China factories regain footing

HONG KONG (CNNMoney)

China's official purchasing managers' index increased to 51.0 in August from 50.3 in July, according to the National Bureau of Statistics. Any number over 50 indicates an acceleration in the sector, and 50.1 is the highest mark since April of last year.

A separate PMI measure released Monday by global bank HSBC came in at 50.1, a sharp increase from the 11-month low of 47.7 recorded in July.

The official government gauge is heavily weighted toward large enterprises, while the HSBC survey taps a smaller sample size and places greater emphasis on smaller firms.

HSBC economist Hongbin Qu attributed the sector's strong performance to companies' restocking activities and some minor stimulus measures undertaken by Beijing.

"Growth in China's manufacturing sector has started to stabilize on the back of a modest rebound of new orders and output," Qu said.

Related story: China's Internet hit by biggest cyberattack in its history

Steadying growth in China's vast manufacturing sector, seen as an economic bellwether, could lighten the burden for a government that has been under pressure to launch more significant stimulus measures.

China's economy has averaged growth of around 10% a year for the past three decades, allowing the nation to rocket past competitors.

But expansion slowed to an annual rate of 7.5% last quarter, and many economists had projected even slower growth during the second half of the year.

The improvement in manufacturing data could spur economists to revise their growth forecasts higher for the third and fourth quarters -- especially since inflation is well in hand at below 3%.

"We expect some upside surprises to China's growth in the coming months," Qu said.

First Published: September 1, 2013: 11:01 PM ET

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Vodafone nears $130 billion deal with Verizon

HONG KONG (CNNMoney)

The deal, valued at $130 billion, would give Verizon 100% control of Verizon Wireless if completed. Vodafone (VOD) currently owns 45% of the venture.

Vodafone cautioned that there is no guarantee that an agreement will be reached, but said that the deal would consist of a mixture of Verizon common stock and cash.

"A further announcement will be made as soon as practicable," the company said in a statement. A Verizon representative did not immediately respond to a request for comment.

If completed, it will be one of the largest deals in corporate history. Vodafone paid a record $180 billion for Germany's Mannesmann in 2000.

Verizon (VZ, Fortune 500) has expressed desire in controlling all of Verizon Wireless for years, but rumors that such a deal was about to get done have increased over the past few months.

Verizon Wireless is the most profitable U.S. wireless carrier, and Verizon wants total access to that firehose -- not just 55% of it.

The wireless business is the only reason the company is growing: Landlines are dying, and Verizon has stopped building out its FiOS Internet and television infrastructure.

Related story: Vodafone's $10 billion German takeover

It could help Vodafone ease its sizable debt burden. Joe Rundle, head of trading at ETX Capital in London estimated that the deal could save Vodafone $35 billion in taxes.

Vodafone also said the purchase would allow it to continue growing in the German market -- one of the few European mobile markets that is actually doing well.

The deal comes at a time of consolidation for the wireless industry. MetroPCS and T-Mobile (TMUS) recently completed their complex merger, and Softbank bought Sprint (S, Fortune 500) in July.

First Published: September 2, 2013: 12:14 AM ET

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China Everbright fined for insider trading

Everbright Securities shares dropped 10% Monday as investors reacted to new fines and penalties.

HONG KONG (CNNMoney)

The state-controlled company will be forced to pay a 523 million yuan ($85.5 million) fine, and regulators say Everbright has been banned indefinitely from trading on its own account.

Everbright is able to continue trading fixed-income securities, but the company is prohibited from applying for new business. The government didn't specify if it would consider allowing the firm to engage in proprietary trading at a future date.

In addition, four executives have been fined 600,000 yuan, and barred from the securities market for life, while another was fined 200,000 yuan.

Two of the punished executives have since resigned, including assistant president Yang Chizhong and board secretary Mei Jian, according to a company statement to the Shanghai Stock Exchange.

Everbright president Xu Haoming stepped down earlier in the middle of the government investigation.

News of the securities watchdog's fines caused shares of Everbright Securities to tumble 10% at market open on Monday, the daily limit allowed on the Shanghai Stock Exchange.

The China Securities Regulatory Commission began investigating Everbright after a systems glitch bombarded the market with erroneous buy orders on Aug. 16, sending the Shanghai Composite Index up by 6% in a matter of minutes.

After realizing its mistake, Everbright tried to fix the error by taking short positions in index futures and exchange-traded funds, even turning a profit of $87.2 million yuan before disclosing the computer systems gaffe, according to the government.

Everbright's trades constituted insider trading, violated stock exchange regulations, and caused great negative impact to public investors, the CSRC said. The government will confiscate the millions in profit, in addition to the fines levied.

The company could appeal to the CSRC, but hasn't said whether it will do so, according to a company statement.

Everbright's gaffe, the largest such incident in the history since China's capital markets were established, have raised questions over effective regulation and the use of high-speed trading platforms on the exchange.

Related story: Fat fingers in Shanghai shake investor confidence

Computer trading systems glitches are common in markets around the world, Robert Horrocks, chief investment officer at Matthews Asia, said before the CSRC announced the Everbright fines.

"The nature of the error tells you a little bit about how the market has developed over time," he said. "And to me, the nature of this error tells me that the markets have developed a wee bit and gotten more complex and sophisticated."

Last month, computer malfunctions caused a trading halt in all Nasdaq-listed stocks and options for more than three hours. In April, the Dow quickly plunged 140 points after hackers managed to send an incorrect tweet about an emergency at the White House. And in 2010, the Dow Jones industrial average plunged nearly 1,000 points, briefly erasing $1 trillion in market value

First Published: September 2, 2013: 1:28 AM ET

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India's economic growth slowest since 2009

India's GDP growth hit is lowest level since the beginning of 2009.

LONDON (CNNMoney)

The nation's gross domestic product -- the broadest measure of economic growth -- came in at 4.4% annual rate for the April to June quarter.

That's India's lowest quarterly growth since the beginning of 2009, heightening concerns about a nation that is struggling with a falling currency, dysfunctional politics and a highly volatile stock market.

"This number is a little bit lower than consensus expectations, but expectations were quite low to begin with," said Anjalika Bardalai, a senior analyst at Eurasia Group in London.

Growth in the January to March quarter was also sluggish, at 4.8%. The most recent International Monetary Fund report forecasts that India's economy will expand by 5.6% in fiscal 2013, but many economists believe that number is overly optimistic.

Related: Emerging market woes: Contained or contagion?

The GDP data was released just hours after the country's prime minister, Manmohan Singh, said "the fundamentals of the Indian economy continue to be strong," while acknowledging that India faced "a difficult economic situation."

The Indian rupee has lost roughly 12% of its value during the past month, with much of it coming in a series of stomach-churning drops during the past few days. The sharp currency devaluation is extremely problematic since the country imports many more goods than it exports. That could leave consumers struggling to pay higher prices for everyday goods.

Equity markets have also taken a big hit in recent days. The benchmark Mumbai Sensex index has quickly turned into one of the worst performers in Asia.

The government has responded with a series of policy changes, but none have been particularly effective in stabilizing the recent volatility.

Economists have long argued that India needs to implement structural economic reforms to bring about meaningful progress. Last year, parliament lifted restrictions on foreign direct investment after much debate -- a key step.

But Eurasia's Bardalai said India is simply not making enough progress with its economic reforms, and that's hurting the country's future prospects.

Meanwhile, time for making bold new reforms is running out, with national elections due to take place by May 2014.

--CNNMoney's Charles Riley contributed to this report.

First Published: August 30, 2013: 11:25 AM ET

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China partners with U.S. oil firm in Egypt

NEW YORK (CNNMoney)

The deal involves Sinopec (SHI) paying $3.1 billion for a 33% stake in Apache's Egyptian operations, which produce about 100,000 barrels of oil day.

Apache (APA, Fortune 500) said the sale had nothing to do with the current turbulence in Egypt.

"Apache's exploration and production operations, which are located in remote, unpopulated areas, remain unaffected by political events in the region," the company said in a statement announcing the deal.

Instead, Apache said it will use the money to focus on "assets with predictable growth rates and attractive rates of return" -- primarily oil fields in West Texas, the Texas Panhandle, and Oklahoma.

Related: Oil companies target America for investment

Apache is the latest in a string of oil companies that have been selling assets overseas, including $11 billion in sales from ConocoPhillips (COP, Fortune 500) and $4 billion from Hess (HES, Fortune 500) in 2012.

Much of the money is being invested in U.S. states including Texas, North Dakota and Pennsylvania, where hydraulic fracturing and advances in drilling have unlocked previously inaccessible oil and gas supplies and led to a boom in U.S. energy production.

Analysts say the firms are attracted to the relatively well developed infrastructure in the United States, well trained workers, strong laws and low tax rates. Royalties, income and other taxes in the United States typically take about 50% of an oil company's profit, compared to 90% or more in many other parts of the world.

China's expansion: For the Chinese, the deal is yet another in a series of partnerships Chinese oil firms have struck with Western companies as China seeks to secure additional supplies for its rapidly expanding economy and gain knowledge of cutting edge industry technology.

Other large Chinese deals this year include a $4.1 billion purchase of an offshore gas field in Mozambique from Italy's Eni (E), a $1.7 billion partnership with Texas-based Pioneer (PXD) on fields in that state, and a $1.5 billion deal for offshore assets with Brazil's Petrobras (PBR), according to Brian Lidsky, an analyst with energy data provider PLS in Houston.

Chinese firms often come in as a junior partner, putting up some cash in exchange for a minority stake in the oil fields. The fields themselves remain operated by the majority investor, although Chinese engineers are often on site.

Chinese investment in U.S oil fields remains a sensitive issue in the United States, with some fearing the involvement of firms controlled by a not-always-friendly government in such a strategic resource. In 2005, the U.S. government effectively blocked the sale of California's Unocal to China's CNOOC.

Yet others say greater Chinese investment in the oil industry is a good thing. Oil is, after all, a global commodity. If China is going to continue using so much oil, the more everyone will have to pay. So its firms might as well put up the money, and assume some of the risk, to get the stuff out of the ground.

First Published: August 30, 2013: 11:38 AM ET

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American, US Air win quick trial for antitrust case

US Airways and American Airlines won their request for a quick trial in the antitrust case that seeks to block their proposed merger.

NEW YORK (CNNMoney)

U.S. District Court Judge Colleen Kollar-Kotelly on Friday set a Nov. 25 trial date, which was only two weeks after the airlines' requested trial date. The case will be a bench trial, not a jury trial, at the courthouse in Washington.

The Justice Department had asked for a March trial date for the antitrust case it filed in mid-August. But attorneys for US Air and American had said such a delay would threaten the deal itself because they could not wait that long to know if they could go ahead with the combination.

"Two independent companies can be asked to stay in limbo for only so long before they need to make independent plans," said the airline in a filing on Wednesday.

The airlines said they were pleased with Friday's decision and confident they will win the court's approval of the merger.

Justice Department spokesman Peter Carr said "We appreciate the court's careful consideration of the scheduling issues and will be ready to present our case on Nov. 25, 2013."

Shares of US Air (LCC, Fortune 500), which have lost ground since the antitrust case was brought, rose 2% in Friday trading.

Related: Questions about price hikes surround American-US Airways deal

Justice filed the antitrust suit earlier this month, charging the combination would hurt airline passengers by reducing choices and driving up costs. The airlines argue the $11 billion merger of their two networks announced in February would give customers more choices and reduce overall costs, and would spur competition.

Justice contends that American Airlines' financial turnaround since its November 2011 bankruptcy filing, including the posting of its largest monthly profit on record in July, is proof that the airlines could survive as independent carriers.

First Published: August 30, 2013: 2:28 PM ET

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India's economic growth slowest since 2009

India's GDP growth hit is lowest level since the beginning of 2009.

LONDON (CNNMoney)

The nation's gross domestic product -- the broadest measure of economic growth -- came in at 4.4% annual rate for the April to June quarter.

That's India's lowest quarterly growth since the beginning of 2009, heightening concerns about a nation that is struggling with a falling currency, dysfunctional politics and a highly volatile stock market.

"This number is a little bit lower than consensus expectations, but expectations were quite low to begin with," said Anjalika Bardalai, a senior analyst at Eurasia Group in London.

Growth in the January to March quarter was also sluggish, at 4.8%. The most recent International Monetary Fund report forecasts that India's economy will expand by 5.6% in fiscal 2013, but many economists believe that number is overly optimistic.

Related: Emerging market woes: Contained or contagion?

The GDP data was released just hours after the country's prime minister, Manmohan Singh, said "the fundamentals of the Indian economy continue to be strong," while acknowledging that India faced "a difficult economic situation."

The Indian rupee has lost roughly 12% of its value during the past month, with much of it coming in a series of stomach-churning drops during the past few days. The sharp currency devaluation is extremely problematic since the country imports many more goods than it exports. That could leave consumers struggling to pay higher prices for everyday goods.

Equity markets have also taken a big hit in recent days. The benchmark Mumbai Sensex index has quickly turned into one of the worst performers in Asia.

The government has responded with a series of policy changes, but none have been particularly effective in stabilizing the recent volatility.

Economists have long argued that India needs to implement structural economic reforms to bring about meaningful progress. Last year, parliament lifted restrictions on foreign direct investment after much debate -- a key step.

But Eurasia's Bardalai said India is simply not making enough progress with its economic reforms, and that's hurting the country's future prospects.

Meanwhile, time for making bold new reforms is running out, with national elections due to take place by May 2014.

--CNNMoney's Charles Riley contributed to this report.

First Published: August 30, 2013: 11:25 AM ET

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China partners with U.S. oil firm in Egypt

NEW YORK (CNNMoney)

The deal involves Sinopec (SHI) paying $3.1 billion for a 33% stake in Apache's Egyptian operations, which produce about 100,000 barrels of oil day.

Apache (APA, Fortune 500) said the sale had nothing to do with the current turbulence in Egypt.

"Apache's exploration and production operations, which are located in remote, unpopulated areas, remain unaffected by political events in the region," the company said in a statement announcing the deal.

Instead, Apache said it will use the money to focus on "assets with predictable growth rates and attractive rates of return" -- primarily oil fields in West Texas, the Texas Panhandle, and Oklahoma.

Related: Oil companies target America for investment

Apache is the latest in a string of oil companies that have been selling assets overseas, including $11 billion in sales from ConocoPhillips (COP, Fortune 500) and $4 billion from Hess (HES, Fortune 500) in 2012.

Much of the money is being invested in U.S. states including Texas, North Dakota and Pennsylvania, where hydraulic fracturing and advances in drilling have unlocked previously inaccessible oil and gas supplies and led to a boom in U.S. energy production.

Analysts say the firms are attracted to the relatively well developed infrastructure in the United States, well trained workers, strong laws and low tax rates. Royalties, income and other taxes in the United States typically take about 50% of an oil company's profit, compared to 90% or more in many other parts of the world.

China's expansion: For the Chinese, the deal is yet another in a series of partnerships Chinese oil firms have struck with Western companies as China seeks to secure additional supplies for its rapidly expanding economy and gain knowledge of cutting edge industry technology.

Other large Chinese deals this year include a $4.1 billion purchase of an offshore gas field in Mozambique from Italy's Eni (E), a $1.7 billion partnership with Texas-based Pioneer (PXD) on fields in that state, and a $1.5 billion deal for offshore assets with Brazil's Petrobras (PBR), according to Brian Lidsky, an analyst with energy data provider PLS in Houston.

Chinese firms often come in as a junior partner, putting up some cash in exchange for a minority stake in the oil fields. The fields themselves remain operated by the majority investor, although Chinese engineers are often on site.

Chinese investment in U.S oil fields remains a sensitive issue in the United States, with some fearing the involvement of firms controlled by a not-always-friendly government in such a strategic resource. In 2005, the U.S. government effectively blocked the sale of California's Unocal to China's CNOOC.

Yet others say greater Chinese investment in the oil industry is a good thing. Oil is, after all, a global commodity. If China is going to continue using so much oil, the more everyone will have to pay. So its firms might as well put up the money, and assume some of the risk, to get the stuff out of the ground.

First Published: August 30, 2013: 11:38 AM ET

15.30 | 0 komentar | Read More

American, US Air win quick trial for antitrust case

US Airways and American Airlines won their request for a quick trial in the antitrust case that seeks to block their proposed merger.

NEW YORK (CNNMoney)

U.S. District Court Judge Colleen Kollar-Kotelly on Friday set a Nov. 25 trial date, which was only two weeks after the airlines' requested trial date. The case will be a bench trial, not a jury trial, at the courthouse in Washington.

The Justice Department had asked for a March trial date for the antitrust case it filed in mid-August. But attorneys for US Air and American had said such a delay would threaten the deal itself because they could not wait that long to know if they could go ahead with the combination.

"Two independent companies can be asked to stay in limbo for only so long before they need to make independent plans," said the airline in a filing on Wednesday.

The airlines said they were pleased with Friday's decision and confident they will win the court's approval of the merger.

Justice Department spokesman Peter Carr said "We appreciate the court's careful consideration of the scheduling issues and will be ready to present our case on Nov. 25, 2013."

Shares of US Air (LCC, Fortune 500), which have lost ground since the antitrust case was brought, rose 2% in Friday trading.

Related: Questions about price hikes surround American-US Airways deal

Justice filed the antitrust suit earlier this month, charging the combination would hurt airline passengers by reducing choices and driving up costs. The airlines argue the $11 billion merger of their two networks announced in February would give customers more choices and reduce overall costs, and would spur competition.

Justice contends that American Airlines' financial turnaround since its November 2011 bankruptcy filing, including the posting of its largest monthly profit on record in July, is proof that the airlines could survive as independent carriers.

First Published: August 30, 2013: 2:28 PM ET

15.30 | 0 komentar | Read More

India's economic growth slowest since 2009

India's GDP growth hit is lowest level since the beginning of 2009.

LONDON (CNNMoney)

The nation's gross domestic product -- the broadest measure of economic growth -- came in at 4.4% annual rate for the April to June quarter.

That's India's lowest quarterly growth since the beginning of 2009, heightening concerns about a nation that is struggling with a falling currency, dysfunctional politics and a highly volatile stock market.

"This number is a little bit lower than consensus expectations, but expectations were quite low to begin with," said Anjalika Bardalai, a senior analyst at Eurasia Group in London.

Growth in the January to March quarter was also sluggish, at 4.8%. The most recent International Monetary Fund report forecasts that India's economy will expand by 5.6% in fiscal 2013, but many economists believe that number is overly optimistic.

Related: Emerging market woes: Contained or contagion?

The GDP data was released just hours after the country's prime minister, Manmohan Singh, said "the fundamentals of the Indian economy continue to be strong," while acknowledging that India faced "a difficult economic situation."

The Indian rupee has lost roughly 12% of its value during the past month, with much of it coming in a series of stomach-churning drops during the past few days. The sharp currency devaluation is extremely problematic since the country imports many more goods than it exports. That could leave consumers struggling to pay higher prices for everyday goods.

Equity markets have also taken a big hit in recent days. The benchmark Mumbai Sensex index has quickly turned into one of the worst performers in Asia.

The government has responded with a series of policy changes, but none have been particularly effective in stabilizing the recent volatility.

Economists have long argued that India needs to implement structural economic reforms to bring about meaningful progress. Last year, parliament lifted restrictions on foreign direct investment after much debate -- a key step.

But Eurasia's Bardalai said India is simply not making enough progress with its economic reforms, and that's hurting the country's future prospects.

Meanwhile, time for making bold new reforms is running out, with national elections due to take place by May 2014.

--CNNMoney's Charles Riley contributed to this report.

First Published: August 30, 2013: 11:25 AM ET

17.42 | 0 komentar | Read More