Investors monitor a screen displaying stock information at the Saudi Stock Exchange (Tadawul) following the debut of Saudi Aramco's initial public offering (IPO) on the Riyadh's stock market, in Riyadh, Saudi Arabia, December 11, 2019.
Ahmed Yosri | Reuters
State-owned oil company Saudi Aramco said on Sunday it has exercised its "greenshoe option" to sell an additional 450 million shares, raising the size of its initial public offering (IPO) to a record $29.4 billion.
Aramco initially raised a then-record $25.6 billion in its IPO in December by selling 3 billion shares at 32 riyals ($8.53) but indicated it may sell additional shares through the over-allotment of shares.
A greenshoe option, or over-allotment, allows companies to issue more shares in an IPO when there is greater demand from participants during the initial offering.
Investors were allocated the additional shares for the option during the book-building process, Aramco said.
Aramco said "no additional shares are being offered into the market today and the stabilizing manager will not hold any shares in the company as a result of exercise of the over-allotment option."
Aramco shares have been volatile recently because of geopolitical concerns as tensions between the United States and Iran rose after President Donald Trump ordered a drone strike that killed a top Iranian commander and raised fears of war.
Shares of Aramco fell to 34 riyals on Jan. 8, its lowest since the stock began trading on Dec. 11, but closed at 35 riyals on Thursday.
Thursday's closing price valued Aramco at $1.87 trillion, above the IPO price, which valued the company at $1.7 trillion, but below Crown Prince Mohammed bin Salman's coveted $2 trillion target.
Every weekday morning, Greg Kelly, the former Nissan executive accused of helping Carlos Ghosn hide his compensation from the Japanese authorities, makes his way to his lawyer’s office in Tokyo to chip away at a monumental task: reviewing close to one billion pages of documents.
His wife, Donna Lynn Kelly, whom everyone calls Dee, goes off to Japanese class.
That’s the life of the two Americans in Japan as they await Mr. Kelly’s trial, according to a person who knows Mr. Kelly and spoke on condition of anonymity to discuss personal matters. The timing of the trial, once set to begin in April, is now uncertain after Mr. Ghosn’s sudden flight to Lebanon two weeks ago. A pretrial hearing next Thursday may shed more light.
Mr. Kelly, whose passport was taken away when he was arrested in November 2018, is preparing to defend himself against criminal charges that, as Mr. Ghosn’s chief of staff and the man nominally in charge of Nissan’s internal auditing, he helped Mr. Ghosn conceal how much he was being paid. The prosecutors in Japan declined to comment on Mr. Kelly’s case.
Mr. Kelly says he is innocent and just wants to go home to Tennessee. At 63, he suffers from a spinal condition that has left him with weakness in his extremities and an uncertain gait that sometimes causes him to trip and fall. He has an infant grandson in Seattle he has never met.
On Jan. 8, he watched his former boss, appearing fit and pugnacious in Beirut, address a room packed with journalists. Over nearly three hours, Mr. Ghosn proclaimed his innocence in four languages. He mentioned Mr. Kelly twice.
“Greg Kelly, an honorable man, husband and father, who was brutally taken from his family,” Mr. Ghosn said. “My plight has captured headlines,” he said. “You cannot forget Greg’s ordeal.”
In Beirut, Mr. Ghosn has a pink mansion in an upscale part of town. The Kellys live in an apartment, small but clean, with a microwave but no stove. Ms. Kelly can visit family in the United States, but she spends most of her time with her husband in Tokyo, the person said. Her visa depends on her studying Japanese, so she spends several hours a day in class. If she doesn’t score high enough on the exams, she can be sent home.
While Mr. Ghosn used a corporate jet to visit homes in Brazil, Beirut, Paris and Tokyo before the 2018 arrests, Mr. Kelly led a more pedestrian life as a Nissan executive, according to two people who know him.
A lawyer, Mr. Kelly joined Nissan in 1988, enticed by a recruiter who described “an extremely interesting Japanese company in Tennessee. I think it would a good fit for you,” he recalled last year in an interview with the publication Bungei Shunju.
He and his wife raised a family — two sons — in Brentwood, Tenn., a Nashville suburb near Nissan’s North American headquarters, and Ms. Kelly worked as an accountant. While the children were young, the Kellys were members of the Church of the Good Shepherd, a local Episcopalian congregation, with Dee and their son Mike writing and directing Christmas pageants.
In 2008, their lives changed. Mr. Kelly’s job, as senior executive in Nissan’s human resources department, took him to Japan, and Ms. Kelly came with him. He became a senior vice president and then, in 2012, joined Nissan’s board — Nissan’s first American board member —while working for Mr. Ghosn, the chairman, as the company’s top legal officer.
He was considered a close associate of the chairman, a reliable vote to help Mr. Ghosn carry out his plans for an alliance of Nissan and Renault, the French automaker Mr. Ghosn also headed. But Mr. Kelly has rejected that description, pointing out that he was not on the board’s top decision-making body, the executive committee. “Considering this, why was I called Ghosn’s right-hand man?” he told Bungei Shunju.
The Kellys enjoyed Japan — “Greg and I often discussed the possibility of living in Japan part-time in our retirement,” Ms. Kelly later said — but their lives remained rooted in the United States.
In 2008, they bought a vacation house in Sanibel Island, Fla., in a neighborhood crammed with a network of canals leading to the Gulf of Mexico, according to property documents. They joined a sailing club that organized potlucks at picnic huts on the beach and luncheons at local seafood restaurants.
“You’re dealing with an all-American guy, not extravagant, no racehorses, nothing,” said the second person who knows Mr. Kelly. “Very ordinary guy, and charming, very American in the positive sense of the word.”
Mr. Kelly retired to Tennessee in 2015 but kept his board seat. In November 2018, Mr. Kelly recalled in the interview with Bungei Shunju, a senior executive urged him to attend a board meeting in Japan. Mr. Kelly, facing spinal surgery within two weeks at Vanderbilt University Medical Center, said he would prefer to attend via video conference. The official insisted that he come in person, that the company would send a plane to pick him up and that he would be home within three days, in time for Thanksgiving.
Minutes after landing in Tokyo, he was arrested. He spent the next 34 days in a cell at Tokyo Detention House, sleeping on a futon on the floor.
Before he was released on bail on Christmas Day in 2018, Ms. Kelly recorded a video and distributed it news organizations, begging for her husband to be freed or at least to be allowed to consult with a Japanese doctor she had identified as one of the country’s leading experts on Mr. Kelly’s condition. He would eventually undergo surgery in Tokyo for spinal stenosis, but it did not relieve his symptoms.
In September, the United States Securities and Exchange Commission accused Mr. Kelly, along with Mr. Ghosn and Nissan, of breaking American disclosure laws. Mr. Kelly agreed to pay $100,000 and submit to a five-year ban on serving as a senior executive of a public company to settle the charges without admitting or denying guilt.
Prosecutors have barred his lawyers from putting the voluminous documents in his case online and making them searchable, which means that only Mr. Kelly’s Japanese defense team, or others who come to their Tokyo offices, can see them.
Mr. Kelly has insisted on helping to review the mountain of documents prosecutors say they will use to make their case. He spends hours each day at his lawyer’s office.
“Greg has been wrongly accused as part of a power grab by several Nissan executives,” Ms. Kelly said in the video. “The truth of this will come out.”
In the 2019 magazine interview, Mr. Kelly was defiant about his and Mr. Ghosn’s innocence, contending that Hiroto Saikawa, who was then Nissan’s chief executive, approved the compensation plans that led to the arrests. “How come Ghosn and I were suddenly arrested without one instance of being asked to explain and no discussions or meeting on the subject,” he said.
But then Mr. Kelly added, “I am very proud to have worked for this amazing company, Nissan, for over 30 years. It has been an honor.”
Liz Alderman and Makiko Inoue contributed reporting.
The Secure Act aims to make it easier for small employers to offer retirement benefits. But some analysts say the new law doesn't go far enough because it's optional and doesn't apply to gig workers.
Alex Edelman/AFP via Getty Images
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Alex Edelman/AFP via Getty Images
The most powerful way to get people to save for retirement in recent decades has been through benefits offered at their job. But a lot of people — about half the American workforce — don't get that from their employers.
"Over 50 million workers right now don't have access to any retirement plan at all," says David Certner, legislative counsel for AARP.
Small employers are the biggest segment lacking coverage, he says. That's because many small businesses lack time and money to set such programs up, he says.
The new law, called the Secure Act, aims to help with that in part by allowing smaller employers to band together to share the administrative burden — making it cheaper and easier to offer retirement benefits. How many will do so and expand their retirement benefits is far from clear, because the program is optional.
And, Certner says, the law won't apply to many other workers who aren't classified as employees. That's because they're contractors or gig workers who aren't eligible for those benefits.
The Secure Act also gives people more flexibility to save for longer periods of time and delay withdrawing funds. It also allows employers to offer other investment options like annuities.
The fact that the measure passed with overwhelming bipartisan support last month is significant, says Alicia Munnell, director of the Center for Retirement Research at Boston College. But she says the changes are modest.
She notes that the government has tried — and largely failed — to encourage more small businesses to offer retirement benefits through programs like the Treasury Department's now-expired myRA program.
She expects it will be the same with this latest law.
"I don't really think they're really going to move the needle much at all," Munnell says.
The new law requires employers offering retirement benefits to include part-time workers who've been on the job at least three years. That could help about 4 million workers, Munnell says.
Much bigger changes to retirement law have been occurring at the state level, experts say. Ten states — including Oregon, California and Illinois — recently started requiring private employers to enroll their workers in individual retirement accounts if the employers don't offer their own benefits. Those state programs are expected to expand retirement savings to 15 million more people.
"Without a mandate, without somebody saying, 'Mr. Small Businessman, you have to do something for your employees,' I don't think we're going to see much change," Munnell says. That's why she says she'd like to see such rules extend to all 50 states.
FILE PHOTO: 70th Cannes Film Festival – Screening of the film "L'Amant double" (Amant Double) in competition - Red Carpet Arrivals - Cannes, France. 26/05/2017. Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, and his wife Carole pose. Picture taken May 26, 2017. REUTERS/Jean-Paul Pelissier/File Photo
TOKYO (Reuters) - Japanese authorities have requested the International Criminal Police Organization (ICPO) for an Interpol wanted notice for the wife of former Nissan Motor (7201.T) boss Carole Ghosn, local media reported on Saturday.
If the notice is issued for his wife, Carole, the couple’s travel chances outside of Lebanon may be restricted, Mainichi newspaper said. Interpol has already issued an arrest warrant for Ghosn.
The request from Japan was made on Thursday, Mainichi and other Japanese media said, quoting unnamed sources.
Officials at the Japanese justice ministry weren’t immediately available for comment.
Japanese prosecutors on Tuesday issued an arrest warrant against Ghosn’s wife for alleged perjury, as officials stepped up efforts to bring the fugitive car industry boss back to face trial on financial misconduct charges.
Ghosn, the former Nissan and Renault (RENA.PA) chairman, fled Japan to Lebanon, his childhood home, last month as he awaited trial on charges of under-reporting earnings, breach of trust and misappropriation of company funds, all of which he denies.
His dramatic escape has raised tensions between Japan and Lebanon, where Ghosn slammed the Japanese justice system at a two-hour news conference on Wednesday, prompting Japan’s Justice Minister to launch a rare and forceful public response.
Lebanon, which has no extradition agreement with Japan, may lift a travel ban on Carlos Ghosn if files pertaining to his case do not arrive from Japan within 40 days, caretaker justice minister Albert Serhan said in a statement on Friday.
Reporting by Yuka Obayashi; Editing by Shri Navaratnam
The U.S. jobs market ended 2019 on a sour note, with December's payroll and wage growth missing expectations, according to Labor Department figures released Friday.
Nonfarm payrolls increased by just 145,000 while the unemployment rate held steady at 3.5%. Economists surveyed by Dow Jones had been looking for job growth of 160,000. The jobless rate met expectations for staying at a 50-year low.
In addition to the slow payroll growth, average hourly earnings rose by just 2.9%, below the 3.1% projection. December marked the first time that wage gains were below 3% on a year-over-year basis since July 2018.
Revisions to the October and November counts brought those two months down by 14,000 as well. The glittering 266,000 initial estimate for November came down 10,000 while October's fell from 156,000 to 152,000.
Dow futures turned negative following the disappointing report.
Lowest since 1994
On the upside, a separate, more encompassing measure that includes discouraged and underemployed workers fell to 6.7%, the lowest it's ever been in records going back to 1994. The decline came amid a drop of 140,000 in people working part-time for economic reasons.
The labor force participation rate held steady at 63.2% as the workforce rose by 209,000 to 164.6 million and those considered no longer in the job pool fell by 48,000 to 95.6 million.
The total employment level rose to 158.8 million, also a fresh high. However, the unemployment rate for African Americans rose 0.3 percentage points to 5.9%.
For the year, payrolls increased by 2.1 million, an average of 176,000 a month, the slowest year for job creation since 2011 — three years after the start of the financial crisis — and down considerably from the 2.7 million positions added in 2018.
The numbers follow a year of anxiety about a potential recession on the horizon. While fears of an outright downturn have largely been eradicated, recent surveys among corporate executives show a high level of unease about slowing growth.
Manufacturing job declines
Job gains in December came primarily from retail (41,000), leisure and hospitality (40,000) and health care (28,000).
Construction rose by 20,000 and professional and business services saw an increase of 10,000, while manufacturing declined by 12,000, transportation and warehousing lost 10,000 and mining fell by 8,000.
It was a difficult year for manufacturing jobs: The sector saw a net gain of just 46,000 compared with a 264,000 gain the year before. The U.S. and China spent the year locked in a trade battle that saw billions of dollars in tariffs exchanged between the two sides.
The average work week, considered a good indicator for employers' future intentions, held steady at 34.3 hours.
The Labor Department also released its annual revisions to its household survey data, but there were no changes to monthly unemployment rates throughout the year.
Correction: This report was corrected to show that the October job gains fell to 152,000, making the total revisions for October and November down by 14,000.
1. Dow set to trade above 29,000 for first time at open
Traders and financial professionals work on the floor of the New York Stock Exchange at the closing bell on October 30, 2019 in New York City.
Drew Angerer | Getty Images
U.S. stock futures, ahead of the release of the government's monthly employment report, were higher on Friday after record closes for the Dow Jones Industrial Average, S&P 500 and Nasdaq. The Dow is being indicated to trade above 29,000 for the first time ever at Wall Street's open. That could, of course, change after the December jobs report comes out at 8:30 a.m. ET. But as of Thursday's close, the Dow and S&P 500 were tracking for over 1% gains for the week, and the Nasdaq was riding a weekly increase of 2%.
2. December's jobs report could have some surprises in it
Flextronics International Apple factory employees work on Apple Mac Pro computer assembly in Austin, TX, November 20, 2019.
Tom Brenner | Reuters
Economists expect December's employment report to show a solid pace of job growth and steady wage gains. Nonfarm payrolls are expected to have increased by 160,000 last month, with steady 3.1% year-over-year wage growth. The unemployment rate is expected to remain unchanged at 3.5%, matching half-century lows. However, economists say both the headline payroll number and wage growth could be above forecasts because the economy has been a bit stronger than expected recently.
3. 'Designed by clowns who in turn are supervised by monkeys'
Boeing 737 MAX airplanes are parked at Grant County International Airport October 23, 2019 in Moses Lake, Washington. Boeing reported that its profits were down by more than half in the latest quarter.
David Ryder | Getty Images
Shares of Dow stock Boeing were under some pressure in Friday's premarket trading after the embattled aircraft giant released a trove of internal communications that showed employees boasting about bullying regulators to approve the now-grounded 737 Max without requiring pilots to undergo simulator training. In messages from April 2017, one Boeing employee told another: "This airplane is designed by clowns who in turn are supervised by monkeys."
4. House passes resolution to limit Trump's war powers
President Donald Trump announces proposed rollbacks to the National Environmental Policy Act regulations during an event in Roosevelt Room of the White House in Washington, January 9, 2020.
Kevin Lamarque | Reuters
The House passed a resolution to curb President Donald Trump's war powers against Iran, which retaliated this week for the U.S. killing last week of a top Iranian general. The Democratic-held House approved the nonbinding measure by a 224-194 vote, mostly along party lines. However, three Republicans and an independent did vote for it, while eight Democrats did vote against it. While nearly all Republicans have expressed support for taking out Iranian Gen. Qasem Soleimani, a few GOP lawmakers criticized the Trump administration after being briefed on the operation.
5. Pelosi: I won't rush to send impeachment articles
Speaker of the House Nancy Pelosi, D-Calif., meets with reporters following escalation of tensions this week between the U.S. and Iran, Thursday, Jan. 9, 2020, on Capitol Hill in Washington.
J. Scott Applewhite | AP
House Speaker Nancy Pelosi is saying she will not rush to deliver two articles of impeachment against the president to the Senate. The decision to delay sending the articles is part of a strategy aimed at forcing concessions out of Senate Majority Leader Mitch McConnell on rules for the trial. Trump said he would support witnesses testifying in his upcoming Senate impeachment trial, as long as it meant his legal team could summon House Intelligence Committee Chairman Adam Schiff, former Vice President Joe Biden and his son Hunter Biden, and the anonymous whistleblower whose 2019 complaint sparked the impeachment probe in the first place.
Friday’s trading is likely to be driven by the release of the Labor Department’s jobs report, so more on that in a second.
A bit longer term is this call of the day from Shep Perkins, chief investment officer for equities at Putnam Investments. He argues the S&P 500
SPX, +0.67%
could reach 5,000 quicker than you might imagine, given that it only reached 3,000 in July (and closed Thursday at a record 3,274.70).
In the Boston fund manager’s first-quarter outlook, Perkins says price-to-earnings multiples are in line with their average in recent decades, and there is a reasonable case that multiples will expand, fueled by historically low long-term bond yields.
For much of the second half of 2019, the dividend yield on the S&P 500 was higher than the 10-year U.S. Treasury yield
TMUBMUSD10Y, -0.38%
—compared with bonds, stocks have almost never been cheaper.
Technology giants including Facebook
FB, +1.43%,
Google owner Alphabet
GOOG, +1.10%,
Cisco Systems
CSCO, -0.42%,
Intel
INTC, +0.56%
and Apple
AAPL, +2.12%
have “undemanding valuations,” says Perkins, while sectors including financials, energy and basic materials, which account for a fifth of the S&P 500, are priced well below historical average.
And what if earnings accelerate, say driven by a pickup of global growth and a weakening dollar? “With earnings growth of 8.5% per year and a 26x P/E multiple, the market would surpass that mark inside of three years. This is hardly the base case, but it’s also not an extreme scenario in the event bond yields remain depressed,” Perkins says.
Even if a recession hits, the S&P 500 could reach 5,000 in five years, particularly if that downturn came this year or next, he adds.
The buzz
The number of new jobs created in December may have tapered off to about 160,000 from a surprisingly large 266,000 gain in the prior month, according to economists polled by MarketWatch. The unemployment rate is seen as staying at 3.5%, a 50-year low. The data report is due at 8:30 a.m. Eastern.
Tom Porcelli of RBC Capital Markets, who is forecasting 150,000 jobs created, says the labor market is heading toward a lower break-even point, that is, the level at which jobs are created to absorb the growth in the labor force. The number of prime-working-age people not in the labor force is now down to prerecession levels, suggesting that future employment growth may become more closely aligned with population growth, which would take the break-even level down to around 100,000 a month.
As wages are rising, “we need to get used to lower rates of job growth, but that’s not necessarily a bad thing,” Porcelli says.
On the corporate front, new internal emails paint a disturbing picture of the deadly Boeing
BA, +1.50%
737 Max aircraft, with one insider saying the plane was “designed by clowns who in turn are supervised by monkeys,” the latter referring to the Federal Aviation Administration. Boeing shares advanced on Thursday on indications the 737 that crashed in Tehran may have been accidentally shot down.
A spokesperson for delivery service Grubhub
GRUB, +1.79%
told the New York Post there are no plans to sell the company, following a report it was reviewing its strategic options.
Eli Lilly
LLY, +1.65%
announced it was buying skin-focused biopharma Dermira
DERM, +4.47%
in a $1.1 billion deal.
The markets
After the 211-point surge in the Dow industrials
DJIA, +0.74%
on Thursday, U.S. stock futures
ES00, +0.24%
leaned higher. European stocks
SXXP, +0.09%
were on track to reach a record.
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