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Lenders play it safe amid China property woes

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Lenders are expected to stay cautious towards China’s cash-strapped property sector as Shenzhen-based developer Kaisa’s debt woes continue to rattle the market. But they will continue to lend to larger mainland companies.

“Companies from China will remain a major source of business for loan markets this year,” said Sonia Li, head of syndicated loans for Asia at JP Morgan. “But you will see a flight to quality for Chinese borrowers, particularly in light of what is happening in the real estate sector. Lenders will be very cautious to the real estate sector,” she added.

China has become a bigger part of Asia’s loan markets. According to Thomson Reuters data, China was the largest driver for loan growth in the Asia-Pacific region last year, accounting for $141.3 billion in loan volume or about 27% of the total in the region. Infrastructure, project and real estate deals accounted for slightly more than two-thirds of that volume.

Given the increasing exposure banks have to Chinese property, a protracted downturn could have a knock-on effect on the banks. “A lot of mid-sized and big Chinese banks as well as foreign banks have exposure to the China property sector. A big downturn in China real estate market would affect everyone but the mainland banks have the most exposure to the property market,” said Christine Kuo, senior credit officer at Moody’s.

For now, however, the rating agency views Kaisa’s problems as being unique to the company and, at a briefing in Hong Kong on Tuesday, Simon Wong, Moody’s senior credit officer, told reporters that he didn’t think the Shenzhen’s developer’s problems would pose a systemic risk to the sector.

“If the Kaisa case is resolved satisfactorily, such as another developer coming in and potentially buying Kaisa’s assets at fair market value, I think that would also help to ease investors’ concerns,” Wong told reporters.

related

Kaisa given respite but is still in the doghouse Kaisa default triggers broader loan worries Agile woe compounds China’s property problems Cofco Land plans up to $500m placement Loan Week, February 13-18

For now though, investors and lenders are giving the sector a wide berth.

Kaisa had been subject to unexplained bans imposed by the Shenzhen government on the sale of its property projects in Shenzhen. Reports had been circulating that other developers including Fantasia and China Overseas Land & Investment have faced similar bans but the companies have since clarified that the blocked sales are due to administrative procedures by the authorities, and not violations by the companies.

Lenders could also turn wary towards small-cap companies. “China is an important market but we expect more large-cap and higher grade companies this year compared to last year given the concerns over the mid-cap sector,” said Amit Khattar, head of syndicated loans for Asia at Deutsche Bank.

Subordination risk

Kaisa’s problems expose the risks that offshore lenders face. It had initially defaulted on a $51 million loan with HSBC. While it subsequently got a waiver from the British lender, other creditors have frozen some of its onshore bank accounts, and if it came down to a default, onshore lenders would get first dibs on the assets.

Offshore lenders are often subordinated to mainland lenders as the loans are typically issued through offshore holding companies, using the so-called red chip structure.

China’s State Administration of Foreign Exchange (Safe) has made moves to take away some of that subordination risk and, in July last year, relaxed the rules to allow mainland companies to use onshore assets as collateral when raising funds offshore. However, there are restrictions, and Safe has made it clear that the proceeds have to be kept offshore.

“The change in Safe rules means that offshore lenders can get senior secured access to Chinese companies rather than just a red chip structure,” said Khattar. “It is a meaningful development but the number of companies using this has been limited by restrictions over the use of proceeds,” he added.

Lenders have been comfortable lending to offshore holding companies, provided they are perceived to be a strong credit. For example, smartphone company Xiaomi last year tested the market with a debut $1 billion loan, which attracted 29 lenders. Xiaomi is cash rich, with no onshore borrowings.

However, weaker companies are expected to come under more scrutiny now. “Lenders have become more comfortable with loans using offshore holding company structures,” said Deutsche Bank’s Khattar. “But they will be more wary about certain credits,” he added.

This year could be a more challenging one for mainland companies as Taiwanese lenders are keen to keep their exposure to mainland companies down, and could look to diversify to Indian or Southeast Asian companies. “Taiwanese banks were big investors for China loans in the past but they have pretty tight China limits at the moment,” said JP Morgan’s Li.

But amid ongoing market volatility, more companies could start tapping the loan markets as bond yields have risen. “Bond market volatility specially in the high yield market could see more high yield issuers trying to access the loan markets in 2015,” said Khattar.

¬ Haymarket Media Limited. All rights reserved.

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Three banks offer US$4.95bil bridge loan for OCBC's Wing Hang deal

HONG KONG/SINGAPORE: Three banks are providing a fully underwritten US$4.95bil bridge loan to Singapore’s Overseas-Chinese Banking Corp Ltd (OCBC) to fund its offer to buy Hong Kong-based Wing Hang Bank, according to sources close to the matter.

Bank of America Merrill Lynch (BofA), HSBC and J.P. Morgan are sharing equal underwriting of the loan, the sources said, which will have a 12-month tenor.

The size of the loan, which is the same as OCBC’s all-cash offer for Wing Hang, shows how hungry lenders in the region have become to book assets and finance large acquisitions.

BofA, HSBC, and J.P. Morgan declined to comment. OCBC did not return a call seeking comment.

OCBC said on Tuesday that it has agreed to buy Wing Hang for HK$125 per share, or US$4.95bil, in a deal that would give the Singapore lender a much sought-after gateway to the Greater China region.

The sources said the bridge will be taken out by capital markets fund-raisings to be determined later this month. OCBC said on Tuesday that it planned to raise equity but did not give more details.

OCBC’s bridge loan will be the second such banking acquisition-related loan in Hong Kong in recent months.

Last October, four banks provided a US$1bil bridge loan to Yue Xiu Enterprises Holdings Ltd for its HK$11.64 billion (US$1.50bil) purchase of a 75% stake in Hong Kong lender Chong Hing Bank Ltd.

Record low interest rates across the globe have fuelled cheap loans and huge borrowing levels in Asia. Following the region’s quick recovery from the 2008 financial crisis, banks have thrown themselves at the feet of companies with strong credit ratings and the desire to purchase assets at home and abroad.

While that has helped Asian companies expand their businesses, leverage levels across the region have risen sharply, sparking concerns that a sharp economic slowdown would spark the kind of debt distress China is showing signs of.

The US$8bil loan for Chinese e-commerce giant Alibaba Group completed last July is an example of the appetite among lenders. Nine banks underwrote the loan initially, while nine other lenders joined the deal subsequently. – Reuters

[…]

Three banks offer $4.95 bln bridge loan for OCBC's Wing Hang deal-sources

(Adds details of the loan, background)

By Prakash Chakravarti and Saeed Azhar

HONG KONG/SINGAPORE, April 2 (Reuters) – Three banks are providing a fully underwritten $4.95 billion bridge loan to Singapore’s Overseas-Chinese Banking Corp Ltd (OCBC) to fund its offer to buy Hong Kong-based Wing Hang Bank, according to sources close to the matter.

Bank of America Merrill Lynch (BofA), HSBC and J.P. Morgan are sharing equal underwriting of the loan, the sources said, which will have a 12-month tenor.

The size of the loan, which is the same as OCBC’s all-cash offer for Wing Hang, shows how hungry lenders in the region have become to book assets and finance large acquisitions.

BofA, HSBC, and J.P. Morgan declined to comment. OCBC did not return a call seeking comment.

OCBC said on Tuesday that it has agreed to buy Wing Hang for HK$125 per share, or $4.95 billion, in a deal that would give the Singapore lender a much sought-after gateway to the Greater China region.

The sources said the bridge will be taken out by capital markets fundraisings to be determined later this month. OCBC said on Tuesday that it planned to raise equity but did not give more details.

OCBC’s bridge loan will be the second such banking acquisition-related loan in Hong Kong in recent months.

Last October, four banks provided a $1 billion bridge loan to Yue Xiu Enterprises Holdings Ltd for its HK$11.64 billion ($1.50 billion) purchase of a 75 percent stake in Hong Kong lender Chong Hing Bank Ltd.

Record low interest rates across the globe have fuelled cheap loans and huge borrowing levels in Asia. Following the region’s quick recovery from the 2008 financial crisis, banks have thrown themselves at the feet of companies with strong credit ratings and the desire to purchase assets at home and abroad.

While that has helped Asian companies expand their businesses, leverage levels across the region have risen sharply, sparking concerns that a sharp economic slowdown would spark the kind of debt distress China is showing signs of.

The $8 billion loan for Chinese e-commerce giant Alibaba Group completed last July is an example of the appetite among lenders. Nine banks underwrote the loan initially, while nine other lenders joined the deal subsequently.

($1 = 7.7571 Hong Kong Dollars) (Reporting by Prakash Chakravarti of IFR/LPC and Saeed Azhar; Editing by Michael Flaherty and Ryan Woo)

Mergers, Acquisitions & TakeoversFinanceWing Hang Bankbridge loan […]

ANZ Bank posts 13 percent gain in first-quarter cash profit



ANZ Bank posts 13 percent gain in first-quarter cash profit

Tuesday, 11 February 2014, 11:56 am
Article: BusinessDesk

ANZ Bank posts 13 percent gain in first-quarter cash profit on reduced impairments, higher lending

Feb. 11 (BusinessDesk) – Australia & New Zealand Banking Group posted a 13 percent gain in first-quarter cash profit after recording a lower charge for impaired loans and boosting lending.

Unaudited cash profit was A$1.73 billion in the three months ended Dec. 31, from A$1.53 billion a year earlier, the Melbourne-based lender said in a statement. Cash profit excludes one-time items. Statutory profit increased to A$1.64 billion from A$1.36 billion.

Shares of ANZ have climbed 140 percent on the ASX in the past five years, a period when it has posted record profits. Today, chief executive Mike Smith said revenue growth in 2014 would be 4 percent to 5 percent, outpacing an expected 2 percent rise in expenses. The forecast assumes no change in foreign exchange rates.

In the latest quarter, customer deposits rose 4 percent and loans and advances gained 3 percent, versus the end of the 2013 year. Group net interest margin fell, it said, without giving details. “While ANZ has seen some easing in deposit pricing, this was offset by the ongoing impacts of the lower interest rate environment and some asset pricing pressure which was broadly based,” the lender said.

The first-quarter provision charge was A$191 million, down from A$311 million in the same quarter a year earlier.

The lender’s ANZ New Zealand unit is this nation’s biggest bank. The New Zealand division “continued to grow our home loan book strongly through both business banking and retail channels, with strong performance in the under 80 percent loan to value ratio segment,” it said. The bank didn’t release a separate statement for the New Zealand business.

(BusinessDesk)

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Email – jonathan@businessdesk.co.nz Email – pattrick@businessdesk.co.nz […]

IMF approves $6.7 billion loan for Pakistan

The International Monetary Fund’s board has approved a $6.7 billion loan package for Pakistan to help the South Asian nation revive its ailing economy.

In a statement, the IMF said the three-year program should help Pakistan rebuild its reserves and prevent a crisis in the balance of payments. IMF loans generally come with conditions for economic reform and should encourage other donors to step in with more funds.

Two top finance ministry officials in Pakistan announced the Fund’s approval of a package in August, pending the board’s decision and Pakistan’s progress on fiscal reforms.

The new loan will arrive just in time. As of August, the central bank had only about $5 billion left in foreign currency reserves, enough to cover less than five weeks of imports.

The Asian Development Bank, one of Pakistan’s major lenders, estimates that Pakistan needs $6 billion to $9 billion to meet its obligations, including about $5 billion in outstanding debt on an earlier $11 billion IMF loan package.

Pakistan averted a balance of payments crisis in 2008 by securing the $11 billion IMF loan. This was suspended two years ago after economic and reform targets were missed.

‘Effort needed’

This time around, the government had to fulfill certain conditions set by the IMF before the loan could be approved, including slashing costly subsidies on electricity and sending out notices to 10,000 delinquent taxpayers.

Pakistan has one of the lowest tax-to-GDP ratios in the world. The IMF wants it to do more to tackle rampant tax evasion by the wealthy elite.

Pakistan gets $540 million immediately, and the rest will be disbursed after regular reviews of the program, the Fund said.

The IMF also said Pakistan should boost its tax-to-GDP ratio by reducing special tax deductions and exemptions. It praised Pakistan’s reform efforts so far, but warned that the road ahead would not be easy, given the country’s dire finances.

“Much effort is needed to boost confidence in order to attract foreign direct investment in line with Pakistan’s
long-term growth potential,” it said.

[…]

Thai Tycoon in Biggest Asian M&A Deal of Year

The latest deal, primarily funded by a $6 billion loan, will combine the operators of Thailand’s biggest convenience stores and cash-and-carry businesses, giving CP All greater bargaining power in sourcing supplies and the muscle to expand in Southeast Asia.

“This is a format that has been very successful in Thailand and could be rolled out to Southeast Asia more generally,” said David Chin, co-head of investment banking in Asia for UBS, which was among the lead arrangers for CP All for financing of the Siam Makro transaction.

Thai companies have been on an acquisition binge in the last two years, encouraged by cheap bank debt, rising cash piles and surging share prices. That took Thai M&A volume to a record $25.9 billion last year.

CP All holds more cash than all but one Southeast Asian retailer, according to Thomson Reuters data, with $1.15 billion in cash and equivalents, just behind SM Investments, which has $1.8 billion. The world’s third-largest operator of 7-Eleven stores, CP All aims to have 10,000 of the outlets in Thailand by 2018.

Dhanin and SHV founded Siam Makro in 1988, and by 1997 Dhanin’s Charoen Pokpphand group was its biggest shareholder. The crash of the Thai baht in 1997 forced Dhanin to sell holdings including Siam Makro and Lotus Supercenter, which was acquired by British retailer Tesco.

The offer values Siam Makro at 53 times historic price-to-earnings, making it the most expensive retail stock in the Asia-Pacific region, according to Thomson Reuters data.

Debt-Backed

This is the second debt-backed deal by companies linked to Dhanin in the last three months. The Ping An stake buy was part-funded with a $5.5 billion loan from UBS, Reuters previously reported.

The Siam Makro deal will be funded by a $6 billion loan arranged by HSBC, Siam Commercial Bank, Standard Chartered, Japan’s Sumitomo Mitsui Banking Corp., and UBS, two people with direct knowledge of the matter said, speaking on condition of anonymity because financing details are not public.

CP All, which will be the borrower, said it does not plan to issue new shares.

HSBC was the sole advisor to SHV Holdings, while Siam Commercial Bank advised CP All, the people familiar said.

Other companies that earlier showed interest in Siam Makro included Berli Jucker, a trading firm controlled by beer tycoon Charoen Sirivadhanabhakdi and Central Group, Thai media reports previously said.

“CP All is the only bidder to offer the price. It seems like the deal was done before other bidders joined the bid,” said a source with direct knowledge of the offer, speaking on condition of anonymity as the deal was confidential.

CP All’s offer represents a 15.4 percent premium to Siam Makro’s last traded price on Friday, before its shares were halted on Monday pending an announcement.

CP All’s $6.6 billion offer for Siam Makro would be the biggest retail M&A in the world this year, and double the size of the No. 2 deal, according to Thomson Reuters data.

Siam Makro, controlled by privately held Dutch trading house SHV Holdings, has 58 Makro-branded outlets in Thailand, mainly selling food in bulk to hotels, restaurants and smaller retail outlets. It made a 2012 net profit of 3.56 billion baht ($124.11 million), up 36 percent year-on-year, but it has been the country’s slowest-expanding retailer as a result of stricter rules on large stores.

Competition for Thai shoppers’ business has intensified since the Chirathiwat family, which owns the country’s largest retailer Central Group, bought a stake in the local unit of Japanese-based Family Mart last year.

Lawson Inc., Japan’s second-largest convenience store chain, has also formed a joint venture with Saha Pattanapibul, part of the Saha Group, Thailand’s leading maker and distributor of consumer products.

Earlier on Tuesday CP All’s shares were suspended pending an announcement.

[…]

Thailand's Richest Man Buys Dutch Firm

The latest deal, primarily funded by a $6 billion loan, will combine the operators of Thailand’s biggest convenience stores and cash-and-carry businesses, giving CP All greater bargaining power in sourcing supplies and the muscle to expand in Southeast Asia.

“This is a format that has been very successful in Thailand and could be rolled out to Southeast Asia more generally,” said David Chin, co-head of investment banking in Asia for UBS, which was among the lead arrangers for CP All for financing of the Siam Makro transaction.

Thai companies have been on an acquisition binge in the last two years, encouraged by cheap bank debt, rising cash piles and surging share prices. That took Thai M&A volume to a record $25.9 billion last year.

CP All holds more cash than all but one Southeast Asian retailer, according to Thomson Reuters data, with $1.15 billion in cash and equivalents, just behind SM Investments, which has $1.8 billion. The world’s third-largest operator of 7-Eleven stores, CP All aims to have 10,000 of the outlets in Thailand by 2018.

Dhanin and SHV founded Siam Makro in 1988, and by 1997 Dhanin’s Charoen Pokpphand group was its biggest shareholder. The crash of the Thai baht in 1997 forced Dhanin to sell holdings including Siam Makro and Lotus Supercenter, which was acquired by British retailer Tesco.

The offer values Siam Makro at 53 times historic price-to-earnings, making it the most expensive retail stock in the Asia-Pacific region, according to Thomson Reuters data.

Debt-Backed

This is the second debt-backed deal by companies linked to Dhanin in the last three months. The Ping An stake buy was part-funded with a $5.5 billion loan from UBS, Reuters previously reported.

The Siam Makro deal will be funded by a $6 billion loan arranged by HSBC, Siam Commercial Bank, Standard Chartered, Japan’s Sumitomo Mitsui Banking Corp., and UBS, two people with direct knowledge of the matter said, speaking on condition of anonymity because financing details are not public.

CP All, which will be the borrower, said it does not plan to issue new shares.

HSBC was the sole advisor to SHV Holdings, while Siam Commercial Bank advised CP All, the people familiar said.

Other companies that earlier showed interest in Siam Makro included Berli Jucker, a trading firm controlled by beer tycoon Charoen Sirivadhanabhakdi and Central Group, Thai media reports previously said.

“CP All is the only bidder to offer the price. It seems like the deal was done before other bidders joined the bid,” said a source with direct knowledge of the offer, speaking on condition of anonymity as the deal was confidential.

CP All’s offer represents a 15.4 percent premium to Siam Makro’s last traded price on Friday, before its shares were halted on Monday pending an announcement.

CP All’s $6.6 billion offer for Siam Makro would be the biggest retail M&A in the world this year, and double the size of the No. 2 deal, according to Thomson Reuters data.

Siam Makro, controlled by privately held Dutch trading house SHV Holdings, has 58 Makro-branded outlets in Thailand, mainly selling food in bulk to hotels, restaurants and smaller retail outlets. It made a 2012 net profit of 3.56 billion baht ($124.11 million), up 36 percent year-on-year, but it has been the country’s slowest-expanding retailer as a result of stricter rules on large stores.

Competition for Thai shoppers’ business has intensified since the Chirathiwat family, which owns the country’s largest retailer Central Group, bought a stake in the local unit of Japanese-based Family Mart last year.

Lawson Inc., Japan’s second-largest convenience store chain, has also formed a joint venture with Saha Pattanapibul, part of the Saha Group, Thailand’s leading maker and distributor of consumer products.

Earlier on Tuesday CP All’s shares were suspended pending an announcement.

[…]

UPDATE 2-MUFG buys U.S. property loans from Deutsche worth $3.7 bln

* Over half of the portfolio is in top 3 U.S. metropolitan areas

* MUFG has been actively looking for U.S. acquisition opportunities

* Amount to be paid not disclosed; all-cash transaction

By Taiga Uranaka and Denny Thomas

TOKYO/HONG KONG, April 8 (Reuters) – Mitsubishi UFJ Financial Group has acquired a U.S. commercial property loan portfolio from a Deutsche Bank (Xetra: 514000news) unit worth $3.7 billion, as cashed-up Japanese lenders swoop in on assets sold by retreating European banks.

The deal, which comes as MUFG is pushing aggressively to ramp up its U.S presence, will make the Japanese bank the ninth biggest commercial real estate lender in the United States, up from 17th, while diversifying its property portfolio and allowing it to deploy excess capital.

It also comes as a number of European banks offload loan portfolios and exit non-core operations, helping them to raise capital to meet tough new regulatory norms under Basel III requirements.

The all-cash acquisition is expected to close in the second quarter of this year and does not require any regulatory approval, MUFG said in a presentation. It did not disclose the amount to be paid in the transaction.

The bank also noted that U.S. commercial property prices have recently recovered from 2009 lows.

About 52 percent of loans are made to properties in the top three U.S. metropolitans areas: New York City, Los Angeles and Chicago.

MUFG President Nobuyuki Hirano has said the bank wants to double the size of its unit Union Bank (BSE: UNIONBANKQF.BOnews) , which would make it the 10th largest lender the United States. The San Francisco-based bank bought Pacific Capital Bancorp for about $1.5 billion last year.

Relatively unscathed by Europe’s debt problems and boasting stronger capital and liquidity positions than their global peers, MUFG and domestic rivals Mizuho Financial Group and Sumitomo Mitsui Financial Group have been actively scouting for distressed assets as they confront slowing loan demand at home.

Overseas purchases have pushed up the foreign share of total outstanding loans for the three megabanks to 20 percent at end-September 2012, compared with 16 percent at the end of March 2010, according to Moody’s Investors Service.

In 2010, MUFG acquired a $6.4 billion project financing loan book from Royal Bank of Scotland (LSE: RBS.Lnews) . More recently, Mizuho agreed to buy a Brazilian unit of Germany’s WestLB for about $380 million.

But Moody’s Investors Service senior analyst Tetsuya Yamamoto said he expected the pace of overseas purchases by Japan’s top three banks to slow as their foreign currency funding is not that strong compared with their Japanese yen liquidity.

While they have been looking at buying minority equity stakes in some Asian banks, that would be a drain on core capital.

“From a regulatory capital perspective, acquisition of loans would make more sense than a minority stake in a foreign bank,” Yamamoto added.

[…]

Barclays Faces Investigation Over Qatar Money

UK authorities are probing an allegation that Barclays loaned Qatar money to invest in the bank as part of its cash call at the height of the financial crisis in 2008, which enabled the bank to avoid a UK government bailout.

While the terms of Barclays’ emergency fundraising have been under the scrutiny of the Financial Services Authority and the Serious Fraud Office since the summer – with a particular focus on fees paid for the deal – allegations over a loan to the Qataris is a new thread of the investigation. Two sources familiar with the situation have independently told the Financial Times of the investigation into the alleged loan.

If confirmed, such an arrangement could contravene market regulations if it was not properly disclosed at the time, legal and industry experts warned. “The concept of lending money to any investor to purchase your own shares raises a series of immediate questions about disclosure and other regulatory issues,” said Peter Hahn, a former banker at Citi now at Cass Business School.

The revelation is yet another blow for attempts by Antony Jenkins, Barclays’ chief executive, to clean up the bank’s image that has been tarnished by high-profile scandals ranging from Libor manipulation to the mis-selling of payment protection insurance.

(Read More: Barclays CEO: We Were Too Aggressive, Too Self-Serving)

Chris Lucas, Barclays’ chief financial officer, is among four former and current executives investigated in connection with the capital raising.

The probe underscores broader inquiries by authorities worldwide on the terms of deals struck at the height of the financial crisis – often with Middle Eastern and Asian investors – as western banks battled to stay out of government control.

Dexia, the Franco-Belgian lender, came under scrutiny in 2011 when it emerged it had loaned two of its biggest institutional shareholders money to buy its shares in 2008.

The Icelandic prosecutor investigating the collapse of Kaupthing has examined a loan the bank allegedly made secretly to a Qatari royal, Sheikh Mohammed bin Khalifa al-Thani, in 2008 to fund the purchase of Kaupthing’s shares. Four Icelandic individuals have been charged in the case.

Barclays turned to Qatar Holding, a subsidiary of the Qatar Investment Authority, and Challenger – an investment vehicle of Sheikh Hamad bin Jassim bin Jabr al-Thani, the prime minister of Qatar and his family – twice in 2008 for a total of 6.1 billion pounds. The sheikh – often referred to as HBJ – is also the chairman of Qatar Holding.

[…]

Asia stocks up after deal over Greek debt reached

By PAMELA SAMPSON

AP Business Writer

BANGKOK (AP) – Asian stock markets rose Tuesday after talks over Greece’s financial crisis ended with an agreement on how to reduce its debt load, paving the way for the cash-strapped country to receive the next installment of a bailout loan.

Finance ministers of the 17 countries that use the euro and representatives of the International Monetary Fund reached an agreement late Monday that will enable Athens to receive €34.4 billion ($40.8 billion) immediately and three additional payments in early 2013.

“This is quite positive. It definitely gives support to the local stock market,” said Dickie Wong, executive director of research at Kingston Securities Ltd. in Hong Kong.

Greece has endured five years of recession and a 25 percent unemployment rate. It has been locked out of the international long-term debt market by exceptionally high interest rates demanded for its bonds since 2010, and has been relying on funds from rescue loans by other euro countries and the IMF.

Japan’s Nikkei 225 index rose 0.4 percent to 9,429.44. South Korea’s Kospi rose 0.9 percent to 1,925.94. Hong Kong’s Hang Seng added 0.1 percent to 21,890.71. Australia’s S&P/ASX 200 gained 0.7 percent to 4,453.10. Benchmarks in Taiwan, Singapore, Thailand and the Philippines also rose. Indonesia and New Zealand fell.

In mainland China, the Shanghai Composite Index fell 1 percent 1,998.20. The index has not closed below 2,000 in nearly four years. The smaller Shenzhen Composite Index plummeted 2.3 percent to 771.28.

Wong said investors are taking a “wait and see” stance ahead of the national economic work conference in early December, a forum for leaders involved in economic policy.

“Before this meeting, the sentiment of the Chinese stock market will remain sluggish,” he said.

Wall Street stocks were mixed on the first full day of trading after the Thanksgiving holiday, with no resolution on the immediate horizon to the “fiscal cliff” of automatic tax increases and steep spending cuts that take effect in January unless President Barack Obama and Congress reach a budget agreement.

The Dow Jones industrial average fell 0.3 percent to close at 12,967.37. The Standard & Poor’s 500 index fell 0.2 percent to 1,406.29. The Nasdaq composite rose 0.3 percent to 2,976.78.

Benchmark oil for January delivery was up 22 cents to $87.96 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 54 cents to close at $87.74 on the Nymex on Monday.

In currencies, the euro rose to $1.2988 from $1.2963 late Monday in New York. The dollar fell to 82.12 yen from 82.18 yen.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[…]