China's CIC to fund Sinopec oil search abroad-paper

BEIJING, Dec 21 (Reuters) - China Investment Corp, the country's sovereign wealth fund, is in talks with China Petroleum & Chemical Corp, or Sinopec, to provide funding to help it explore for oil overseas, the China Business News reported on Friday.

Sinopec (SNP.N: Quote, Profile, Research) (0386.HK: Quote, Profile, Research) (600028.SS: Quote, Profile, Research), China's second-largest oil and gas producer, is listed in Shanghai, Hong Kong and New York. The company could not be immediately reached for comment.

The paper did not say what form the injection of funds would take. One possibility is for CIC and Sinopec's parent to jointly invest in overseas exploration projects and to sell the assets to the listed company, the paper quoted unidentified sources as saying.

The State-owned Assets Supervision and Administration Commission (SASAC) has been keen for CIC to support the overseas expansion of the 150 or so large firms under its control and has now reached agreement with the fund to do that, the paper said.

CIC identified Sinopec as the first candidate for financial support after several rounds of talks with the refiner, the newspaper added.

CIC has initially been entrusted with $200 billion to manage, of which one-third is earmarked for international investments.

The fund said this week it was injecting $5 billion into U.S. investment bank Morgan Stanley (MS.N: Quote, Profile, Research). (Reporting by Langi Chiang; Editing by Alan Wheatley and Edmund Klamann)

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source: reuters.com

Merrill may get $5 bln capital from Temasek: report

NEW YORK (Reuters) - Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research) may get up to $5 billion in a capital infusion from Singapore state investor Temasek Holdings TEM.UL, the Wall Street Journal reported on Thursday.

Temasek is in advanced talks with the largest U.S. brokerage and its board has given preliminary approval for the investment, the Journal reported, citing a person familiar with the matter.

However, pricing, timing and regulatory issues would still need to be negotiated between the two companies, the Journal said.

A Merrill spokeswoman could not be immediately reached for comment. In Singapore, Temasek spokesman Mark Lee said: "Like we told the Wall Street Journal, we decline comment."

Merrill Lynch faces huge potential write-downs on assets underpinned by risky subprime mortgages. The company's $8.4 billion write-down in the third quarter cost Chairman and Chief Executive Stan O'Neal his job, leaving new Merrill leader John Thain with the task of cleaning up.

Analysts estimate Merrill could further slash the value of these subprime-related assets by an additional several billion dollars. Last month, the company said its total exposure to subprime mortgages and collateralized debt obligations was $27.2 billion.

A Temasek capital infusion into Merrill would be the latest in a series by sovereign wealth funds into western banks hurt by this year's credit crunch.

Earlier this week, China Investment Corp agreed to pump $5 billion into Morgan Stanley (MS.N: Quote, Profile, Research) as the U.S. investment bank posted a fourth-quarter loss fuelled by $9.4 billion of losses in subprime mortgages and other assets.

Citigroup Inc (C.N: Quote, Profile, Research) agreed last month to sell a 4.9 percent stake to Abu Dhabi for $7.5 billion, while UBS (UBSN.VX: Quote, Profile, Research) accepted a $9.75 billion investment from the Government of Singapore Investment Corporation (GIC).

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source: reuters.com

UPDATE 5-Bear Stearns has huge loss, cuts executive bonuses

(Adds Moody's ratings action, updates share price to close)

By Tim McLaughlin

NEW YORK, Dec 20 (Reuters) - Bear Stearns Co Inc (BSC.N: Quote, Profile, Research) posted a much bigger-than-expected quarterly loss on Thursday, capping a fiscal year when the fifth-largest U.S. investment bank took a beating on bad bets on risky subprime mortgages.

It was the first loss in the history of the company, which decided top executives would not receive bonuses. Bank of America analyst Michael Hecht said Bear's smaller bonus pool could lead to attrition and hinder a strong rebound.

Bear Stearns said it took a $1.9 billion write-down in the fourth quarter ended Nov. 30, reflecting the reduced value of subprime mortgage-related securities. That was bigger than the $1.2 billion the company estimated in early November.

The quarterly net loss of $854 million, or $6.90 a share, compared with a year-earlier profit of $563 million, or $4 a share.

The loss was nearly four times bigger than the $1.80 a share that analysts were expecting, according to Reuters Estimates.

Goldman Sachs analyst William Tanona said the good news was that Bear's subprime mortgages problems might be largely over, but there is doubt that the company is diversified enough to recover as quickly as rivals.

Bear Stearns' shares were down for much of the session, but rallied late in the day as the broader market rose, closing up 82 cents at $91.42 on the New York Stock Exchange. The stock has fallen nearly 44 percent this year, compared with a 16 percent decline for the Amex Securities Broker Dealer index .XBD.

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source: reuters.com

PFF Bancorp rebuffs investor over stake plan

BOSTON, Dec 20 (Reuters) - Financial services firm PFF Bancorp Inc (PFB.N: Quote, Profile, Research) urged an investment firm on Thursday to withdraw its application to the Federal Reserve seeking permission to buy up to 24.9 percent of PFF Bancorp.

"After careful consideration, including consultation with financial and legal advisors, the board has unanimously concluded that the proposal that you seek to undertake would not be in the best interests of our shareholders," PFF Bancorp Chief Executive Kevin McCarthy said in a letter to the chairman of FBOP Corporation, which made the application to the Fed.

"Accordingly, we respectfully request that FBOP promptly withdraw its application," McCarthy said in the letter to FBOP Chairman Michael Kelly.

If the application is not withdrawn before the end of the public comment period, PFF Bancorp intends to file a protest with the Federal Reserve, he said. The letter was disclosed in a filing to the U.S. Securities and Exchange Commission.

FBOP Corporation, based in Illinois, is a privately held holding company with stakes in several small banks.

Shares of PFF Bancorp, which provides financing and consulting services to home builders and land owners, closed up $1.13, or 9.5 percent, at $13.08 on the New York Stock Exchange.

(Reporting by Muralikumar Anantharaman, editing by Richard Chang)

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source: reuters.com

FACTBOX-A lump of coal for Bear Stearns employees

NEW YORK (Reuters) - Bear Stearns Cos Inc (BSC.N: Quote, Profile, Research) employees will be the worst paid on Wall Street among the four investment banks whose fiscal year ends in November.

Bear Stearns, which posted its first quarterly loss in its history on Thursday after making bad bets on subprime mortgages, will pay employees an average of $241,998, down about 24 percent from last year and about a third of the average pay for a Goldman Sachs Group Inc employee.

Bear Stearns' top executives, including Chairman and Chief Executive Jimmy Cayne, will not take home bonuses at all, which should leave more money in the bonus pool for other employees. Last year, Bear Stearns' top four executives received cash and restricted stock then valued at over $100 million.

But Bank of America analyst Michael Hecht said Bear's smaller bonus pool could lead to attrition and hinder a strong rebound for the investment bank.

Goldman Sachs employees were the best paid among the four investment banks, taking home an average of $661,490.

A table showing relative pay at the firms is below.

Bear Stearns 2007 2006 Net revenue, full year $5.95 bln $9.23 bln Compensation and benefits expense, full year $3.43 bln $4.34 bln Number of employees, end of year 14,153 13,566 Revenue per employee, full year $420,052.29 $680,156.27 Compensation expense per employee, full year $241,998.16 $320,138.58

Morgan Stanley 2007 2006 Net revenue, full year $28.03 bln $28.84 bln Compensation and benefits expense, full year $16.55 bln $13.99 bln Number of employees, end of year 48,256 43,124 Revenue per employee, full year $580,777.52 $668,745.94 Compensation expense per employee, full year $343,003.98 $324,320.56

Goldman Sachs 2007 2006 Net revenue, full year $45.99 bln $37.67 bln Compensation and benefits expense, full year $20.19 bln $16.46 bln Number of employees, end of year 30,522 26,467 Revenue per employee, full year $1,506,683.70 $1,423,092.91 Compensation expense per employee, full year $661,490.07 $621,793.18

Lehman Brothers 2007 2006 Net revenue, full year $19.26 bln $17.58 bln Compensation and benefits expense, full year $9.49 bln $8.67 bln Number of employees, end of year 28,556 25,936 Revenue per employee, full year $674,359.15 $677,938.00 Compensation expense per employee, full year $332,469.53 $334,245.84

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source: reuters.com