These are stories Report on Business is following Friday, July 13, 2012.
Teachers' takes Hansen stake
The Ontario Teachers' Pension Plan is getting cool.
The fund announced today that it's buying a majority stake in Helly Hansen Group AS, the Norwegian company known for its outdoor clothing.
The plan's private equity investment unit, Teachers' Private Capital, is buying the stake from another group, Altor Fund II, which will still hold a 25-per-cent interest.
The terms weren't announced, though Reuters quoted sources as saying the price topped 2-billion Norwegian crowns, or $326-million (U.S.), which would be about six times Altor's original price.
“Helly Hansen is an iconic brand with a long heritage and a strong commitment to innovation and design. We see excellent opportunities to continue growing revenues and international awareness outside the core European markets,” said Jo Taylor , TPC vice-president and head of Teachers’ London office.
Hansen's chief executive officer, Peter Sjolander, said Teachers' will be key as the company moves to expand the brand, notably in North America.
Other retailers also kicked the tires at Hansen, named for Helly Juell Hansen, a mariner who in 1877 began manufacturing apparel with his wife. Hansen was particularly hip among the younger set in the late 1990s
This is a deal unlike many that we've seen among Canada's pension funds, major institutional investors that have tended more to real estate and energy projects.
JPMorgan takes $4.4-billion hit
JPMorgan Chase & Co. today took a hit of $4.4-billion (U.S.) on credit derivatives, and said it's now moving on from the debacle, having "put most of this problem behind us."
The number had originally been estimated at $2-billion, but is still below what some reports had suggested. The losses are still mounting, though, and, beyond the recorded results, are now a cumulative $5.8-billion.
Even with the hit, the U.S. bank earned $5-billion, or $1.21 a share, in the second quarter, compared to $5.43-billion or $1.27 a year earlier.
JPMorgan is also restating its first-quarter numbers, taking some of the hit in the first three months of the year.
Chief executive officer Jamie Dimon said the bank has cleaned up its chief investment office, the source of the trouble, but is still probing for more details.
"We believe these events to be isolated to CIO, but have taken the opportunity to apply lessons learned across the firm," he said.
"The board of directors is independently overseeing and guiding the Company’s review, including any additional corrective actions. While our review continues, it is important to note that no client was impacted."
China growth slows
China's economy is cooling, but not as rapidly as some had feared.
Official numbers released in Beijing today show the economy expanded by 7.6 per cent, year over year, from a year earlier, slower than the 8.1-per-cent pace of the first three months of the year. That's the slowest pace in about three years.
Some observers had feared a faster slowdown, and, indeed, others don't even believe the government numbers.
"We continue to believe that China's economy is not doing as well as the already downbeat official figures suggest," said Mark Williams, chief Asia economist at Capital Economics in London. "But there are signs that growth will soon pick up."
Mr. Williams calculates that second-quarter growth may have been more in the area of 7 per cent. Regardless, he projects growth may be nearing its low point.
It's interesting to note that whether the number is 7.6 per cent or 7 per cent, it's enviable growth compared to that of other economies. Why it matters, though, is that China is seen as key to helping pull other economies out of a slump.
"Chinese economic data has had something of a mixed reception this morning, even if Beijing's economy is still growing at a rate that would make David Cameron and Barack Obama green with envy," said market analyst Chris Beauchamp of IG Index.
"A weaker property market and a slowdown in exports, a knock-on effect of the euro zone crisis, hampered growth," he added in a research note.
"As with most China data, there is plenty for both optimists and pessimists; the former expect that China will now ease policy yet further, while the latter argue that this giant economy is still headed for a ‘hard landing,’ with growth slowing markedly as the year continues."
- Canada launches lending-rate review after Libor scandal
- Kinross a likely target for Barrick, analyst says
- Italy passes market test despite Moody's downgrade