FINANCE
Knight Capital rescue plan
Knight Capital Group Inc, driven to the brink of bankruptcy by trading losses last week, has agreed to a US$400 million cash infusion through the sale of convertible securities, two people with direct knowledge of the matter said. Getco LLC, the automated trading firm backed by General Atlantic LLC; Blackstone Group LP and brokerages Stifel Nicolaus & Co and TD Ameritrade Holding Corp are investing, according to the people, who asked not to be named because the agreements are not public. Stephens Inc and Jefferies Group Inc are taking part and the securities will represent a 70 to 75 percent stake in the company, one of the people said. Knight, whose market-making unit executes about 10 percent of US shares, has been fighting for survival since a computer breakdown spewed orders through stock exchanges on Wednesday and led to a US$440 million loss. The mishap spurred calls in Congress for an examination of whether an increase in automation is damaging the integrity of the US equity market, the world’s largest with US$16.4 trillion in share value.
SPAIN
Bank deal for toxic debt
Economy Minister Luis de Guindos says the government is set to approve a new law creating an asset management agency, or “bad bank,” to deal with the toxic assets that have led many Spanish banks to seek an EU bailout. The toxic assets — expected to total 200 billion euros (US$244.9 billion) — will be segregated from the banks, and dealt with by the new agency. De Guindos said on Sunday in an interview with newspaper ABC that the law is up for approval on Aug. 24. The EU is to provide up to 100 billion euros for banks struggling from non-performing loans, foreclosed property and other unwanted assets resulting from the collapse of the country’s real estate market. Leading banks, such as Banco Santander SA, are not expected to need help.
ENERGY
Shell shifts giant cash base
Energy giant Royal Dutch Shell is to move some of its cash pile from European banks due to the eurozone debt crisis, the Times newspaper reported yesterday, citing the group’s chief financial officer. Chief finance officer Simon Henry told the daily that the Anglo-Dutch group was looking at putting some of its 12.13 billion euros in cash into US government bonds and banks. “There’s been a shift in our willingness to take credit risk in Europe,” Henry said. The Times said Shell was still required to keep some money in Europe to fund its operations.
NORTH KOREA
Army’s controls curtailed
Pyongyang has shut down a military-run company tasked with attracting foreign investment due to its poor performance, as the regime tries to rein in the army, a report said yesterday. Chosun Ilbo newspaper, citing a South Korean government source, said the Taepung International Investment Group — created in 2009 by approval of the powerful National Defence Commission — was recently closed down. “Taepung, when it first opened, had an ambitious goal to solicit foreign investment of US$10 billion in 2010 and US$120 billion within five years, but made little progress,” said the source quoted by Chosun. The shutdown was also intended to curb the military that had grown too powerful under the late ruler Kim Jong-il, it said.
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
At a massive shipyard in North Vancouver, Canadian workers grind metal beams for a powerful new icebreaker crucial to cementing the country’s presence in the increasingly contested arctic. Icebreakers are specialized, expensive vessels able to navigate in the frozen far north. And “this is the crown jewel,” said Eddie Schehr, vice president of production at the Seaspan shipyard. For Canadian Prime Minister Mark Carney, who heads to Norway next Friday to observe arctic defense drills involving troops from 14 NATO states, Canada’s extreme north has emerged as a strategic priority. “Canada is and forever will be an Arctic nation,” he said ahead of
Chinese entrepreneur Frank Gao used to spend long hours running his social media accounts but now outsources the chore to artificial intelligence (AI) agent tool OpenClaw, which is taking China by storm despite official warnings over cybersecurity. OpenClaw, created in November by an Austrian coder, differs from bots such as ChatGPT because it can execute real-life tasks such as sending e-mails, organizing files or even booking flight tickets. “Since January, I’ve spent hours on the lobster every day,” Gao said in an interview, referring to OpenClaw’s red crustacean mascot. “We’re family.” After downloading OpenClaw, users connect it to artificial intelligence models of their
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
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