NY Fed Prez Says No V Shaped Recovery @ Hand
Not everyone is enthusiastic about the recovery. New York Fed President Bill Dudley is concerned about several things, including commercial real estate.
Yes, financial markets are performing better, but on the negative side, unemployment is way too high.
Dudley, who spoke last night at Fordham University said that the recovery will turn out to be “moderate by historical standards,” an outcome he calls “disappointing” and which will not to bring the unemployment rate—currently 9.8% —down quickly.
He said three restraining factors are into play: The shock to household net worth seems likely to have several important implications for household behavior; the fiscal outlook, as the stimulus is a temporary fix; and banks’ still-in-the-dumps’ balance sheets, which makes them capital constrained and hesitant to expand their lending.
While Dudley addressed the 800-pound gorilla – commercial real estate — which is “under particular pressure,” and laid out the reasons of the sector’s sorry state, he falls short from offering any solutions or saying that banks might want to start cleaning up their balance sheets. (Thanks!)
___________________________________________________________
– Neal Kimberley is an FX market analyst for Reuters. The opinions expressed are his own –
LONDON (Reuters) – An article in Britain’s Independent newspaper on Tuesday rightly attracted a lot of market attention with its provocative heading “The demise of the dollar.” While subsequent and almost co-ordinated denials from numerous capitals have taken the steam out of the story, the dollar’s role is again under scrutiny.
While the geopolitical realities of the Middle East would arguably rule out the re-pricing of oil in non-dollar currencies at this time, that may change in the future.
Alarmist conclusions that the dollar is on a swift road to ruin are wide of the mark. The road will be long and at its end the dollar will not be ruined, but it will be less important.
The dollar remains, however, on the back foot as the story resonated with a market that was already looking for an excuse to unload the greenback. Sovereign reserve managers, working for future generations, will have taken note. These stories add to the uncertainty of holding vast sums of dollars in trust.
It has long been the fate of reserve currencies to depreciate and be displaced. Global reserve currency status has always encouraged the beneficiary nation or empire to live beyond its means, safe in the knowledge that the rest of the world must hold its currency to pay for goods and commodities. The Roman dinar, the Spanish reale and most recently the British pound are all examples of currencies that have gradually lost their reserve status in this manner.
The key point is that the process is gradual. Displacement occurs in baby steps, small incremental developments which eventually create an unstoppable momentum. When the European Community first posited the idea of the single currency, the markets (particularly in London) sneered. Yet the euro was born and has prospered.
The dollar is entering a process of critical examination. This will take years, probably decades. Sterling retained significant world reserve status throughout the first half of the 20th century, despite clear signs economic primacy had shifted to the United States and despite the crushing financial weight of participation in two world wars.
One newspaper article is not a game-changer, but it is a reminder that the dollar’s position is under the microscope.
The market remembers only too well the suggestions of China’s Central Bank Governor Zhou Xiaochuan in March 2009. He said then that the world should consider adopting the Special Drawing Right, a basket of dollars, euros, sterling and yen, as a super-sovereign reserve currency.
The Chinese suggestion was a baby step toward change but the U.S. reaction was telling. Treasury Secretary Timothy Geithner said he had not read the proposal but added, “As I understand it, it’s a proposal designed to increase the use of the IMF’s Special Drawing Rights. I am actually quite open to that suggestion.” A masterful piece of political deflection but the market recognized the Chinese intent.
Even more recently, in September, the United Nations Conference on Trade and Development issued a report calling for a new global reserve currency.
It’s like the dripping of a tap. Across the world, institutions, governments and the media are wearing away at the dollar’s dominance. Central banks managing billions of dollars of reserves are not immune to these incremental developments.
In the past, Japanese officials characterized the best moment for intervention to be when they could “go with the wind.” In the current debate, reserve managers will consider that a light breeze is blowing against the dollar. They will make a measured and appropriate response. Marginal adjustments in reserves would increase the non-dollar component.
The Independent story may have been denied but it chimed with the market. It wasn’t the first such story and it won’t be the last. With the United States perceived to be living beyond its means and facing the challenges of rapidly rising economic and political rivals, the debate will continue. But it will be a long, long debate, and the effects on the value of the dollar will be incremental, not precipitate. To paraphrase Mark Twain, rumors of the dollar’s sudden death have been greatly exaggerated.
(Editing by Nigel Stephenson)
Reverse Mortgages May Be Taking Advantage of Seniors
By Alexis Leondis
Oct. 6 (Bloomberg) — Reverse mortgages may be the next subprime crisis, according to the National Consumer Law Center.
Some of the same U.S. lenders that helped drive the real estate boom with loans to home buyers who couldn’t afford the payments are now targeting seniors, the center said. Brokers, who are given financial incentives to sell the loans, may be making misleading claims to potential customers, according to a report titled “Subprime Revisited,’’ that was released today by the Boston-based NCLC.
“This market is designed to serve seniors, so when we find abuses cropping up and migrating from the subprime market to the senior market, that sounds an especially loud warning bell,” said Rick Jurgens, an advocate at the National Consumer Law Center, who contributed to the report.
Reverse mortgages enable people aged 62 and over who are looking for extra cash to use the equity in their homes and receive lump-sum payments, periodic checks, a line of credit, or a combination of the three. Lenders are repaid from the sale of the home when the borrowers die or move.
The former maximum payout for reverse mortgages backed by the Federal Housing Administration was $417,000. That limit was increased temporarily to $625,500 in February. Origination fees are capped at $6,000. In 2008, more than 100,000 seniors used reverse mortgages to tap over $17 billion in home equity, according to the Housing and Urban Development Department.
Consumer Protections
“These can be good things for certain people, but there are many pitfalls and we need transparency and consumer protections,” said Senator Herb Kohl, a Wisconsin Democrat, and chairman of the Senate Special Committee on Aging, in an e- mailed statement.
____________________________________________________________
Stocks laughed all the way to the big banks as Goldman’s upgrade of the sector saw a four-day slide end in emphatic fashion. Innerwear outfit Hanesbrands (HBI) (+12.05%) and Victoria’s Secret owner Limited Brands (LTD) (7.75%) were each indicative of a market which had nothing to hide. Dow Chemical (DOW) jumped 5.25% after saying it sees ample opportunity in solar shingles, a performance put in the shade by DepoMed’s (DEPO) 27.21% surge on successful trials for its shingles related pain product. Foodies fretted — diet darling NutriSystem (NTRI) was worth the weight with a 23.26% after hours increase on the day Gourmet magazine called it quits — but with both Yum Brands (YUM) and Rocky Mountain Chocolate Factory (RMCF) reporting results today, gluttons everywhere are out to emphasize revenge is best served cold.
The Supreme Court reconvened after vacation and Bank of America (BAC) announced a full court press to bring Merrill’s iconic bull back from hibernation, assuaging investors who had spotted its doppelganger in the doghouse. And if Sunday night was all about Mad Men’s Don Draper, Monday morning debuted dapper Don, with Imus in the Morning starting its 6:00AM simulcast on Fox Business channel.
Initiations
American International Group (AIG): UBS assumes coverage of American International Group with a Neutral.
Research In Motion (RIMM): The tech giant is initiated at Sanford Bernstein with an Underperform $60 price objective since it sees consensus estimates as too optimistic.
Tiffany (TIF): The retailer may shine after Citigroup picked it up with a with a Buy.
Marriott International (MAR): Collins Stewart makes room for Marriott with a Hold amid softness in timeshare and luxury residential markets.
Allergan (AGN): Beauty is only skin deep at Allergan, with the Botox maker frozen at Neutral by JP Morgan as its valuation already reflects its diverse growth opportunities.
Gap Inc. (GPS): The Gap gets initiated with a Buy and $25 target at Jesup & Lamont. See yesterday’s article Stick With Winners in Retail.
Upgrades
General Mills (GIS): The food packager starts the day with an Overweight-from-Equal Weight increase at Morgan Stanley on increased conviction following a stellar first quarter. The target price is taken to $72 from $64. For more see General Mills: The Company of Champions.
Family Dollar (FDO): Discounter Family Dollar is upgraded to Outperform from Market Perform by BMO Capital Markets ahead of earnings.
Corning (GLW): The company gets a Buy-from-Neutral boost at UBS.
Select Comfort (SCSS): Sleep specialist Select Comfort can take comfort in an upgrade at Raymond James (Outperform from Market Perform).
AFLAC (AFL): UBS upgrades AFLAC to Neutral from Sell.
Downgrades
Energy Stocks: Chesapeake Energy (CHK) and Devon Energy (DVN) are each downgraded to Underperform from Neutral at Credit Suisse.
International Game Technology (IGT): The stock gets cut to Buy from Conviction Buy at Goldman Sachs.
Zimmer Holding (ZMH): UBS lowers Zimmer Holdings (Neutral from Buy).
PepsiCo (PEP): The beverage firm is removed from the US Focus List at Credit Suisse, which sees shares rangebound after recent strength.
Nothing contained in this article is intended as a solicitation for business of any kind or for investment in the firm.
___________________________________________________________
Gold Hits New Highs on Weak Dollar
Gold hit a record high of $1,035.95 an ounce in Europe on Tuesday, with buying fueled by dollar weakness.
Spot gold cnbc_comboQuoteMove(‘[email protected]_ID0EMF15839609’);[[email protected] 1030.7 12.90 (+1.27%)]
cnbc_quoteComponent_init_getData(“[email protected]″,”WSODQ_COMPONENT_US%40GC.1_ID0EMF15839609″,”WSODQ”,”false”,”ID0EMF15839609″,”off”,”false”,”inLineQuote”);
was bid at $1,034.75 an ounce at against $1,016.65 late in New York on Monday…….
___________________________________________________________
BA to Take a Charge & Delay 747 Freighter
Boeing said it would take a charge of $1 billion in the third quarter because of higher production costs and tough market conditions for its 747-8 program.
The world’s second-largest plane-maker also said it would delay the first flight of the jumbo 747-8 Freighter to 2010 from the fourth quarter of 2009.
Boeing cnbc_comboQuoteMove(‘popup_ba_ID0EHH15839609’);[BA 52.28 — UNCH (0) ]
cnbc_quoteComponent_init_getData(“ba”,”WSODQ_COMPONENT_BA_ID0EHH15839609″,”WSODQ”,”true”,”ID0EHH15839609″,”off”,”false”,”inLineQuote”);
said $640 million of the charge reflects higher estimated costs to produce the 747-8. The company said “late maturity of engineering designs” disrupted manufacturing in the third quarter.
The remaining $360 million of the charge is linked to tough market conditions and the company’s decision to maintain the 747-8 production rate at 1.5 airplanes per month nearly two years longer than previously planned…..
___________________________________________________________
By Hui-yong Yu
Oct. 6 (Bloomberg) — U.S. apartment vacancies rose to 7.8 percent in the third quarter, the highest since 1986, as rising unemployment reduced rental demand, Reis Inc. said.
Actual rents paid by tenants, known as effective rents, declined 2.7 percent from a year earlier, the New York-based property research firm said in a report today. Asking rents, or what landlords sought, fell 1.8 percent from a year earlier.
Job losses and falling wages are shrinking the pool of potential tenants. The U.S. unemployment rate rose to 9.8 percent in August, the highest since 1983, the Labor Department said Oct. 2.
Vacancies “continued to rise despite what has traditionally been a strong leasing period for apartment properties,” Victor Calanog, director of research at Reis, said in a statement. “Given the inherent seasonality of rental and lease-up patterns we expect fourth-quarter figures to be even weaker, implying that we may break historic vacancy levels by year-end 2009.”
The apartment vacancy rate was 7.7 percent in the second quarter and 6.2 percent in 2008’s third quarter, Reis said. Compared with the second quarter, asking rents fell 0.5 percent and effective rents fell 0.3 percent.
New York’s Rate Falls
New York’s vacancy rate fell to 2.9 percent in the third quarter from 3 percent in the second, as the end of summer brought an influx of tenants signing leases, Reis said. Effective rents dropped 0.9 percent from the prior quarter and were down 6.8 percent from a year earlier.
“With New York being relatively more dependent on the still-embattled financial services sector, it may take a few more quarters before we see rents bottoming out” there, Calanog said. “We are on track for 2009 to register as the worst year in rent drops on record, far exceeding the historic 3.8 percent decline recorded in 2002.”
New Haven, Connecticut, replaced New York as the city with the lowest vacancy rate, at 2.5 percent, partly due to the start of the academic year, said Reis. Yale University is located in New Haven.
____________________________________________________________
Emerson, the US engineering company, said on Tuesday it had agreed to acquire Avocent, which makes network equipment and software, in a $1.2bn deal intended to widen its services offerings.
The all-cash deal is expected to close next January and at $25 a share would give Avocent stock holders a 22 per cent premium from last Friday’s closing share price. Shares of Avocent surged in pre-market trading by 20.81 per cent to $24.79, while Emerson’s stock was flat.
___________________________________________________________
Asian Markets Rise on U.S. ISM Data
By Jonathan Burgos and Shani Raja
Oct. 6 (Bloomberg) — Asian stocks rose for the first time in four days, led by companies reliant on overseas sales, after U.S. service industries returned to growth following 11 months of contraction.
Mazda Motor Corp., Japan’s No. 4 carmaker, rose 7.6 percent in Tokyo after narrowing a loss forecast and as a private report on services, which account for almost 90 percent of the U.S. economy, fueled optimism growth will pick up. Jiangxi Copper Co. climbed 4.1 percent in Hong Kong after commodity prices gained. Sumitomo Mitsui Financial Group Inc. added 3.6 percent after Japan’s financial services minister said lenders won’t have to boost provisions for bad loans should borrowers delay repayments.
The MSCI Asia Pacific Index added 1.4 percent to 115.29 as of 5:44 p.m. in Tokyo, following a three-day, 3.6 percent drop. The gauge has rallied 63 percent from a five-year low on March 9 amid better-than-estimated economic data and earnings reports. Shares on the gauge trade at an average 22 times estimated profit, more than the MSCI World Index’s 17 times.
“Asian markets are at higher valuations than most other markets, but the expectation is that you’ll get a lot more growth,” said Philip Schwartz, who manages $1.2 billion as head of international investing at ING Investment Management in New York. “Unless the numbers are really disappointing, I don’t think there’s a lot of risk to the markets.”
Japan’s Nikkei 225 Stock Average added 0.2 percent. Hong Kong’s Hang Seng Index rose 0.8 percent, as Alibaba.com Ltd., operator of China’s biggest trading Web site, surged 4.4 percent after Deutsche Bank AG upgraded the stock. China’s markets are closed for a holiday……
European Markets Enjoy a Broad Based Rally
By Adria Cimino
Oct. 6 (Bloomberg) — European and Asian stocks gained as higher commodities lifted metal producers, while financial shares advanced after BofA Merrill Lynch Global Research recommended European banks.
BHP Billiton Ltd., the world’s biggest mining company, climbed for a second day as copper increased. Credit Agricole SA, France’s third-largest bank by market value, advanced 4.2 percent after BofA Merrill advised buying the stock. Societe Generale SA, the country’s second-biggest lender, fell for a fifth day after saying it aims to raise 4.8 billion euros ($7.1 billion) and is in talks to purchase Dexia SA’s 20 percent stake in Credit du Nord. Dexia added 2.8 percent.
Europe’s Dow Jones Stoxx 600 Index gained 1.4 percent to 239.37 at 10:59 a.m. in London, while futures on the Standard & Poor’s 500 Index rose 0.8 percent. The benchmark gauges for Europe and the U.S. rebounded yesterday as a report showed American service industries returned to growth after 11 months of contraction.
“If banks are doing well, that’s good news for the rest of the market,” said Kilian de Kertanguy, a fund manager at Cholet-Dupont Gestion SA in Paris, which oversees about $2.3 billion. “There are signs that the market is ready to return to its highs. Each time there is a decline, we see that there are buyers and liquidity out there ready to enter.”….
By ALEX KENNEDY p {margin:12px 0px 0px 0px;}
Benchmark crude for November delivery was up 60 cents at $71.01 by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained 46 cents to settle at $70.41 Monday.
Oil has loitered near the $70 a barrel level for months as traders struggle to gauge how strongly the U.S. economy will recover.
Last week, poor jobs and manufacturing data undermined optimism, but on Monday the Institute for Supply Management said its service index showed that sector grew in September for the first time since August of last year.
Crude traders often look to stock markets for a sense of overall investor confidence. The Dow Jones industrial average rose 1.2 percent Monday, and most Asian indexes gained in early trading Tuesday.
A weakening dollar also helped oil prices. The euro rose to $1.4717 on Tuesday from $1.4647 the previous day, and the dollar slipped to 89.22 yen from 89.53.
In other Nymex trading, heating oil gained 1.10 cents to $1.80 a gallon. Gasoline for November delivery jumped 1.18 cents to $1.77 a gallon. Natural gas for November delivery fell 2.5 cents to $4.96 per 1,000 cubic feet.
In London, Brent crude rose 60 cents to $68.64 on the ICE Futures exchange.
….The euro, which closed yesterday’s trading at 1.4650 against the dollar jumped to a 12-day high of 1.4750 in early deals on Tuesday. The next upside target level for the euro-dollar pair is seen at 1.484.During early trading on Tuesday, the euro climbed to an 8-day high of 0.9247 against the pound. If the European currency advances further, it may target the 0.930 level. At yesterday’s close, the euro-pound pair was quoted at 0.9194.
An unexpected fall in U.K. industrial production weakened the pound today. The Office for National Statistics report showed that British industrial production declined 2.5% in August from July, while economists were looking for 0.2% rise. Annually, production was down 11.2%, larger than the 8.7% decrease expected by economists.
The euro recouped its Asian session’s loss against the Japanese yen in early European deals on Tuesday. The euro-yen pair thus moved from 130.73 to 131.58. On the upside, 132.1 is seen as the next target level for the euro. The pair was worth 131.22 at yesterday’s close.
In early deals on Tuesday, the euro fell to 1.5098 against the Swiss franc. This may be compared to yesterday’s closing value of 1.5122. The near term support for the euro-franc pair is seen around the 1.508 level.
Switzerland’s consumer price index or CPI fell 0.9% year-on-year in September after falling 0.8% in August, the Federal Statistical Office said today. Economists had forecast consumer prices to decline 0.8%. On a monthly basis, the CPI was flat in September, while it was expected to rise 0.1% after an increase of 0.1% in August.
by RTT Staff Writer
By Jacob Greber
Oct. 6 (Bloomberg) — Australia’s central bank unexpectedly raised its benchmark interest rate from a 49-year low and signaled further increases in coming months amid signs the economy is strengthening.
Reserve Bank Governor Glenn Stevens increased the overnight cash rate target to 3.25 percent from 3 percent in Sydney today. Only one of 20 economists surveyed by Bloomberg News forecast today’s move. The rest predicted no change.
The local currency jumped to the highest level in 14 months as Australia became the first Group of 20 nation to boost borrowing costs since the start of the global financial crisis more than a year ago. Rising job vacancies, retail sales and house prices, plus surging business and consumer confidence support Stevens’ view that the “basis for such a low interest rate setting has now passed.”
“It’s quite a pre-emptive move,” said Su-Lin Ong, senior economist at RBC Capital Markets Ltd. in Sydney. “They’re very comfortable the globe is returning to firmer growth, particularly Australia’s key trading partners in Asia.
“There are a few more hikes ahead.”
The Australian dollar rose to 88.53 U.S. cents at 5:47 p.m. in Sydney from 87.62 cents just before the decision was announced. The two-year government bond yield gained 4 basis points to 4.39 percent. A basis point is 0.01 percentage point.
Governor Stevens, who cut the benchmark lending rate by a record 4.25 percentage points between September 2008 and April to cushion Australia against fallout from the global credit squeeze, said today that the economy is likely to expand “close to trend over the year ahead,” and inflation will remain near the bank’s target range of between 2 percent and 3 percent.
Risk Has Passed…..
AIG Close To Selling Taiwan Unit
By Cathy Chan
Oct. 6 (Bloomberg) — American International Group Inc., the insurer bailed out by the U.S. government, is near an agreement to sell its Taiwan life insurance unit to Primus Financial Holdings Ltd., people familiar with the matter said.
New York-based AIG is in advanced talks with Primus and the two companies may sign an agreement as early as next week, the three people said, asking not to be identified. Primus Financial, co-founded by former Citigroup Inc. Asia investment banking chief Robert Morse, offered more than $2 billion for AIG’s Taipei-based Nan Shan Life Insurance Co., two of the people said.
AIG, once the world’s biggest insurer, is divesting units to repay loans included in its $182.5 billion government bailout. The selection of Primus Financial would end a four-month battle for Nan Shan that pitted the Hong Kong-based company against Chinatrust Financial Holding Co. and Cathay Financial Holding Co.
Jennifer Chen, a spokeswoman for Primus, declined to comment. An outside spokeswoman for AIG, who declined to be identified citing company policy, had no comment.
Primus Financial and Chinatrust sweetened terms of their offers in September as they entered final talks with AIG, two people familiar with the matter said. Fubon Financial Holding Co. and Cathay Financial dropped out of bidding after AIG rejected their offers, they said.
Hong Kong Tycoons….
VALE Increases Iron Ore Output to 95% Capacity
By Diana Kinch
Oct. 5 (Bloomberg) — Vale SA, the world’s biggest iron-ore producer, has increased output to 95 percent of capacity at its Brazilian mines, sooner than previously expected following the financial crisis, Goldman Sachs said.
Vale iron-ore mines in southeastern Brazil are producing at full capacity, while its higher-cost mines in the country’s south are operating at 80 percent, Goldman Sachs’s analysts led by Marcelo Aguiar said today in an e-mailed note to clients, citing Vale managers. Goldman Sachs previously forecast Vale to operate at 84 percent capacity in the fourth quarter.
The Rio de Janeiro-based mining company cut output of the steelmaking raw material earlier this year as the global economic crisis pared global demand. Chief Executive Officer Roger Agnelli told reporters July 7 Vale was restarting mines and pellet plants as demand rebounded.
“Vale should operate close to full iron-ore and pellets capacity in 2010, which represents 330 million to 340 million tons of iron ore,” Aguiar said after meeting Agnelli last week. The Sao Paulo-based analyst had estimated output of 306 million tons in 2010.
Vale rose 1.5 percent to 37.14 reais in Sao Paulo trading. The stock has gained 55 percent this year, less than the 66 percent increase for Brazil’s benchmark Bovespa index.
U.K. Factory Manufacturing Unexpectedly Slips to ’92 Lows
By Svenja O’Donnell
Oct. 6 (Bloomberg) — U.K. manufacturing production unexpectedly slumped in August to the lowest level since 1992, a sign the economy is struggling to shake off the recession.
Factory output dropped 1.9 percent from the previous month, the Office for National Statistics said today in London. Economists predicted a 0.3 percent increase, according to the median of 26 forecasts in a Bloomberg News survey. The index of manufacturing fell to 87.8, the lowest in 17 years.
Bank of England policy makers have cautioned that the credit squeeze and weak demand at home and overseas may hamper the economy’s escape from the worst recession in at least a generation. The central bank will keep up its 175 billion-pound ($280 billion) asset-purchase plan this week as officials gauge the strength of the recovery, economists say.
The data are “shockingly bad,” said Alan Clarke, an economist at BNP Paribas SA in London. “This starts to concern us that we’re losing momentum a bit earlier than we’d feared. We’re out of recession but it’s far from good growth yet.”
The pound dropped versus the euro and pared its advance against the dollar after the report. The British currency declined 0.3 percent to 92.24 pence per euro as of 9:50 a.m. in London. It was 0.2 percent higher at $1.5964, after earlier gaining as much as 0.7 percent.
Across the Board
The drop in manufacturing on the month was the biggest since January. All 13 categories fell, led by paper, printing, publishing, and then electrical and optical equipment, the statistics office said. From a year earlier, factory production declined 11.3 percent…..
RTP & Mongolia Sign A Monster Mining Deal
By ELISABETH BEHRMANN and JEFFREY SPARSHOTT
LONDON — Mongolia’s government Tuesday signed a long-awaited investment agreement for the multi-billion dollar Oyu Tolgoi copper-gold mine, owned by Canada-based Ivanhoe Mines Ltd. in which Rio Tinto PLC holds a significant stake.
The agreement establishes a clear framework for taxation and government involvement for Oyu Tolgoi, and marks a significant step forward for mining investment in the country. It is expected to pave the way for billions of dollars of future investment in Mongolia’s largely untapped coal, iron ore, zinc, gold and uranium riches.
“We believe Oyu Tolgoi will bring far reaching benefits for employees and communities directly linked to the mine, as well as for the people and industries indirectly connected to our operations,” Bret Clayton, chief executive of Rio Tinto’s copper and diamonds group, said in a statement.
Rio Tinto in 2006 purchased a 9.9% stake in Ivanhoe for $303 million. That holding is set to double with the signing of the investment agreement and an additional payment of $388 million. Rio Tinto may raise its stake in the company to up to 46.65%.
If you enjoy the content at iBankCoin, please follow us on Twitter