Early Edition September 03 2008 at 05:23 AM Chi-Chu Tschang and Harry Maurer
Energy Takes Center Stage at Republican Convention, Bush Praises McCain
Delegates at the Republican National Convention have given energy issues top billing as the GOP pushes to make energy their hallmark campaign issue for the first time in decades. Experts say it's an attempt to put aside internal rifts over oil drilling and climate change and focus on tapping voters' anxiety over high gas prices.
Alongside energy, U.S. President George Bush on Sept. 2 hailed Senator John McCain as a president in waiting who would prevent terrorist attacks before they occurred. Bush stressed the national security credentials of the presumptive Republican nominee and his willingness to take on threats to the U.S.
Source: Financial Times, Bloomberg
Oil prices continue to fall
Oil prices dropped more than $1 to below $109 on Sept. 3, deepening this week's sharp fall as traders looked past Hurricane Gustav to focus on the slowing global economy and gloomy outlook for energy demand. Oil has fallen more than $6 since Aug. 29, touching its lowest in five months after early signs that a weakened Hurricane Gustav caused little damage to U.S. oil installations.
Source: Reuters
Dollar bounces back against foreign currencies
The dollar on Sept. 2 rose to the highest level against the euro in almost seven months as the market speculated that the U.S. Federal Reserve's monetary policy would help the domestic economy outperform Europe's and Asia's. The British pound also fell to a two-year low against the dollar due to a looming recession in the country.
Source: Washington Post
Pressure grows for U.S. rate hike
Directors at three U.S. Federal Reserve banks backed a quarter percentage-point increase in the discount rate before an Aug. 5 policy meeting in an attempt to keep inflation at bay, Fed documents released on Sept. 2 show. Directors at the other nine regional Fed banks all voted to hold the discount rate at 2.25% in the same period leading up to the Fed's most recent interest rate-setting meeting.
Source: New York Times
Chinese pull back from Fannie Mae & Freddie Mac
China's four biggest listed banks have pared back their holdings in debt related to Fannie Mae and Freddie Mac, which has attracted interest as a possible gauge of broader sentiment toward such securities. After trimming their holdings of U.S. mortgage-related debt, Chinese financial players increasingly are facing difficult decisions about how to invest their sizable foreign-currency holdings.
Source: Wall Street Journal
China to raise electricity prices
China -- the world's second-biggest energy consumer -- may raise retail electricity prices to cover higher costs for generators and distributors, according to Zhang Zengchan, secretary general of China Ferroalloys Industry Association. China is facing a sixth year of power shortages and already has increased wholesale electricity tariffs twice and retail prices once this year.
Source: Bloomberg
Coca-Cola eyes $2.4 billion Chinese acquisition
Coca-Cola has offered to acquire a Chinese maker of juices and nectars for about $2.4 billion -- the second-largest acquisition in the Atlanta company's history. If successful, the acquisition of Beijing-based China Huiyuan Juice Group would also represent the largest purchase of control of a Chinese company by a foreign company.
Source: Wall Street Journal
Activist investors pressure Deutsche Borse
On Sept. 2, Atticus Capital and The Children's Investment Fund -- the activist hedge funds that are the two biggest investors in Deutsche Borse -- warned the stock exchange group to take urgent action to boost shareholder value. In a joint statement, the two funds said they would use their stakes to force the German exchange operator to "pursue all options" to create value.
Source: Financial Times
Morgan Stanley targets property market
U.S. financial giant Morgan Stanley is raising $10 billion for a global property fund and plans to put $1.5 billion or more of that into China, shrugging off concern about a property market downturn, according to a banking source. The Morgan Stanley Real Estate Fund VII Global is expected to begin investing worldwide before the end of this year.
Source: Reuters
Tata's Nano faces problems in India
Tata Motors -- maker of the highly anticipated $2,500 Nano small car -- finally has called it quits in Singur, in the east Indian state of West Bengal, where the car was to be manufactured. The implications of Tata's relocation are severe. Industry observers believe the politicization of the Nano project will most likely ground fresh investments in the Communist-led state of West Bengal.
Source: BusinessWeek
Conversation of the Day: McCain's Energy Intentions
Reader Hugo van Randwyck Writes: "Try increasing petrol from $4 to $10 a gallon as in Europe, and refunding tax. Sarah Palin has the expertise for implementing such a process."
