UPI NewsTrack Business

March 20, 2013 at 11:46 AM
share with facebook
share with twitter

Markets climb early

NEW YORK, March 20 (UPI) -- U.S. markets swung higher Wednesday morning as investors anticipate the Federal Reserve will maintain an accommodating monetary policy.

The Fed's Open Market Committee concludes a two day meeting with a policy announcement scheduled for Wednesday afternoon.

Investors ignored uncertainly about the $13 billion international bailout offered to Cyprus. Lawmakers in Cyprus overwhelmingly rejected the plan to tax bank accounts, which was part of the deal worked out in Brussels.

In late morning trading, the Dow Jones industrial average added 62.09 points or 0.43 percent to 14,517.91.

The Nasdaq gained 17.06 points or 0.53 percent to 3,246.16.

The Standard and Poor's 500 added 8.56 points or 0.55 percent to 1,556.90.

Ten-year U.S. treasury bonds fell 9/32 to yield 1.939 percent.

Against the dollar, the euro was at $1.2942 from Tuesday's $1.2883. Against the yen, the dollar was higher at 95.52 yen from 95.17 yen.

Cyprus looks for Plan B

NICOSIA, Cyprus, March 20 (UPI) -- Cypriot Finance Minister Michalis Sarris said in Moscow there was hope that Russia would assist Cyprus, where lawmakers rejected a eurozone bailout plan.

"We had a very good first meeting -- a very constructive, very honest discussion. We underscored how difficult the situation is and we will now continue our discussions to find a solution by which we hope we will be getting some support from Russia," the finance minister said after meeting for 90 minutes with Russian Finance Minister Anton Siluanov.

Sarris called the meeting "a good beginning," and said talks would continue.

The meetings are taking place a day after members of Parliament in Cyprus rejected a $13 billion bailout proposal from the European Commission, the International Monetary Fund and the European Central bank, known as the troika.

That plan stipulates that Cyprus come up with $7.5 billion itself. The plan lawmakers rejected Tuesday called for a tax to be levied on bank deposits, a strategy that is, in part, due to concerns that deposits in Cypriot banks include huge amounts of ill-gotten gains from Russian criminals.

That plan was not only rejected soundly by lawmakers, but was harshly criticized by Russian President Vladimir Putin, The New York Times reported Wednesday.

Russia has already loaned Cyprus $3.2 billion. Part of the talks between the finance ministers included an extension of that loan and a possible reduction in the loan's 4.5 percent interest rate.

Britain's The Guardian newspaper said Cypriot President Nicos Anastasiades met with Orthodox Archbishop Chrysostomos II, who has offered to put the church's property in Cyprus up for collateral.

A government spokesman said the president was looking for a solution that would "reduce the $7.5 billion haircut from depositors, by borrowing from our own resources."

One observer said Cyprus did not understand international expectations.

"The Cypriot members of Parliament obviously didn't get the EU [European Union] memo that states that you must vote yes, and if you don't, you keep voting until you do," said market analyst Michael Hewson at CMC Markets.

JPMorgan Chase settles with MF Global

NEW YORK, March 20 (UPI) -- U.S. clients of failed brokerage MF Global will see a return rate of 93 percent on the dollar for their investments, court trustee James Giddens said.

The rate was boosted this week as JP Morgan Chase agreed to pay $100 million to the firm and return $29 million in funds it had held onto since MF Global declared bankruptcy in 2011, CNNMoney reported Wednesday.

The court appointed trustee, who is charged with recovering funds for clients, has also agreed to release $417 million in funds from JP Morgan Chase that the bank has already returned.

The settlement also boosts the return rate for foreign investors from 75 percent to 82 percent of their investment, Giddens said.

The trustee said the settlement with the bank was a better deal for MF Global clients than taking the issue to court.

"This is a favorable and economically sound agreement ending what would have been a costly, protracted, and uncertain legal battle. Without the agreement, additional substantial distributions would have been delayed for at least two or three years," Giddens said.

The firm declared bankruptcy in late 2011 and reportedly lost $1.6 billion in client funds in the weeks leading up to its collapse.

About $105 billion in cash was distributed in the firm's final week of business, the trustee has said.

Former New Jersey Gov. Jon Corzine, the firm's top executive, said he had no idea client funds were missing until just before the firm declared bankruptcy. He has repeatedly said he did not direct any misuse of client money.

The firm, however, was using client funds to cover its own obligations, it has been revealed.

No criminal charges have yet been filed in the case.

The settlement with JP Morgan Chase is tentative until it is approved by the courts, CNNMoney said.

China investments in Africa boom

BEIJING, March 20 (UPI) -- China's trade with Africa is booming as Chinese investments in the continent soar, Chinese officials and experts say.

The official China Daily reported Wednesday a growing number of Chinese companies are investing in Africa where they see big opportunities. China is already Africa's largest trading partner.

"China and Africa are good friends, good brothers and good partners. China has actively supported African countries in developing their infrastructure and economy," said Li Zhaoxing, president of China Public Diplomacy Association.

"China will speed up investment in Africa. China's new president Xi Jinping will attend the fifth leaders' summit of BRICS [Brazil, Russia, India, China and South Africa] in South Africa. The visit by the new president will give impetus to the strengthening cooperation between China and African countries."

Chinese official data showed China-Africa trade reached a high of more than $160 billion in 2011, up 28 percent from 2010. China Daily said the volume for 2012 is estimated to have surpassed $200 billion.

At the end of 2011, China's direct investment in Africa reached almost $15 billion, with more than 2,000 Chinese companies currently invested in Africa, the report said.

Related UPI Stories
Trending Stories