastern Europe, Middle East and Africa region for Fullerton. The firm's profit rose 61 per cent to 191 million dirhams (S$72.9 million) in 2014 and it had assets of 1.6 billion dirhams, the company said in March. It was established in 2008 and offers financial products including loans, credit cards, deposits for non-individual customers, and finance for small businesses, according to its website.

BLOOMBERG

    
 

Dubai's DP World becomes sole owner of Southampton container terminal: statement

      

NOV 2, 20158:54 PM

[DUBAI] Dubai-listed ports operator DP World has became sole owner of the company which operates Southampton container terminal after it bought the remaining 49 per cent stake held by Associated British Ports (ABP), the company said on Monday.

DP World also said it extended the license agreement for DP World Southampton for another 25 years until 2047.

The company did not disclose how much it paid for ABP's stake.

Associated British Ports is Britain's leading port operator, with ports in England, Scotland and Wales.

REUTERS

China completes production of own passenger plane

China's first big passenger plane rolled off the assembly line on Monday as the Asian giant seeks to develop its own aviation sector and challenge foreign industry giants for prestige and market share. 

PHOTO: XINHUA

NOV 2, 201511:25 AM

[SHANGHAI] China's first big passenger plane rolled off the assembly line on Monday as the Asian giant seeks to develop its own aviation sector and challenge foreign industry giants for prestige and market share.

The C919, a narrow-body jet which can seat 168 passengers, has been under production at a facility in commercial hub Shanghai for over a year, as workers assembled components under the guidance of Commercial Aircraft Corp. of China (COMAC).

For China, the plane represents years of efforts in a state-mandated drive to reduce dependence on European consortium Airbus and Boeing of the United States, and even compete against them.

"The roll out of the first C919 aircraft marks a significant milestone in the development of China's first indigenous aircraft," COMAC chairman Jin Zhuanglong told an audience of government and industry officials.

A small truck towed the 39-metre long plane - painted white with a green tail - out of a cavernous building decorated with an enormous Chinese flag into the sunlight as project workers marched alongside, an AFP journalist saw.

But the aircraft, which has a range of up to 5,555km, will not make its first test flight this year as originally scheduled, Jin said, with the maiden voyage planned for 2016.

The China Daily newspaper has reported it could even be put back to 2017.

Although the C919 is made in China, foreign firms are playing key roles by supplying systems as well as the engines, which are made by CFM International, a joint venture between GE of the US and France's Safran.

Spending on the C919 has not been revealed. Last month, the Export-Import Bank of China said it would provide state-owned COMAC with US$7.9 billion in financing for its aircraft projects.

The company already has orders for 517 of its C919 planes, according to a COMAC statement, almost all of them from domestic buyers. Among foreign customers, Thailand's City Airways has ordered 10, according to an announcement last month.

COMAC has already developed a smaller regional jet, the ARJ, in a project which is years behind schedule.

The 78-90 seat ARJ is still undergoing test flights and lacks the crucial certification by the US Federal Aviation Administration, enabling it to fly in US skies.

The Chinese company also plans a wide body plane, the C929, in cooperation with Russia's United Aircraft Corp., and speculation is mounting China will create a new aero-engine entity to try to produce the powerful jets needed for large civil aircraft.

AFP

    
 

Adele breaks record with million song downloads 

Adele on Monday shattered a record with her long-awaited song Hello, which became the first track downloaded more than one million times in a week in the United States. 

PHOTO: REUTERS

NOV 3, 20156:54 AM

[NEW YORK] Adele on Monday shattered a record with her long-awaited song Hello, which became the first track downloaded more than one million times in a week in the United States.

Hello, a piano ballad that is the debut single from the British pop star's first album in nearly five years, opened at number one for the week through Thursday on the Billboard Hot 100 singles chart, which monitors sales, streaming and radio play.

For digital sales only, Hello was downloaded 1.1 million times, far outpacing the previous record holder, rapper Flo Rida's New Wave-sampling Right Round which sold 636,000 copies in a week in early 2009, tracking service Nielsen Music said.

Hello also broke by a wide margin the feat for streaming. The song was played 20.4 million times via on-demand subscription services, more than twice the record set two months ago by Canadian pop singer Justin Bieber for What Do You Mean?

Music industry watchers are expecting Adele's upcoming album 25, which comes out on November 20, to be the year's biggest release and say it may even rival Taylor Swift's blockbuster 1989 album from last year.

Adele's last album, 21, which featured the heartache song Someone Like You, was the top-seller in the United States for two years in a row and the biggest album by a comfortable margin in Britain in the 21st century.

Adele is planning to promote the album in the United States with a recorded-for-television concert at New York's Radio City Music Hall and an appearance on Saturday Night Live.

Hello has amassed nearly 200 million views on YouTube, becoming the fastest video to hit the 100 million mark with the exception of Gentlemen by South Korean pop singer Psy, his follow-up to the most-viewed-ever YouTube clip Gangnam Style.

AFP

      

Oil prices dip on Chinese, Russian data

Oil prices dropped on Monday after data showed China's manufacturing output continued to contract and Russian oil production hit a new record high. 

PHOTO: REUTERS

NOV 3, 20156:43 AM

[NEW YORK] Oil prices dropped on Monday after data showed China's manufacturing output continued to contract and Russian oil production hit a new record high.

The weakening outlook for demand in China, the world's largest energy consumer, and the increased Russian production added to worries about the global oil oversupply that have pushed prices lower by more than 50 per cent since mid-2014.

After three straight sessions of gains last week, US benchmark West Texas Intermediate for December closed at US$46.14 a barrel on the New York Mercantile Exchange, down 45 cents from Friday's settlement.

Brent North Sea crude for delivery in December, the global oil benchmark, fell 77 cents to US$48.79 in London.

"It's just an overall oversupplied market with demand that is not really enough to get people excited," said Kyle Cooper at IAF Advisors.

China's official purchasing managers index for the manufacturing sector showed activity shrank in October for the third straight month.

"The Chinese PMI disappointed only slightly but that's enough to renew the bearish sentiment around the oil market," said John Kilduff at Again Capital.

Tim Evans of Citi Futures said there was "no urgency" to the selling Monday despite the China and Russia news or Iran's moving closer to the lifting of international sanctions, which have hobbled its exports.

"A slowing economy in China and Iranian nuclear developments are apparently no longer news, at least as far as the oil market is concerned," Evans said.

"We see a risky complacency regarding the ongoing physical surplus." Russian oil production broke a post-Soviet record in October, climbing to 10.78 million barrels per day, according to Bloomberg News.

Although Saudi Arabia produced less last month, at around 10.1 million barrels a day, it remains the world's biggest exporter of crude.

AFP

    
 

AKP's Turkey election win reduces near-term uncertainty: Moody's

NOV 2, 20156:26 PM

[ISTANBUL] Ratings agency Moody's said on Monday the AK Party's Turkish election win reduced near-term political uncertainty but the impact on sovereign credit quality will depend on its strategy to combat low growth, high inflation and volatile capital flows.

In an emailed statement, Moody's said banks in Turkey still face elevated risk aversion towards emerging markets and elevated geopolitical risks despite the lowering in political uncertainty.

REUTERS

China Environment may have to raise cash if customers cannot pay on time

By

Kenneth Limkenlim@sph.com.sg@KennethLimBT

NOV 2, 20158:34 PM

China Environment may have to raise additional capital if its customers fail to pay up on time amid current conditions, the supplier of industrial gas cleaning equipment said on Monday.

The credit environment for China Environment's customers is currently tight, and work progression is slow, the company said after the market closed.

"Collection of the group's trade receivables from its customers may be slow or not on time as and when they fall due, and the group may require to seek fresh funds either from existing shareholders, new private placements, or other debt financing methods such as issue of preference shares, notes or bonds," the company said.

The announcement came a week after the company said a wholly owned subsidiary in China faced loan repayment demands from a branch of Citic Bank. China Environment said on Monday that working capital after a proposed S$3.2 million share placement will be sufficient to meet present requirements.

China Environment shares closed at 9.5 Singapore cents on Monday, unchanged from the previous session.