New York (HedgeCo.Net) – Australian regulators have extended the ban on short-selling, saying the move was in the “national interest” of the country.

As large national banks prepare to release their profits in the wake of more write-downs and rising debt, regulators wanted to avoid the effects that short-selling by aggressive hedge funds would have on the market.  

"We welcome any additional steps that further boost stability in these difficult conditions," said Senator Nick Sherry. "This is a decision made firmly in the national interest and regardless of any sectoral interests."

The Alternative Investment Management Association was disappointed with the decision, saying the ban reduces liquidity in the market.  Both the Federal Government and the Australian Bankers Association agreed with the extension of the ban, while others disagree with the reasons outlined by the regulators.   

The Australian Securities and Investment Commission said they would “not hesitate to act” should it be discovered that individuals or companies were skirting the ban.

The ASIC originally enacted the ban last September amidst the market collapse and crumbling financial institutions.  The United States and Great Britain enacted bans on short-selling as well, which were lifted shortly thereafter.  

The Australian government said they are hoping to lift the ban eventually, after the completion of their new short-selling disclosure requirements.  

Julie Scuderi
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Bloomberg – Microsoft Corp., the software maker that scrapped a $47.5 billion bid for Yahoo! Inc. this month, may forge a partnership with the Internet company in the search- advertising market to challenge Google Inc.

Microsoft, which abandoned its takeover attempts May 3, said yesterday that it’s exploring a transaction with Yahoo and may renew attempts to buy the entire company. The two may combine units that sell ads that run next to Internet search results, said Morningstar Inc. analyst Toan Tran.

Billionaire investor Carl Icahn is pressuring Yahoo to ally itself with Microsoft to compete with Google, which dominates the Internet search market. Icahn, backed by investors such as hedge- fund manager John Paulson, plans to oust Yahoo’s board if Chief Executive Officer Jerry Yang fails to sell to Microsoft.

“Carl Icahn is in this to make a quick buck, so whatever helps him make money he’ll be happy with,” said Tran, who is based in Chicago and doesn’t own shares of either company. “What Carl Icahn definitely wants is an outright sale of Yahoo to Microsoft at some price higher than what it is now.”

Microsoft has offered to buy Yahoo’s search unit and take a minority stake in the company after Yahoo gets rid of its holdings in Asia, Reuters reported today, citing a person familiar with the talks. Microsoft spokesman Frank Shaw declined to confirm or deny the report, while Yahoo spokeswoman Diana Wong declined to comment.

Microsoft, based in Redmond, Washington, fell 53 cents to $29.46 at 4 p.m. New York time in Nasdaq Stock Market trading. Sunnyvale, California-based Yahoo rose 2 cents to $27.68, while Google dropped $2.55 to $577.52.

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