Global Investing Roundups

William Patalon III — Wed, 02 Apr 2008 14:47:54 +0000

Airbus Lands in Hot Water; Ford Fishtails in March; Microsoft Won’t Raise Yahoo Bid; SCA Sues Merrill Lynch; Big Oil Brought Before Congress; $10.9 Billion Blackstone Real Estate Fund; Gold Prices Sink; Indonesia’s Inflation Soars

French financial market regulator, the Autorité des Marchés Financiers, filed a formal complaint yesterday (Tuesday) against European Aeronautic, Defense & Space, the parent company of Airbus S.A.S. and more than a dozen current and former executives in connection with an inquiry into allegations of insider trading and other market abuses, the International Herald Tribune reported. The regulator said it was initiating sanction proceedings against several individuals for violations of French insider trading rules and against the company itself for misleading investors by failing to meet market standards on the publication of financial information.

Ford Motor Co.’s (F) U.S. sales fell 14% last month as demand for its trucks and sport utility vehicles plunged while gas prices rose and construction continued to slow. Ford was the first major automaker to report, and other automakers are expected to have faired just as poorly amid waning consumer confidence.

Microsoft Corp. (MSFT) won’t change from its original $44.6 billion bid for Yahoo! Inc. (YHOO) The Wall Street Journal reported. Citing people close to the situation, the paper said strategists from the Redmond, Wash.-based company didn’t find anything in Yahoo’s recent presentation to investors that would justify paying more. So far Microsoft has met once with Sunnyvale, Calif.-based Yahoo and still hopes to enter more serious discussions.

Security Capital Assurance Ltd. (SCA), the bond insurer, sued Merrill Lynch & Co. Inc. (MER) for breach of contract in an attempt to avoid losses on about $3.1 billion in collateralized debt obligations, Bloomberg News reported. “Determined to get those CDO risks off its books at all costs before the third quarter of 2007 closed, Merrill Lynch made the decision to blatantly ignore its prior commitments to” SCA, the Hamilton, Bermuda-based company said. SCA is seeking at least $28 million in damages.

Executives from Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), ConocoPhillips (COP), BP PLC (BP) and Royal Dutch Shell PLC (RDS.A, RDS.B) appeared before a U.S. Congressional panel yesterday (Tuesday) to explain why their firms are not to blame for record-high energy prices despite booking $123 billion in profits in 2007. “The American people deserve answers and it is time for Big Oil to go on the record about these record prices,” said Rep. Ed Markey of Massachusetts, chairman of the House Select Committee on Energy Independence and Global Warming, Reuters reported.

The Blackstone Group LP (BX) announced it had raised $10.9 billion for its Blackstone Real Estate Partners VI fund, which will invest in properties with depressed prices. “With this fund we will be able to enter new markets and expand Blackstone’s global investment activities,” said Chad Pike, senior managing director and London-based co-head of Blackstone’s real estate group, CNNMoney reported.

Gold prices sank to a two-month low below $880 yesterday, as the rising dollar continued to prod investors to sell previous metals. Gold hit a low of $872.90, far below its all-time high of $1,030.80, hit just two weeks ago.

Indonesia’s March inflation rate surged 8.2% from the previous year, the fastest pace in 18 months. Food and energy prices are mostly to blame, as wheat, soybeans, corn and palm oil hit records this year, Bloomberg reported.

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Global Investing Roundups