Olympus may take legal action against ousted Chief Executive
Michael Woodford, accusing him of disclosing confidential
information in media reports following his firing on Friday, a
senior executive told investors on Monday.
MSICPL’s ratings are driven by Fitch’s expectation of continued strong support from its
ultimate parent - Morgan Stanley (MS, Long-Term Issuer Default Rating (IDR): ‘A’/Stable;
Viability Rating: ‘a’; Short-Term IDR: ‘F1’). The former’s systems and operations are well
integrated within MS’s, and MS has invested over INR1.5bn in MSICPL in FY10 through Morgan
Stanley India Company Private Limited. The ratings may be downgraded if the linkages of and
support from MS are deemed by Fitch to have deteriorated or if MS’s ratings are downgraded to
India sovereign rating of ‘BBB-‘Funding profile is well-matched due to shorter tenor of assets compared with liabilities. It
also has back-up liquidity in the form of fixed deposits, bank lines and mutual funds. Leverage
is currently below 2x.Return on average assets (using an average of assets at end-financial year) dipped in FY11
to 1.38% from 2.43% in FY10 due to rising interest costs, although supported by improved
operational efficiency. Fitch notes that profitability may be volatile in near-term as the
current global economic slowdown impacts business volumes.MSICPL is engaged in financing MS’s private wealth management clients in India against
liquid securities (primarily shares) as well as in trading fixed income securities.Fitch has taken the following additional rating actions on MSICPL’s instruments:Proposed INR7.93bn long-term fully principal protected market-linked debentures: assigned a
final rating of ‘Fitch AAAemr(ind)’INR2.07bn fully principal protected market-linked notes (issued and outstanding): affirmed
at ‘Fitch AAAemr(ind)’INR20bn short-term debt: affirmed at ‘Fitch A1+(ind)’INR10bn long-term debt affirmed at ‘Fitch AAA(ind)’The suffix ‘emr’ denotes the exclusion of the embedded market risk from the rating. Ratings
of the equity-linked debentures is an ordinal assessment of the underlying credit risk of the
instrument and does not factor in the market risk that investors in such instruments will
assume. This market risk stems from the fact that coupon payment on these instruments will be
based on the performance of a reference index or equity share.
* Mexico’s peso firms 1.5 pct, Chile’s peso up 2 pctBy Jean Luis Arce and Rachel UrangaMEXICO CITY, Oct 12 (Reuters) - Mexico’s and Chile’s pesos
firmed to three-week highs on Wednesday as hopes Europe will
soon approve a plan to bolster its bailout fund boosted riskier
assets around the globe.Slovakia is the last country in the 17-member euro zone
that still needs to approve a plan to strengthen the euro
zone’s rescue fund.The Slovak parliament rejected on Tuesday the plan to
bolster the European Financial Stability Facility (EFSF), but
parties began talks with the opposition to reach a deal on
ratifying the plan.”They will end up approving it in a second vote and
investors are giving them the benefit of the doubt,” said
Gabriel Lozano, an economist at Santander in Mexico City.Mexico’s peso gained more than 1.6 percent to
13.1780 per dollar, its strongest since Sept. 19. The Chilean
peso bid 2 percent stronger on Wednesday to 499 per
dollar, also a three-week high.Mexico’s peso has gained 7 percent from near a two-year low
last week, while Chile’s peso rocketed back from a one-year low
as fears eased that Europe’s debt troubles could spark another
global financial crisis.Still, traders were cautious that recent gains could
reverse if Europe is unable to deliver on expectations of a
bolder new plan to shore up banks hurt by the debt crisis.”We are seeing demand for emerging markets today,” said
Francisco Diez, director of emerging market trading at RBC
Capital Markets in New York. “But sentiment is changing day to
day,” he said.Colombia’s peso gained 1 percent to 1896 per
dollar, trading at its strongest in two weeks.Peru’s sol surged to its highest in more than
three years, but pulled back to 2.7250 per dollar, still 0.18
percent firmer.High metals prices are supporting exports while investors
have become increasingly convinced left-wing President Ollanta
Humala, who took office in July, will not impose major reforms
that could discourage foreign investment in Peru.”Positive trade results together with evidence of strong
capital inflows from foreign direct investment still support
our forecast for the (sol) to remain strong,” Felipe Hernandez,
an analyst at RBS Securities, wrote in a note.Brazilian markets were closed for a holiday. The real had
gained ground for six straight sessions through Tuesday.
* PBOC mid-point only slightly weaker, no sign of response
yet* Offshore yuan gyrates amid corporate repositioning* Yuan at 6.3829, up 3.24 pct so far this yearBy Lu Jianxin and Jason SublerSHANGHAI, Oct 12 (Reuters) - China’s yuan fell versus the
dollar on Wednesday on speculation that a U.S. bill prodding
China to let the yuan rise at a faster pace could spark
retaliatory steps, but the currency recovered from its lower
daily limit after government-controlled Chinese banks sold
dollars into the market.The People’s Bank of China (PBOC) has at times in the past
engineered declines in the yuan to coincide with U.S.
pressure for it to strengthen its currency, in what analysts
have interpreted as an effort to signal that it will move at its
own pace on the currency, officially known as the renminbi.Expectations that it could take a similar response to the
bill approved by the U.S. Senate on Tuesday, aimed at pushing
China to let its currency rise at a faster pace, led to a sharp
fall in the yuan in the opening minutes of trade.Spot yuan was pushed briefly to the bottom end of the daily
trading band at 6.3916, even though the PBOC had set the day’s
mid-point higher than Tuesday’s close. It later trimmed its
losses to stand at 6.3829 per dollar by midday, down only
slightly from Tuesday’s close of 6.3750.”Since a sort of panic prevailed in early trading,
the big state banks were seen offering dollar liquidity to the
market that then helped the yuan to move away from its
limit-down level,” said a trader at a U.S. Bank in Shanghai.”This is actually not a surprise as the PBOC and the Big
Four are the only sources of dollar liquidity in the domestic
market.”NO SIGN OF RETALIATION - YETCurrency politics have hung over the local currency market
in the last couple of days, as the U.S. Senate late on Tuesday
approved a bill aimed at imposing penalties for what it says is
an undervalued yuan that is hurting the American job market.Although that bill is considered unlikely to pass through
the House of Representatives or to be signed into law by
President Barack Obama, China wasted no time in responding to
it.The foreign ministry issued a strongly worded statement just
hours after its passage, and the central bank following up by
saying the currency was not the main cause of trade imbalances.Still, the PBOC set its mid-point against the dollar at
6.3598, shy of a record high the day before at 6.3375 and still
stronger than the close in the spot market on Tuesday.The central bank uses the reference rate, from which the
dollar/yuan exchange rate may rise or fall 0.5 percent each day,
to signal the government’s intentions for the yuan.”Market jitters over a potential trade dispute between the
United States and China loom very large, although the PBOC did
not give an indication of an immediate retaliation via its
mid-point,” said a trader with a major European bank.”Past experience shows that excessive U.S. pressure on China
for yuan appreciation is temporarily counterproductive, with
China often halting yuan appreciation for a while to show
resistance to what it thinks is interference in its internal
affairs.”UNWINDING OF POSITIONS IN HKWhile onshore yuan volatility on Wednesday was related to
speculation over the prospects of yuan appreciation, the
currency also fluctuated sharply earlier this week and in late
September, but for different reasons, according to traders —
dollar demand from exporters and importers, traders said.Similar reasons were behind a sharp drop in the offshore
yuan , also known as CNH, in early trade on Wednesday,
as companies that had built up positions in offshore yuan sold
heavily.That was later balanced out by yuan buying in both the CNH
and non-deliverable forwards by a large U.S. bank, bringing
offshore yuan from a low of 6.5530 per dollar back up to 6.4550
at midday.Spot yuan has now appreciated 3.24 percent since
the start of this year and 6.95 percent since it was depegged
from the dollar in June 2010.”I suspect foreign banks, affected by weakening expectations
of yuan appreciation overseas, were the main dollar buyers today
although transaction details are not available here,” said a
trader at an Asian bank in Shanghai.”Recent increased volatility has also allowed speculation in
the yuan exchange rate. More experienced foreign banks are in a
better position to conduct profit-targeted speculation.”
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