Wal-Mart Buys 35% in Chinese Retailer

Elena
27 Feb, 2007
New York City

Through the investment, Wal-Mart will expand its presence in China''s fast-growing retail market. Financial details of the deal were not revealed, but according to reports Wal-Mart agreed to pay $1 billion for the stake. The company said that it is planning to acquire ownership control in the future.

[R]8:30 AM Wal-Mart agreed to pay $1billion for 35% in Trust-Mart.[/R]
The world’s largest retailer Wal-Mart ((WMT)) agreed to buy a 35% stake in Trust-Mart, a major Chinese discount chain, in an effort to expand its presence in China. Financial details of the deal were not revealed, but according to reports Wal-Mart agreed to pay $1 billion for the stake. The company said that it is planning to acquire ownership control in the future. Wal-Mart is one of the numerous foreign retailers investing in China’s fast-growing retail markets one of its biggest and most prominent foreign employers, with a work force of 37,000 and 68 stores. It has been seeking international expansion to compensate for slowing growth in the United States. Its total international division accounted for 20% of its overall net sales of $312.4 billion in 2005.


[R]6:30AM Europe is lower on Tuesday on weakness in banking sector.[/R]
European markets were lower on Tuesday. By mid morning, Frankfurt Xetra Dax shed 1.5% to 6,927.34, the CAC 40 in Paris lost 1.6% to 5,669.2 and London FTSE 100 fell 1.5% to 6,339.6.

Advancers

GKN, U.K. maker of car and airplane parts, rallied 8.7%, as the company said full-year profit more than tripled to 177 million pounds or $347 million after it sold more plane components and reduced spending on reorganization.

Reuters Group advanced 1.4% as Credit Suisse Group raised its recommendation on the world largest publicly traded provider of financial data to outperform from neutral.

Decliners

Austrian Raiffeisen International, which has substantial operations in Russia and Ukraine, fell 6.3%. Erste Bank, which also has businesses across central and eastern Europe, shed 3.4%. National Bank of Greece, which owns Finansbank of Turkey, fell 3.3%. Bank of Piraeus lost 3.1%.

BHP, the world largest mining company, lost 3.9% and Rio Tinto, the third biggest, declined 3.5%. Xstrata, the world fourth-biggest nickel producer, dropped 4.8%.

ABB, the Swiss engineering group, fell 4.6% after Deutsche Bank downgraded the stock from hold to buy. Shipping and port operator Möller Maersk was also hit by its exposure to emerging markets. The company, which owns shares in shipyards in Russia and China, also said that proposed tax changes in Denmark would have severe negative consequenses. The shares fell 4.2%.

Oil and gold

Crude oil traded little changed, near a nine-week high in New York, on speculation rising fuel demand and refinery shutdowns cut U.S. gasoline supplies. Crude oil for April delivery was at $61.48 a barrel, up 9 cents, on the New York Mercantile Exchange in early trade in London. Brent crude traded at $61.47 a barrel, up 14 cents, on the London-based ICE Futures exchange.

Gold fell in London after two days of gains to a nine-month high prompted some sales by investment funds. Gold for immediate delivery declined $1.40, or 0.2%, to $685.15 an ounce in early trade in London.

Currencies

The euro advanced against the U.S. dollar Tuesday, hitting two-month highs, after Alan Greenspan warned that the United States could be in a recession later this year. His remarks Monday night supported the euro to $1.3211 in morning European trading, hitting two-month highs, and above the $1.3185 it bought in New York late Monday. The British pound was barely changed, moving to $1.9652 from $1.9644. The dollar dropped to 119.58 Japanese yen from 121.04 yen.