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Wednesday 19 June 2013

US rate futures traders see first Fed rate hike in early 2015

TRADERS of short-term US interest rate futures do not expect the Federal Reserve to lift its target for short-term borrowing costs until early 2015 after the central bank said on Wednesday it would keep up its bond-buying programme to help the economy.
Fed funds futures contracts added to losses after the Fed issued its statement at the close of its regular two-day policy-setting meeting.
The Fed said it will continue buying assets until there is substantial improvement in the labor market outlook, and said it would keep rates low until unemployment falls to at least 6.5 per cent as long as inflation does not threaten to rise above 2.5 per cent.
Futures prices before the statement suggested traders saw about a 51 per cent chance of a rate hike in January 2015.
After the statement the figure stood at 52 per cent, according to CME Group's Fed Watch, which generates probabilities based on the price of fed fund futures traded at the Chicago Board of Trade. Traders gave a 42 per cent chance of a hike in December 2014.
The Fed has held its target rate for overnight lending between banks near zero since December 2008. -Reuters

Tuesday 11 June 2013

NewSat flags interest in Singtel's sale of Optus unit

Australian satellite communications company NewSat has flagged its interest in Singapore Telecommunications Ltd's A$2 billion (US$1.88 billion) sale of its Australian unit, Optus Satellite.
NewSat chief executive Adrian Ballintine said a number of private equity firms and investment banks have approached the satellite operator about potential partnerships.
"There is an opportunity for us to be a participant," Mr Ballintine was quoted as saying in The Australian newspaper on Wednesday.
"It's fair to say that we have been approached by numerous PE firms and banks to partner up," Mr Ballintine said. "We could also manage the process too, which would be interesting."
Private equity firms KKR and Carlyle Group are among the suitors lining up bids for Optus, people familiar with the matter have previously told Reuters.
SingTel, Southeast Asia's largest telecom operator, is battling tepid growth in its key markets of Singapore and Australia, and the funds raised from the sale would help it plough cash into faster-growing businesses.
France's Eutelsat Communications SA, Blackstone Group BX.N and Providence Equity Partners are also expected to bid, sources have said. SingTel is inviting first round offers by June 14, one of the people said. -Reuters