WORLDWIDE : HEADLINES
Samsung affiliates’ shares rise after Lee’s death sparks hopes of shake-up
SEOUL – Shares in Samsung Electronics Co Ltd and affiliates rose on Monday after the death a day earlier of Chairman Lee Kun-hee sparked hopes for restructuring and stake sales, analysts said.
Investors were betting that such measures would be needed to pay a hefty inheritance tax, estimated around 10 trillion won ($8.9 billion) for stockholdings alone, although analysts were divided on which moves were most likely.
Shares in Samsung C&T and Samsung Life Insurance rose as much as 21.2% and 15.7% respectively, while shares in Samsung BioLogics, Samsung SDS and Samsung Engineering also rose.
“The inheritance tax is outrageous, so family members might have no choice but to sell stakes in some non-core firms” such as Samsung Life, said NH Investment Securities analyst Kim Dong-yang.
Investors have long anticipated a shake-up in the event of Lee’s death, hoping for gains from any restructuring to strengthen de facto holding company Samsung C&T’s control of crown jewel Samsung Electronics, such as Samsung C&T buying an affiliate’s stake in the tech giant.
Son and heir apparent Jay Y. Lee has a 17.3% stake in Samsung C&T, which owns a 5.01% stake in Samsung Electronics, the global leader in smartphones and memory chips. Samsung C&T also has a 19.3% stake in Samsung Life, the No.2 shareholder of Samsung Electronics.
Full coverage: REUTERS
Amazon wins arbitration order against Future’s deal with Reliance
NEW DELHI/MUMBAI – A Singapore arbitration panel has put on hold Future Group’s $3.38 billion asset sale to Reliance Industries Ltd, an interim win for Amazon.com Inc, which had alleged the deal between the Indian firms breached existing agreements.
Amazon received an emergency order to halt the companies from proceeding with the deal until an arbitration tribunal is formed, a source with direct knowledge of the matter told Reuters.
Amazon last year bought a 49% stake in Future Coupons Ltd, which owns a 7.3% stake in Future Retail. In August, Mukesh Ambani’s Reliance decided to buy retail, wholesale and some other businesses of Future Group in a deal valued at $3.38 billion, including debt.
But Amazon’s investment came with contractual rights that include a right of first refusal and a non-compete-like pact, media had reported, and Amazon later started arbitration proceedings in Singapore.
Full coverage: REUTERS
WORLDWIDE : FINANCE / MARKETS
Asia shares turn muted as S&P 500 futures slip
SYDNEY – Asian shares got off to a subdued start on Monday as surging coronavirus cases in Europe and the United states threatened the global outlook, while China’s leaders meet to ponder the future of the economic giant.
The United States has seen its highest ever number of new COVID-19 cases in the past two days, while France also set unwanted case records and Spain announced a state of emergency.
That combined with no clear progress on a U.S. stimulus package to pull S&P 500 futures down 0.5% ESc1. EUROSTOXX 50 futures STXEc1 eased 0.4% and FTSE futures FFIc1 0.3%.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS went flat, still short of its recent 31-month peak. Japan’s Nikkei .N225 dithered either side of steady, and South Korea’s main index lost 0.3% .KS11.
Chinese blue chips .CSI300 shed 1.1% as the country’s leaders met to chart the nation’s economic course for 2021-2025, balancing growth with reforms amid an uncertain global outlook and deepening tensions with the United States.
Full coverage: REUTERS
Oil falls more than 1% as surging COVID-19 cases stoke demand fears
TOKYO – Oil prices fell on Monday, extending last week’s losses, as a jump in COVID-19 infections in the United States and Europe raised alarms over crude demand, while the prospect of increased supply also hurt sentiment.
Brent crude LCOc1 was down by 53 cents, or 1.3%, at $41.24 by 0052 GMT. U.S. West Texas Intermediate (WTI) dropped 53 cents, or 1.3%, to $39.32, having fallen more than a dollar shortly after the start of trading.
Brent fell 2.7% last week and WTI dropped 2.5%.
The United States reported its highest number yet of new coronavirus infections in two days through Saturday, while in France new cases hit a record of more than 50,000 on Sunday, underlining the severity of the outbreak.
On the supply side, Libya’s National Oil Corp on Friday ended its force majeure on exports from two key ports and said production would reach 1 million barrels per day (bpd) in four weeks, a quicker ramp-up than many analysts had predicted.
Full coverage: REUTERS
Dollar firm as virus’ spread and stimulus stalemate spur caution
SINGAPORE – The dollar found support on Monday, as surging coronavirus cases in Europe and the United States and a lack of progress toward a U.S. stimulus package put traders in a cautious mood, although hopes for a Brexit trade deal held sterling steady.
Against a basket of currencies =USD, the greenback traded between steady and slightly firmer early in the Asia session, hovering around the middle of a range it has held for months.
Against the risk-sensitive Australian dollar and New Zealand dollars, it gained about 0.1%. Sterling GBP=, however, rose a tiny bit to $1.3046.
The United States has recorded its highest ever number of new COVID-19 cases for two consecutive days, while Italy has ordered restaurants and bars to shut by 6 p.m. as a fresh wave of infections sweeps Europe.
U.S. House Speaker Nancy Pelosi said on Sunday that she expected a White House response on Monday regarding the latest stimulus spending plan – but there have been few tangible signs that a long-stalled deal is actually nearer.
“The combination of receding hopes for a pre-election fiscal deal and the news on COVID and potentially stricter lockdowns is enough to take a bite out of the stock market,” said Ray Attrill, head of FX strategy at National Australia Bank.
Full coverage: REUTERS
