The Star Online: Business
The Star Online: Business |
- Murdoch splits empire into two firms
- China banking system 'stable' despite fund squeeze
- Wall Street Week Ahead: Fed fears may be gone but brace for volatility
| Murdoch splits empire into two firms Posted: 29 Jun 2013 06:18 AM PDT NEW YORK: Rupert Murdoch split his corporate empire into two parts under a long-promised plan to "unlock value" by separating high-flying entertainment operations from struggling publishing activities. The split became effective at the close of trade in New York Friday, creating a new group called 21st Century Fox while retaining the name News Corp for the publishing group. Murdoch remains in charge of both. The 21st Century Fox group, which includes the Fox Hollywood studios and television entities, "launches as a unique force bringing news and entertainment to more than a billion customers every day in over 100 languages," said Murdoch. "Our success will continue to be rooted in a deep belief in originality and a commitment to empowering creative minds and entrepreneurs around the world. "Our management teams are the best in the business and we will drive growth and shareholder value by expanding our existing assets and brands, while embracing new opportunities and technology." The new News Corp, with Murdoch in the role of chairman, includes well-known newspapers like the Wall Street Journal and New York Post in the United States; The Sunday Times of London, Sunday Telegraph and The Sun in Britain; and The Australian. It also includes Dow Jones news agency, Fox Sports Australia and the HarperCollins publishing house. "We are continuing a proud tradition and fashioning a prosperous future in the new News Corp," chief executive Robert Thomson said. "We have a valuable collection of complementary companies and our task is to make the new News more than the sum of these distinguished parts." Rupert Murdoch, shown in a file picture reading a copy of The Sun on Sunday newspaper, split his corporate empire into two parts Friday under a long-promised plan to "unlock value" by separating high-flying entertainment operations from struggling publishing activities. New News Corp shares will trade under the ticker symbols "NWSA" and "NWS," starting on Monday. Shares in 21st Century Fox will trade under the symbols "FOXA" and "FOX." The split of the company, with some $34 billion in revenues worldwide, is seen partly as a nod to shareholders angered by the damage and costs inflicted by a phone hacking scandal in Britain, and partly because of troubles within the group's publishing arm. While some analysts see the outlook for publishing as bleak, Murdoch says he remains committed to his newspaper roots. Murdoch has spent a lifetime building News Corp from a single Australian newspaper he inherited. As his empire was being built through a series of mergers and acquisitions, Murdoch also went through a series of unions and breakups in his personal life. Earlier this month, Murdoch filed papers to divorce his third wife Wendi Deng, citing an "irretrievably" broken marriage to a woman 38 years his junior. Deng was perhaps best known for a 2011 incident in which she leapt to defend her husband by striking a pie-wielding protester, prompting headlines calling her a "tiger wife." The divorce will not affect the way in which the media empire is run, as Deng does not have stock or voting rights in News Corp, sources familiar with the company said. - AFP |
| China banking system 'stable' despite fund squeeze Posted: 29 Jun 2013 06:14 AM PDT SHANGHAI: China's bank regulator said that a recent liquidity squeeze would not hurt the stability of the banking system, in the latest government effort to soothe concerns over the funding shortage. For three weeks, funds have been in short supply on China's interbank market, and the interest rates banks charge to lend to each other have surged to record highs. Head of the China Banking Regulatory Commission, Shang Fulin, said the overall banking system had adequate liquidity, echoing comments by the central bank earlier in the week. "These days the issue with tight liquidity in the interbank market has started to ease," Shang told a financial forum in Shanghai. "This situation will not affect the overall pattern of stable operations in the domestic banking sector," he said, adding domestic financial institutions had excess reserves of 1.5 trillion yuan ($244 billion) on Friday. China's central bank chief Zhou Xiaochuan, speaking a day earlier, offered assurances that the People's Bank of China would use multiple tools to "ensure the overall stability of the market". There are worries tight liquidity among banks could prompt them to tighten lending, which threatens to carry over into the real economy. State media has reported that banks are struggling to meet their payment obligations as around 1.5 trillion yuan worth of wealth management products mature at the end of June. A top official of one of China's big four banks, the Agricultural Bank of China, said Friday that lenders should step up risk control and allocate financial resources to the right places. "The recent liquidity shortage in the market to some extent has something to do with overly high financial leverage and rapid expansion of shadow banking," Agricultural Bank deputy chairman Zhang Yun told the forum. Shang, the banking regulator, also called for more attention by domestic banks for risk control and liquidity management. But he played down risks from local government debts, another issue which has sparked worries over China's economy. "Recently some foreign institutions and industry players showed concern about risk in areas including local government debts," Shang said. "As long as we apply the right risk-management measures, these risks are controllable," he said. China's top auditor recently put outstanding debts held by 18 of the country's 31 provinces and major municipalities at 3.85 trillion yuan in 2012, the official Xinhua news agency reported Thursday. - AFP |
| Wall Street Week Ahead: Fed fears may be gone but brace for volatility Posted: 29 Jun 2013 06:08 AM PDT NEW YORK: Panic selling on fears of an early exit of the U.S. Federal Reserve's stimulus efforts may be over, but the stock market may still face wild intraday swings as investors scramble to position themselves for Friday's payrolls report. Trading volume is likely to be thin, with a half-day session on Wednesday and markets closed for the Independence Day holiday on Thursday. Both the Labor Department's weekly jobless claims and employment report for June will be released at 8:30 a.m. (1230 GMT). "Non-farm payrolls generally cause more volatility in the market, but how many times do you see weekly claims and payrolls coming out the same day on a shortened trading week? That will certainly cause a lot of volatility," said Randy Frederick, managing director of trading and derivatives at Charles Schwab & Co Austin, Texas. In the options market, traders were active in the put weekly options on the S&P 500 .SPX. These short-term options have a week-long life span and expire on July 5. Put options are generally viewed as bearish bets against the market. "We've seen some buying pop up in the weeklies for next week. The most active ones are the 1,600 puts on the SPX," said JJ Kinahan, chief strategist at online brokerage firm TD Ameritrade in Chicago. "We will probably see more hedging activity early next week and perhaps higher intraday swings as people try to figure out their option positions going into the holiday with the employment report due the next day." June's employment report could offer clues on the timing of the Fed's eventual tapering of its bond purchases. Non-farm payrolls are expected at 170,000, below the 194,000 six-month moving average. The unemployment rate is seen dipping to 7.5 percent from 7.6 percent. Manufacturing will also be in the spotlight next week. The Institute for Supply Management is expected to report on Monday that factory activity expanded in June after a surprise contraction in May. While U.S. markets are closed on Thursday, the Bank of England monetary policy meets for the first time under the chairmanship Governor Mark Carney. The European Central Bank, which also holds its monetary meeting on Thursday, is not expected to change rates, but President Mario Draghi may discuss just how much longer the ECB will stick with extraordinary policy settings. SECOND HALF OF THE YEAR The S&P 500 on Friday posted the best first half of the year since 1998, rising more than 13 percent in the first six months of 2013, fueled by U.S. monetary stimulus. "I think that the market's pretty fairly valued, so we would be surprised if you saw the same kind of rally like you saw in the first half of the year, but it doesn't seem to be a catastrophic environment, like you're going off the cliff either," said Steven Baffico, chief executive officer at Four Wood Capital Partners in New York. For the quarter, the S&P 500 was up 2.3 percent but for the month, the S&P 500 fell 1.5 percent on concerns of an early exit by the Fed's supportive measures. A Reuters survey of 53 investors across the United States, Europe and Japan released on Friday found that funds had already cut their average equity holdings in June to a nine-month low due to the recent volatility and had held more cash. The equities market took a hit last week after Fed Chairman Ben Bernanke signaled the central bank would begin to slow the pace of its bond buying later this year if the economy improves as forecast. Since then, a number of Fed speakers have sought to calm markets, giving assurances the stimulus efforts are going to be in place for awhile. Federal Reserve Bank of New York President William Dudley, who said markets are "quite out of sync" with the Fed, will speak on economic conditions on Tuesday. "I think the panic selling from the Fed is pretty much over. Now they (Fed officials) are coming out and saying unanimously that 'we haven't changed at all, and we are possibly tapering in the fall depending on the data,'" Frederick said. "I think the market is believing that now, and I don't expect anything surprisingly different from the Fed speaker next week." - Reuters |
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