Finance & Business World

Ukraine and Kazakhstan, home to two of this year’s worst emerging stock markets, are driving away investors by attempting to prevent capital flight.

Ukraine ordered banks this month to buy and sell the hryvnia at a rate no weaker than a floor policy makers set each day. Kazakhstan’s parliament is preparing to give the president power to force exporters to sell the government their foreign- currency earnings for tenge.

“If you’ve got money in a country that introduces some sort of controls, that’s an issue and so we’re steering pretty clear of that area right now,” said Andrew Bosomworth, a fund manager in Munich at Pacific Investment Management Co. who helps oversee more than $50 billion in emerging-market debt for the world’s largest bond-fund manager. “The best way to attract private money that’s going to stay there is to provide a coherent environment to invest in.”

The two nations devalued their currencies and took over struggling banks in the past six months as the first global recession since World War II slashed demand for exports at the same time that frozen credit markets drove away foreign investment.

Ukraine’s PFTS stock index fell 26 percent this year and the Kazakhstan Stock Exchange Shares Index lost 28 percent, ranking among the worst emerging-market performers with Costa Rica, Nigeria, Serbia, Qatar and Bosnia, according to data compiled by Bloomberg.

Slumping Currency

Ukraine’s foreign-currency reserves were reduced by a third in the six months to February, with most of that $12 billion drop due to the central bank’s purchases of hryvnia, said Ivan Tchakarov, an economist in London at Nomura Holdings Inc. The currency has slumped 37 percent versus the dollar since September as sales of steel, the nation’s biggest export, fell 50 percent in the year to February and the governing coalition collapsed over the handling of the economic crisis.

President Viktor Yushchenko, a former central bank governor who led the peaceful overthrow of a pro-Russian government in 2004, opposes Prime Minister Yulia Timoshenko’s moves to fire current bank chief Volodymyr Stelmakh and to negotiate with Russia for a $5 billion loan.

Ukraine has received the first $4.5 billion installment of a $16.4 billion bailout from the International Monetary Fund. The IMF has delayed the second loan installment of $1.9 billion until the former Soviet state cuts a 2009 budget deficit equal to 5 percent of gross domestic product. The IMF will accept a budget gap of 3.1 percent of GDP, Yushchenko said March 23.

Minimum Rate

The central bank’s mandatory minimum hryvnia rate was 7.9489 per dollar when it was last updated on March 27. That’s 4 percent stronger than the 8.28 per dollar spot rate currency traders at Galt & Taggart Holdings Inc. saw quoted yesterday, said Nick Piazza, head of sales at the Kiev-based brokerage.

Countries like Ukraine and Kazakhstan need capital controls so they can stop hemorrhaging money, said Douglas Polunin, who manages about $200 million in emerging-market assets, including Ukrainian and Kazakh equities, at Polunin Capital Partners in London.

“They help the economy because you don’t have this sudden flow of money rushing out of the country that has such a destabilizing effect on company balance sheets,” Polunin said. “Overall capital controls are a good thing, though foreign investors do get frightened because of concerns they won’t be able to withdraw their money.”

Held Responsible

The central banks’ currency regulation department told lenders on March 17 that chairmen would be held responsible for the hryvnia exchange rates quoted on their bank Web sites and on information systems such as Bloomberg and Reuters, according to Natsionalnyi Bank Ukrainy’s head of external relations, Serhiy Kruhlik.

The hryvnia’s drop is rooted in “psychological and speculative factors” and authorities will leave “no stone unturned” in investigating possible currency speculation Yushchenko said in a statement on his Web site.

Yushchenko promised Ukraine would emerge from the crisis with a revived economy, saying March 25 the government has formed a “clear response.”

“Clearly the level of foreign currency depletion is politically highly sensitive, and there’s an idea that speculators have ripped them off,” said Tim Ash, head of emerging-market economics in London at Royal Bank of Scotland Group Plc cashadvance.

‘Bloodbath’

Moscow-based Prosperity Capital Management, which oversees $1.9 billion in former Soviet assets, has been selling Ukrainian equities. Its fund managers have been unable to get money out of the country because banks are unwilling to lose dollars from their stockpiles by converting hryvnia-denominated proceeds, said Ivan Mazalov, a Prosperity director.

“It’s a bloodbath,” he said.

Ukraine’s central bank has taken control of 11 local lenders since requesting the IMF loan. The Washington-based fund estimates the country will need to spend about 4.5 percent of its GDP to recapitalize the banking sector.

The yield on 4.95 percent euro-denominated Ukraine government bonds due 2015 doubled to 24 percent in the past six months. Russian dollar-bonds due 2018 yield just 6.61 percent.

Credit-default swaps insuring Ukrainian government debt are the most expensive in emerging Europe, according to prices from CMA Datavision in London. They cost 60.5 percent of the amount covered upfront and 5 percent a year. That means investors must pay $6.1 million in advance and $500,000 a year to protect $10 million in bonds for five years. Six months ago, that same protection cost $567,000 a year and nothing upfront.

‘Outright Taxation’

Yaroslav Lissovolik, chief economist in Moscow at Deutsche Bank AG, said Ukraine may impose “outright taxation on withdrawals leaving the country” or require exporters to sell some or all of their foreign-currency earnings to the central bank at rates it dictates.

In Kazakhstan, the government is preparing to block foreign currency from leaving. The Majilis, the lower house of parliament, has twice given preliminary approval to a measure that would let President Nursultan Nazarbayev compel exporters to sell foreign-exchange earnings to the government for tenge.

Kazakhstan’s exporters include Irving, Texas-based Exxon Mobil Corp, the world’s biggest oil company; Courbevoie, France- based Total SA, Europe’s third-largest oil group; and San Ramon, California-based Chevron Corp, the second-biggest U.S. oil producer.

‘Painful’ Possibility

Those companies wouldn’t be able to pay dividends to international shareholders or repatriate profits under this type of capital control, said Tatiana Orlova, an economist in Moscow at ING Groep NV. “It would be painful,” she said.

The Kazakh bill, which needs Senate approval before the president considers it, would also ban companies and citizens from making foreign-currency transfers overseas.

National Bank of Kazakhstan allowed the tenge to weaken 21 percent versus the dollar on Feb. 4 after Russia let the ruble depreciate 36 percent in the previous six months as oil prices fell 67 percent. Oil is the largest export earner for both Russia and Kazakhstan.

The tenge will be held at 150 per dollar for the rest of the year, central bank Governor Grigori Marchenko said on Feb. 18 and again a month later.

The Almaty-based central bank didn’t respond yesterday to questions e-mailed to spokeswoman Aigul Amankulova.

Economic Contraction

Kazakhstan, which holds 3.2 percent of the world’s oil reserves according to BP Plc, is facing its first contraction in economic growth in a decade as the government vows to spend as much as $4 billion bailing out banks. The state is the majority shareholder in BTA Bank, the country’s biggest lender, and may take a 76 percent share of Alliance Bank, the fourth-largest, said Margulan Seisembayev, its chairman, on March 2.

Credit-default swaps for Kazakhstan government debt have more than tripled to 1,114 basis points, or 11.14 percent of the amount covered, in the past six months, making them the second most expensive in the ex-Soviet and eastern European region. It costs $1.1 million a year to protect $10 million in debt from default each year for five years.

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Japan’s consumer prices stalled in February and retail sales tumbled the most in seven years, signaling a return to deflation is likely to deepen the recession.

Prices excluding fresh food were unchanged from a year earlier, the statistics bureau said today in Tokyo. Retail sales declined 5.8 percent, the Trade Ministry said, more than the 3 percent economists predicted.

An unprecedented drop in exports is forcing companies to fire workers and cut wages, weakening household spending and pushing the economy closer to its worst slump in the postwar era. With the benchmark interest rate already at 0.1 percent, the Bank of Japan has little scope to stop prices from falling.

“Japan is back in deflation and the price level is set to decline for several years,” said Richard Jerram, chief economist at Macquarie Securities Ltd. in Tokyo. Deflation “erodes the health of the corporate sector and means that the Bank of Japan cannot cut interest rates to appropriate levels.”

Central bank Governor Masaaki Shirakawa said this week that core prices are on the verge of falling and policy makers are committed to preventing the economy from sliding into a deflationary spiral.

During Japan’s last bout with sustained price declines that began a decade ago, bankruptcies surged and the jobless rate advanced to a postwar high. The central bank responded by cutting interest rates to zero percent and flooding the banking system with reserves for five years through 2006.

Reasons to Worry

“There are many reasons we have to worry about a return of deflation,” said Azusa Kato, an economist at BNP Paribas in Tokyo. “Companies may race to discount to get rid of inventories if they keep posting losses, and wage cuts and bankruptcies will spread in coming months.”

Investors shrugged off the reports. The Topix index rose 0.9 percent at the lunch break in Tokyo, heading for its best week in more than 16 years as better-than-expected earnings by U.S. companies fueled speculation the global recession is abating. The yen traded at 98 same day payday loans.27 per dollar from 98.71.

Wages fell for a third month in January, leaving consumers with less money to spend and forcing retailers to lower prices.

Aeon Co., Japan’s largest supermarket operator, last week said it will offer discounts on 5,100 items this month. Rivals Ito-Yokado Co. and Seiyu Ltd. already cut prices of food, clothing and household products this month.

“Clearly the consumer has taken a shock,” Jerram said. “The pain in manufacturing has led to greater insecurity, and it seems to have damaged consumer spending.”

Store Discounts

Excluding food and energy, prices fell 0.1 percent in February, a second monthly decline. Finance Minister Kaoru Yosano said it was “too early” to conclude that the drop meant Japan has slid back to deflation.

Core prices in Tokyo rose 0.4 percent in March from a year earlier, slower than the 0.6 percent in February.

Sales at large retailers, which include supermarkets and department stores, plunged 8.2 percent, the biggest drop in 11 years. J. Front Retailing Co., the holding company that operates department stores Daimaru Inc. and Matsuzakaya Co., said sales slid 15 percent in February as shoppers cut back on clothing and luxury items.

Still, the retail slump may have been overstated because there were fewer shopping days in February compared with the same month in 2008, a leap year. About half the declines were owing to a drop in revenue at gasoline retailers, reflecting crude oil’s 59 percent slide last month from a year earlier.

Also, the retail report doesn’t account for the growing share of money spent through the internet or on services.

Consumer spending fell 0.4 percent last quarter from the previous three months, a fraction of the record 13.8 percent drop in exports that drove the worst quarterly contraction in gross domestic product since the 1974 oil crisis.

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American Express Co may have to set aside a significant amount of money to cover more losses in the next few quarters as U.S. credit card defaults are expected to remain high, analysts at J.P. Morgan Securities said, as they reinitiated the stock with an “underweight” rating.

Analysts Andrew Wessel and Daniel Kim projected a 45 percent increase in loss-reserve expense for the company in 2009 versus a year ago, and a nearly 6 percent decline in billed business due mainly to a fall in consumer discretionary spending.

JP Morgan analysts expect U.S. consumers to cut down on discretionary spending and build savings until unemployment levels stabilize and the housing market collapse begins to abate.

“Given this macro view and our 10 percent unemployment outlook, we believe AmEx will face ongoing declines in billed business and significant increases in charge-offs well into 2010,” the analysts wrote in a note to clients.

They have a price target of $10.50 on the stock. AmEx, the largest U.S. charge card operator by sales volume, said last week that its net charge-off rate — debts the company believes will never be repaid — rose to 8 payday loans in one hour.70 percent in February from 8.30 percent in January.

“Our model forecasts peak charge-offs of 11 percent on a managed basis in second quarter of 2010,” the analysts said, adding that they saw further downside risk to their current charge-off estimates.

The analysts, however, believe AmEx is well-capitalized when compared with peers, and said the company may not need additional equity.

JP Morgan analysts also expect AmEx to remain profitable through the cycle, but said a prolonged recession will restrict material earnings growth until 2011. Shares of the company, which caters to wealthier consumers that are viewed as more credit worthy, closed at $13.90 Tuesday on the New York Stock Exchange.

(Reporting by Tenzin Pema in Bangalore; Editing by Anil D’Silva)

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Daimler will raise 1.95 billion euros ($2.67 billion) in fresh capital through the sale of a 9.1 percent stake to Abu Dhabi’s Aabar Investments PJSC AABAR.AD, the two companies said on Sunday.

Some 96.4 million new shares will be issued to Aabar for a price of 20.27 euros each through a 10 percent capital increase that excludes subscription rights for existing shareholders.

The dilution means Emirate of Kuwait stake shrink to 6.9 percent from a previous 7.6 percent, and Aabar would eclipse it as Daimler’s largest investor.

“We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy,” Daimler Chief Executive Dieter Zetsche said in a statement.

“We look forward to working together to pursue joint strategic initiatives,” he added.

Daimler has repeatedly been a subject of takeover speculation in the past since it is one of the only major carmakers in the world without a protective shareholder.

Some analysts therefor have believed the massive crisis in the auto industry might encourage Daimler to boost its size via an acquisition or a cross-shareholding with another rival such as BMW.

Formerly called Aabar Petroleum Investments Company PJSC and founded in early 2005, the Abu Dhabi-based company explored oil and gas in Southeast Asia before selling off in 2008 core units like Pearl Energy Limited and Dalma Energy LLC that it had only acquired a couple of years earlier no fax cash advance.

ELECTRIC CAR COOPERATION

Aabar has since branched out into real estate and financial services, recently buying AIG Private Bank for 407 million Swiss francs ($363.7 million) in equity and debt and taking a 3.3 percent stake in Italian toll road operator Atlantia, formerly known as Autostrade.

A fraction the size of Daimler, Aabar has total assets of some $922 million and a market cap of just 1.58 billion dirhams.

While Abu Dhabi Investment Company (ADIC) and Mubadala Development Company were among the founding investors, Aabar is now controlled by the Abu Dhabi state-owned International Petroleum Investment Company (IPIC).

“Daimler is an iconic brand and a financially strong company with a reputation for excellence worldwide,” Aabar Chairman and IPIC managing director Khadem Al Qubaisi said in a statement. “We are delighted to have received the opportunity to be making this investment.”

Daimler and Aabar also plan to cooperate three different areas: electric vehicles that would reduce carbon emissions, developing innovative compound materials to be used in automotive manufacturing, and social projects in Abu Dhabi to educate young talent for positions in the car industry.

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With Pfizer Inc. about to acquire rival drug maker Wyeth and its expertise in making pricey and complex biologic drugs, Pfizer Chief Executive Jeffrey Kindler strongly supports allowing generic versions of them.

"Done right, with regard to the safety of the products, biological follow-ons are a very appropriate thing to do," he said in an interview with The Associated Press.

Top drug makers are piling into this area because biologic drugs, made in living cells, can cost $1,000 and more per month and so far haven’t faced lower-price generic competitors. But legislation was introduced last week to create a pathway for regulators to approve what have been called "biosimilar" drugs, and President Barack Obama has been touting the idea as one way to control health care costs.

Kindler said Pfizer’s increasing expertise in the area "could provide us with an opportunity to make biologic follow-ons" of its own, Wyeth’s and possibly rivals’ biotech drugs.

He also backs government-sponsored research comparing drug effectiveness, unlike many in his industry concerned that could cut into sales.

Kindler called it "an area with a lot of promise, if it’s done right," openly, and not "driven entirely by cost considerations but rather by considerations of value."

His somewhat contrarian views come as the drug industry is in upheaval, forced to slash jobs and other costs as a tidal wave of generic competition to 1990s’ blockbuster pills cuts revenue while research operations aren’t producing nearly enough replacements cash advance. Those two trends are behind the recent flurry of mergers, including Pfizer’s.

Meanwhile, the Obama administration is promising to revamp the nation’s health care system to help the 48 million Americans without health insurance. Such an overhaul could boost drug sales if millions more people get insured but could hurt drug makers if they lose pricing power.

Kindler was the only chief executive from the drug industry at the White House summit on health care reform two weeks ago.

"We have an obligation as an industry to participate (in reform) and try to contribute to the solution of these problems," said Kindler.

Among other changes, he supports more emphasis on preventive care, expanding government insurance and having an independent federal board oversee standards, coverage and pricing. And Kindler says it makes more sense to support beneficial changes than just to block ones the industry doesn’t like.
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BEIJING–The head of the Organization for Economic Cooperation and Development, the club of rich countries, endorsed China's appeal for more say in global finance bodies Friday ahead of a summit of world leaders.

"Yes," Secretary-General Angel Gurria told reporters when asked whether China should have more voting rights in the International Monetary Fund and other bodies. "The fact that China has less votes than Belgium tells you (that)."

Beijing is pressing for developing countries – especially China – to have more influence in the IMF, World Bank and other bodies and has lobbied for that as part of a joint response to the global financial crisis.

A joint statement issued Sunday after a meeting of finance officials of the Group of 20 major economies agreed the IMF should reflect the growing role of developing countries. The fund and other bodies have yet to take action on such pledges.

Chinese President Hu Jintao and other officials are due to attend G-20 meeting on April 2 in London fast cash advance.

Gurria was in Beijing to meet Chinese officials. Beijing is not part of the 30-nation OECD, but the Paris-based group is forming closer ties with China and four other major non-members – India, South Africa, Brazil and Indonesia.

Gurria did not directly respond when asked whether the OECD was concerned about China's rejection of Coca-Cola Co.'s bid to buy a Chinese fruit juice maker, which stirred concern among foreign companies. Regulators cited anti-monopoly concerns, but industry analysts say Beijing wanted to keep a leading local brand out of foreign hands.

But Gurria, a former Mexican finance minister, warned against what he said was rising protectionist sentiment amid the global economic crisis.

"Protectionism makes a bad thing worse," he said. "If you're in a hole, the first rule of holes is to stop digging. And protectionism is just one big shovel."

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Investors attending a five-hour GE conference in New York will want to know how healthy the lending unit actually is. They’ll look for more information about losses on investments and bad loans. And they’ll be anxious about GE Capital’s cash levels.

Another question in shareholders’ minds: Will GE’s $5 billion earnings forecast for the unit hold up this year given its lending in battered sectors like real estate and credit cards?

Fears of lurking losses at GE Capital have dragged down GE shares 72 percent in the past year. The unit’s problems also have played a big role in GE’s recent dividend cut — its first since 1938 — and the loss of its top ‘AAA’ credit rating.

"Investors are looking for GE to pull the curtain back," said Matt Collins, an analyst with Edward Jones.

Until recently, the finance unit accounted for half of GE’s profits, but GE is now shrinking the business as part of a restructuring.

Chief Financial Officer Keith Sherin said recently the meeting will focus on "hot spots" at GE Capital, including house mortgages, credit cards and commercial real estate payday loan companies.

GE expects $35 billion worth of losses and impairments over a three-year period at GE Capital, but Sherin said the parent company has enough cash — $16 billion this year — to meet its funding needs.

While Thursday’s meeting could ease anxiety over GE Capital, GE is also taking a risk by opening up its books, analysts say.

"It is an opportunity for the psychology to turn more positive," said Peter Sorrentino, senior portfolio manager of Huntington Asset Advisors, which owns 6.4 million GE shares. "But all it takes is one stumble or one missed target and they will give up all the gains they had in the last couple of days."

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The Federal Reserve’s $1 trillion program to jump-start consumer and business lending is encountering resistance from investment firms over a new law that would make it harder to bring in employees from overseas.

Lawmakers inserted rules into last month’s stimulus legislation that prevent firms from replacing fired U.S. workers with foreign employees if they get funds under rescue programs. Hedge funds, insurers and companies considering joining the plan may balk at hurdles involved in bringing in foreign talent.

The central bank has already delayed introduction of the Term Asset-Backed Securities Loan Facility, or TALF, which was first announced in November and originally scheduled to start last month. A further postponement or a limit to the number of investors participating would hamper the goal of thawing the market for securities backed by consumer and business loans.

“We need to be a little careful about how much we micromanage these financial institutions,” said Clay Lowery, a former assistant Treasury secretary, who is now a managing director of the Glover Park Group in Washington.

The securities industry’s main trade group alerted members to the issue on March 13, six days before the rescheduled start of the TALF.

Companies that apply for a visa on behalf of a foreign worker can’t dismiss employees in similar positions 90 days before and 90 days after requesting the visa, and have to prove they attempted to recruit a U free credit report.S. worker first.

Visa Burden

The Fed is working with the Homeland Security Department’s U.S. Citizenship and Immigration Services to provide guidance on the issue.

The law applies the restrictions to any recipient of funds under section 13 of the Federal Reserve Act. The TALF and most other Fed lending programs were authorized under that section.

The visa provision adds a burden to what participants already expected to be a slow start to the TALF, which is aimed at reviving the market for securities backed by auto, education, credit-card and small-business loans.

Fed Chairman Ben S. Bernanke and Treasury Secretary Timothy Geithner are counting on investors such as hedge funds to use cheap Fed loans to buy the securities, helping lenders lower rates and loosen other terms on new loans to consumers and businesses. The Treasury is funding 10 percent of the TALF loans from the $700 billion financial-rescue fund.

The New York Fed, which is administering the TALF, starts accepting applications for loans through the program today at 10 a.m. Originally the Fed planned a two-hour window for applications, then announced March 13 that the period would be extended until 5 p.m. on March 19, saying participants requested more time to complete documentation.

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U.S.-based outsourcer iGate Corp’s bid for fraud-hit Satyam Computer Services Ltd will be well short of the current market price, its chief executive told a television channel on Monday.

“I mean what we have picked up in terms of the financial, I do believe our bid will be quite a bit south of the 90 cents a share, which is currently the market price of Satyam,” Phaneesh Murthy said on CNBC-TV18.

By 0615 GMT, Satyam shares were trading 0.4 percent lower at 45.30 rupees (88 cents) in line with the broader Mumbai market .BSESN.

iGate is among a clutch of firms that have expressed interest in buying Satyam, which has been battling for survival since its founder and Chairman Ramalinga Raju quit on January 7 saying profits had been overstated for years and assets falsified.

New York-listed Satyam said on Friday that Indian and international firms, including private equity companies, had registered to bid for a controlling stake in the company.

Indian engineering firm Larsen & Toubro, IT services firm Tech Mahindra and diversified Spice Group are among those registered as potential bidders.

Murthy said bidding would be a tough task due to the uncertainty about Satyam’s finances and liabilities arising from the class action lawsuits filed in the United States on behalf of Satyam’s shareholders there payday loans guaranteed no fax.

“I think it’s a big struggle for any public company to bid for this company,” he told the television channel.

“Therefore, while I think now there are multiple players in the fray I do believe that net, net the number of players is going to come down dramatically very, very soon.”

Satyam said on Friday it had received an adequate response but did not name or number the bidders.

Two investment banking sources told Reuters some eight potential suitors had registered to bid for a 51 percent stake.

iGate had said on Friday it wanted to see the latest financial statements and an update on Satyam’s liabilities before it decided to make a formal bid.

($1=51.6 rupees)

(Reporting by Sumeet Chatterjee and Narayanan Somasundaram; Editing by Ranjit Gangadharan)

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Treasurys advanced Thursday as investors responded to another strong auction of U.S. debt.

The Treasury Department offered $11 billion in 30-year notes Thursday in the last of three auctions this week. The auction drew more than $26 billion worth of bids for the $11 billion of debt offered, for a bid-to-cover ratio of 2.4 - a signal that the sale was well received.

Thursday’s auction came after the government offered $34 billion in 3-year notes Tuesday and $18 billion in 10-year notes Wednesday.

While this week’s auctions have done relatively well, many analysts worry that the record amounts of government debt coming to the market will eventually overwhelm demand and push prices lower.

The auctions are part of the government’s plan to issue between $2.7 trillion and $4.2 trillion of debt over the next two years to finance its economic and financial rescue plans. The government is set to pay $787 billion for stimulus, $700 billion for the bank bailout and trillions more in various liquidity programs.

"It’s a question of supply," said Peter Cardillo, chief market strategist at Avalon Partners in New York. The market is also responding to an upbeat report on retail sales, he said.

A smaller-than-expected drop in retail sales helped send stock prices higher in afternoon trade. The rally came despite a downgrade of General Electric’s (GE, Fortune 500) pristine credit rating. Wall Street ended the day higher Thursday, marking a rare three-day streak of gains for the stock market.

Prices for Treasury bonds, which are considered one of the most secure assets available, often climb when stock prices fall as demand for safety outweighs investors’ tolerance for risk bad credit payday advance.

"Market psychology is finally beginning to change," Cardillo said about the stock market. "I’m not sure this signals a long-term climb, but I don’t think the market is headed to new lows."

Treasury prices: The benchmark 10-year note was up 15/32 to 99 3/32 and its yield fell to 2.86% from 2.91% Wednesday. Bond prices and yields move in opposite directions.

The 30-year bond rallied 29/32 to 97 30/32 with a yield of 3.62%.

The 2-year note edged up 1/32 to 99 24/32 and yielded 1.02%.

The 3 month bill yielded 0.20%.

Lending rates: The 3-month Libor rate eased to 1.32% from 1.33% Wednesday, according to data on Bloomberg.com. The overnight Libor rate held steady at 0.33%.

Libor, the London Interbank Offered Rate, is a daily average of rates that 16 different banks charge each other to lend money in London.

One credit market gauge was unchanged and another reflected slightly tighter credit markets. The "TED" spread widened to 1.12 percentage points from 1.10 percentage points Wednesday. The more wide the TED spread, the less willing investors are to take risks.

The Libor-OIS spread was unchanged at 1.07 percentage points, even with the prior day. A narrower spread indicates that more cash is available for lending. 

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