PRESS DIGEST - New York Times business news - Dec 21

Dec 21 (Reuters) - The New York Times reported the following stories on its business pages on Friday. Reuters has not verified these stories and does not vouch for their accuracy.

* Despite a year that is among the worst in their firms' long histories, the chiefs of both Bear Stearns Cos Inc (BSC.N: Quote, Profile, Research) and Morgan Stanley (MS.N: Quote, Profile, Research) are holding tight to their perches of power.

* New evidence shows that drug makers Merck & Co (MRK.N: Quote, Profile, Research) and Schering-Plough Corp (SGP.N: Quote, Profile, Research) have conducted several studies of their popular cholesterol medicine Zetia that raise questions about its risks to the liver, but the companies have never published those results.

* SLM Corp (SLM.N: Quote, Profile, Research), which for years profited from placing large bets on its own stock going up, now faces a possible loss of more than $1 billion.

* New calculations by the World Bank suggest China may not be so rich after all, and could deflate arguments for a need to revalue the yuan.

* Campbell Soup Co (CPB.N: Quote, Profile, Research) agreed on Thursday to sell its Godiva Chocolatier unit to Yildiz Holding of Turkey for $850 million.

* Apple Inc (AAPL.O: Quote, Profile, Research) on Thursday put to rest the last of a series of lawsuits it brought in a losing and costly effort to put a stop to Web leaks about its product plans.

* Carmakers expect 2008 to be challenging, but hundreds of automotive parts suppliers are anticipating the year ahead to be one of the ugliest ever.

* The Internal Revenue Service has criticized proposed legislation that would scale back audits of wealthy taxpayers in the United States Virgin Islands, saying that the bill would "significantly affect" the agency's efforts to combat offshore tax fraud.

* On Thursday, shares of the nation's biggest insurer of financial risk, MBIA Inc (MBI.N: Quote, Profile, Research), fell 26 percent after it disclosed that it was guaranteeing billions of dollars of the kind of complex debt that unnerved the credit market this summer.

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source: reuters.com

PRESS DIGEST - Wall Street Journal - Dec 21

Dec 21 (Reuters) - The following were the top stories in The Wall Street Journal on Friday. Reuters has not verified these stories and does not vouch for their accuracy.

* Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research) is in advanced talks to receive a capital infusion of up to $5 billion from Temasek Holdings Pte Ltd [TEM.UL], a Singapore state-owned investment fund. The news comes amid analyst predictions that mortgage write-downs for the Wall Street firm may double with another $8 billion or more in the fourth quarter.

* Chrysler LLC is in a serious financial crunch and trying to sell assets just months after Cerberus Capital Management LP [CBS.UL] and new Chief Executive Robert Nardelli stepped in to save the auto maker. The acquisition is turning into a case study of how deals made during the boom are going sour.

* Mortgage-fraud schemes -- some highly sophisticated -- are costing banks billions and go a long way toward explaining why defaults and foreclosures are rocking Wall Street and the economy. The system itself bears some blame.

* Russia's OAO Vimpel Communications (VIP.N: Quote, Profile, Research) has agreed to acquire broadband and fixed-line operator Golden Telecom Inc (GLDN.O: Quote, Profile, Research) for about $4.24 billion, according to a person familiar with the matter.

* Banks and investors are dealing with a growing problem: Some firms on the other side of trades in the beleaguered credit markets might not be able to make good on their commitments. Nowhere is it more apparent than in the bond-insurance business, where units of firms like MBIA Inc (MBI.N: Quote, Profile, Research) and ACA Capital Holdings Inc ACAH.PK have guaranteed payments on billions of dollars of mortgage debt to large banks, brokers and investors around the world.

* The latest massive maneuvers by the U.S. Federal Reserve and European Central Bank have had the desired calming effect on money markets. But as those central banks acknowledge, the moves haven't eliminated the threat from a cascade of bad news from financial firms, worries about more bad news to come and the likely impact of falling U.S. housing prices.

* United Company RUSAL is poised to take a 25 percent stake in Russia's OAO Norilsk Nickel (GMKN.MM: Quote, Profile, Research), which may lead to full control of the world's largest nickel producer and further the Russian aluminum giant's ambition to become a mining power.

* U.S. Justice Department antitrust enforcers are inquiring about pricing by chocolate makers, which have been trying to offset higher dairy costs.

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source: reuters.com

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 1-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.

Huang Wensheng, the spokesman for the listed entity, said he had no information about any talks, which would be conducted by the parent company.

"Any overseas investment would be done by the parent company," he said. "Under the existing agreement, we just have the right of first refusal to take any assets from the parent."

Nobody at the parent company was available 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.

Asset injections by state-owned parent companies allow listed firms such as Sinopec and its stablemate PetroChina, a subsidiary of China National Petroleum Corp, to grow quickly and at a favourable price.

According to research by analysts at Goldman Sachs, Sinopec has indicated its parent has 120 million tonnes (880 million barrels) of recoverable oil reserves compared to its own oil and gas proved reserves of 3.77 billion barrels of oil equivalent.

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source: reuters.com