Daily News: Clearwire, Yahoo, Microsoft, Baidu, Research In Motion, Wells Fargo, Intel

• Standard Chartered planning rights sale. Shares of Standard Chartered (SCBFF.PK) were suspended in Hong Kong trading after reports the company is planning to raise as much as £7B ($11B) in a rights offering to shore up its capital position; the company subsequently issued a statement that it’s planning to raise around £3.3B ($5.2B) in an offer. A share sale would make StanChart the second large international bank to respond directly to new Basel III requirements, after Deutsche Bank (DB) raised €10.2B ($14.2B) earlier this month. Though StanChart’s core tier one ratio of 9% is well within the normal range for banks and is ahead of Basel III’s 7% minimum, analysts have estimated that a 9% ratio today could be worth as little as 6% once the Basel rules are fully phased in by 2019.
• Suitors line up for Clearwire spectrum. A handful of major telecom operators and cable companies have expressed interest in a Clearwire (CLWR) auction of wireless airwaves. Clearwire, which is majority owned by Sprint (S), has said it’s looking to raise new funding by the end of this year in order to continue expanding its high-speed wireless network. Companies including AT&T (T), Verizon Wireless (VZ, VOD), Deutsche Telekom (DTEGY.PK) and Sprint are reportedly among those interested in the sale, which is said to be in its second round of bidding and could bring in as much as $5B.
• Alibaba, Microsoft launch new Chinese search engine. Alibaba, which is 40% owned by Yahoo (YHOO), and Microsoft (MSFT) have launched a new Chinese search website in a move that could challenge market-leader Baidu (BIDU). The new website is aimed at driving traffic to Alibaba’s retail website, Taobao.com, and Taobao listings appear first in search results, followed by related online forums. Search results provided by Microsoft’s Bing appear last. Analysts don’t expect the new website to pose a serious threat to Baidu in the short-term, but the move is “a coup for Microsoft,” which is still testing its Chinese search site and doesn’t yet have a significant share of market revenue. Premarket: MSFT +0.9%, BIDU +1.6% (7:00 ET).
• RIM gets Indian reprieve. India has once again extended a reprieve to Research In Motion (RIMM), giving the company until the end of the year to come up with a permanent solution to security concerns connected to its BlackBerry devices. RIM dodged a bullet last week as well, when the United Arab Emirates backed off its planned BlackBerry ban and said BlackBerry services had complied with UAE telecom regulations. RIM insists it’s sticking to the principles laid out in August for working with government officials, including not providing “special deals for specific countries,” but the company has also declined to provide details on its agreement with the UAE or its provisional deal with India.
• Gov’t lifts deepwater drilling ban. The government lifted its moratorium on deepwater drilling in the Gulf of Mexico; the controversial ban, which critics called arbitrary and unjustified, had been in place since the Deepwater Horizon disaster in April. The immediate practical ramifications are limited, as it could take weeks for rig operators to win regulatory approval to return to work in the region. In addition to slowing down the resumption of drilling, the new safety regulations could prove costly for companies to comply with and could potentially force smaller firms to stop operating in the Gulf.
• FOMC suggests QE2 coming soon. The FOMC minutes, released yesterday, supported market speculation that a second round of quantitative easing will be coming soon, as “several” officials said the Fed would need to act soon unless inflation moves back towards a more consistent level. As expected, the committee cut its growth expectations for the rest of this year and next. Spending is mixed and hiring concerns are weighing down business investment, but a return to recession is unlikely.
• Foreclosure mess spreads. Fallout from the foreclosure mess and robo-signing scandals is growing, with GMAC Mortgage saying it will expand its review of foreclosures to all 50 states, and for the first time it will look at all foreclosure sale files nationwide to ensure there are no errors. Wells Fargo (WFC) said it has started a review of all pending home foreclosures where affidavits are required, though the bank says it has no plans to initiate a foreclosure moratorium. White House officials threw their support behind a joint investigation by 40 states into flawed foreclosure procedures, but continued to insist that a nationwide foreclosure moratorium would be unwise as it could damage the country’s fragile economic recovery.
• FDIC takes first step on TBTF rules. As expected, the FDIC’s proposed rules for dismantling large, failing financial firms would require creditors to take a loss, though regulators left room for the government to give preferential treatment to some creditors in specific cases. The FDIC will outline several additional proposals next year as it works to clarify how it would wind down large firms, including how the U.S. could recover its money if it has to step in and provide temporary funding.
• China’s forex reserves surge. China’s foreign-exchange reserves surged by a record $194B to $2.65T as of the end of September. A separate report showed that China’s September exports were the second-highest on record at $145B. Taken together, the two data points will undoubtedly intensify calls for China to allow the yuan to strengthen, especially as talk heats up among international leaders about the threat of a currency war.
• Intel’s beat raises hopes. Intel (INTC) beat earnings estimates yesterday (see details below) and pointed to “solid [global] demand” for computers, allaying concerns that businesses are reducing tech spending. Its gross profit margin rose to 65.9% from 57.6%, and the company expects it to rise to 67% for Q4. Intel is seeing strong demand for an overhauled line of microprocessors, and expects the Apple-led resurgence in tablets to eventually “be additive to our bottom line and not take away from it.”

Source: SeekingAlpha