Lehman rally fizzles on Korean news

NEW YORK, Aug. 23 (UPI) -- A Korean bank has clarified it is not ready to purchase any of troubled Lehman Brothers Holdings Inc., fizzling a short rally in the Wall Street firm's stock.

Shares had jumped as much as 16 percent but fell back Friday as the Korean Development Bank, KDB, clarified it was just window shopping for now, The Wall Street Journal reported Saturday.

At Friday's end Lehman was up about 5 percent, or 69 cents, to $14.41. But in total it has fallen 78 percent in 2008 and its management remains under intense pressure with net losses of $2 billion and write-downs of more than $3 billion expected in the current quarter.

Lehman has looked at options including selling struggling commercial real-estate assets or its healthy investment-management unit. Similar approaches appear to have aided Merrill Lynch & Co., whose stock has now risen 4 percent since July, The Journal noted.

For now, however, the Korean purchase of Lehman appears to be on hold.

"We are just at an early stage of privatization, and we are weak at investment banking by international standards," bank spokesman Sung Joo-yung told The Journal. "In the long term, we should strengthen that weakness."