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NEW YORK, US - MF GLOBAL, a global brokerage firm, said on Monday that it had no exposure to ailing US mortgage investments and that a British billionaire and major Bear Stearns shareholder was not one of its clients.
MF Global said it remained 'well capitalised' as investors sold off its shares amid market jitters about a widening US credit crunch which has also rocked global markets.
US investors remain wary of further contagion from Bear Stearns rapid demise in the past week.
Bear Stearns, a major US investment bank and brokerage, was pushed close to collapse on Friday as it sought to stem mounting losses tied to mortgage-backed securities.
The bank agreed to be taken over by US banking giant JPMorgan Chase on Sunday for around US$236 million (S$326 million) , or just US$2 a share, when its market worth had ranked in the billions of dollars just weeks ago.
MF Global's shares had plummeted 49 per cent to US$8.87 in Monday afternoon trading, but the company said in a statement issued in New York that it 'has no exposure to subprime mortgage-backed securities that have been the root cause of the current market environment.'
Subprime mortgages granted to Americans with poor credit have experienced rising defaults amid a US housing slump and triggered a related credit squeeze in the financial markets.
'The company is very well capitalized with US$1.4 billion in a committed, undrawn credit facility,' MF Global said.
'As previously announced, as of today, volumes and net revenues for the current quarter to date remain at higher levels than in any comparable period during the current fiscal year,' the brokerage stated.
MF Global said that secretive British billionaire Joseph Lewis was not a client of the company.
US media reports have speculated that Mr Lewis lost over US$1 billion which he had invested in Bear Stearns last year, before its financing woes took a turn for the worse.
The British billionaire lives in the Bahamas, an island chain located off the east coast of the US state of Florida, and is a keen golfer, according to British media reports.
Forbes' magazine calculated his net worth last year at around US$2.5 billion.
MF Global operates offices in Bermuda, New York, Chicago and London among other cities. -- AFP
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