Li Ka-Shing Rushes Into China Where Bond Angels Fear

(Bloomberg) -- The bond market is telling Li Ka-shing, Asia's richest man, he's sitting on a Chinese property bubble that's bigger than the one deflating in the U.S.

Bonds of China's Agile Property Holdings Ltd. yield 7.17 percentage points more than U.S. Treasuries, double the premium in July and 1.79 percentage points more than the debt of Los Angeles-based KB Home, which has the same credit ratings. Agile, a housing developer in the southern province of Guangdong, and Country Garden Holdings Co., China's most-profitable builder, canceled debt sales in November when borrowing costs climbed.

As China's government attempts to cool property prices with limits on lending, developers are in a land grab. Li, who made his fortune in Hong Kong real estate, Chinese billionaire Xu Rongmao, who owns Shimao Property Holdings Ltd., and hundreds of local developers boosted investment 29 percent in the first eight months of 2007, the National Bureau of Statistics said.

 

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MBIA Cuts Dividend, to Raise $1 Billion After Losses

(Bloomberg) - MBIA Inc., the world's largest bond insurer, sliced its dividend and will raise $1 billion in the sale of notes to boost capital and preserve its AAA credit rating.

The reduction of its quarterly payout to 13 cents a share from 34 cents will save $80 million a year, Armonk, New York- based MBIA said in a statement today.

Fitch Ratings, which gave MBIA until the end of the month to raise money, said the plan may be enough to stave off a downgrade. The loss of MBIA's AAA stamp would jeopardize ratings on $652 billion of bonds and threaten the company's ability to guarantee securities, a business that makes up about 90 percent of revenue. MBIA said today it will report losses of $737 million in the fourth quarter after a slump in the credit quality of the debt it insures.

 

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Blu-ray scores victory

(Fin24) - The International Consumer Electronics Show is turning out to be a celebration party for Blu-ray, the high-definition format that Sony Corp backed, and a wake for a rival movie disc technology pushed by Toshiba Corp.

Just two months ago, Sony CEO Howard Stringer said the fight between Blu-ray and Toshiba's HD-DVD was at a "stalemate", and expressed a wish to travel back in time to avert it.

The impasse was broken on Friday by Warner Bros Entertainment, the last major studio to put out movies in both formats. It announced it was ditching HD-DVD, and from May on, would only publish on Blu-ray and traditional DVD.

The decision puts a strong majority of the major studios, five versus two, in the Blu-ray camp.

Asked on Monday at the show if the Warner announcement decides the format war, Stringer said: "I never put up banners that say 'Mission Accomplished."' But his cheerful delivery belied his words.

By contrast, the main media event scheduled for the show by the North American HD-DVD Promotional Group, which includes Intel and Microsoft, was cancelled because of Warner's defection.
 

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Economic worries mar tech show's glitz

(Reuters) - The world's major technology companies are trying to convince consumers they need an expensive, digitally connected home with the latest high-tech gadgets.

But there's a problem: an increasing number of consumers are having trouble just paying for the roof over the heads, much less a 150-inch television.

Few company executives at the annual Consumer Electronics Show in Las Vegas this week can avoid questions about the state of the economy, and the combination of a surge in the U.S. jobless rate, oil around $100 and a worsening credit and housing crisis has many on edge.

"The fourth quarter is full of strange, unanswerable situations related to unemployment, related to GDP, related to everything else," Sony Corp (6758.T: Quote, Profile, Research) Chief Executive Howard Stringer said on Monday after a briefing at the show. "So it's too soon for us to be pessimistic, but I read the papers."

 

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Wii trounces PS3, Xbox

(Fin24) - Nintendo's Wii outsold rival Sony's PlayStation 3 three-fold in Japan last year, helping the country's multi-billion dollar video game market to notch up its best ever year, a survey showed on Monday.

Nintendo sold about 3.63 million Wii consoles in its home market in 2007 while Sony sold 1.21 million PS3s, according to magazine publisher Enterbrain.

The Wii also trounced the PS3 more than three-fold in the key year-end sales period between November 25 and December 30, selling 774 123 Wii consoles against Sony's sales of 232 421 PS3s, the survey showed.

Nintendo won back its lead after the two rivals briefly traded places in November, when the PS3 outsold the Wii in Japan for the first time, helped by a price cut and a stronger line-up of games, according to Enterbrain.

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Oil drops further away from $100

(Fin24) - Oil prices eased further from the historic 100-dollar-a-barrel level on Monday on fears that energy demand in the United States could be hit by the weakness of the world's biggest economy, traders said.

 

New York's main contract, light sweet crude for delivery in February, fell 51c to $97.40/barrel in electronic deals.

It had struck a record high of $100.09 last Thursday.

On Monday, Brent North Sea crude for February eased 7c to $96.72/barrel. Last week it struck an historic peak of $98.50.

"Prices fall as weak economic data rekindle fears of recessions in the US," Barclays Capital analyst Kevin Norrish wrote in a note to clients.
 

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Europe Confidence Falls to Lowest in Almost Two Years

(Bloomberg) -- European economic confidence fell in December to the lowest in almost two years as orders weakened and soaring prices for food and energy pushed up inflation.

An index of executive and consumer sentiment in the euro area slipped to 104.7, the lowest since March 2006, from 104.8 in November, the European Commission in Brussels said today. A separate report showed producer-price inflation accelerated in November to the highest in almost a year.

Expansion in Europe's services and manufacturing industries is slowing and confidence is weakening after oil prices reached a record and the euro gained against the dollar. Still, the European Central Bank has held off cutting its key lending rate as inflation soars, threatening to fuel bigger pay demands.

 

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