China pushes currency exchange
Shanghai, China
Pushing China’s foreign exchange reform ahead by another step, the central bank on Friday carried out its first currency swap deals with local banks in a move that could help bring more flexibility to the market.
The People’s Bank of China confirmed that it was carrying out its first foreign exchange swap deal on Friday, but would not give more details. A Beijing-based trader for a major state-owned bank said that the central bank offered one-year currency swaps worth $6 billion at 7.85 Chinese yuan per dollar.
The swap deal didn’t seem to have any immediate effect on the yuan spot market.
In spot dealings, the yuan closed at 8.0815 to the dollar on Friday. It ended trading Thursday at 8.0805.
Analysts said that it wasn’t clear exactly what mechanism the central bank was using in its swaps transactions, but said it could be selling dollars and buying yuan on the spot market, and a year later could reverse the deal at the set rate.
That would have the effect of removing yuan from the money market. At the same time, the central bank could use the swap rate to signal its expectations about how fast it expects the yuan’s value to rise, they said.
ShopKo merger vote set for Dec. 23
Green Bay, Wis. ShopKo Stores Inc. said Friday its shareholders will vote Dec. 23 on a proposed merger with an affiliate of Sun Capital Partners Inc.
An affiliate of Boca Raton, Fla.-based Sun Capital is buying ShopKo for $29 a share, plus an annual 6 percent over the share price prorated for each day starting Dec. 15 until the deal closed.
Immediately before signing the deal last month, ShopKo said it had called off a merger agreement to be bought by an affiliate of Goldner Hawn Johnson & Morrison Inc., and agreed to pay it a $13.5 million breakup fee.
Goldner Hawn said it recently increased its bid to $29 a share.
ShopKo’s board said it made the decision between the two bids based on “Sun Capital’s financial resources, experience in the retail industry, relationships with key retail vendors and other suppliers, and experience in successfully completing transactions of this type.”
Sun Capital has acquired some 100 companies worldwide with sales exceeding $22 billion.
Taser International receives delisting notice
Scottsdale, Ariz. Stun gun maker Taser International Inc. said Friday that the Nasdaq Stock Market told the company its stock could be delisted because it failed to file its third-quarter financial report on time.
The company’s shares shed 47 cents, or 6.4 percent, to $6.93 before the start of regular trading.
Taser said it will appeal the Nasdaq’s decision by requesting a hearing before the exchange’s listing qualifications panel. Until the panel makes a decision, Taser’s stock will continue to be traded on the Nasdaq, though its stock symbol will be changed to “TASRE” from “TASR” until it files its quarterly report.