Money Daily Brief: Troubled Galleon sees redemptions soar
Investors have redeemed $1.3 billion from troubled hedge firm Galleon.
•Galleon Group woes: Employees began preparing resumes as investors moved to recoup $1.3 billion in assets from the $3.7 billion hedge fund, which is at the center of an insider-trading scandal. Raj Rajaratnam , the group's cofounder, went free after posting $100 million in bail. Institutional investors may have to pull out of the firm.Skip to next paragraph
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•Earnings reports: DuPont's third-quarter profit rose a better-than-expected 11 percent, but the chemical giant's revenues fell. Pfizer, whose earnings climbed 26 percent, saw a similar phenomenon, while Caterpillar's earnings plunged 53 percent. The picture was far brighter at Apple, which surged past earnings expectations for the fiscal fourth quarter with a 47 percent rise in profit and 25 percent jump in revenue on computer and iPhone sales. But the tech bellwether expected its gross profit margin to slip more than 2 percent in the fiscal first quarter, which includes the holiday season.
•Sale of Manpower: Swiss-based Adecco SA, the world's largest supplier of temporary workers, is set to buy MPS Group for $1.3 billion to expand services in the US, United Kingdom, and Canada. The prices represents a 24 percent premium. Companies like Adecco are expecting a surge in work as economies around the world begin to crawl back from the crisis.
•Smooth sailing: The global shipping industry may have seen the worst of the downturn, analysts say. But while freight rates are rising to break-even levels, it could be years before shippers return to the kind of profitability they saw in better times. The slight resurgence in their stock prices is also fragile.
•In my backyard: Toyota Motor Corp. launched its flagship Prius hybrid and two other Toyota-brand models in South Korea, muscling into a market dominated by local automakers. The Japanese manufacturer had previously offered only Lexus-brand models here. The Prius may prove especially successful thanks to South Korea's hefty tax benefits for drivers who buy green vehicles. South Korea's own Hyundai Motor Corp., a late-comer to the green-car market, launched its Elantra hybrid just this July. It is only sold domestically and uses liquid petroleum gas.
– Ben Hancock is a Monitor contributor based in Seoul. For a look at US-backed mortgage guarantors, see Outlook for Fannie Mae, Freddie Mac still troubled a year later.