Yancoal parent keeps investors on tenterhooks
While Chinese coal firm Yanzhou’s advisers wait to see if their attempt to spin the Foreign Investment Review Board 180 degrees is successful, investors in Yancoal’s contingent value rights are trying to figure out where they sit in the company’s plans, according to the Australian Financial Review.
Hedge funds that own the CVRs have done well in recent months from the bet that they would get their $3 worth of cash or stock, come December’s maturity date.
The CVRs are trading up from $2.40 in March to $2.82.
Now holders are wondering whether it is worth sticking around for the last 18¢. The outcome is unclear. Absent a proposed privatisation, Yanzhou would have to decide whether to pay out $262 million in cash to CVR holders or issue an amount of shares that would dilute the parent’s ownership, most likely to below 50%.
Boom's $190bn windfall 'wasted'
Australia has squandered nearly all of the $190 billion windfall from the resources boom over the past decade through a raft of unsustainable government spending programs and tax cuts, according to The Australian.
With cabinet today expected to discuss savings and tax measures for Chris Bowen's planned economic statement to combat a predicted $8bn slump in revenue, a report from the Melbourne-based Grattan Institute think tank warns of a significant, long-term budget deficit.
JPMorgan considers exiting commodities business
A decision by JPMorgan Chase & Co to exit its physical commodities business would temporarily reduce market liquidity before other companies quickly take its place, according to analysts and traders, according to the Australian Financial Review.
New York-based JPMorgan, the largest US bank, said on Friday after an internal review that it was “pursuing strategic alternatives”, including the sale or spinoff of its commodities business.
The statement came three days after a congressional hearing investigated whether deposit-taking banks should be allowed to trade raw materials such as oil and industrial metals.
JPMorgan owns and trades financial and physical commodities including crude oil, natural gas and power. It describes itself as “one of the world’s leading energy market makers”
