Scott gone, but still no investigation into MFS. It’s fair to suggest that MFS/Octaviar executive director, Chris Scott, has officially jumped off the sinking ship. Scott’s former spokesperson and business partner, Jenny Hutson, who is now running Premium Income Fund (nee MFS Premium Income Fund) yesterday accused MFS of plundering PIF to prop up its ailing empire. Hutson told the Financial Review that “it’s a breach of the Corporations Act, of the Product Disclosure Statement, the PIF Constitution, the compliance plan – this is not how this fund was meant to run.” Hutson claimed that MFS pilfered $147.5 million of PIF funds and that its officers had “not fulfilled their obligations to unit holders.” Crikey spoke with ASIC today, who noted that no formal investigation has yet been announced into MFS/Octaviar/PIF or anyone else involved in the almighty mess. — Adam Schwab
MYOB slumping. Significant MYOB shareholders, Guinness Peat Group, Colonial and Schroders would be gnashing their teeth at the recent performance of MYOB scrip, which has continued to slump since MYOB rejected an approach from private equity firm, Archer Capital, earlier this year. The large shareholders were reportedly fuming after the company refused to entertain Archer’s foray, which valued the company at $1.90 per share. Since MYOB rejected the offer, its shares have slumped, falling to $1.25 per share, 35% less than Archer’s indicative offer. In fact, MYOB shares are back where they were in 2004, prior to its merger with Solution 6. Rumors have reached Crikey that MYOB has suffered poor operating results in recent months. That said, shareholders buy MYOB shares with full knowledge that the company’s founder, Craig Winkler, holds a 28% stake. Given private equity almost never go hostile (KKR’s infamous Nabisco deal aside), unless Winkler indicates wants to sell out (which so far, he hasn’t) the company will continue to trade without a substantial takeover premium. — Adam Schwab
New drilling won’t cut oil prices. As U.S. consumers reel from the effects of an oil market rife with uncertainty and climbing prices, a proposal calling for more drilling at home sounds promising. In theory, if the U.S. boosted supply, prices would slip and the country would be less dependent on foreign energy sources. Unfortunately, the oil market is far more complex. For one thing, oil production requires enormous investment, and companies such as ExxonMobil, BP, and Chevron won’t start major new projects until it is clear the project can be profitable. Any new domestic supply would take nearly a decade to tap. Moreover, much of the change in oil markets in recent years has come more from trading than fundamentals. Investors have poured vast sums into commodities, driving prices higher and causing many people to blame rampant speculation for the surges. In other words, the President’s proposals cannot have a significant short-term impact on oil prices, and only a questionable effect in the long run. — Moira Herbst, BusinessWeek
Millionaires top 10 million. The number of dollar millionaires around the world increased by 6% last year, defying the impact of the credit crunch, with the fastest growth in the emerging economies of India, China and Brazil. There are now 10.1 million people worth more than $1m (£508,000) excluding the value of their main homes, according to the latest World Wealth Report from Merrill Lynch and the consultancy Capgemini. Developed economies in Europe and North America continued to create millionaires, though the rate of growth slowed significantly from 2006 as the credit crunch and inflationary pressures caused the world economy to falter. But developing markets, driven by thriving exports of commodities and booming domestic markets, proved to be far more resilient. The number of dollar millionaires in India’s red-hot economy grew by 22.7%, China followed with growth of 20.3% and Brazil came next with 19.1%. — Guardian
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