Moody’s cuts Argentina rating
Moody’s lowered its credit rating for Argentina by one step on Monday, citing a sharp fall in the country’s reserves and inconsistent economic policies. Moody’s cut the rating to “Caa1” from “B3,” putting it in the mid-range of “speculative” or junk bonds. The agency also cut its outlook for Argentina to negative from stable — a warning that the country could face another downgrade. Moody’s said a sharp fall in the government’s foreign exchange reserves, to US$27.5 billion from US$52.7 billion in 2011, increases the risk that Buenos Aires “may not meet its foreign-currency debt service obligations.”
Bombardier wins SA bid
Bombardier Inc is one of four companies picked to supply a total of 1,064 locomotives to South Africa’s state-owned freight rail system. Transnet Freight Rail said on Monday the total contract is worth about US$5 billion. Bombardier’s announcement did not disclose how much its share of the contract is worth, but a spokesman said the company is to supply 240 electric locomotives. In total, Transnet says it is buying 599 electric locomotives from Bombardier and CSR Zhuzhou Electric and 465 diesel engines are to be supplied by General Electric and CNR Rolling Stock.
Australian market probed
Foreign investment in Australia’s housing market is to be examined by a national parliamentary committee, its chair said on Monday, following a study that said Chinese investors are squeezing out local buyers. The Australian House Standing Committee on Economics inquiry into affordable housing is to probe the foreign investment framework to see whether it helps increase housing stock, and whether it is driving up prices. Investment bank Credit Suisse this month estimated that Chinese investors could pour A$40 billion (US$36 billion) into Australia’s residential property over the next seven years.
Chesapeake to spin off unit
Chesapeake Energy, the second-largest US natural-gas producer, said on Monday it has notified regulators of a plan to spin off its oilfield-services subsidiary. The wholly owned unit of the struggling energy company, Chesapeake Oilfield Operating, would have an initial public offering on the NYSE, according to the preliminary information the firm filed with the US Securities and Exchange Commission.
Cairn under tax probe
London-listed oil and gas explorer Cairn Energy said it would halt a US$300 million share buyback program while Indian tax authorities assess income taxes dating back seven years. The company made the announcement yesterday as it reported a loss last year of US$556 million after costs for unsuccessful exploration in Morocco and the North Sea soared. Analysts said the company had already completed around one-third of its US$300 million share buyback program.
Gernan court clears Porsche
A German court on Monday threw out claims from a number of institutional investors against Porsche in connection with its failed attempt to take over carmaker Volkswagen (VW) in 2008. Twenty-three 23 hedge funds, including Viking Global Investors, Glenhill Capital and Greenhill, had been seeking a total 1.36 billion euros (US$1.9 billion) in damages.