Dai-ichi to take over Australia's Tower for $1.2 billion

By Junko Fujita and Isabel Reynolds

TOKYO | Tue Dec 28, 2010 5:04am EST

TOKYO (Reuters) - Dai-ichi Life Insurance Co will take full control of Tower Australia Group Ltd for $1.2 billion in cash, the latest in overseas acquisitions by Japanese insurers keen to move away from a stagnant home market.

It is the first major purchase by Japan's No.2 life insurer since its $11 billion stock market debut in April, and is another deal for Australia's $1.2 trillion wealth management sector, which is growing thanks to compulsory private pension schemes.

While Dai-ichi did not raise any money through its IPO, it said it would use it as a springboard to push into overseas markets to address concerns about its growth prospects in Japan, where the population is shrinking.

It will pay A$4.00 per share for all the shares it does not own in Tower Australia, a 47 percent premium over Tower's latest closing price. Dai-ichi is currently the biggest shareholder in the midsized life insurer, with a 29 percent stake.

"This is a positive move," said Ryosuke Okazaki, chief investment officer at ITC Investment Partners in Tokyo.

"Top management is being decisive and if it did not take steps like this there wouldn't have been any point to it becoming a listed company."

The buyout ranks as the Japan's third biggest insurance acquisition after Tokio Marine Holdings, Japan's No. 2 non-life insurer, spent $4.7 billion to buy U.S. insurer Philadelphia Consolidated and 442 million pounds to buy Lloyd's of London insurer Kiln Plc.

Overseas acquisitions made by Japanese insurers hit a peak in 2008 with 547 billion yen worth of deals struck. This year there has been 109 billion yen worth of transactions made.

Dai-ichi said the deal will increase the amount of net profit derived from overseas to 9 percent from 3 percent. It had 55.6 billion yen net profit for the year ended March 2010.

Dai-ichi also has minority stakes in Ocean Life Insurance Co in Thailand and Star Union Dai-ichi Life Insurance Co in India.

AUSTRALIAN MARKET

Australia's wealth management sector is the world's fourth-largest and has recently seen much M&A activity, with Australian wealth manager AMP and French insurer AXA SA launching a new $13.1 billion-plus bid for AXA Asia Pacific last month.

Private equity firm Kohlberg Kravis Roberts & Co offered $1.7 billion for wealth manager Perpetual, although the deal fell through this month.

Tower Australia's principal activities include life insurance, funds management, superannuation, financial planning, and investment management.

Dai-ichi's shares rose 2.1 percent to 133,600 yen in Tokyo after the Nikkei business daily first reported the deal earlier on Tuesday.

Amazon says Kindle holding its own against tablets

The Amazon Kindle Wi-Fi e-book reader is shown in this publicity photo released to Reuters on July 28, 2010.

Credit: Reuters/Amazon.com/Handout

12:00am GMT+0200

NEW YORK | Tue Dec 28, 2010 3:06am EST

NEW YORK (Reuters) - Amazon.com Inc said sales of its Kindle e-reader were strong over the holiday season amid competition from devices such as Apple Inc's iPad, a computer tablet that also has e-reader capabilities.

Amazon, which has a policy of not divulging exact sales figures for the Kindle and digital books, said the most recent version of the Kindle was its best-selling product ever.

"We're seeing that many of the people who are buying Kindles also own an LCD tablet," Chief Executive Jeff Bezos said in a statement.

Analysts have said e-readers such as the Kindle and Barnes & Noble Inc's Nook can withstand competition from tablets among readers who prefer a device made specifically for reading.

"Customers report using their LCD tablets for games, movies and Web browsing and their Kindles for reading," Bezos said.

Amazon, the world's largest online retailer, said sales of digital books on its Kindle broke a company record on Christmas.

Several Barnes & Noble locations reporting selling out of the Nook this weekend.

Amazon shares were down $1.42, or 0.8 percent, at $181.16 in morning trading on the Nasdaq Stock Market.

(Reporting by Phil Wahba, editing by Maureen Bavdek.)

Japan, China shares fall after rate rise

People look at an electronic board at a brokerage house in Shanghai December 27, 2010. China's key stock index ended down 1.9 percent on Monday, wiping out an earlier 1.5 percent gain, as investors dumped property, financial and energy shares on concerns about their longer-term outlook after a short-lived relief rally in the morning.

Credit: Reuters/Aly Song

By Alex Richardson

SINGAPORE | Tue Dec 28, 2010 1:11am EST

SINGAPORE (Reuters) - Shares in Japan and China eased on Tuesday as concerns that further Chinese monetary tightening will cool the engine of world economic growth overshadowed Japanese data that pointed to improving demand.

The euro spiked against the dollar, although market players attributed its strength to technical factors in light holiday trade, and oil edged up near a 26-month high as a snow storm in the U.S. northeast underpinned demand expectations.

Data from Japan showed factory output rose for the first time in six months in November and a survey of manufacturers revealed they expected to boost production in the coming months to meet firm demand from the rest of Asia.

"Data in recent weeks have been supportive of the stocks and commodity markets globally," said David Cohen, director of Asian economic forecasting at Action Economics.

"The U.S. will avoid a double-dip. The Asian region including Japan looks a little bit better, with its industrial production finally showing an increase."

But despite some positive signs on the outlook, investors entering thin year-end trading remained concerned about Chinese monetary policy tightening in the months ahead.

The timing of China's Christmas Day interest rate rise may have surprised but the move itself did not, with Chinese leaders pledged to make fighting inflation a priority in 2011.

World shares mostly fell on Monday in response to the move, as investors fretted that tighter monetary policy would moderate the growth that many are relying on to support the global economic recovery.

On Tuesday, MSCI's broadest index of Asia shares outside Japan, which is up nearly 13 percent for the year, rose 0.1 percent.

But Shanghai shares fell 1 percent, after a 2 percent drop the previous day, and Tokyo's Nikkei shed 0.6 percent.

"Investors locked in profits as Shanghai shares fell in late trade yesterday," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets. "They didn't want to buy further as uncertainty remained for Chinese shares."

With Australian markets closed for a holiday the main stock gains in Asia were in South Korea, where the benchmark index rose 0.6 percent, led by a 1.7 percent rise for Samsung Electronics.

U.S. stocks finished little moved on Monday, with the Dow Jones industrial average down 0.2 percent but the Nasdaq Composite 0.1 percent firmer.

EURO JUMPS

The euro rose sharply as bears who had been betting on further weakness due to worries about the continent's sovereign debt crisis were forced to abandon their positions.

Japan output up on Asia demand

Smoke rises from factories at Keihin industrial zone in Kawasaki, south of Tokyo in this November 30, 2009 file photo.

Credit: Reuters/Toru Hanai

By Leika Kihara

TOKYO | Tue Dec 28, 2010 3:59am EST

TOKYO (Reuters) - Japanese factory output rose for the first time in six months in November and manufacturers expect to boost production in coming months, suggesting that firm demand in Asia will help the economy resume a recovery early next year.

But creeping rises in the yen kept policymakers on alert for risks to the export-reliant economy, with the finance minister repeating his warning that the government would take decisive action to stem any sharp yen rises that could hurt growth.

Industrial output rose 1.0 percent in November, matching a median market forecast and marking the first rise in six months, the Ministry of Economy, Trade and Industry said on Tuesday.

Manufacturers surveyed by the ministry expect output to rise 3.4 percent in December and 3.7 percent in January.

The data bodes well for the fragile economy and underscores the Bank of Japan's view that growth will pick up modestly early next year on continued support from exports to emerging Asia, lessening the chance of an imminent policy easing by the central bank.

"The headline figure was in line with expectations, but forecasts for December and January came in quite strong," said Yoshiki Shinke, senior economist at Dai-ichi Life Research Institute.

"Since today's data shows that the downward risks to the economy have eased, we now have a smaller chance of the BOJ easing its policy further as long as there are no wild market fluctuations caused by some overseas factors."

Companies increased output of automobile, machinery and electronic parts mainly for export to Asia and the Middle East, the data showed.

Automakers also increased output to restock in anticipation of a pickup in domestic demand next year, a sign that output may have bottomed out after tumbling when government subsidies on low-emission cars expired in September.

"We have already got some positive news from Asian neighbors for October and November. This is confirmation that Japan is benefiting from the recovery of the Asian economies," said Masamichi Adachi, senior economist at JPMorgan Securities Japan.

Still, the ministry maintained its assessment that industrial output was moving on a weak note, stressing that production has recovered only moderately after steep declines in the past few months.

Financial markets did not react much to the data with yen moves swayed more by broad selling pressure on the dollar.

Northeast digs out after storm snarls travel

Steve Labreck shovels out his drive way under a boat stored there for the season during a snowstorm in Scituate, Massachusetts December 27, 2010.

Credit: Reuters/Brian Snyder

By Daniel Trotta

NEW YORK | Tue Dec 28, 2010 5:44am EST

NEW YORK (Reuters) - New Yorkers faced the task of clearing huge snowdrifts and thousands of stranded travelers looked forward to boarding flights on Tuesday after a blizzard slammed the U.S. Northeast the day after Christmas.

New York City and surrounding areas were hit hardest by the storm, which swept up the Atlantic Coast on Sunday night and through the Monday morning commute, burying cities in knee-deep snow and unleashing winds of up to 59 mph.

Treacherous road conditions caused by ice and wind were blamed for at least a dozen traffic deaths in several states.

Financial markets operated normally on Monday but trading volumes were thinned by the storm, which also kept shoppers away from the malls on the day after Christmas, one of the busiest shopping times of the year.

New York's major airports -- John F. Kennedy, Newark Liberty and LaGuardia -- were shut for nearly 24 hours before reopening Monday evening, forcing many passengers to camp out in terminals.

Thousands of additional flights were canceled on Monday, and officials said it would take several days before air travel, especially in the New York area, began to return to normal.

The storm moved into Canada's Maritime provinces and was headed northeastward toward Newfoundland early Tuesday morning, the U.S. National Weather Service. It warned that visibility across New England states could be reduced due to blowing and drifting snow.

Parts of New England, like New York and New Jersey, were buried in snow.

"I can't even find the sidewalk," said Marilyn Westgate, 44, of Belmont, Massachusetts, as she shoveled snow on her corner lot. "I don't even think about the time. I just do it."

The biting cold in the Northeast also has raised concerns about whether Times Square in New York could be cleared of snow before Friday's New Year's Eve celebration.

Utility crews worked to restore power to tens of thousands of homes while subway and Amtrak passenger rail services faced problems returning to normal schedules.

(Additional reporting by Daniel Lovering, Edith Honan, Aman Ali, Ros Krasny, Jon Hurdle, Emily Chasan, Lou Charbonneau, Chris Michaud, Lynn Adler and Jonathan Allen; Writing by Eric Walsh; Editing by Angus MacSwan)

WikiLeaks: UAE Considered Keeping Hamas Hit Quiet

28/12/2010

DUBAI, United Arab Emirates, (AP) – Diplomatic cables recently released by WikiLeaks indicate authorities in the United Arab Emirates debated whether to keep quiet about the high-profile killing of a Hamas operative in Dubai in January.

The documents also show the UAE sought U.S. help in tracking down details of credit cards Dubai police believe were used by a foreign hit squad involved in the killing. The spy novel-like slaying, complete with faked passports and assassins in disguise, is widely believed to be the work of Israeli secret agents.

Dubai officials didn't discuss Mahmoud al-Mabhouh's death publicly until Jan. 29 — nine days after his body was discovered in a locked airport hotel room and only after Hamas itself announced the killing.

The delayed acknowledgment followed talks at the highest levels of the UAE government, where officials discussed whether "to say nothing at all, or to reveal more or less the full extent of the UAE's investigations," according to one of the cables.

Police initially referred to the killers as an "experienced criminal gang" traveling on European passports, and only later blamed Israel's Mossad spy agency directly. Hamas also accuses Israel of the slaying.

Israel has never acknowledged that it carried out the hit.

The cables, which were released Saturday, don't shed new light on the killers' identities. But in one, the American ambassador to the Emirati capital Abu Dhabi points to a possible motive behind the UAE's decision to eventually reveal details of the murder.

"Saying nothing would have been perceived as protecting the Israelis and in the end, the UAE chose to tell all," Ambassador Richard Olson wrote. "The statement was carefully drafted not to point any fingers, but the reference ... to a gang with western passports will be read locally as referring to the Mossad."

Another cable outlines a request the Emirates made on Feb. 24 for U.S. help in tracking down cardholder details and other information relating to credit cards linked to the suspected killers.

Dubai police say many of the alleged members of the hit squad used prepaid credit cards issued by a bank in Iowa that were distributed through another U.S. company known as Payoneer.

U.S. embassy officials passed on details of the request to the FBI and urged Washington to handle it urgently, according to the cable.

Dubai's government media office said it was looking into the disclosures and had no immediate comment on Tuesday.

Interest hike by Chinese central bank has little impact on baht: BoT

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BANGKOK, Dec 28 – The move by the People’s Bank of China to raise interest rates frequently will have little impact on capital movements affecting Thailand and the value of the baht, according to the Bank of Thailand (BoT).

BoT Assistant Governor Pongpen Ruengvirayudh said the Chinese central bank’s announcement of interest rate hikes on both lending and deposit by 25 basis points, which is the second time in two months, was aimed to rein in rising inflation.

“Now, Beijing is trying by all means to slow the inflation rate. It raised the interest rate once two months ago and issued a measure to maintain the liquid assets of commercial banks fortnightly before announcing the latest interest hike. It is expected the Chinese government will raise the interest rate further,” she said.

However, she believed that the interest hike by the Chinese central bank would not adversely affect the capital movement and currencies in Asia, including the Thai baht, because many countries, like China, looked to raise interest rates to contain rising inflation.

Thailand is considering the policy interest rate increase as part of its effort to control inflation, which is expected to rise at an accelerating rate next year.

At present, it is widely expected in the market that the BoT’s Monetary Policy Committee would further raise the policy interest rate next year.

The assistant governor said she believed all countries had already prepared measures to cope with capital inflows in a higher-than-usual amount. The measures are different, depending on the situation in each country.

Still, the BoT would closely supervise capital movements and the baht value and prepare tools to deal properly with the situation.

She emphasised that the interest rate is just one of the magnets attracting foreign capital. The major attraction for the capital influx is the economic growth potential of the country. (MCOT online news)