BEIJING — A new Chinese-led international development bank announced its first four loans on Saturday, pledging to lend $509 million for projects to spread electric power in rural Bangladesh, upgrade living conditions in slums in Indonesia, and improve roads in Pakistan and Tajikistan.
At the first of the annual general meetings of the institution, the Asian Infrastructure Investment Bank, the bank’s president, Jin Liqun, said the projects were financially sound and environmentally friendly and had been accepted by the people in the project areas.
U.K. homebuilders slumped on concern demand for buying will slow after Britons voted to leave the European Union. A gauge of FTSE 350 Index housing stocks plunged as much as 16 percent, the worst drop ever, breaching its short-term and long-term moving averages. It was 9.3 percent lower as of 4:07 p.m. in London, with firms including Taylor Wimpey Plc and Persimmon Plc plummeting more than 26 percent…
Private equity firms, once known as corporate raiders, are now huge, influential and everywhere in everyday American life. In a series of stories, we chronicle private equity’s ascendance, and some of the problems it has caused. (Read the first part »)
Here is a brief primer on the industry.
What is private equity?
In general, private equity refers to investment firms that use large chunks of money from pension funds and endowments to buy up businesses and other assets. Private equity firms are not as regulated as the banks…
The cost to procure dollars surged to levels unseen since 2011 for Japanese borrowers and climbed to a seven-month high for Europeans after the U.K.’s decision to leave the European Union sparked global demand for the greenback.
Cross-currency basis swap spreads showed the cost to borrow dollars in exchange for yen reached 68 basis points on Friday, its highest since November 2011, while the premium against the euro reached 48 basis points, the most since December…
CreditJoshua Bright for The New York Times
Even some of the smartest guys in the room got this one wrong.
The billionaire hedge fund manager Leon Cooperman told an audience of Wall Street insiders on Wednesday that there was a 70 percent probability that Britain would stay inside the European Union. “I don’t worry about Brexit,” he added.
Morgan Stanley tumbled 10 percent as financial stocks were battered by the U.K.’s decision to leave the European Union.
Morgan Stanley fell to $24.56 at 12:53 p.m. in New York, on pace for its biggest decline on a closing basis since September 2011…
Brexit decision to spur systematic selling in funds: Kolanovic
UBS predicted $150 billion in automated sales following vote
One way to assess how much pain looms for global stocks post-Brexit is to figure out who needs to sell. Strategists analyzing fund flows say that includes computer traders, exchange-traded funds and individuals who piled into European stocks expecting a different outcome.
Britain’s departure from the European Union will unleash as much as $300 billion of selling by automated quant programs in the already-battered U.S. stock market, according to Marko Kolanovic, the JPMorgan Chase & Co. derivatives strategist. His colleague Nikolaos Panigirtzoglou looked at ETF and government data and concluded that U.S. investors own a lot more European stock than they did during the sovereign debt crisis four years ago…
Bailey most recently consulted at Bailey & Elliott in Maine
Lawyer was disbarred in Florida in 2001 for ethics violations
F. Lee Bailey, a defense attorney who gained fame for his work in two sensational 1960s cases and later was part of O.J. Simpson’s “Dream Team,” filed for personal bankruptcy, saying he’s more than $5 million in debt.
Besides Simpson, a former football star found not guilty in 1995 of the murder of his ex-wife and a friend, Bailey represented Claude Duboc, who was accused in 1994 and later convicted of importing large amounts of marijuana into the U.S…
New York’s landmark Waldorf Astoria hotel is scheduled to close in spring 2017 so owner Anbang Insurance Group Co. can begin converting most of the more than 1,400 rooms to luxury condominiums, said a person with knowledge of the plans.
The luxury hotel, managed by Hilton Worldwide Holdings Inc., is set to reopen as many as three years later, with about 300 to 500 hotel rooms remaining, said the person, who asked not to be identified because the plans aren’t public.
Net-long holdings rise before prices reach two-year high
Bullion could jump 7.7% in 2016, Bloomberg survey shows
Unlike most of the world, gold investors got it right when it came time to betting on the Brexit vote. They were rewarded with a world-beating rally.
Hedge funds boosted their bets on price gains for bullion to an all-time high just two days before U.K. voters took to the polls and decided to leave the European Union, sending global markets roiling. Gold futures climbed to a two-year high after the referendum. The metal’s wild ride isn’t over yet. Prices could jump another 7.7 percent by the end of the year, a Bloomberg survey showed…
The nation’s biggest banks have all built up big enough buffers to weather a severe recession in decent shape, United States regulators said on Thursday.
The Federal Reserve looked at how the country’s 33 largest banks would do in a recession with sustained high unemployment and negative interest rates. It found that the big banks would all suffer major losses — $526 billion in total.
Tight entry-level supply spurring bidding wars, Zillow says
Buyers of high-end homes finding more choices, price cuts
Prices for entry-level homes in the U.S. are rising at twice the pace of the costliest properties as competition among first-time buyers intensifies, according to an analysis by Zillow.
Values in the top third of the market climbed 4 percent in May from a year earlier, compared with an 8 percent increase for the least-expensive houses, Zillow said in a statement Thursday. The supply of starter-home listings plunged 9 percent, while the number of top-tier offerings was little changed…
Now the firm is focused on finding analysts better suited to the demands of banking.
That requires updating some of its traditional recruiting methods. Goldman announced on Thursday that it would no longer conduct first-round, face-to-face interviews on elite college campuses, and instead would interview students remotely on video…
Similar in concept to LEED certification, WiredScore’s program evaluates the infrastructure, technology and internet connectivity of office buildings.
Nova Place in Pittsburgh
Pittsburgh–Nova Place, Faros Properties’ 1.5 million-square-foot office redevelopment project in Pittsburgh, received the Wired Certified Platinum Rating by WiredScore, becoming the only building in the city with this designation.
Through the Wired Certification international program, WiredScore evaluates a building’s connectivity by examining the number and quality of internet service providers as well as the bandwidth capabilities and reliability of connections that are based on the building’s infrastructure. The standard is similar to LEED certification for energy efficiency and environmental sustainability…
Adam Jonas now has an “equal weight” rating on Tesla.
There was a time when Morgan Stanley Analyst Adam Jonas thought shares of Tesla Motors Inc. would nearly double. But after Chief Executive Officer Elon Musk presented a $2.86 billion plan to combine Tesla and SolarCity Corp., the analyst is drastically cutting his price target and downgrading the stock.
Adam Jonas, who’d had an overweight rating on shares of the electric vehicle company since September 2012, is lowering the stock to equal weight and taking his price target to $245 from $333. His target had been as high as $465 late last year…
Plan to be submitted to U.S. district court judge on June 28
Terms to settle lawsuits after cheating on emission tests
Volkswagen AG will pay owners of its polluting diesel cars as much as $7,000 each and agree to fund a program to offset air pollution, under a $10 billion settlement being negotiated for submission to a federal judge next week, said people familiar with the talks.
Canadian Finance Minister Bill Morneau hinted policy makers may soon be taking additional steps to rein in housing prices in Toronto and Vancouver, the country’s two most expensive markets.
The Canadian government is setting up a working group that will include officials from the two cities, and the provincial governments of Ontario and British Columbia, Morneau said Thursday in a speech in Toronto. The group will study the matter in coming months and make proposals…
SEC says bank used customer cash to finance its own trades
Merrill Lynch admits to wrondoing in settling investigation
Bank of America Corp. admitted to wrongdoing in settling a U.S. regulator’s allegations that it misused billions of dollars in customer funds to finance trades that benefited the firm.
The bank will pay $415 million over claims that its Merrill Lynch unit engaged in complex transactions to reduce the amount of client funds that had to be set aside in reserve accounts, the Securities and Exchange Commission said in a statement Thursday. Had the firm failed, its customers would have been exposed to a “massive shortfall,” the regulator said…
Purchases of new homes declined in May from an eight-year high as the housing market continued to display the choppy progress that’s been a hallmark of the recovery.
Sales fell 6 percent to a 551,000 annualized pace following a 586,000 rate in April that was slower than previously estimated, Commerce Department figures showed Thursday. The median estimate in a Bloomberg survey called for a 560,000 pace in May.
While the report showed demand retrenched last month, the volatile data are showing gradual improvement on the back of steady job gains and low mortgage rates. Stronger wage growth and a greater availability of cheaper properties would help lure more first-time buyers and provide an additional push for the housing recovery…
Big banks favored compliance over fighting Labor Department
Wells Fargo, Morgan Stanley said to have opposed court battle
Some of the biggest Wall Street banks opposed an industry decision to sue the U.S. Labor Department over its new broker rules, exposing a fissure between the companies and their smaller competitors, people familiar with the matter said.
Debate over the high-profile litigation has roiled the Securities Industry and Financial Markets Association, one of several trade groups that sought to overturn the regulation in federal court in Dallas earlier this month. In a sign of the discontent, the association’s board held a vote on whether to join the case, a rare occurrence because it usually operates by consensus on such matters, the people said…
WHY UBER KEEPS RAISING BILLIONS | It feels like almost every other week there is a new headline about Uber raising more money,
Andrew Ross Sorkin writes in the DealBook column.
If you add up all the money the company has raised since it started in 2009, it is on its way to amassing $15 billion and has a valuation of $68 billion — all while remaining a private company.
When Amazon went public in 1997, it had raised $54 million and was valued at $438 million.
Debt repayments made in fiscal 2016 now total $2.9 billion
Iron ore supplier trimming debt under drive to lower costs
Fortescue Metals Group Ltd., the fourth-biggest iron ore supplier, will make a $500 million early repayment of a loan, extending its debt reduction drive as it seeks to lower costs amid weaker prices. Its shares rose to the highest in seven weeks.
Perth-based Fortescue’s debt repayments since July now total $2.9 billion, reducing annual interest expenses by $186 million, the producer said Thursday in a statement. The latest repayment of part of a term loan due to mature in 2019 will be made at par from accumulated cash, the company said…
CreditA.M. Ahad/Associated Press
DHAKA, Bangladesh — The former governor of Bangladesh’s central bank, from which $81 million was stolen in February, says that flaws in the global money transfer system — and not any misstep by him — are to blame for the brazen heist.
In an interview this week at his home in a well-to-do neighborhood in the Bangladeshi capital, Dhaka, Atiur Rahman, who resigned from his post after the theft, said that the loss had been a “systemic failure” and that “Bangladesh should not be blamed for something going wrong in the chain.”
Shareholders try to remove Poetsch as host of annual meeting
Investors seeking no-confidence vote on Volkswagen boards
Volkswagen AG Chairman Hans Dieter Poetsch bore the brunt of investor dissatisfaction over the automaker’s handling of the emissions cheating scandal during a raucous shareholder meeting, with some even trying to remove him as host of the gathering.
Poetsch received a tongue-lashing from investors for his shift last year from chief financial officer to the head of the supervisory board, which has oversight over top management. Underscoring the sour mood, some investors asked to have Stephan Weil, Lower Saxony premier and VW board member, take over the meeting. The motion was turned down…
Three of five largest say minus rates complicate call funding
Some banks relying on repurchase agreements to raise cash
A majority of Japan’s biggest private lenders are still unwilling to borrow from the market for overnight loans almost six months after the Bank of Japan announced its negative interest-rate policy.
Three of Japan’s five largest lenders by market capitalization said they were not tapping the unsecured overnight call market for funding, according to a Bloomberg survey this month of Bank of Tokyo-Mitsubishi UFJ Ltd., Sumitomo Mitsui Banking Corp., Mizuho Bank Ltd., Sumitomo Mitsui Trust Holdings Inc. and Resona Holdings Inc. Two said they are raising funds from the market to maintain relationships with clients…
U.S. home prices rose 5.9 percent in April from a year earlier as job growth spurred competition for a limited number of listings.
Prices climbed 0.2 percent on a seasonally adjusted basis from March, the Federal Housing Finance Agency said in a report Wednesday from Washington. The average estimate of 20 economists was for a 0.6 percent gain, according to data compiled by Bloomberg.
Values have increased steadily as buyers, bolstered by an improving labor market and easing mortgage standards, battle for a tight supply of homes on the market. Inventory at the end of April was down 3.6 percent from a year earlier, according to the National Association of Realtors…
Many tenants are keeping up with rising rents. It’s the poor who are hurting.
A popular narrative of the U.S. housing market has been that big city prices are locking out young buyers, feeding a cycle in which a growing number of people are forced to rent at ever higher rates as demand overwhelms supply. Throw in the fact that wages haven’t kept pace, and you have a world where a wide swath of Americans can’t save enough to ever buy that first home.
Vancouver Mayor Robertson makes pitch to British Columbia
Canadian city seeks to stem soaring home prices, speculation
Vancouver, home of Canada’s priciest housing market, is proposing a tax on empty homes to help address an “unprecedented” low vacancy rate as residents struggle to find affordable housing.
Vancouver’s preferred option is to have the provincial government of British Columbia create a new tax for empty or under-occupied residential homes, Mayor Gregor Robertson said in a statement Wednesday. Failing that, the city plans to impose a business tax on empty homes held as investment properties. The city wants a response from the province by Aug. 1…
Led the company during global clean-energy buying binge
Chief restructuring officer Dubel taking over as CEO
Ahmad Chatila, chief executive officer of bankrupt clean-energy giant SunEdison Inc., has resigned. His last day is Wednesday.
SunEdison appointed John Dubel, the company’s chief restructuring officer since late April, to replace Chatila, according to a statement Wednesday. Dubel joined SunEdison shortly after it filed for bankruptcy protection, listing $16.1 billion in liabilities.
Chatila was the architect of a massive clean-power buying-binge. In a two-year period, SunEdison bought wind and solar farms on every continent except Antarctica, creating the world’s biggest renewable-energy developer…
Series D round includes former IBM CEO Sam Palmisano
Circle has set up independent company in China with local team
Circle Internet Financial raised $60 million in a funding round backed by Baidu Inc. as the startup that allows users to send payments for free also formed a China business to win customers in the second-largest economy.
Sam Palmisano, former chairman of International Business Machines Corp., and IDG Capital Partners supported the Series D financing, Circle said in a statement. Alex Norstrom, an executive at Spotify Ltd., will join the company’s board.
Traders speculate that Delaware Judge Will Rule for ETE
Merger arbitrage spread jumped to a record high this week
Wall Street is placing bets that Energy Transfer Equity LP will defeat Williams Cos. in court and walk away from the companies’ multibillion-dollar merger without paying a breakup fee.
The spread traded by those speculating on whether the deal will fall apart reached a record high Wednesday after the pipeline giants spent two days sparring in Delaware’s Court of Chancery. Judge Sam Glasscock said Tuesday a key issue is whether lawyers from Latham & Watkins LLP, who were hired to assess the tax implications of the deal, acted in “good faith” when they concluded it was marred by complications.
Shares climb as much as 3.3%, leading U.S. homebuilder index
Sales, new orders and average selling price all increased
Lennar Corp., the second-largest U.S. homebuilder, reported fiscal second-quarter earnings that beat analysts’ estimates as the improving job market helped boost sales.
Net income for the three months through May was $218.5 million, or 95 cents a share, compared with $183 million, or 79 cents, a year earlier, the Miami-based company said in a statement Tuesday. The average estimate of 13 analysts was for earnings of 87 cents a share, according to data compiled by Bloomberg…
Troy Dixon Photographer: Shahar Azran/Getty Images
Troy Dixon had hit the big time: he’d gone, as they say in his old neighborhood, from “Hollis to Hollywood.”
It was a June night last year at the Apollo Theater, the legendary Harlem spot that’s helped launch stars from Billie Holiday to Michael Jackson, and Dixon was back-slapping his way through the annual spring gala.
Dixon, a member of the Apollo’s celebrity-studded board, is a star of a different sort. First at Deutsche Bank AG and now at his own hedge fund, he’s become one of the most powerful — and controversial — figures in the $6 trillion market for government-backed mortgage bonds…
Two tranches are listed, in a first for such bonds in nation
Deal subscribed more than 8 times, a third sold to individuals
A unit of Singapore state investment company Temasek Holdings raised $510 million via bonds backed by its interests in private equity funds that co-invest with industry powerhouses such as Blackstone Group LP and KKR & Co.
Two of the tranches of the debt totaling $440 million are listed, in a first for such notes in the country, according to a statement from Azalea Asset Management, which is wholly-owned by Temasek. The bonds were issued by Astrea III, a vehicle that holds interests in 34 private equity funds that is sponsored by an Azalea unit…
A high-flying hedge fund manager at Visium Asset Management, who was charged last week with insider trading, has died, apparently the victim of a suicide.
The manager, Sanjay Valvani, was discovered on Monday by his wife in their brownstone in Brooklyn Heights, a New York police official said. Mr. Valvani was found face down on the bedroom floor with a cut to his neck, the official said. He left a note, and a knife was found near his body. He was 44.
Loophole for fund managers slams shut at the end of 2017
Experts searched but ‘no one has come up with magic bullet’
The tax man cometh for some of the richest money managers in the U.S. They’ve had eight years to dream up a dodge. So far, no luck.
The deadline they face is Dec. 31, 2017. That’s when a loophole closes, and hedge-fund managers will have to pay taxes on performance fees parked offshore. Some have brought the money home, taking the hit, but others have waited to benefit from the magic of tax-deferred compounding. And in the hope that clever advisers would come up with a workaround for a total that some estimates put at $100 billion — at least…
A new survey says these jobs aren’t as sought-after as they used to be.
As business students pack up their belongings after graduation, fewer are listing hedge funds as a top destination, while private equity and startups are becoming more attractive.
According to a survey from Training the Street, a firm that offers technical training to Wall Street firms and business schools, startups and private equity firms saw a growing percentage of MBA students naming them as top destinations at which they wanted to work after graduation. At the same time, hedge fund, corporate development, and consulting firms all saw their appeal fall from the previous year. Apparently, the students weren’t deterred by the rise of robo-advisors either, as private wealth management saw gains from last year…
Ibovespa drops, led by Itau, Banco do Brasil, after filing
Regulator Anatel says company needs consent to sell assets
The bankruptcy filing of Oi SA, the largest in Brazil’s history, is reverberating through the nation’s strained financial industry as investors tally the potential hit to creditors.
Sydney’s housing market is losing momentum. Home prices in Australia’s most populous city increased 9.7 percent in the January-March period from a year earlier, the slowest pace since the second quarter of 2013, according to the Australian Bureau of Statistics. Record prices and tighter bank mortgage lending criteria are outweighing benchmark interest rates at the lowest ever…
Lawsuit claims legislation can’t be applied to 2014 bonds
Suit is over $3.5 billion in general-obligation bonds
Puerto Rico was sued in New York by a group of hedge funds claiming it’s illegally using an emergency fiscal-crisis law to dodge payments on $3.5 billion in bonds that are supposed to be guaranteed by the island’s constitution.
The Emergency Moratorium and Financial Rehabilitation Act, signed into law in April just 48 hours after being presented to Puerto Rico’s legislature, can’t be applied to the general-obligation bonds at the center of the case, the group said in a complaint filed Tuesday in Manhattan federal court…
Cross-border M&A drove FDI to $1.76 trillion in 2015, UN says
FDI forecast to fall 15% this year on fragile world economy
A surge in cross-border mergers and acquisitions boosted global foreign direct investment flows around the world last year to $1.76 trillion, the most since the 2008-2009 financial crisis, the United Nations said in a study.
Dagong says Russian, Chinese sovereign debt is safer than U.S.
Rating companies faced questions after 2008 financial crisis
One of China’s three biggest rating companies says it wants to strip political bias from the business of assessing sovereign credit risk. That doesn’t mean the outcome will be any less jarring.
Even with Russia mired in its second year of recession and whipsawed by the crash in oil, Dagong Global Credit Rating Co. still has its foreign-currency government debt at A with a stable outlook, the sixth-highest investment level and one above the U.S. China, whose economy last year grew the slowest since 1990, carries a sterling AAA credit rating from Beijing-based Dagong…
China slowdown, capital-outflow risks hang over each city
Both economies seeking new sources of economic growth
Asia’s financial-hub twins, Hong Kong and Singapore, are facing increasing brakes on growth even before potential turmoil from a Brexit vote in their ex-colonial master, with China’s slowdown and the continuing shrinkage of the financial industry striking both.
Hong Kong’s economy unexpectedly contracted in the first quarter, weighed down by falling retail sales and the weakest property market in 25 years. Singapore eked out only a modest expansion in the same period, hurt by weak exports and a downturn in financial services…
ENERGY TRANSFER AND WILLIAMS NEAR A RECKONING |Kelcy L. Warren, the chief executive of Energy Transfer Equity, has been scrambling to find a way out of a $38 billion merger with Williams Companies and his time is swiftly running out,
Julie Creswell and Leslie Picker report in DealBook.
The deal is now worth only about $20 billion and has led to three lawsuits filed by Williams against his company and one filed against him personally.
Williams shareholders will vote in a week on the merger and the two sides will meet on Monday in a Georgetown, Del., courtroom, where lawyers will analyze the fine print of their merger agreement…
Want to sell your house? Here’s why real estate agents advise putting a property on the market in the spring: the median purchase price for U.S. existing homes almost always peaks in June. That’s because families with kids looking for bigger digs want to be settled before the start of a new school year.