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.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
RESPONSE: The Japanese Ministry of Finance might have to intervene in the currency markets should the yen keep weakening toward the 160 level against the US dollar Japan’s chief currency official yesterday sent a warning on recent foreign exchange moves, after the yen weakened against the US dollar following Friday last week’s Bank of Japan (BOJ) decision. “We’re seeing one-directional, sudden moves especially after last week’s monetary policy meeting, so I’m deeply concerned,” Japanese Vice Finance Minister for International Affairs Atsushi Mimura told reporters. “We’d like to take appropriate responses against excessive moves.” The central bank on Friday raised its benchmark interest rate to the highest in 30 years, but Bank of Japan Governor Kazuo Ueda chose to keep his options open rather than bolster the yen,
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
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