China to invest $2 billion in IADB Latin America investment fund

(Reuters) - China will invest $2 billion to back Interamerican Development Bank (IADB) public and private sector projects in Latin America and the Caribbean, the development bank said on Saturday.

The contribution by the People's Bank of China will be used to co-finance up to $500 million in IADB public sector loans and up to $1.5 billion in private sector credit, available over the next three to six years, the IADB said in a news release.

The goal of the fund was to alleviate poverty and boost competitiveness.

China has invested tens of billions of dollars in the region, from Mexico to Argentina, over the last decade to acquire strategic assets or companies in sectors such as oil, minerals and food products.

Last March, China's export-import bank and the IADB announced a joint $1 billion dollar fund for private and public sector investment in the region, reflecting the country's eagerness to link up with prominent institutions in the region.

(Writing by Tomas Sarmiento and Alexandra Alper; Editing by Doina Chiacu)

Illinois Is Accused of Fraud by S.E.C.

For the second time in history, federal regulators have accused an American state of securities fraud, finding that Illinois misled investors about the condition of its public pension system from 2005 to 2009.

In announcing a settlement with the state on Monday, the Securities and Exchange Commission accused Illinois of claiming that it had been properly funding public workers’ retirement plans when it had not. In particular, it cited the period from 2005 to 2009, when Illinois also issued $2.2 billion in bonds.

full story: http://www.nytimes.com/2013/03/12/business/sec-accuses-illinois-of-securities-fraud.html?_r=0

Euro Weakens

The euro weakened and European stocks extended a retreat from a 4 1/2-year high before reports forecast to show weaker manufacturing data in the region.

The euro declined 0.3 percent versus the dollar as of 8:18 a.m. in London, and fell against most of its 16 major peers. The Stoxx Europe 600 Index slid for a second day, down 0.1 percent.

European Union leaders will meet in Brussels for a summit on March 14-15 to discuss rescue plans for Cyprus.

Facebook new lawsuit

Facebook has been hit with a new IPO suit. An early investor files a new case against the social network saying, "The defendants were unjustly enriched because they realized enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors."

Reuters reported that Investor Gaye Jones filed a new case against Facebook Chief Executive Mark Zuckerberg and the company's underwriters.

Facebook said in a statement that "we believe this lawsuit is without merit and will defend ourselves vigorously."

Shares in Facebook's highly anticipated IPO fell from the initial price of $38 to about $25 within a month. The stock closed on Monday at $27.72 on Nasdaq, down 6 cents.

Soon after the IPO, which was also marked by technical glitches on the Nasdaq exchange, more than 50 investor lawsuits were filed. A proposed class action is being heard in federal court in Manhattan.

The lawsuit was filed in the Court of Chancery in Delaware, where Facebook is incorporated, and also named as defendants the IPO underwriters - units of JPMorgan Chase & Co, Morgan Stanley and Goldman Sachs Group Inc.

China’s manufacturing is expanding at the slowest pace

China’s manufacturing is expanding at the slowest pace in four months. HSBC Holdings Plc and Markit Economics today said that the preliminary reading of a Purchasing Managers’ Index was at 50.4 in February. That compares with the 52.3 final reading for January and the 52.2 median estimate of 11 analysts surveyed by Bloomberg News. A number above 50 indicates expansion.

Today’s report may damp optimism that an economic rebound is gaining traction following a seven-quarter slowdown and the weakest annual expansion in 13 years. The benchmark Shanghai Composite Index (SHCOMP) last week dropped the most since May 2011 on concern the government will expand restrictions on the property market to curb home-price gains.

Consumer confidence at 3-month high

Consumer confidence at 3-month high at 76.3.

The gauge, provided by the Thomson Reuters/University of Michigan preliminary index, climbed from 73.8 in January. Increasing confidence may help preserve recent gains in household spending and propel the economy. Increased property values, a strengthening job market and stocks at five-year highs are boosting Americans' balance sheets and offsetting an increase in payroll tax.

Dell Buyout

Shareholders are being pushed aside in the proposed Dell buyout. Michael Dell will benefit with this buyout, his $3.7 billion stake could more than triple in five years. But the company's biggest outside investor Southeastern Asset Management, opposes the deal. They said that it "grossly undervalues the company."

Southeastern believes the price is much too low and will vote against the proposed deal. Southeastern values the company at $23.72 a share, greater than the $13.50 to $13.75 a share that Dell and his partners are offering.

“We would have endorsed a transformative transaction that would have provided full and fair value to Dell’s public shareholders, including a leveraged recapitalization or a go-private type sale where current shareholders could elect to continue to participate in a new company with a public stub,” Southeastern said.

“Unfortunately, the proposed Silver Lake transaction falls significantly short of that, and instead appears to be an effort to acquire Dell at a substantial discount to intrinsic value at the expense of public shareholders.”

"This deal is so compellingly unfair to shareholders that I don't know where to begin," says Richard Pzena, chief investment officer at Pzena Investment Management, which held 14 million shares on Sept. 30. His firm values Dell at about $25 a share. The stock was unchanged at $13.63 last week, after gaining about 1% Friday afternoon on the Southeastern news.