* China’s FX reserves soar $153bn

* Thomas Cook shares plunge on warning

* China’s ‘eye-in-the-sky’ nears par with US

* Essar Oil set to raise $1.5bn

* Vale drops $1.1bn bid to purchase Metorex

* Global Switch in £1bn move to expand

* Romania starts record $870m Petrom share sale to attract investors

* Brazil retail merger funding probed

* Boom fuels São Paulo warehouse price surge

* Starwood may consider Shanghai listing

* Egypt: Gas pipeline to Israel and Jordan hit by blast

* Markets, down

China’s FX reserves soar $153bn
China’s foreign exchange reserves, already the world’s biggest, soared again in the second quarter, adding to inflationary pressure and highlighting the risks in Beijing’s policy of holding down the value of its currency, the FT reports.

Thomas Cook shares plunge on warning
Shares in Thomas Cook fell heavily on Tuesday after trading difficulties on both sides of the English Channel forced the tour operator to issue a profit warning. The company said it was struggling to pass on cost increases to budget-conscious UK travellers, while French holidaymakers were shunning their usual summer haunts in Egypt, Tunisia and Morocco because of recent political unrest in the Middle East and North Africa, the FT reports.

China’s ‘eye-in-the-sky’ nears par with US
China’s rapidly expanding satellite programme could alter power dynamics in Asia and reduce the US military’s scope for operations in the region, according to new research, the FT reports. Chinese reconnaissance satellites can now monitor targets for up to six hours a day, the World Security Institute, a Washington think-tank, has concluded in a new report. The People’s Liberation Army, which could only manage three hours of daily coverage just 18 months ago, is now nearly on a par with the US military in its ability to monitor fixed targets, according to the findings.

Essar Oil set to raise $1.5bn
Essar Oil, which reported a better-than-expected profit after tax of R469 crore for the first quarter of the financial year 2011-12, said it will raise $1.5bn in foreign currency loans, instead of rupee loans, for its ongoing projects, the Financial Express reports. The company posted a profit for the quarter, compared with a R70-crore loss for the same period last year, as it benefited from higher gross refining margins during the first quarter, at $7.38 per barrel against $5.79 a barrel a year ago.

Vale drops $1.1bn bid to purchase Metorex
Brazil’s Vale has dropped its $1.1bn offer for Metorex, a central African copper and cobalt miner, clearing the way for China’s Jinchuan Group to complete a $1.4bn takeover that would establish the state-owned miner in risky frontier markets for metals, the FT reports. The move came a week after Jinchuan, one of China’s largest mining companies, disrupted its Brazilian rival’s plans by offering R8.90 per share for Metorex. Metorex, however, has not yet recommended Jinchuan’s higher offer to shareholders. Its board will “convene shortly to consider its position with respect to the Vale offer and the Jinchuan offer”, the South Africa-based miner said.

Global Switch in £1bn move to expand
Global Switch, the data centre operator owned by billionaire brothers David and Simon Reuben, is investing £1bn ($1.59bn) in the expansion of its network across the world amid continued talk of a future public listing for the group, the FT reports. The group is embarking on a development programme that will add more than 1.1m sq ft of additional space by 2013, at an estimated cost of about £1bn. Global Switch has seen many of its centres around the world near full occupancy given the surge in demand for data provision and processing, while it is targeting future growth in the emerging markets of Asia.

Romania starts record $870m Petrom share sale to attract investors
Romania will seek to lure international buyers to its 2.6bn lei ($861m) sale of shares in OMV Petrom over the next two weeks, the biggest offering ever on the Bucharest Stock Exchange, Bloomberg reports. The government is selling 5.6bn shares in the country’s dominant oil company, or 9.8 per cent, at a maximum price of 0.46 lei per share starting today through July 22 and will hold promotional tours in European cities, including London, Frankfurt, Vienna and Warsaw, according to Ioana Tanase, the head of EFG Securities, one of the lead managers.

Brazil retail merger funding probed
Brazilian federal prosecutors are looking into the use of public funds in a proposed merger of the country’s biggest retailer, Pão de Açúcar, and Carrefour’s local business, casting further doubt over the controversial $14bn deal, the FT reports. BNDES, Brazil’s state development bank, two weeks ago promised to finance the merger of the private companies with €1.7bn ($2.4bn) from its investment arm, but the proposal has since been attacked on legal, antitrust, and ethical grounds.

Boom fuels São Paulo warehouse price surge
Prime warehouse space in São Paulo is among the most expensive in the world, outstripping London and Singapore, as the country’s creaking infrastructure struggles to cope with a consumer boom, the FT reports. Space in “Class A” warehouses in the business capital of Latin America’s biggest economy cost an average of R$23.50 per square metre a month to rent in the first quarter of this year, the fourth most expensive in the world after Tokyo, Zurich and Hong Kong. A similar study at the end of last year showed São Paulo ranked eighth.

Starwood may consider Shanghai listing
Starwood Hotels & Resorts, which opened China’s first international-branded hotel 26 years ago, is prepared to consider a listing in the country, where its top executives have been for the past month, Bloomberg reports. Van Paasschen, 50, and his top executives moved the company’s headquarters to Shanghai from White Plains, New York between June 8 and July 11 to “better understand” its second- largest market. China may eventually pass the US as a hotel market, he said, where 90 hotels, or 30 per cent of Starwood’s pipeline of 300 properties, are under construction in cities including Nanhai and Foshan.

Egypt: Gas pipeline to Israel and Jordan hit by blast
An Egyptian pipeline supplying gas to Israel and Jordan was hit by a strong explosion, state media and officials said, the BBC reports.

Emerging Markets
MSCI Emerging Market Index down -1.93% at 1,121

Europe
FTSE down -1.40% at 5,846
RTF down -0.98% at 1,900
Wig Index down -1.15% at 47,371
FTSE 300 Eurotop down -1.45% at 1,082

Americas
DJIA down -1.20% at 12,506
S&P 500 down -1.81% at 1,319
Bovespa down -2.10% at 60,224

Asia
Nikkei 225 down -1.43% at 9,926
Topix down -1.49% at 857.19
Hang Seng down -3.06% at 21,663
Shanghai Composite down -1.72% at 2,755
MSCI Asia ex-Japan down -2.67% at 558.33
S&P CNX Nifty Index down -1.60% at 5,526

Currencies
€/$ 1.39 (1.40)
$/¥ 79.65 (80.31)

Commodities
Brent Crude (ICE) down -1.39 at 115.85
Light Crude (Nymex) down -0.77 at 94.38
100 Oz Gold (Comex) down -0.60 at 1,548

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