The Investment Blog from Advantage 'zyaada'

The Data is courtesy http://amfiindia.com (AMFI)

October turned out to be buoyant for the entire economy with retail and auto sectors reporting a 30% + uptick in sales and mutual funds also adding a neat INR 20000 Crores or $4.33 billion.

However individual fortunes were mixed as some fund houses managed to lose in Assets under management in the cracker season. UTI MF grew further by INR 3260 Crores or $720 million, and even Tata MF growing by INR 2500 Crores or $550 million. A small player like Kotak grew its corpus by INR 1350 Crores or $ 300 million. It is definitely a market whose time has come.

However Religare lost over 350 crores in AUM in the festive celebrations as it also withdrew from its AIG The newer giant Reliance at INR 116782 Crores also reported a reduction of INR 2000 crores and the growth is favoring the progressive biggies with a good corporate governance score. ICICI Prudential kept losing custom with markets withdrawing their favor after the recent turmoil in its ranks losing a miniscule but significant INR 400 crores, while its larger rival HDFC MF has taken its market share up to 12.23% growing to INR 93.300 Crores

The only other significant player in the Birla Sun Life MF grew rapidly by INR 2000 crores with the AUM of INR 65.500 crores reflecting a market share of 8.5% Ajay as head of the Financial Services business for the group has recently appeared in a a few network interviews to beef up these gains and reiterate BSL’s plan and vision in the upcoming wealth explosion in India. Fidelity MF remained between ICICI and HDFC in the rankings with INR 87000 crores or $19 billion without reporting any close ended schemes in October

UTI MF grew best in its Income funds with INR 5000 Crores adding in its Treasury Advantage plan and HDFC has grown its best performing Prudence ( Balanced ) and Top 200 ( Equity , medium risk ) schemes among others

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Dutch bank ING Group ING.AS has hired JPMorgan JPM.N to advise on the sale of INGs private banking business in Europe and Asia, which could fetch more than $1 billion, sources told Reuters on Thursday.The sale is part of INGs move to raise cash after being hit badly by the global credit crisis, which forced it into a loss in 2008 and led to the Dutch government injecting 10 billion euros into the bank.”The deal could be over a billion dollar,” said a source with direct knowledge of the deal, adding JPMorgan is advising the firm. “But its a bit early in the process.”ING declined to comment and JPMorgan was not available to comment.The Dutch bank has been working on a program to reduce risks, raise up to 8 billion euros from asset sales and exit from 10 of 48 countries where it operates.”I think it is a good sign that will give an extra buffer to ING. Secondly, in private banking, ING will never become a world leader. Strategically it makes sense to sell,” Rabo Securities analyst Cor Kluis said.Kluis said he did not expect ING to sell its Dutch private banking business, which administered 20 billion euros in assets out of the total 62 billion euros the Dutch bank had under management at the end of 2008.

via ING hires JPMorgan to sell private bank units: sources| Deals| Reuters.

Meanwhile, RBS has completed sale of the RBS Asia Pac units including ABN AMRO to StanChart and Goldman Sachs & BofA have earlier sold one third of their stakes in ICBC and China Construction Bank

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zyakaira notes: sadly, not enough people have invested in the emerging markets or even in the next slice of America in this downturn..don’t they want to buy cheap anymore?

Stock markets rewarded companies such as Johnson & Johnson JNJ.N and Cisco CSCO.O who were brave enough to make acquisitions in the months after Lehman Brothers collapse, a study released on Monday showed.

Although firms who made purchases worth $100 million or more suffered an average 25.5 percent fall in their stock price, they outperformed the wider market by 6.3 percentage points, the Towers Perrin/Cass Business School research found.

Global mergers and acquisitions M&A plunged 40 percent in the first half of 2009 to $941 billion, as shrinking economies, volatile markets and scarce debt hammered corporate confidence. The World Bank forecasts the global economy will shrink 2.9 percent this year.”Companies with M&A in mind should be emboldened by our analysis: fortune favors the brave,” the studys authors, led by Marco Boschetti, wrote.

“Fears that M&A is riskier post-Lehman seem to be misplaced.”Repeat acquirers did even better, on average outperforming the MSCI World Index by 8.1 percent.Among them, Cisco Systems Inc, Johnson & Johnson, Abbott Laboratories ABT.N, BG Group Plc BG.L, and Symantec Corp SYMC.O all outperformed world, regional and sector indexes.However, other multiple acquirers such as Eli Lilly and Co LLY.N, Medtronic Inc MDT.N and Banco Santander SA SAN.MC underperformed on some or all measures.

via Brave post-Lehman M&A rewarded by market -study| Deals| Reuters.

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Manhattan apartment prices fell sharply during the second quarter of 2009, as the limited number of deals struck during the darkest months of the economic downturn began to close, according to a series of market reports released Wednesday.

The number of closings fell more than 50 percent, and prices in some categories were reported down as much as 25 percent, compared with the same quarter in 2008. Sale prices were also down from those reported in the first quarter of 2009.

One report, by Brown Harris Stevens and Halstead Property, put the average price of a Manhattan apartment in the second quarter at $1.26 million, a decline of 24 percent from the same period in 2008, and 16 percent below the previous quarter. It put the median sale price at $795,000, 19 percent below the figure in the first quarter of 2008.

Another report, by Prudential Douglas Elliman, found that the median sale price on the resale of existing apartments was down by 25.6 percent from a year earlier. The report, prepared by Jonathan J. Miller, president of Miller Samuel Inc., an appraisal firm, said that the number of sales was down 50.3 percent compared with the same period in 2008.

The new figures on closed sales confirm the downward trajectory in the Manhattan market that brokers have been reporting for many months. But the report was issued at a time when b

via Sharp Price Drops in Manhattan Apartments – NYTimes.com.

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Today’s summary from a newshound recmmended on linkedin.com ( the story was recommended.. )

Remember state-owned German lender KfW Bankengruppe ?

Well, back in September last year, the bank was busy cutting down its exposure to Lehman Brothers, but then someone executed an erroneous (and unstoppable) automated currency swap valued at $426m with Lehman on the very day it went belly up! The German government was up in arms and the bank was the object of ridicule at home, with Germany’s biggest-circulation newspaper, Bild, splashing a ‘Germany’s Dumbest Bank’ headline over its front pages. The upshot was that two of the bank’s management board members were suspended pending an investigation, and one, Peter Fleischer, ended up getting fired and taking the bank to court in Frankfurt.

And guess what ? Fleischer won the case. The bank was ordered to pay him 2 years salary, bonuses and interest. Nice.

FT Alphaville reports that shares in Commerzbank rose over 18% Wednesday, after the European Central Bank approved Germany’s ‘bad bank’ plan, which will allow participants to offload toxic assets from their balance sheets and pretend that they don’t exist

The Financial Times reports that Bank of America was hoping to raise about $3bn from the sale of asset management unit Columbia Management, but bids are described as ‘lukewarm’, and the unit may end up on

via World’s ‘Dumbest’ Bank Gets Caught Again :: Business News :: Here Is The City News :: The Latest Business & Financial Markets News And Views.

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YOUR FAVE ROCK NOW AVAILABLE AT THE SUPER MARKET – Off the SHELF?

Is Tesco mulling a bid for Britain’s state-owned lender Northern Rock?The Times of London reported that the British supermarket chain had emerged as a potential bidder for Northern Rock, which the U.K. government is seeking to unload ahead a general election.However, Reuters, citing an industry source, said Tesco, Britain’s biggest retailer, is unlikely to be interested in a bid for the nationalized bank.Potential bidders, including Tesco, Richard Branson’s Virgin Group and private equity funds, have shown interest in Northern Rock, Britain’s highest-profile victim of the credit crunch that was nationalized in February 2008, The Times said.Reuters, citing its source, said that while the supermarket group had expressed some interest in the past, this had not led to anything.Tesco said it did not comment on rumor and speculation, Reuters said.The supermarket group announced a major push into banking last July with a 950 million pound deal to buy out Royal Bank of Scotland’s stake in their joint banking venture.Eager to cash in on growing disillusionment with traditional banks, Tesco said in March it planned to open bank branches in 30 of its stores by the end of this year.

via Is Tesco Eyeing a Bid for Northern Rock? – DealBook Blog – NYTimes.com.

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Standard Chartered and Australia’s ANZ are in advanced talks to acquire separate parts of the Asian retail and commercial assets being sold by Royal Bank of Scotland, according to people familiar with the matter.Standard Chartered is now in pole position to acquire RBS units being sold in China, India and Malaysia, while ANZ was closing in on assets in Hong Kong, Taiwan, Singapore, Vietnam and Indonesia, said people familiar with the situation.

The assets are expected to fetch around $1bn-$1.5bn for the stricken UK lender.“The process is progressing well but nothing is yet final,” said one person familiar with the matter.HSBC could also pick up some of the assets, should talks with the other banks fail to reach a successful conclusion, said people familiar with the situation.

RBS put the assets up for sale this year, after posting the biggest loss in British corporate history. The bank, which is 70 per cent owned by the UK government, made a loss of £24.1bn $35.3bn last year and is shrinking its £2,000bn balance sheet.Its regional retail banking platform vastly expanded after the 2007 acquisition of the Asian operations of ABN Amro, which had built up significant branch networks in countries such as China and India.

RBS’s Asian retail assets include 170 branches, including 28 in India and 13 in China.The sale of the Asian assets has been complicated by RBS’ decision to retain its wholesale banking footprint in key regional markets.There has been uncertainty about whether banking authorities in the eight individual markets would rubber-stamp the transfer of branch licences to the potential acquirers, some of whom already boasting large retail networks in countries such as China and India.

A successful conclusion of the talks would transform ANZ’s footprint in the region and bolster its strategy to become a “super-regional” lender. The bank in May announced a A$2.5bn capital raising to fund a potential bid for RBS assets.

via FT.com / Companies / Banks – StanChart and ANZ poised to split RBS Asian assets.

zyakaira notes: StanChart benefits from ANZ not being in a hurry to confront RBI and enter India with a fresh licence, i guess…Also, RBS’ new branches will also become Stamchart. While Stanchart has a large presence in India, they are hardly notable for Wealth Management

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Office Depot said Tuesday that the private equity firm BC Partners has made a $350 million investment through a preferred stock purchase, giving it a stake in the office supplies chain of approximately 20 percent.

BC bought about $275 million of the company’s Series A convertible perpetual preferred stock and approximately $75 million of its Series B conditional convertible perpetual preferred shares.

Office Depot, which previously announced that it would close approximately 9 percent of its North American stores and cut 2,200 jobs, said it will use the proceeds for general corporate purposes.

The Boca Raton, Fla.-based chain, which plans to open fewer locations next year, has seen its sales and stock price slide as corporate customers, many of them small businesses, cut spending because of the recession. The investment by BC Partners is looked at by Office Depot as a way to improve its balance sheet and provide some ”financial flexibility.”

The Series A stock included in the preferred stock purchase can be converted into common stock immediately at a conversion price of $5 per share, which is a 32 percent premium to Office Depot’s Monday closing stock price of $3.79 per share.

The Series B stock will become convertible at the same terms as the Series A shares if stockholders approve shares being issued in connection with the conversion.

The investment also allows for three BC Partners executives to become part of Office Depot’s board, which has grown to 14 members. Among those joining the board include managing partner Raymond Svider, senior partner James Rubin and partner Justin Bateman.

The transaction, which was approved by Office Depot’s board, closed Tuesday morning.

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Reliance Capital who stock is almost up by more than 45 percent in just 4 trading session has informed that its looking to divest up to 26 percent in its insurance arm Reliance Life Insurance through an IPO as well as by inducting a strategic investor. Reliance Capital holds 100% in Reliance Life Insurance. Reliance Life Insurance would be valued well in excess of Rs 12,000 crore and they will have more clear picture on it in another 3 to 4 months.
Reliance Life insurance is considered to be 4th strongest in line next to ICICI, SBI Life and Bajaj Allianz. They have almost more than 10 percent share in the indian insurance market.
 via <a href=’www.rupya.com’>Rupya</a>

zyakaira notes: The 3-4 insurance IPOs including ICICI Bank IPO for separating capital structures and governance would themselves bring companies with a valuation of INR 120000 Crores or around $25 Billion to the listed markets at BSE and NSE. Along with the PSUs and Infra stocks we may be adding market cap equivalent to India’s GDP in these 1-2 years and raising more than $10 billion from the markets

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After a long and fruitless hunt for acquisitions, Singapore Telecommunications is in sight of a growth booster. And going by its involvement in the Bharti Airtel-MTN Group merger talks, it is determined to grab it.

SingTel’s current business model depends on its foreign holdings, including Indian associate Bharti Airtel, to generate profit growth, with operations in Australia and Singapore yielding cashflow. But some of its foreign mobile associates are under pressure from increasing market competition while others are posting losses.

Bloomberg News/Landov

A Bharti-MTN merger would be a godsend for SingTel.A combination of Bharti and MTN would thus be a godsend for the Singapore company — Tuesday SingTel said it will “continue to be actively involved in due diligence and key aspects of the transaction,” emphasizing its interest.

If the $23-billion merger deal goes through, SingTel could own a piece of an outfit that would have more than 200 million subscribers in Asia, the Middle East and Africa combined, generating more than $20 billion in annual revenue. That’s almost twice SingTel’s revenue during the fiscal year that ended March.

Although the deal could dilute SingTel’s holding in Bharti to 19%-20% from the current 30.4%, SingTel could get as much 12% of MTN.

via Bharti-MTN a Dream Deal for SingTel – WSJ.com.

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