China faces mounting pressure from trading partners to loosen currency controls and is giving signs it might raise the value of the yuan to ease strains on its fast-growing economy. Many economists say a sharp increase in the yuan’s value could boost U.S. exports and create jobs. A stronger currency could also help China’s leaders achieve their goal of making the economy more self-sustaining by boosting consumer buying power and reducing dependence on exports and investment. But most analysts expect that if China does allow its currency to rise in value, it will do so at a slow pace.
MetLife buys AIG insurance U.S. division
American International Group said Monday it will sell its American Life Insurance Co. division to MetLife for about $15.5 billion in cash and shares — the company’s second major sale in a week as it attempts to pay back billions of dollars to U.S. taxpayers. AIG said it will receive $6.8 billion in cash and around $8.7 billion in MetLife equity securities for the unit, which has about 20 million customers worldwide. The deal comes a week after AIG agreed to sell its AIA unit in Asia to U.K. insurer Prudential PLC for $35.5 billion in cash and shares. AIG Chairman Harvey Golub said the two sales will generate $31.5 billion in cash, which will be used to repay the debt to the New York Fed.
Lower costs drive up H&R Block’s profits
H&R Block Inc. says its fiscal third-quarter profit rose 7 percent, as lower costs offset a revenue drop that stemmed from handling fewer returns. For the three months ended Jan. 31, the nation’s largest tax preparer earned $50.6 million, or 15 cents per share, compared with $47.4 million, or 14 cents per share, in the year-ago quarter. Revenue fell 6 percent to $934.9 million from $993.4 million last year. Wall Street was expecting profit of 14 cents per share, on revenue of $949.6 million. Through Feb. 28, H&R Block says the number of returns it prepared in its storefronts fell 6.8 percent from last year. Total returns, which include do-it-yourself software and online preparation, are down a little more than 9 percent.
T-bill rates increase in Monday auction
The Treasury Department auctioned three-month bills at a discount rate of 0.15 percent, up from 0.125 percent last week. Six-month bills were auctioned at a discount rate of 0.205 percent, up from 0.185 percent last week. The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,996.21 while a six-month bill sold for $9,989.64. That would equal an annualized rate of 0.152 percent for the three-month bills and 0.208 percent for the six-month bills. Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, was unchanged at 0.34 percent last week.
From Herald news services
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