Equity Fund Outflows Surge, $4.29 Billion From U.S. (Update1)

By Jonathan Burgos and Garfield Reynolds

Sept. 4 (Bloomberg) — Investors withdrew a net $4.95 billion from equity funds and added $5.06 billion to bond funds in the week to Sept. 2, amid concerns about the strength of a world recovery, EPFR Global said in a report.

“They struggled to make the connection between equity markets at 10 to 12 month highs and a global economy that has digested the bulk of the fiscal stimulus packages served up in recent months but continues to shed jobs,” wrote the EPFR, which tracks funds with $10 trillion worldwide. “Going into September they steered the cash they once again pulled out of Money Market Funds into fixed income rather than equity funds.”


The MSCI World Index has fallen 2.7 percent this week, while the MSCI Asia Pacific Index lost 1.1 percent.

To contact the reporters on this story: Garfield Reynolds in Sydney at greynolds1@bloomberg.netJonathan Burgos in Singapore at jburgos4@bloomberg.net.
Last Updated: September 3, 2009 21:43 EDT





China’s Nuclear Expansion to Exceed Forecast, Japan Steel Says

By Masumi Suga and Shunichi Ozasa

Sept. 7 (Bloomberg) — Japan Steel Works Ltd., which makes reactor parts for Areva SA, Toshiba Corp. and rivals, more than doubled its forecast for China’s nuclear plant construction because of stimulus spending and environmental pressures.

The country may build about 22 reactors in the five years ending 2010 and 132 units thereafter, compared with a company estimate last year for a total 60 reactors, President Ikuo Sato said in an interview. Japan Steel Works has the only plant that makes the central part of a large-size nuclear reactor’s containment vessel in a single piece, reducing radiation risk.

[ . . . ]

China became the world’s largest emitter of greenhouse gasses from burning oil and coal in 2006, followed by the U.S., Russia, India and Japan, according to U.S. Department of Energy

[ . . . ]

Globally, a total of 52 nuclear reactors were under construction as of Jan. 1, according to the Japan Atomic Industrial Forum Inc.

Japan Steel Works is spending 80 billion yen ($864 million) at its Muroran plant in the country’s northern island of Hokkaido by March 2012 to increase capacity to make parts for 12 nuclear reactors a year, compared with 5.5 units now, the president said.

The investment will increase annual sales from Japan Steel Works’ cast and forged steel for electric and nuclear power to 70 billion yen from the year starting April 2012, up from 45.5 billion yen expected for the current year, Sato said.

To contact the reporters on this story: Masumi Suga in Tokyo at msuga@bloomberg.net; Shunichi Ozasa in Tokyo at sozasa@bloomberg.net.
Last Updated: September 6, 2009 13:00 EDT



Saudi Central Bank Won’t Buy Algosaibi, Saad Debt From Banks
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By Camilla Hall

Sept. 6 (Bloomberg) — Muhammad al-Jasser, Saudi Arabia’s central bank governor, said the bank won’t buy up debts from two family businesses that defaulted after borrowing more than $15 billion.

“Absolutely not,” al-Jasser said when asked whether the Saudi Arabian Monetary Agency would buy up the debt of Ahmad Hamad Algosaibi & Bros. and Maan al-Sanea’s Saad Group from local banks. He spoke to Bloomberg News at a meeting of central bank governors and finance ministers of the Group of 20 countries in London yesterday.

Units of the two groups have borrowed at least $15.7 billion from more than 80 regional and international banks, including Paris-based BNP Paribas SA, New York-based Citigroup Inc. and Arab Bank Plc in Amman, Jordan, according to documents provided by lenders. About $5 billion of that is owed to Saudi banks, Standard Chartered Plc said in an Aug. 26 report.

Al-Jasser’s comment comes after the Economist Intelligence Unit said in a report this month that the “fall-out for local banks may be limited as the Saudi Arabian Monetary Agency is expected to help local banks to cover losses.”

International and regional banks are suing the Al-Khobar- based Saudi groups after both missed payments due from their Bahraini-based banking units, which are now under the administration of the Bahraini central bank.

Court cases are also taking place between the two after the Algosaibi group said in a May 22 New York filing that al-Sanea, the owner of Saad Group, used “falsified documents” to obtain $10 billion. Saad Group will respond to the claim through the judicial process, according to an Aug. 1 e-mailed statement from the company.

‘Debt Restructuring’

The Saudi government has set up a special committee to look at the debt defaults by the groups.

The Algosaibi group, a holding company with a broad range of interests from financial institutions to hotels, shipping and a bottling company, said in May it hadn’t made payments to creditors of its Bahrain-based lender, The International Banking Corporation BSC, “pending a debt restructuring exercise.”

The Saad group, which engages in a range of businesses from construction to health care, said in June it was planning an “orderly restructuring” of its debt.

Qatar, a neighboring Gulf state, has bought up portfolios of local banks to boost the banking industry through the financial crisis. To date, Saudi Arabia’s central bank has cut interest rates, reduced the reserve requirements for banks and placed deposits with banks.

‘Stressed Financially’

Saudi Arabia’s economy will contract 1 percent this year as the debt problems of family-run businesses dissuade banks from lending, Riyadh-based Jadwa Investment Co. said in a July 28 report. In addition to these two Saudi conglomerates, “several other family groups are stressed financially,” Jadwa said.

Al-Tuwairqi Group hired HSBC Holdings Plc to oversee a restructuring of its bank loans after the Saudi steelmaker was hurt by falling prices, a person familiar with the situation said on June 24. The Dammam-based company is restructuring as much as 7 billion riyals ($1.9 billion) in debt, the person said.

To contact the reporter on this story: Camilla Hall in London at chall24@bloomberg.net
Last Updated: September 5, 2009 21:01 EDT



Princeton, Harvard Raise Undergrad Tuition as Economy Burns: Chart of Day



1972        Nov 14, The Dow Jones Industrial Average closed above 1,000 for the first time, ending the day at 1,003.16
(HFA, ’96, p.18)(AP, 11/14/97)

[from – http://timelines.ws/20thcent/1972.HTML%5D

1972        The See family sold their South San Francisco, Ca., chocolate and candy business to Warren Buffett, chairman of Berkshire Hathaway Inc. Buffet named Charles Huggins as See’s Candies top officer. Huggins retired at the end of 2005.
(SSFC, 1/15/06, p.D6)(www.ifa.com/Library/Buffet.html)