Morgan Stanley is borrowing 225 billion yen ($2 billion) from Citigroup Inc., Shinsei Bank Ltd. and the Government of Singapore Investment Corp. to fund Japan's largest real estate deal, three people familiar with the transaction said.
Morgan Stanley will obtain senior loans from Citigroup and Tokyo-based Shinsei, and junior credit from GIC, the investment unit of the Singapore government, to fund its 281.3 billion yen purchase of All Nippon Airways Co.'s 13 Japanese hotels, said the people, who declined to be identified because the lending hasn't been announced.
Japan's commercial land prices rose for the first time in 16 years in the 12 months ended June 30, as international and domestic investors competed to buy properties. Citigroup and Shinsei are looking for buyers of the senior loans worth 180 billion yen after the collapse of the U.S. subprime mortgage market prompted more than $50 billion of writedowns at the world's biggest banks and pushed up borrowing costs.
``Japan's real-estate market is still hot but it is true banks are cautious about making exposure after seeing the absolute turmoil in the U.S. and Europe,'' said Koyo Ozeki, head of Asia-Pacific credit research at Pimco Japan Ltd. ``Debt investors have become more demanding in pricing as well.''
a-stockforum.com
четверг, 29 ноября 2007 г.
Treasuries Advance on Speculation U.S. Housing Slump to Deepen
Treasury notes rose before a government report that will probably show the U.S. real-estate slump deepened last month, bolstering the case for another reduction in interest rates by the Federal Reserve.
Fed fund futures today showed traders have increased bets on the central bank lowering the target rate by a quarter-point on Dec. 11 to spur the economy. Economists in a Bloomberg News survey predict purchases of new homes in the U.S. fell 2.6 percent to an annual pace of 750,000 in October. The report is due at 10 a.m. in Washington.
``It looks like the market will get what it wants from the Fed this month, and that's a rate cut,'' said Kornelius Purps, fixed-income strategist at Unicredit Markets & Investment Banking in Munich, the investment arm of Italy's biggest bank. ``I'm afraid we will see more negative headlines coming. Treasury yields will have to fall further.''
Five-year note yields fell 2 basis points to 3.49 percent as of 10:14 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 7/8 percent security due in October 2012 rose 2/32, or 63 cents per $1,000 face amount, to 101 24/32.
Five-year yields have climbed more than a quarter percentage point since the start of the week as the Treasury Department prepares to sell $13 billion of the notes today.
The 10-year note yield declined 1 basis point to 4.03 percent. It will fall to 3.90 percent by the end of the year, Purps predicted.
a-stockforum.com
Fed fund futures today showed traders have increased bets on the central bank lowering the target rate by a quarter-point on Dec. 11 to spur the economy. Economists in a Bloomberg News survey predict purchases of new homes in the U.S. fell 2.6 percent to an annual pace of 750,000 in October. The report is due at 10 a.m. in Washington.
``It looks like the market will get what it wants from the Fed this month, and that's a rate cut,'' said Kornelius Purps, fixed-income strategist at Unicredit Markets & Investment Banking in Munich, the investment arm of Italy's biggest bank. ``I'm afraid we will see more negative headlines coming. Treasury yields will have to fall further.''
Five-year note yields fell 2 basis points to 3.49 percent as of 10:14 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 7/8 percent security due in October 2012 rose 2/32, or 63 cents per $1,000 face amount, to 101 24/32.
Five-year yields have climbed more than a quarter percentage point since the start of the week as the Treasury Department prepares to sell $13 billion of the notes today.
The 10-year note yield declined 1 basis point to 4.03 percent. It will fall to 3.90 percent by the end of the year, Purps predicted.
a-stockforum.com
пятница, 23 ноября 2007 г.
U.S. Notes Have Longest Rally in 5 Years on Demand for Safety
Two-year Treasuries headed for their longest weekly rally in five years as tumbling stocks and credit-market losses increased demand for the relative safety of government debt.
The yield fell below 3 percent for the first time since December 2004, and the 10-year rate declined to less than 4 percent, the lowest since 2005. The dollar slid to a record against the euro and crude oil rallied to $99 a barrel, spurring expectations among traders that the Federal Reserve will cut its benchmark interest rate next month to support economic growth.
``You have the U.S. economy turning over, led by housing,'' said Adam MacKillop, who trades U.S. bonds at Barclays Capital Japan in Tokyo. ``You've got credit concerns. Equities are under pressure. This is why we had such a massive rally.''
Yields on the 3 5/8 percent Treasury due in October 2009 rose 3 basis points to 3.03 percent as of 9:34 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price fell 1/32, or 31 cents per $1,000 face amount, to 101 3/32.
The yield declined 32 basis points since Nov. 16, making this the sixth winning week. A basis point equals 0.01 percentage point.
The last time notes had such a long run of gains was in the period ended Oct. 4, 2002. The Fed was in the process of cutting its target for overnight loans between banks, taking the rate to a 45-year low of 1 percent by June 2003.
good-investor-idia.com
The yield fell below 3 percent for the first time since December 2004, and the 10-year rate declined to less than 4 percent, the lowest since 2005. The dollar slid to a record against the euro and crude oil rallied to $99 a barrel, spurring expectations among traders that the Federal Reserve will cut its benchmark interest rate next month to support economic growth.
``You have the U.S. economy turning over, led by housing,'' said Adam MacKillop, who trades U.S. bonds at Barclays Capital Japan in Tokyo. ``You've got credit concerns. Equities are under pressure. This is why we had such a massive rally.''
Yields on the 3 5/8 percent Treasury due in October 2009 rose 3 basis points to 3.03 percent as of 9:34 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price fell 1/32, or 31 cents per $1,000 face amount, to 101 3/32.
The yield declined 32 basis points since Nov. 16, making this the sixth winning week. A basis point equals 0.01 percentage point.
The last time notes had such a long run of gains was in the period ended Oct. 4, 2002. The Fed was in the process of cutting its target for overnight loans between banks, taking the rate to a 45-year low of 1 percent by June 2003.
good-investor-idia.com
Kospi Heads for Longest Losing Streak Since 2004
South Korea's stocks declined for the seventh day, with the benchmark heading to its longest losing streak in three years on concern that global economic growth will slow from credit market losses in the U.S.
Hyundai Heavy Industries Ltd. paced a decline among makers of capital goods on speculation slower global growth will weaken demand for machinery, power generators and ships.
SK Telecom Co. Ltd. led companies that rely on domestic spending higher on expectations slowing global growth will push investors to switch into stocks that rely on local demand. LG Electronics Inc. paced an advance among the nation's exporters of electronics as the won weakened for the seventh day.
``Equipment makers and manufacturers of machines are not attractive when global economic growth is weak because companies will not be expanding,'' said Kim Woo Sik, who manages $328 million at SH Asset Management Co. in Seoul. ``Telecoms are up because these are good domestic plays. A weak won is good for electronics exporters.''
The Kospi fell 47.64, or 2.7 percent, to 1,751.23 as of 1:05 p.m. in Seoul, after sliding 8.8 percent in the previous six days. The measure is heading to its longest losing streak since a seven- day slide in October 2004.
The Kosdaq decreased 3.7 percent to 695.31. Kospi 200 futures expiring in December declined 2.1 percent to 224.05, while the underlying index fell 2.1 percent to 223.30.
Hyundai Heavy, the world's largest shipbuilder, fell 16,500 won, or 4 percent, to 392,500. Doosan Heavy Industries & Construction Co., South Korea's biggest maker of electricity generators, lost 12,500 won, or 9.7 percent, to 116,500.
good-investor-idia.com
Hyundai Heavy Industries Ltd. paced a decline among makers of capital goods on speculation slower global growth will weaken demand for machinery, power generators and ships.
SK Telecom Co. Ltd. led companies that rely on domestic spending higher on expectations slowing global growth will push investors to switch into stocks that rely on local demand. LG Electronics Inc. paced an advance among the nation's exporters of electronics as the won weakened for the seventh day.
``Equipment makers and manufacturers of machines are not attractive when global economic growth is weak because companies will not be expanding,'' said Kim Woo Sik, who manages $328 million at SH Asset Management Co. in Seoul. ``Telecoms are up because these are good domestic plays. A weak won is good for electronics exporters.''
The Kospi fell 47.64, or 2.7 percent, to 1,751.23 as of 1:05 p.m. in Seoul, after sliding 8.8 percent in the previous six days. The measure is heading to its longest losing streak since a seven- day slide in October 2004.
The Kosdaq decreased 3.7 percent to 695.31. Kospi 200 futures expiring in December declined 2.1 percent to 224.05, while the underlying index fell 2.1 percent to 223.30.
Hyundai Heavy, the world's largest shipbuilder, fell 16,500 won, or 4 percent, to 392,500. Doosan Heavy Industries & Construction Co., South Korea's biggest maker of electricity generators, lost 12,500 won, or 9.7 percent, to 116,500.
good-investor-idia.com
среда, 21 ноября 2007 г.
Rigged Bids, SEC Give Dealers Edge as Auction-Rate Bonds Fail
More than a year after 15 securities firms settled claims of manipulating auction-rate bonds, the $360 billion market remains as opaque as ever.
Investors can't get basic information about trading in their securities, like the interest rate. Qwest Communications International Inc. and Synaptics Inc. haven't been able to unload the debt when they wanted to, regulatory filings show. Borrowing costs on the $270 billion of auction bonds sold by state and local governments have climbed an average 13 basis points compared with notes that aren't subject to periodic sales, according to the brokerage industry's trade group.
The collapse of debt backed by subprime mortgages that forced banks to report more than $50 billion of losses and writedowns this year is infecting the market for auction securities. Investors are concerned because brokers can advise bidders on what they should pay and the U.S. Securities and Exchange Commission allows dealers to use their inside information to compete with bondholders.
``When you buy auction securities, you are beholden to a broker,'' said Adam Dean, president at SVB Asset Management, a Santa Clara, California, firm that manages about $6 billion of corporate cash accounts. While Dean doesn't buy the debt because of the risk that they can't be readily converted to cash, ``our clients are constantly being solicited by brokers,'' he said.
Unlike Treasuries or stocks, there is no daily source of information about auction-rate bonds, floating-rate securities whose interest rate is reset though periodic bids, typically every seven, 25 or 28 days.
financial-stock.com
Investors can't get basic information about trading in their securities, like the interest rate. Qwest Communications International Inc. and Synaptics Inc. haven't been able to unload the debt when they wanted to, regulatory filings show. Borrowing costs on the $270 billion of auction bonds sold by state and local governments have climbed an average 13 basis points compared with notes that aren't subject to periodic sales, according to the brokerage industry's trade group.
The collapse of debt backed by subprime mortgages that forced banks to report more than $50 billion of losses and writedowns this year is infecting the market for auction securities. Investors are concerned because brokers can advise bidders on what they should pay and the U.S. Securities and Exchange Commission allows dealers to use their inside information to compete with bondholders.
``When you buy auction securities, you are beholden to a broker,'' said Adam Dean, president at SVB Asset Management, a Santa Clara, California, firm that manages about $6 billion of corporate cash accounts. While Dean doesn't buy the debt because of the risk that they can't be readily converted to cash, ``our clients are constantly being solicited by brokers,'' he said.
Unlike Treasuries or stocks, there is no daily source of information about auction-rate bonds, floating-rate securities whose interest rate is reset though periodic bids, typically every seven, 25 or 28 days.
financial-stock.com
Fed Forecasts Spur Traders to Ignore Warnings, Bet on Rate Cuts
The Federal Reserve's first set of quarterly economic forecasts fueled speculation that it will cut interest rates again, contrary to warnings by policy makers in the past two weeks.
The degree of ``uncertainty'' about the growth outlook is greater than that for inflation, officials said in a supplement to minutes of their October meeting released yesterday. While officials expressed confidence price increases will ease, they viewed markets as ``still fragile and were concerned that an adverse shock'' would worsen economic risks.
The wariness about a continued credit collapse pushed odds of a rate cut next month up to 92 percent, according to federal funds futures, from as low as 70 percent. Investors differ with Chairman Ben S. Bernanke and other officials, who have said this month that the dangers of a slower expansion and faster inflation were ``roughly'' balanced.
``Risks aren't balanced,'' said Michael Feroli, a former Fed board staff member who is now an economist at JPMorgan Chase & Co. in New York. ``Recent developments in financial markets increase the likelihood that they will ease.''
As part of its new release on the three-year economic estimates of Fed governors and district-bank presidents, the central bank discussed risks to the outlook. ``Most participants judged that the uncertainty attending'' their growth forecasts ``was above typical levels seen in the past,'' the Fed said.
financial-stock.com
The degree of ``uncertainty'' about the growth outlook is greater than that for inflation, officials said in a supplement to minutes of their October meeting released yesterday. While officials expressed confidence price increases will ease, they viewed markets as ``still fragile and were concerned that an adverse shock'' would worsen economic risks.
The wariness about a continued credit collapse pushed odds of a rate cut next month up to 92 percent, according to federal funds futures, from as low as 70 percent. Investors differ with Chairman Ben S. Bernanke and other officials, who have said this month that the dangers of a slower expansion and faster inflation were ``roughly'' balanced.
``Risks aren't balanced,'' said Michael Feroli, a former Fed board staff member who is now an economist at JPMorgan Chase & Co. in New York. ``Recent developments in financial markets increase the likelihood that they will ease.''
As part of its new release on the three-year economic estimates of Fed governors and district-bank presidents, the central bank discussed risks to the outlook. ``Most participants judged that the uncertainty attending'' their growth forecasts ``was above typical levels seen in the past,'' the Fed said.
financial-stock.com
понедельник, 19 ноября 2007 г.
U.S. Treasuries Are Little Changed Before Fed Releases Minutes
U.S. Treasuries were little changed on speculation the minutes of last month's Federal Reserve meeting will tomorrow show policy makers are reluctant to cut interest rates further.
Three weeks of gains have pushed two-year yields down to near the lowest since February 2005. Most investors surveyed by research company Ried, Thunberg & Co. in Jersey City, New Jersey, expect the Fed to keep borrowing costs unchanged on Dec. 11.
``Treasuries are beginning to look expensive and I think fair value is above today's yields,'' said Peter Lildholdt, a senior fixed-income analyst at Danske Bank A/S in Copenhagen. ``Our main scenario is for rates to be unchanged in December. Yields could go higher after the minutes.''
The two-year yield fell 1 basis point to 3.32 percent by 10:51 a.m. in London, according to bond broker Cantor Fitzgerald LP, after dropping to as low as 3.28 percent on Nov. 16.
The price of the 3 5/8 percent security due October 2009 rose 1/32, or 31 cents per $1,000 face amount, to 100 18/32.
Two-year notes yielded 1.18 percentage points less than the central bank's target for overnight lending, near the biggest deficit in two months.
Lildholdt said he expects two-year yields to climb to 3.5 percent by year-end.
The yield on two-year notes has fallen 60 basis points since the beginning of November. That compares with an average 16 basis-point drop in the first 19 days of June through October, according to data compiled by Bloomberg.
The yield on 10-year Treasury notes fell 2 basis points to 4.15 percent. Yields move inversely to bond prices. A basis point is 0.01 percentage point.
Interest-Rate Futures
Traders reined-in expectations the central bank will reduce its target rate next month, according to interest-rate futures.
Fed fund futures indicated a 90 percent chance the central bank will reduce its benchmark rate a quarter percentage point to 4.25 percent, down from 94 percent at the end of last week and 98 percent odds a week ago. The chances of another 25 basis-point cut in January were 67 percent, and there was a 43 percent likelihood of the rate falling to 3.75 percent in March.
microcapbooks.com
Three weeks of gains have pushed two-year yields down to near the lowest since February 2005. Most investors surveyed by research company Ried, Thunberg & Co. in Jersey City, New Jersey, expect the Fed to keep borrowing costs unchanged on Dec. 11.
``Treasuries are beginning to look expensive and I think fair value is above today's yields,'' said Peter Lildholdt, a senior fixed-income analyst at Danske Bank A/S in Copenhagen. ``Our main scenario is for rates to be unchanged in December. Yields could go higher after the minutes.''
The two-year yield fell 1 basis point to 3.32 percent by 10:51 a.m. in London, according to bond broker Cantor Fitzgerald LP, after dropping to as low as 3.28 percent on Nov. 16.
The price of the 3 5/8 percent security due October 2009 rose 1/32, or 31 cents per $1,000 face amount, to 100 18/32.
Two-year notes yielded 1.18 percentage points less than the central bank's target for overnight lending, near the biggest deficit in two months.
Lildholdt said he expects two-year yields to climb to 3.5 percent by year-end.
The yield on two-year notes has fallen 60 basis points since the beginning of November. That compares with an average 16 basis-point drop in the first 19 days of June through October, according to data compiled by Bloomberg.
The yield on 10-year Treasury notes fell 2 basis points to 4.15 percent. Yields move inversely to bond prices. A basis point is 0.01 percentage point.
Interest-Rate Futures
Traders reined-in expectations the central bank will reduce its target rate next month, according to interest-rate futures.
Fed fund futures indicated a 90 percent chance the central bank will reduce its benchmark rate a quarter percentage point to 4.25 percent, down from 94 percent at the end of last week and 98 percent odds a week ago. The chances of another 25 basis-point cut in January were 67 percent, and there was a 43 percent likelihood of the rate falling to 3.75 percent in March.
microcapbooks.com
South Korea Stocks Fall to Lowest in 2 Months; Posco Leads Drop
South Korean stocks fell for a third day to close at their lowest in two months. Posco and Hyundai Heavy Industries Co. lead the declines on concern China may raise interest rates to cool economic growth.
``The global equity markets are still sensitive to worries about China's tightening policies and a slowdown in the U.S.,'' said Seo Jung Ho, who manages the equivalent of $640 million at UBS Hana Asset Management Co. in Seoul. ``Nothing much has changed in the overall environment and concerns are lingering.''
The Kospi index declined 32.73, or 1.7 percent, to 1,893.47 at the close in Seoul, the lowest since Sept. 18. The Kosdaq index lost 0.6 percent to 750.79. Kospi 200 futures expiring in December dropped 1.9 percent to 239.65, while the underlying index slid 1.8 percent to 239.78.
Posco, Asia's third-largest steelmaker by output, slid 11,000 won, or 1.9 percent, to 571,000. Hyundai Heavy, the world's biggest shipbuilder, dropped 21,000 won, or 4.5 percent, to 447,000. Samsung Electronics Co., South Korea's largest exporter, fell 16,000 won, or 2.9 percent, to 541,000. China is South Korea's largest export market.
The China Banking Regulatory Commission said it's giving ``guidance'' to banks to cool lending that's already topped its goal of 15 percent growth this year.
The Wall Street Journal reported that authorities have asked banks to freeze lending in order to curb ``runaway investment.'' Lai Xiaomin, a Beijing-based spokesman for the commission, said today there is no lending freeze.
microcapbooks.com
``The global equity markets are still sensitive to worries about China's tightening policies and a slowdown in the U.S.,'' said Seo Jung Ho, who manages the equivalent of $640 million at UBS Hana Asset Management Co. in Seoul. ``Nothing much has changed in the overall environment and concerns are lingering.''
The Kospi index declined 32.73, or 1.7 percent, to 1,893.47 at the close in Seoul, the lowest since Sept. 18. The Kosdaq index lost 0.6 percent to 750.79. Kospi 200 futures expiring in December dropped 1.9 percent to 239.65, while the underlying index slid 1.8 percent to 239.78.
Posco, Asia's third-largest steelmaker by output, slid 11,000 won, or 1.9 percent, to 571,000. Hyundai Heavy, the world's biggest shipbuilder, dropped 21,000 won, or 4.5 percent, to 447,000. Samsung Electronics Co., South Korea's largest exporter, fell 16,000 won, or 2.9 percent, to 541,000. China is South Korea's largest export market.
The China Banking Regulatory Commission said it's giving ``guidance'' to banks to cool lending that's already topped its goal of 15 percent growth this year.
The Wall Street Journal reported that authorities have asked banks to freeze lending in order to curb ``runaway investment.'' Lai Xiaomin, a Beijing-based spokesman for the commission, said today there is no lending freeze.
microcapbooks.com
пятница, 16 ноября 2007 г.
U.S. Treasuries Decline as Yield Advantage Over Japan Narrows
Treasuries declined, paring a weekly gain, on speculation a narrowing yield premium will deter global investors from buying U.S. government debt.
Bonds retreated after a rally yesterday pushed the yield advantage for two-year notes over similar-maturity Japanese debt to the lowest since 2004. Japanese net purchases of bonds abroad slowed for the first time in three weeks in the seven days ended Nov. 10, a Ministry of Finance report showed yesterday.
``I have no interest to get into this market,'' said Takashi Yamamoto, chief trader at Mitsubishi UFJ Trust & Banking Corp. in Singapore. Prices are ``too, too high.''
The two-year yield rose almost 2 basis points to 3.34 percent as of 7:28 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 5/8 percent securities due in October 2009 fell 1/32, or 31 cents per $1,000 face amount, to 100 17/32. The yield was near the lowest since February 2005. The yield may climb to 3.9 percent by year-end, Yamamoto said.
The yield advantage for two-year notes over similar- maturity Japanese debt fell to 2.56 percentage points yesterday, from 4.02 points in June. German two-year notes yield 53 basis points more than their U.S. counterparts, compared with a discount earlier in the year.
A Treasury Department report will show foreigners purchased $71.5 billion more U.S. assets than they sold in September from net sales of a record $69.3 billion in August, according to a Bloomberg News survey.
Two-year Treasuries rose for a fifth week as a slump in stocks spurred demand for the relative safety of government debt. The yield fell as low as 3.308 percent yesterday.
pennystockcommunity.com
Bonds retreated after a rally yesterday pushed the yield advantage for two-year notes over similar-maturity Japanese debt to the lowest since 2004. Japanese net purchases of bonds abroad slowed for the first time in three weeks in the seven days ended Nov. 10, a Ministry of Finance report showed yesterday.
``I have no interest to get into this market,'' said Takashi Yamamoto, chief trader at Mitsubishi UFJ Trust & Banking Corp. in Singapore. Prices are ``too, too high.''
The two-year yield rose almost 2 basis points to 3.34 percent as of 7:28 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 5/8 percent securities due in October 2009 fell 1/32, or 31 cents per $1,000 face amount, to 100 17/32. The yield was near the lowest since February 2005. The yield may climb to 3.9 percent by year-end, Yamamoto said.
The yield advantage for two-year notes over similar- maturity Japanese debt fell to 2.56 percentage points yesterday, from 4.02 points in June. German two-year notes yield 53 basis points more than their U.S. counterparts, compared with a discount earlier in the year.
A Treasury Department report will show foreigners purchased $71.5 billion more U.S. assets than they sold in September from net sales of a record $69.3 billion in August, according to a Bloomberg News survey.
Two-year Treasuries rose for a fifth week as a slump in stocks spurred demand for the relative safety of government debt. The yield fell as low as 3.308 percent yesterday.
pennystockcommunity.com
India's Record Stock Rally May End on Capital Curbs, CLSA Says
India's record stock market rally may falter if the government slaps controls on overseas buying in an attempt to stem gains in the rupee, CLSA Ltd. said.
``Strong capital controls could cause a big decline,'' Christopher Wood, CLSA's Hong Kong-based chief Asian equity strategist, said in an interview yesterday in Gurgaon, near New Delhi, where CLSA is holding its 10th investor conference. ``The central bank may contemplate more measures. That's the biggest risk to Indian markets now.''
Proposals to curb offshore derivatives triggered a slump in markets that halted trading on Oct. 17 and ended eight straight weeks of gains by the Bombay Stock Exchange Sensitive Index. Overseas investors resumed purchases after the regulator's final rules didn't impose additional curbs. They've bought a record $18.7 billion of Indian stocks this year.
The Sensex topped 20,000 for the first time last month, the third-best performing stock market in Asia this year after China and Bangladesh. The rupee, driven by the overseas flows, has advanced 12.7 percent this year, the second-best performance by an Asian currency after the Philippine peso.
The Securities & Exchange Board of India, the market regulator, on Oct. 25 scrapped some offshore investments to persuade foreign investors to register in India. Finance Minister Palaniappan Chidambaram said on Nov. 12 there are no plans to impose further controls on capital flows.
Meets With Accident
Wood said Asian markets could decline if any large financial institution ``meets with an accident'' due to the U.S. subprime- mortgage crisis that has already prompted the departures of chief executives at New York-based Citigroup Inc. and Merrill Lynch & Co.
The world's largest securities firms and banks have announced more than $40 billion of losses from writedowns of collateralized-debt obligations and other debt backed by mortgages to people with poor credit.
Given that there are chances of the U.S. falling into recession, industries such as technology, which depend on North America for most of their revenue, could suffer if the world's biggest economy slowed, Wood said.
Still, India's economy has become more broad-based, he said.
``The Indian domestic economy has moved beyond the software sector,'' Wood said, referring to the creation of jobs and the generation of income by industries such as housing and retail.
India remains an economy driven by domestic demand and current investments by companies will continue for ``many years'' sustaining an economic growth of between 9 percent and 10 percent, Wood said.
The Indian economy will expand by almost 9 percent in the fiscal year ending March 31, Chidambaram said Nov. 5. Gross domestic product has grown an average 8.6 percent since 2004, the fastest pace since independence in 1947.
pennystockcommunity.com
``Strong capital controls could cause a big decline,'' Christopher Wood, CLSA's Hong Kong-based chief Asian equity strategist, said in an interview yesterday in Gurgaon, near New Delhi, where CLSA is holding its 10th investor conference. ``The central bank may contemplate more measures. That's the biggest risk to Indian markets now.''
Proposals to curb offshore derivatives triggered a slump in markets that halted trading on Oct. 17 and ended eight straight weeks of gains by the Bombay Stock Exchange Sensitive Index. Overseas investors resumed purchases after the regulator's final rules didn't impose additional curbs. They've bought a record $18.7 billion of Indian stocks this year.
The Sensex topped 20,000 for the first time last month, the third-best performing stock market in Asia this year after China and Bangladesh. The rupee, driven by the overseas flows, has advanced 12.7 percent this year, the second-best performance by an Asian currency after the Philippine peso.
The Securities & Exchange Board of India, the market regulator, on Oct. 25 scrapped some offshore investments to persuade foreign investors to register in India. Finance Minister Palaniappan Chidambaram said on Nov. 12 there are no plans to impose further controls on capital flows.
Meets With Accident
Wood said Asian markets could decline if any large financial institution ``meets with an accident'' due to the U.S. subprime- mortgage crisis that has already prompted the departures of chief executives at New York-based Citigroup Inc. and Merrill Lynch & Co.
The world's largest securities firms and banks have announced more than $40 billion of losses from writedowns of collateralized-debt obligations and other debt backed by mortgages to people with poor credit.
Given that there are chances of the U.S. falling into recession, industries such as technology, which depend on North America for most of their revenue, could suffer if the world's biggest economy slowed, Wood said.
Still, India's economy has become more broad-based, he said.
``The Indian domestic economy has moved beyond the software sector,'' Wood said, referring to the creation of jobs and the generation of income by industries such as housing and retail.
India remains an economy driven by domestic demand and current investments by companies will continue for ``many years'' sustaining an economic growth of between 9 percent and 10 percent, Wood said.
The Indian economy will expand by almost 9 percent in the fiscal year ending March 31, Chidambaram said Nov. 5. Gross domestic product has grown an average 8.6 percent since 2004, the fastest pace since independence in 1947.
pennystockcommunity.com
четверг, 15 ноября 2007 г.
Citigroup Punished in 1st Bond Sale Since Writedowns
Citigroup Inc., the largest U.S. bank by assets, was punished by investors in its first bond sale since disclosing almost $17 billion in credit-market losses.
Citigroup yesterday sold $4 billion of 10-year notes at the highest yield relative to benchmark interest rates in the bank's history, according to data compiled by Bloomberg. The 6.125 percent securities yield 190 basis points more than Treasuries of similar maturity, up from 118 basis points, or 1.18 percentage points, in a similar offering by New York-based Citigroup three months ago.
Investors are demanding higher yields to own the debt of banks and brokerage firms as losses on securities linked to subprime mortgages and collateralized debt obligations mount. Total losses may reach $400 billion worldwide, Deutsche Bank AG analysts said in a report on Nov. 12, and Citigroup Chief Executive Officer Charles O. ``Chuck'' Prince stepped down Nov. 4 as the bank said it will write down the value of securities.
Rising risk premiums are ``a reflection of the markets not knowing what else may be under the surface in terms of additional exposure,'' said Derek Brown, a bond fund manager in Los Angeles at Transamerica Investment Management, which oversees $8 billion in fixed-income assets. Brown didn't buy the bonds.
pennystock-university.com
Citigroup yesterday sold $4 billion of 10-year notes at the highest yield relative to benchmark interest rates in the bank's history, according to data compiled by Bloomberg. The 6.125 percent securities yield 190 basis points more than Treasuries of similar maturity, up from 118 basis points, or 1.18 percentage points, in a similar offering by New York-based Citigroup three months ago.
Investors are demanding higher yields to own the debt of banks and brokerage firms as losses on securities linked to subprime mortgages and collateralized debt obligations mount. Total losses may reach $400 billion worldwide, Deutsche Bank AG analysts said in a report on Nov. 12, and Citigroup Chief Executive Officer Charles O. ``Chuck'' Prince stepped down Nov. 4 as the bank said it will write down the value of securities.
Rising risk premiums are ``a reflection of the markets not knowing what else may be under the surface in terms of additional exposure,'' said Derek Brown, a bond fund manager in Los Angeles at Transamerica Investment Management, which oversees $8 billion in fixed-income assets. Brown didn't buy the bonds.
pennystock-university.com
Two-Year Treasuries Rise as Falling Stocks Stoke Risk Aversion
U.S. two-year Treasury notes rose, pushing yields to near the lowest in 2 1/2 years, as a decline in Asian and European shares prompted investors to seek the safety of government debt.
The spread, or difference in yields, between two- and 10- year debt widened to near the most since March 2005 as investors bought safer, shorter-dated securities. Barclays Plc, the U.K.'s third-biggest bank, today said it wrote down about 1.3 billion pounds ($2.7 billion) on securities tied to the U.S. subprime- mortgage collapse, reducing appetite for riskier investments.
``We're seeing a reaction to the fall in stocks,'' said Glenn Marci, a fixed-income strategist in Frankfurt at DZ Bank AG, Germany's biggest cooperative lender. ``There's still great uncertainty about the economy, and that's supporting Treasuries.''
The yield on the two-year note fell 4 basis points, or 0.04 percentage point, to 3.47 percent at 7:47 a.m. in New York, according to bond broker Cantor Fitzgerald LP. It reached 3.38 percent on Nov. 13, the lowest since February 2005.
The price of the 3 5/8 percent security due in October 2009 gained 2/32, or 63 cents per $1,000 face amount, to 100 9/32.
Ten-year yields slipped 2 basis points to 4.24 percent. Yields move inversely to bond prices.
Stock markets across Europe and Asia fell. The U.K.'s FTSE 100 Index snapped a three-day rally to drop 1 percent, while the DAX Index in Germany slid for the third day this week, declining 1.1 percent. U.S. stock-index futures were also lower after the Standard & Poor's 500 Index fell 0.7 percent yesterday.
pennystock-university.com
The spread, or difference in yields, between two- and 10- year debt widened to near the most since March 2005 as investors bought safer, shorter-dated securities. Barclays Plc, the U.K.'s third-biggest bank, today said it wrote down about 1.3 billion pounds ($2.7 billion) on securities tied to the U.S. subprime- mortgage collapse, reducing appetite for riskier investments.
``We're seeing a reaction to the fall in stocks,'' said Glenn Marci, a fixed-income strategist in Frankfurt at DZ Bank AG, Germany's biggest cooperative lender. ``There's still great uncertainty about the economy, and that's supporting Treasuries.''
The yield on the two-year note fell 4 basis points, or 0.04 percentage point, to 3.47 percent at 7:47 a.m. in New York, according to bond broker Cantor Fitzgerald LP. It reached 3.38 percent on Nov. 13, the lowest since February 2005.
The price of the 3 5/8 percent security due in October 2009 gained 2/32, or 63 cents per $1,000 face amount, to 100 9/32.
Ten-year yields slipped 2 basis points to 4.24 percent. Yields move inversely to bond prices.
Stock markets across Europe and Asia fell. The U.K.'s FTSE 100 Index snapped a three-day rally to drop 1 percent, while the DAX Index in Germany slid for the third day this week, declining 1.1 percent. U.S. stock-index futures were also lower after the Standard & Poor's 500 Index fell 0.7 percent yesterday.
pennystock-university.com
вторник, 13 ноября 2007 г.
Citigroup, Merrill Default Swaps Rally; Goldman Eases Concerns
The risk of financial companies defaulting on their debt fell after Goldman Sachs Group Inc. and Bank of America Corp. stoked optimism that the nation's largest banks may have seen the worst of credit market losses.
Contracts on Citigroup Inc. declined 8 basis points to 74 basis points, according to CMA Datavision in London. Credit- default swaps tied to Merrill Lynch & Co. fell 10 basis points to about 125 basis points. Goldman Sachs tumbled 15 basis points to 80.5 basis points, the biggest drop in about three years.
Goldman Sachs Chief Executive Officer Lloyd Blankfein told a New York conference yesterday that the largest U.S. securities firm by market value doesn't plan ``significant'' writedowns from subprime-mortgage securities. Bank of America said its losses will be restricted to $3 billion next quarter and UBS AG analyst Glenn Schorr said the potential for losses at Lehman Brothers Holdings Inc. is ``negligible.''
``After several weeks of selloffs, any marginal good news helps the market,'' said George Bory, global head of credit strategy in Stamford, Connecticut, at UBS, Europe's biggest bank by assets.
Citigroup and Merrill Lynch, both based in New York, sparked a selloff of financial shares and debt this month when the firms accepted the resignation of their CEOs and increased writedowns of collateralized debt obligations and other debt backed by mortgages to people with poor credit.
Credit-default swaps tied to the bonds of the world's biggest banks and securities firms soared to the highest last week. Citigroup said it may take an additional $11 billion of writedowns on top of $5.9 billion and Merrill, the world's third-biggest securities firm, increased its losses to $8.4 billion.
checkstockpics.com
Contracts on Citigroup Inc. declined 8 basis points to 74 basis points, according to CMA Datavision in London. Credit- default swaps tied to Merrill Lynch & Co. fell 10 basis points to about 125 basis points. Goldman Sachs tumbled 15 basis points to 80.5 basis points, the biggest drop in about three years.
Goldman Sachs Chief Executive Officer Lloyd Blankfein told a New York conference yesterday that the largest U.S. securities firm by market value doesn't plan ``significant'' writedowns from subprime-mortgage securities. Bank of America said its losses will be restricted to $3 billion next quarter and UBS AG analyst Glenn Schorr said the potential for losses at Lehman Brothers Holdings Inc. is ``negligible.''
``After several weeks of selloffs, any marginal good news helps the market,'' said George Bory, global head of credit strategy in Stamford, Connecticut, at UBS, Europe's biggest bank by assets.
Citigroup and Merrill Lynch, both based in New York, sparked a selloff of financial shares and debt this month when the firms accepted the resignation of their CEOs and increased writedowns of collateralized debt obligations and other debt backed by mortgages to people with poor credit.
Credit-default swaps tied to the bonds of the world's biggest banks and securities firms soared to the highest last week. Citigroup said it may take an additional $11 billion of writedowns on top of $5.9 billion and Merrill, the world's third-biggest securities firm, increased its losses to $8.4 billion.
checkstockpics.com
South Korean Stocks Advance; Samsung, STX Pan Ocean Lead Gains
South Korean stocks advanced after Wal-Mart Stores Inc.'s profit beat estimates, raising speculation U.S. consumer spending will weather the impact of subprime- mortgage defaults. Samsung Electronics Co. paced gains.
``There were all these fuzzy concerns about the subprime issue hitting the real economy, but the actual indicators aren't bad,'' said Heo Pil Seok, who oversees the equivalent of $4.4 billion at Midas International Asset Management in Seoul.
STX Pan Ocean Co. climbed after its net income surged 83- fold on higher bulk-shipping rates. Posco rose after UBS AG suggested investors ``buy steel,'' saying earnings will recover in the fourth quarter.
The Kospi index added 39.69, or 2.1 percent, closing at 1,972.58 in Seoul, its biggest gain since Oct. 26.
Samsung, the nation's biggest exporter, rose 15,000 won, or 2.8 percent, to 547,000. LG.Philips LCD Co., the world's second- largest maker of liquid-crystal displays, added 2,500 won, or 4.8 percent, to 55,000.
U.S. stocks advanced the most in two months yesterday after Wal-Mart Stores Inc., the world's biggest retailer, said its third-quarter net income increased to 70 cents a share, beating the 67 cent average estimate of analysts. The U.S. is South Korea's second-biggest export market.
Hyundai Motor Co., which sells four out of five of its cars overseas, added 2,500 won, or 3.8 percent, to 69,000. LG Electronics Inc., Asia's second-biggest handset maker, gained 5,500 won, or 5.5 percent, to 106,000.
checkstockpics.com
``There were all these fuzzy concerns about the subprime issue hitting the real economy, but the actual indicators aren't bad,'' said Heo Pil Seok, who oversees the equivalent of $4.4 billion at Midas International Asset Management in Seoul.
STX Pan Ocean Co. climbed after its net income surged 83- fold on higher bulk-shipping rates. Posco rose after UBS AG suggested investors ``buy steel,'' saying earnings will recover in the fourth quarter.
The Kospi index added 39.69, or 2.1 percent, closing at 1,972.58 in Seoul, its biggest gain since Oct. 26.
Samsung, the nation's biggest exporter, rose 15,000 won, or 2.8 percent, to 547,000. LG.Philips LCD Co., the world's second- largest maker of liquid-crystal displays, added 2,500 won, or 4.8 percent, to 55,000.
U.S. stocks advanced the most in two months yesterday after Wal-Mart Stores Inc., the world's biggest retailer, said its third-quarter net income increased to 70 cents a share, beating the 67 cent average estimate of analysts. The U.S. is South Korea's second-biggest export market.
Hyundai Motor Co., which sells four out of five of its cars overseas, added 2,500 won, or 3.8 percent, to 69,000. LG Electronics Inc., Asia's second-biggest handset maker, gained 5,500 won, or 5.5 percent, to 106,000.
checkstockpics.com
Ubiquitous Shares Untraded on Debut in Tokyo's Neo
Ubiquitous Corp., a Japanese software supplier to game maker Nintendo Co., was untraded on its first day on Tokyo's Neo market as buy orders exceed available shares by 9,746 to one.
Bids climbed to 300,000 yen compared with the initial offering price of 100,000 yen. Today was also the debut of Jasdaq's Neo market.
Neo, Japan's seventh market for start-ups, is the first to accept companies with no earnings. Listings are based on operating plans and earnings projections.
Ubiquitous forecasts operating profit, or sales minus the cost of goods sold and administrative expenses, of 1 billion yen ($9 million) by the fiscal year ending March 2010, about double the 470 million yen expected for the fiscal year ending next March, according to documents it filed with the exchange.
The Tokyo-based software company expects its shares to trade at 30.9 times earnings for the current year, and forecasts 13.9 times earnings by March 2010.
Ubiquitous plans to boost its profitability by expanding its range of customers, such as audio-visual equipment makers, said president Masahiko Kawauchi. Sales of software to Nintendo, maker of the DS handheld game console, accounted for 88 percent of Ubiquitous's sales during the previous fiscal year.
Renesas Technology Corp., Japan's second-biggest chipmaker, was Ubiquitous's No. 2 customer, accounting for 7 percent of sales. Ubiquitous expects to boost its royalties from Renesas chips that use its software.
The creation of NEO is ``revolutionary'' because its pre- listing screening allows people to get a good idea of the companies they are thinking of investing in, said Katsumi Udagawa of Ichiyoshi Securities Co. in Tokyo in a interview.
If Neo's debut attracts individual investors to stocks in start-up companies, it could have an impact on other equity markets, he added.
checkstocklist.com
Bids climbed to 300,000 yen compared with the initial offering price of 100,000 yen. Today was also the debut of Jasdaq's Neo market.
Neo, Japan's seventh market for start-ups, is the first to accept companies with no earnings. Listings are based on operating plans and earnings projections.
Ubiquitous forecasts operating profit, or sales minus the cost of goods sold and administrative expenses, of 1 billion yen ($9 million) by the fiscal year ending March 2010, about double the 470 million yen expected for the fiscal year ending next March, according to documents it filed with the exchange.
The Tokyo-based software company expects its shares to trade at 30.9 times earnings for the current year, and forecasts 13.9 times earnings by March 2010.
Ubiquitous plans to boost its profitability by expanding its range of customers, such as audio-visual equipment makers, said president Masahiko Kawauchi. Sales of software to Nintendo, maker of the DS handheld game console, accounted for 88 percent of Ubiquitous's sales during the previous fiscal year.
Renesas Technology Corp., Japan's second-biggest chipmaker, was Ubiquitous's No. 2 customer, accounting for 7 percent of sales. Ubiquitous expects to boost its royalties from Renesas chips that use its software.
The creation of NEO is ``revolutionary'' because its pre- listing screening allows people to get a good idea of the companies they are thinking of investing in, said Katsumi Udagawa of Ichiyoshi Securities Co. in Tokyo in a interview.
If Neo's debut attracts individual investors to stocks in start-up companies, it could have an impact on other equity markets, he added.
checkstocklist.com
Hong Kong Stocks Rebound from One-Month Low; Sinopec Gains
Hong Kong's Hang Seng Index rose, rebounding from a one-month low as investors judged recent losses excessive. China Petroleum & Chemical Corp., the nation's largest oil refiner, and Sun Hung Kai Properties Ltd. led gains.
``There are funds starting to buy,'' said Steven Leung, a Hong Kong-based director of institutional sales at UOB-Kay Hian Ltd. ``Investors aren't really worried about the long term. The market is staying firm at this level.''
GCL-Poly Energy Holdings Ltd., which operates co-generators of power and steam in China, and Chinese developer Zhong An Real Estate Ltd. climbed on their debut. Cnooc Ltd. led oil producers lower after crude prices dropped.
The Hang Seng Index added 137.62, or 0.5 percent, to 27,803.35, after sliding as much as 2.6 percent. The benchmark, which yesterday posted its lowest close since Oct. 4, has slumped 11 percent this month.
The Hang Seng China Enterprises Index, which tracks 43 so- called H shares of Chinese companies listed in Hong Kong, climbed 0.2 percent to 16,695.08.
Shares dropped earlier on concern China will raise interest rates for the sixth time this year after a government report showed inflation accelerated to a decade-high last month. Consumer prices rose 6.5 percent from a year earlier, exceeding the 6.3 percent median estimate in a Bloomberg News survey of economists.
``There are concerns about factors such as the global growth outlook and China raising rates,'' said Pauline Dan, who helps manage $2.5 billion at Manulife Asset Management in Hong Kong. ``We've been raising our cash level by reducing some of our stock holdings over the past three to four weeks.''
checkstocklist.com
``There are funds starting to buy,'' said Steven Leung, a Hong Kong-based director of institutional sales at UOB-Kay Hian Ltd. ``Investors aren't really worried about the long term. The market is staying firm at this level.''
GCL-Poly Energy Holdings Ltd., which operates co-generators of power and steam in China, and Chinese developer Zhong An Real Estate Ltd. climbed on their debut. Cnooc Ltd. led oil producers lower after crude prices dropped.
The Hang Seng Index added 137.62, or 0.5 percent, to 27,803.35, after sliding as much as 2.6 percent. The benchmark, which yesterday posted its lowest close since Oct. 4, has slumped 11 percent this month.
The Hang Seng China Enterprises Index, which tracks 43 so- called H shares of Chinese companies listed in Hong Kong, climbed 0.2 percent to 16,695.08.
Shares dropped earlier on concern China will raise interest rates for the sixth time this year after a government report showed inflation accelerated to a decade-high last month. Consumer prices rose 6.5 percent from a year earlier, exceeding the 6.3 percent median estimate in a Bloomberg News survey of economists.
``There are concerns about factors such as the global growth outlook and China raising rates,'' said Pauline Dan, who helps manage $2.5 billion at Manulife Asset Management in Hong Kong. ``We've been raising our cash level by reducing some of our stock holdings over the past three to four weeks.''
checkstocklist.com
понедельник, 12 ноября 2007 г.
Citigroup, Banks Agree on `Super-SIV,' Person Says
Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, reached an agreement on the structure of an $80 billion fund to help revive the market for short-term debt, a person familiar with the talks said yesterday.
Bankers working on the deal met at Bank of America's offices in New York on Nov. 9 and settled on a simpler plan than initially proposed last month, according to the person, who declined to be named because the agreement isn't public. Under the original initiative brokered by Treasury Secretary Henry Paulson, the fund would buy some of the $320 billion in assets held by so-called structured-investment vehicles, known as SIVs.
The banks are pushing to have the fund in place by year-end because SIVs are unable to get short-term credit to finance their higher-yielding investments as losses on subprime mortgages drive investors from all but the safest government debt. The plan still has to win the confidence of investors amid forecasts from Deutsche Bank AG analysts today that losses related to subprime mortgages may reach $400 billion worldwide.
``The whole thing is flawed,'' said Graham Fisher & Co. managing director Josh Rosner, whose New York-based firm analyzes structured finance and real estate investments. ``As opposed to recognizing losses, we're trying to roll those losses into the future, regardless of the sanity or safety and soundness of doing that.''
A fund term sheet may be ready in as few as two weeks, once ratings companies evaluate the super-SIV and the banks obtain tax and legal opinions, the person said.
Borrow Short, Buy Long
Citigroup spokeswoman Danielle Romero-Apsilos and JPMorgan spokesman Brian Marchiony declined to comment. Both firms are based in New York. Scott Silvestri, a spokesman for Charlotte, North Carolina-based Bank of America, said he had no immediate comment. The New York Times reported yesterday that the banks had reached the agreement.
SIVs borrow in the short-term commercial paper market to invest in longer-dated securities ranging from mortgage bonds to bank debt.
The asset-backed commercial paper market has been shrinking for 13 straight weeks in the U.S. and last week declined the most in two months. Debt maturing in 270 days or less and backed by mortgages, credit-card loans and other assets fell $29.5 billion, or 3.4 percent, to a seasonally adjusted $845.2 billion for the week ended Nov. 7, according to the Federal Reserve in Washington.
ir-process.com
Bankers working on the deal met at Bank of America's offices in New York on Nov. 9 and settled on a simpler plan than initially proposed last month, according to the person, who declined to be named because the agreement isn't public. Under the original initiative brokered by Treasury Secretary Henry Paulson, the fund would buy some of the $320 billion in assets held by so-called structured-investment vehicles, known as SIVs.
The banks are pushing to have the fund in place by year-end because SIVs are unable to get short-term credit to finance their higher-yielding investments as losses on subprime mortgages drive investors from all but the safest government debt. The plan still has to win the confidence of investors amid forecasts from Deutsche Bank AG analysts today that losses related to subprime mortgages may reach $400 billion worldwide.
``The whole thing is flawed,'' said Graham Fisher & Co. managing director Josh Rosner, whose New York-based firm analyzes structured finance and real estate investments. ``As opposed to recognizing losses, we're trying to roll those losses into the future, regardless of the sanity or safety and soundness of doing that.''
A fund term sheet may be ready in as few as two weeks, once ratings companies evaluate the super-SIV and the banks obtain tax and legal opinions, the person said.
Borrow Short, Buy Long
Citigroup spokeswoman Danielle Romero-Apsilos and JPMorgan spokesman Brian Marchiony declined to comment. Both firms are based in New York. Scott Silvestri, a spokesman for Charlotte, North Carolina-based Bank of America, said he had no immediate comment. The New York Times reported yesterday that the banks had reached the agreement.
SIVs borrow in the short-term commercial paper market to invest in longer-dated securities ranging from mortgage bonds to bank debt.
The asset-backed commercial paper market has been shrinking for 13 straight weeks in the U.S. and last week declined the most in two months. Debt maturing in 270 days or less and backed by mortgages, credit-card loans and other assets fell $29.5 billion, or 3.4 percent, to a seasonally adjusted $845.2 billion for the week ended Nov. 7, according to the Federal Reserve in Washington.
ir-process.com
A $45 Billion Writedown Won't Stop Second-Best Wall Street Year
Even after the record $8.4 billion writedown for bad debts at Merrill Lynch & Co., the unprecedented ouster of three chief executives within five months and the elimination of $84 billion of market value at the five largest securities firms, Wall Street still is poised to report its second-most profitable year.
And 2008 may be better.
``As the bombs are dropping and the mines are exploding, it's a bit of a surprise,'' said Kenneth Crawford, who helps oversee $950 million at St. Louis-based Argent Capital Management LLC, which holds Morgan Stanley and Merrill shares.
The collapse of the subprime mortgage market derailed the careers of Merrill Chief Executive Officer Stan O'Neal, Citigroup's Charles O. ``Chuck'' Prince III and UBS AG's Peter Wuffli. Together, those companies accounted for about 60 percent of the $45 billion of writedowns reported by the world's biggest banks and securities firms so far this year. The industry already has cut 10,000 jobs.
Amid the gloom, analysts estimate New York-based Goldman Sachs Group Inc., Merrill, Morgan Stanley, Lehman Brothers Holdings Inc. and Bear Stearns Cos. will earn a combined $28 billion this year, down 8.3 percent from the record $30.6 billion in 2006, according to a survey by Bloomberg. Analysts currently estimate the firms' net income will reach $32 billion in 2008.
Goldman and Lehman will report their highest earnings ever this year, while profits will drop 42 percent at Merrill, 34 percent at Bear Stearns and 6 percent at Morgan Stanley. In 2008, analysts predict all the firms except Goldman will post higher profits. Goldman, led by CEO Lloyd Blankfein, will earn a Wall Street record $11 billion this year and then $10.5 billion in fiscal 2008, analysts estimate.
Reason for Optimism
``When you look to next year, you're back to earning money once these writedowns are taken,'' said Benjamin Wallace, who helps manage $750 million at Westborough, Massachusetts-based Grimes & Co. and owns Merrill and Morgan Stanley shares.
Les Satlow, who oversees $450 million at Cabot Money Management in Salem, Massachusetts, said he's more bullish on prospects for investment banks than commercial banks.
``The securities firms have less exposure to the consumer and greater exposure to overseas capital markets, which have a reasonable chance of remaining solid,'' Satlow said.
Goldman and Lehman made more than half of their third- quarter revenue outside the U.S., benefiting from faster growth in Asia and Europe. By contrast, Bank of America Corp. relies on the U.S. for more than 80 percent of its revenue.
ir-process.com
And 2008 may be better.
``As the bombs are dropping and the mines are exploding, it's a bit of a surprise,'' said Kenneth Crawford, who helps oversee $950 million at St. Louis-based Argent Capital Management LLC, which holds Morgan Stanley and Merrill shares.
The collapse of the subprime mortgage market derailed the careers of Merrill Chief Executive Officer Stan O'Neal, Citigroup's Charles O. ``Chuck'' Prince III and UBS AG's Peter Wuffli. Together, those companies accounted for about 60 percent of the $45 billion of writedowns reported by the world's biggest banks and securities firms so far this year. The industry already has cut 10,000 jobs.
Amid the gloom, analysts estimate New York-based Goldman Sachs Group Inc., Merrill, Morgan Stanley, Lehman Brothers Holdings Inc. and Bear Stearns Cos. will earn a combined $28 billion this year, down 8.3 percent from the record $30.6 billion in 2006, according to a survey by Bloomberg. Analysts currently estimate the firms' net income will reach $32 billion in 2008.
Goldman and Lehman will report their highest earnings ever this year, while profits will drop 42 percent at Merrill, 34 percent at Bear Stearns and 6 percent at Morgan Stanley. In 2008, analysts predict all the firms except Goldman will post higher profits. Goldman, led by CEO Lloyd Blankfein, will earn a Wall Street record $11 billion this year and then $10.5 billion in fiscal 2008, analysts estimate.
Reason for Optimism
``When you look to next year, you're back to earning money once these writedowns are taken,'' said Benjamin Wallace, who helps manage $750 million at Westborough, Massachusetts-based Grimes & Co. and owns Merrill and Morgan Stanley shares.
Les Satlow, who oversees $450 million at Cabot Money Management in Salem, Massachusetts, said he's more bullish on prospects for investment banks than commercial banks.
``The securities firms have less exposure to the consumer and greater exposure to overseas capital markets, which have a reasonable chance of remaining solid,'' Satlow said.
Goldman and Lehman made more than half of their third- quarter revenue outside the U.S., benefiting from faster growth in Asia and Europe. By contrast, Bank of America Corp. relies on the U.S. for more than 80 percent of its revenue.
ir-process.com
суббота, 10 ноября 2007 г.
Asian Stocks Have Worst Weekly Loss Since August; Banks Slide
Asian stocks fell, dragging a regional benchmark to its worst weekly performance in almost three months, amid mounting credit-market losses at financial companies and a plunge in the dollar.
Westpac Banking Corp. slipped after Citigroup Inc. and Morgan Stanley reported mortgage-related losses. Mizuho Financial Group Inc., Japan's second-largest publicly traded bank, slumped after the Nikkei newspaper said a merger of one of the bank's brokerages and Shinko Securities Co. will be delayed by subprime-related losses.
``The uncertainty in subprime and further writeoffs in the U.S. banking system would certainly put pressure on stocks here,'' said Hans Goetti, who oversees $10 billion as Singapore-based chief investment officer at LGT Bank in Liechtenstein AG.
Nintendo Co., which generated more than a third of its sales from the Americas in the last financial year, led exporters lower on concern a weaker dollar will erode its U.S. income when converted back to yen.
The Morgan Stanley Capital International Asia Pacific Index lost 3.38 percent to 162.84 this week, the worst decline since the five days ended Aug. 17. All 10 industry groups retreated.
China Life Insurance Co. slumped in Hong Kong, sending the Hang Seng Index to its first drop in nine weeks, after Chinese Premier Wen Jiabao said his government may delay allowing mainland investors to buy the city's stocks. Benchmarks retreated around the region, except in Malaysia where the key gauge rose 0.3 percent to 1402.25. Japan's Nikkei 225 Stock Average slumped 5.7 percent, its second-worst performance this year.
asr-finance.com
Westpac Banking Corp. slipped after Citigroup Inc. and Morgan Stanley reported mortgage-related losses. Mizuho Financial Group Inc., Japan's second-largest publicly traded bank, slumped after the Nikkei newspaper said a merger of one of the bank's brokerages and Shinko Securities Co. will be delayed by subprime-related losses.
``The uncertainty in subprime and further writeoffs in the U.S. banking system would certainly put pressure on stocks here,'' said Hans Goetti, who oversees $10 billion as Singapore-based chief investment officer at LGT Bank in Liechtenstein AG.
Nintendo Co., which generated more than a third of its sales from the Americas in the last financial year, led exporters lower on concern a weaker dollar will erode its U.S. income when converted back to yen.
The Morgan Stanley Capital International Asia Pacific Index lost 3.38 percent to 162.84 this week, the worst decline since the five days ended Aug. 17. All 10 industry groups retreated.
China Life Insurance Co. slumped in Hong Kong, sending the Hang Seng Index to its first drop in nine weeks, after Chinese Premier Wen Jiabao said his government may delay allowing mainland investors to buy the city's stocks. Benchmarks retreated around the region, except in Malaysia where the key gauge rose 0.3 percent to 1402.25. Japan's Nikkei 225 Stock Average slumped 5.7 percent, its second-worst performance this year.
asr-finance.com
Loh & Loh, PTT, Samsung SDI, Wharf: Asia Ex-Japan Stock Preview
The following stocks may have unusual price changes in Asian markets, excluding Japan, on Nov. 12. Prices are from the local market's last close. Stock symbols are in parentheses after company names.
Banpu Pcl (BANPU TB): The biggest coal miner in Thailand said third-quarter profit doubled to 1.72 billion baht ($51 million) from a year earlier on higher earnings from a power- producing unit and increased coal sales. The result beat the 1.6 billion baht profit estimated by analysts in Bloomberg's survey. The stock dropped 8 baht, or 1.9 percent, to 404.
China Resources Power Holdings Co. (836 HK): The third- largest Hong Kong-listed Chinese generator by market value said it increased electricity production by 83.5 percent in October as capacity expanded. The stock fell HK$1.15, or 4.2 percent, to HK$26.15.
Loh & Loh Corp. (LLHL MK): The Malaysian construction company said Binary Bestari agreed to buy a 46 percent stake from its shareholder Vital Achievement Sdn. for 3.60 ringgit a share and will make an offer for the rest of the company at the same price. The stock, suspended at 4.12 ringgit on Nov. 6, will resume trading.
Megaworld Corp. (MEG PM): The second-largest Philippine developer by market value said third-quarter profit rose 29 percent to 844.3 million pesos ($20 million) as demand increased for homes and offices. The stock fell 0.10 peso, or 2.4 percent, to 4.10 pesos.
PTT Pcl (PTT TB): Thailand's biggest energy company said third-quarter profit increased 0.8 percent to 24.5 billion baht. That trailed the 24.6 billion baht expected by analysts in a Bloomberg survey. The stock rose 4 baht, or 1 percent, to 400.
asr-finance.com
Banpu Pcl (BANPU TB): The biggest coal miner in Thailand said third-quarter profit doubled to 1.72 billion baht ($51 million) from a year earlier on higher earnings from a power- producing unit and increased coal sales. The result beat the 1.6 billion baht profit estimated by analysts in Bloomberg's survey. The stock dropped 8 baht, or 1.9 percent, to 404.
China Resources Power Holdings Co. (836 HK): The third- largest Hong Kong-listed Chinese generator by market value said it increased electricity production by 83.5 percent in October as capacity expanded. The stock fell HK$1.15, or 4.2 percent, to HK$26.15.
Loh & Loh Corp. (LLHL MK): The Malaysian construction company said Binary Bestari agreed to buy a 46 percent stake from its shareholder Vital Achievement Sdn. for 3.60 ringgit a share and will make an offer for the rest of the company at the same price. The stock, suspended at 4.12 ringgit on Nov. 6, will resume trading.
Megaworld Corp. (MEG PM): The second-largest Philippine developer by market value said third-quarter profit rose 29 percent to 844.3 million pesos ($20 million) as demand increased for homes and offices. The stock fell 0.10 peso, or 2.4 percent, to 4.10 pesos.
PTT Pcl (PTT TB): Thailand's biggest energy company said third-quarter profit increased 0.8 percent to 24.5 billion baht. That trailed the 24.6 billion baht expected by analysts in a Bloomberg survey. The stock rose 4 baht, or 1 percent, to 400.
asr-finance.com
пятница, 9 ноября 2007 г.
U.S. Two-Year Notes Set for Weekly Gain as Credit Losses Spread
U.S. two-year Treasury notes headed for a fourth weekly advance on speculation spreading losses tied to subprime mortgages at securities companies will lead the Federal Reserve to cut interest rates next month.
The stretch of gains is the longest since the week ended Aug. 3 as Morgan Stanley, Merrill Lynch & Co. and Citigroup Inc. said they lost money on securities linked with home loans to risky borrowers. U.S. notes also rallied because credit-market losses increased demand for the relative safety of government debt.
``We're bullish on Treasuries,'' said Masayuki Yoshihara, who helps manage the equivalent of $26.6 billion of non-yen bonds in Tokyo at Sumitomo Life Insurance Co., the nation's third- largest life insurer. ``Further losses will occur so the Fed must cut rates. The market is in turmoil.''
The two-year yield rose 1 basis point to 3.5 percent by 8:22 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 5/8 percent note due in October 2009 was little changed at 100 7/34.
The yield declined 18 basis points this week and fell to 3.41 percent yesterday, the lowest since February 2005. A basis point is 0.01 percentage point.
Ten-year yields increased 1 basis point today to 4.29 percent. They will probably fall to 4 percent early next year, Yoshihara said.
Notes rose yesterday as Fed Chairman Ben S. Bernanke told Congress he expects the U.S. economy to ``slow noticeably.''
Traders increased bets the Fed will cut borrowing costs for a third time this year at its meeting next month.
a-stockforum.com
The stretch of gains is the longest since the week ended Aug. 3 as Morgan Stanley, Merrill Lynch & Co. and Citigroup Inc. said they lost money on securities linked with home loans to risky borrowers. U.S. notes also rallied because credit-market losses increased demand for the relative safety of government debt.
``We're bullish on Treasuries,'' said Masayuki Yoshihara, who helps manage the equivalent of $26.6 billion of non-yen bonds in Tokyo at Sumitomo Life Insurance Co., the nation's third- largest life insurer. ``Further losses will occur so the Fed must cut rates. The market is in turmoil.''
The two-year yield rose 1 basis point to 3.5 percent by 8:22 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 5/8 percent note due in October 2009 was little changed at 100 7/34.
The yield declined 18 basis points this week and fell to 3.41 percent yesterday, the lowest since February 2005. A basis point is 0.01 percentage point.
Ten-year yields increased 1 basis point today to 4.29 percent. They will probably fall to 4 percent early next year, Yoshihara said.
Notes rose yesterday as Fed Chairman Ben S. Bernanke told Congress he expects the U.S. economy to ``slow noticeably.''
Traders increased bets the Fed will cut borrowing costs for a third time this year at its meeting next month.
a-stockforum.com
South Korean Stocks Rise; SK Telecom Gains, Doosan Heavy Falls
South Korean stocks rose, led by SK Telecom Co., after the company said it may bid for Hanarotelecom Inc.
``Telecommunication shares are strong today on the potential for mergers and acquisitions,'' said Cho Min Keon, who manages the equivalent of $540 million at Kyobo Investment Trust Management Co. in Seoul. ``The Kospi will stay around 2,000 for a while until the U.S. market gives a clear direction.''
Doosan Heavy Industries & Construction Co. and STX Group company shares fell after prosecutors arrested two executives at an STX unit on suspicion of stealing technology from Doosan Heavy.
The Kospi index rose 0.6 percent to 1,990.47 in Seoul. The Kosdaq fell 0.1 percent to 779.04. Kospi 200 futures expiring in December advanced 0.7 percent to 253.00, while the underlying index rose 0.9 percent to 252.21.
SK Telecom Co., South Korea's largest mobile-phone operator, said yesterday it's reviewing whether to make a bid for Hanarotelecom, after being approached by Goldman Sachs Group Inc. regarding a possible deal. Hanaro said Nov. 6 that the sale of 39 percent held by American International Group Inc. and Newbridge Capital LLC was in the ``final stages.''
SK Telecom rose 9,500 won, or 4.1 percent, to 239,000 won. Hanaro, South Korea's second-largest high-speed Internet access provider, climbed 480 won, or 5 percent, to 10,100 won.
Woori Investment & Securities Co. raised its target price for Hanarotelecom by 45 percent to 16,000 won from 11,000, for SK Telecom by 33 percent to 320,000 won from 240,000, citing a possible takeover.
a-stockforum.com
``Telecommunication shares are strong today on the potential for mergers and acquisitions,'' said Cho Min Keon, who manages the equivalent of $540 million at Kyobo Investment Trust Management Co. in Seoul. ``The Kospi will stay around 2,000 for a while until the U.S. market gives a clear direction.''
Doosan Heavy Industries & Construction Co. and STX Group company shares fell after prosecutors arrested two executives at an STX unit on suspicion of stealing technology from Doosan Heavy.
The Kospi index rose 0.6 percent to 1,990.47 in Seoul. The Kosdaq fell 0.1 percent to 779.04. Kospi 200 futures expiring in December advanced 0.7 percent to 253.00, while the underlying index rose 0.9 percent to 252.21.
SK Telecom Co., South Korea's largest mobile-phone operator, said yesterday it's reviewing whether to make a bid for Hanarotelecom, after being approached by Goldman Sachs Group Inc. regarding a possible deal. Hanaro said Nov. 6 that the sale of 39 percent held by American International Group Inc. and Newbridge Capital LLC was in the ``final stages.''
SK Telecom rose 9,500 won, or 4.1 percent, to 239,000 won. Hanaro, South Korea's second-largest high-speed Internet access provider, climbed 480 won, or 5 percent, to 10,100 won.
Woori Investment & Securities Co. raised its target price for Hanarotelecom by 45 percent to 16,000 won from 11,000, for SK Telecom by 33 percent to 320,000 won from 240,000, citing a possible takeover.
a-stockforum.com
четверг, 8 ноября 2007 г.
Treasury Yield Curve Near Steepest Since 2005 on Rate Cut Bets
The difference in yields between U.S. two-year and 10-year Treasury notes held near the widest since April 2005 as deepening credit-market losses spurred investors to raise bets on a reduction in interest rates next month.
Morgan Stanley, the second-biggest U.S. securities firm, joined Merrill Lynch & Co. and Citigroup Inc. in booking losses on subprime mortgage-related assets and said the outlook for credit markets is bleaker than in September. Interest-rate futures show the Federal Reserve will lower its target rate a quarter-point to 4.25 percent on Dec. 11 to shield the economy.
``The yield curve is telling you the subprime turmoil has pushed up expectations that the Fed will have to cut rates further,'' said Peter Mueller, fixed-income strategist at Commerzbank AG in Frankfurt. ``Treasuries are looking stretched at these levels. The problem is with uncertainty remaining high, you don't know when is the right time to sell.''
The two-year note yield rose 6 basis points, or 0.06 percentage point, to 3.59 percent at 8:35 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 3 5/8 percent securities due in October 2009 fell 3/32, or 94 cents per $1,000 face amount, to 100 2/32.
The number of Americans filing first-time claims for unemployment benefits fell more than forecast, suggesting the job market remains resilient.
Initial jobless claims decreased a third straight week, by 13,000 to 317,000 in the week that ended Nov. 3, the Labor Department said today in Washington. The four-week moving average, a less volatile measure, rose to 329,750 from 327,750.
Ten-year note yields were little changed at 4.33 percent. Yields move inversely to bond prices.
good-investor-idia.com
Morgan Stanley, the second-biggest U.S. securities firm, joined Merrill Lynch & Co. and Citigroup Inc. in booking losses on subprime mortgage-related assets and said the outlook for credit markets is bleaker than in September. Interest-rate futures show the Federal Reserve will lower its target rate a quarter-point to 4.25 percent on Dec. 11 to shield the economy.
``The yield curve is telling you the subprime turmoil has pushed up expectations that the Fed will have to cut rates further,'' said Peter Mueller, fixed-income strategist at Commerzbank AG in Frankfurt. ``Treasuries are looking stretched at these levels. The problem is with uncertainty remaining high, you don't know when is the right time to sell.''
The two-year note yield rose 6 basis points, or 0.06 percentage point, to 3.59 percent at 8:35 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 3 5/8 percent securities due in October 2009 fell 3/32, or 94 cents per $1,000 face amount, to 100 2/32.
The number of Americans filing first-time claims for unemployment benefits fell more than forecast, suggesting the job market remains resilient.
Initial jobless claims decreased a third straight week, by 13,000 to 317,000 in the week that ended Nov. 3, the Labor Department said today in Washington. The four-week moving average, a less volatile measure, rose to 329,750 from 327,750.
Ten-year note yields were little changed at 4.33 percent. Yields move inversely to bond prices.
good-investor-idia.com
China Stock Index Slides, Led by Vanke: World's Biggest Mover
China's stocks fell by the most in four months. Property developers and oil-related shares led declines after China Vanke Co. reported a drop in sales and the price of crude dropped.
Vanke, China's biggest listed property developer, slid to its lowest in two weeks. PetroChina Co., the world's largest company following its debut on the Shanghai stock exchange this week, slid.
``Property developers seem to be showing initial signs of slowdown and the outlook isn't heartening,'' said Chen Shide, who manages the equivalent of $212 million at GF Fund Management Co. in Guangzhou. ``The decline in oil prices gives investors a reason to sell oil shares, such as PetroChina, which are already expensive.''
The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, tumbled 256.96, or 4.8 percent, to 5,093.67, declining the most since July 5. It was the biggest fluctuation among markets included in global benchmarks. The measure has dropped 13 percent from its record close of 5,877.20 on Oct. 16.
Vanke, the nation's biggest listed property developer, slid 1.57 yuan, or 4.3 percent, to 34.93, the lowest since Oct. 25. Vanke sold property worth 5.16 billion yuan ($693 million) in October, 25 percent less than the previous month, it said in a statement.
good-investor-idia.com
Vanke, China's biggest listed property developer, slid to its lowest in two weeks. PetroChina Co., the world's largest company following its debut on the Shanghai stock exchange this week, slid.
``Property developers seem to be showing initial signs of slowdown and the outlook isn't heartening,'' said Chen Shide, who manages the equivalent of $212 million at GF Fund Management Co. in Guangzhou. ``The decline in oil prices gives investors a reason to sell oil shares, such as PetroChina, which are already expensive.''
The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, tumbled 256.96, or 4.8 percent, to 5,093.67, declining the most since July 5. It was the biggest fluctuation among markets included in global benchmarks. The measure has dropped 13 percent from its record close of 5,877.20 on Oct. 16.
Vanke, the nation's biggest listed property developer, slid 1.57 yuan, or 4.3 percent, to 34.93, the lowest since Oct. 25. Vanke sold property worth 5.16 billion yuan ($693 million) in October, 25 percent less than the previous month, it said in a statement.
good-investor-idia.com
среда, 7 ноября 2007 г.
Toggle Bonds Lose Toxic Taint as Subprime Contagion Subsides
The worst part of the junk bond market is suddenly back in favor.
Companies raised about $4.4 billion in the past six weeks selling toggle bonds, securities that allow borrowers to pay interest in cash or with more debt, data compiled by Bloomberg show. Demand dried up in July and prices fell as much as 16 cents on the dollar as defaults on subprime mortgages contaminated global credit markets, according to data compiled by Bloomberg.
While Lehman Brothers Holdings Inc. estimates that mortgage losses will be as much as $250 billion in the next five years, the revival of toggles suggests that investors anticipate the economy will continue to grow and corporate defaults will stay near 25-year lows.
``When you have a lot of toggles, you know that the market's not too worried about risk,'' said Margaret Patel, who oversees $1.6 billion as a senior portfolio manager at Evergreen Investment Management Co. in Boston. They are ``a bull market security,'' she said.
The bonds accounted for about 18 percent of the $19.9 billion of new high-yield debt during October, up from an average of 8 percent in the first half of the year, when $8 billion were sold, Bloomberg data show.
Companies that issued the debt include Indianapolis-based auto-parts maker Allison Transmission, the Dallas-based power producer formerly known as TXU Corp. and human-resources manager Ceridian Corp. in Minneapolis.
financial-stock.com
Companies raised about $4.4 billion in the past six weeks selling toggle bonds, securities that allow borrowers to pay interest in cash or with more debt, data compiled by Bloomberg show. Demand dried up in July and prices fell as much as 16 cents on the dollar as defaults on subprime mortgages contaminated global credit markets, according to data compiled by Bloomberg.
While Lehman Brothers Holdings Inc. estimates that mortgage losses will be as much as $250 billion in the next five years, the revival of toggles suggests that investors anticipate the economy will continue to grow and corporate defaults will stay near 25-year lows.
``When you have a lot of toggles, you know that the market's not too worried about risk,'' said Margaret Patel, who oversees $1.6 billion as a senior portfolio manager at Evergreen Investment Management Co. in Boston. They are ``a bull market security,'' she said.
The bonds accounted for about 18 percent of the $19.9 billion of new high-yield debt during October, up from an average of 8 percent in the first half of the year, when $8 billion were sold, Bloomberg data show.
Companies that issued the debt include Indianapolis-based auto-parts maker Allison Transmission, the Dallas-based power producer formerly known as TXU Corp. and human-resources manager Ceridian Corp. in Minneapolis.
financial-stock.com
Citigroup Credit Swaps Near Highest in Five Years
Credit-default swaps on bonds of Citigroup Inc., Wachovia Corp. and Morgan Stanley are trading at the highest in at least five years on speculation the nation's biggest banks may be forced to write down more subprime assets.
Contracts tied to Citigroup's debt have climbed 17 basis points to 70 basis points since Oct. 31, according to broker Phoenix Partners Group in New York. The swaps are trading at the widest levels since at least September 2002, Credit Suisse Group data show. A basis point on a contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.
Credit-default swaps tied to New York-based Citigroup more than tripled in the past three weeks, indicating the risk of default is rising. Citigroup this week said losses from the assets may rise to $11 billion, and analysts said the writedowns may increase. Contracts on Morgan Stanley and Wachovia Corp. and Merrill Lynch & Co. are at or near six-year highs on concerns that their losses will grow.
``Until there is much greater disclosure of what people have on their books, and off balance sheets as well, it just feeds into uncertainty,'' said Scott MacDonald, head of research at Aladdin Capital Management LLC in Stamford, Connecticut, which oversees $21.7 billion.
Citigroup credit default swaps trade as if the company were rated Baa3, the lowest investment-grade rating, according to the credit strategy group at Moody's Investors Service. Moody's this week lowered Citigroup's ratings to Aa2, its third-highest rating, from Aa1.
financial-stock.com
Contracts tied to Citigroup's debt have climbed 17 basis points to 70 basis points since Oct. 31, according to broker Phoenix Partners Group in New York. The swaps are trading at the widest levels since at least September 2002, Credit Suisse Group data show. A basis point on a contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.
Credit-default swaps tied to New York-based Citigroup more than tripled in the past three weeks, indicating the risk of default is rising. Citigroup this week said losses from the assets may rise to $11 billion, and analysts said the writedowns may increase. Contracts on Morgan Stanley and Wachovia Corp. and Merrill Lynch & Co. are at or near six-year highs on concerns that their losses will grow.
``Until there is much greater disclosure of what people have on their books, and off balance sheets as well, it just feeds into uncertainty,'' said Scott MacDonald, head of research at Aladdin Capital Management LLC in Stamford, Connecticut, which oversees $21.7 billion.
Citigroup credit default swaps trade as if the company were rated Baa3, the lowest investment-grade rating, according to the credit strategy group at Moody's Investors Service. Moody's this week lowered Citigroup's ratings to Aa2, its third-highest rating, from Aa1.
financial-stock.com
вторник, 6 ноября 2007 г.
Hong Kong's Hang Seng Index May Reach 36,000, Merrill Says
Hong Kong's benchmark Hang Seng Index may reach 36,000 next year, more than a fifth higher than its current level, and investors should buy the city's equities because of robust fund inflows, strong economic growth and solid company earnings, Merrill Lynch & Co. said.
The Hang Seng is valued at 21 times estimated earnings, higher than the Morgan Stanley Capital International Asia- Pacific Index's 18 times. A level of 36,000 would be 22 percent higher than today's close of 29,438.13.
``The Hang Seng Index is not inexpensive at its current level, but we see any correction as a good buying opportunity,'' strategists at Merrill Lynch including Willie Chan said in a research note released today. The brokerage has an ``overweight'' rating on Hong Kong shares, meaning investors should hold more of the stocks than their representation in the regional benchmark.
The Hang Seng's 44 percent gain and the Hang Seng China Enterprises Index's 68 percent advance since the start of trading on Aug. 20, when China announced a plan to allow mainland individual investors to buy Hong Kong stocks, have made them the best performers among 90 global benchmarks tracked by Bloomberg.
The Hang Seng plunged 5 percent yesterday, the most since the Sept. 11, 2001, terrorist attacks, after Chinese Premier Wen Jiabao said his government may delay the plan.
Merrill, the world's biggest brokerage, forecast a 50 percent increase in the city's residential prices by 2009 and said Henderson Land Development Co. is among its most preferred Hong Kong stocks.
Li & Fung Ltd., Standard Chartered Plc, Hopewell Holdings Ltd. and Pacific Basin Shipping Ltd. are also the brokerage's top picks, according to the research note.
microcapbooks.com
The Hang Seng is valued at 21 times estimated earnings, higher than the Morgan Stanley Capital International Asia- Pacific Index's 18 times. A level of 36,000 would be 22 percent higher than today's close of 29,438.13.
``The Hang Seng Index is not inexpensive at its current level, but we see any correction as a good buying opportunity,'' strategists at Merrill Lynch including Willie Chan said in a research note released today. The brokerage has an ``overweight'' rating on Hong Kong shares, meaning investors should hold more of the stocks than their representation in the regional benchmark.
The Hang Seng's 44 percent gain and the Hang Seng China Enterprises Index's 68 percent advance since the start of trading on Aug. 20, when China announced a plan to allow mainland individual investors to buy Hong Kong stocks, have made them the best performers among 90 global benchmarks tracked by Bloomberg.
The Hang Seng plunged 5 percent yesterday, the most since the Sept. 11, 2001, terrorist attacks, after Chinese Premier Wen Jiabao said his government may delay the plan.
Merrill, the world's biggest brokerage, forecast a 50 percent increase in the city's residential prices by 2009 and said Henderson Land Development Co. is among its most preferred Hong Kong stocks.
Li & Fung Ltd., Standard Chartered Plc, Hopewell Holdings Ltd. and Pacific Basin Shipping Ltd. are also the brokerage's top picks, according to the research note.
microcapbooks.com
South Korean Stocks Rise, Led by Samsung: World's Biggest Mover
South Korean stocks rose, paced by mobile-phone makers Samsung Electronics Co. and LG Electronics Inc., after they joined an alliance led by Google Inc. to create a new handset operating system.
Google, owner of the world's most popular Internet search engine, yesterday announced a 34-member alliance to make a system code-named ``Android'' that will allow programmers to develop free software for handsets.
``It isn't bad news for Korean handset makers, since they are always looking for a technological edge against rivals such as Nokia Oyj,'' said Lee Seung Jun, who helps manage $2 billion at CJ Asset Management Co. in Seoul.
Samsung Electronics, Asia's largest maker of mobile phones, rose 20,000 won, or 3.8 percent, to 548,000. LG Electronics, Samsung's main rival in Korea, gained 8,000 won, or 8.9 percent, to 98,000, its biggest advance since May 2004.
``In the medium term, we believe this announcement will have a positive impact on handset replacement rates,'' Credit Suisse Group analysts including Michael Ounjian wrote in a report yesterday.
The Kospi index rose 38.48, or 1.9 percent, to 2,054.24 at the close of trading in Seoul, its first advance in four days and the largest fluctuation among markets included in global benchmarks. The Kosdaq index gained 0.8 percent to 800.92. Kospi 200 futures expiring in December climbed 2.4 percent to 260.50, while the underlying index advanced 2.1 percent to 259.24.
Other technology shares also rose. Hynix Semiconductor Inc., the world's second-largest computer memory chipmaker, gained 500 won, or 2.1 percent, to 24,150. LG.Philips LCD Co., the world 's second-largest maker of liquid crystal displays, climbed 4,300 won, or 8.3 percent, to 56,000, while Samsung SDI Co., the world's second-largest maker of plasma display panels, added 3,900 won, or 6.1 percent, to 67,400.
About 308 million shares valued at 7.3 trillion won ($8 billion) changed hands on the Korea stock exchange, 6 percent more than the three-month daily average of 6.9 trillion won.
microcapbooks.com
Google, owner of the world's most popular Internet search engine, yesterday announced a 34-member alliance to make a system code-named ``Android'' that will allow programmers to develop free software for handsets.
``It isn't bad news for Korean handset makers, since they are always looking for a technological edge against rivals such as Nokia Oyj,'' said Lee Seung Jun, who helps manage $2 billion at CJ Asset Management Co. in Seoul.
Samsung Electronics, Asia's largest maker of mobile phones, rose 20,000 won, or 3.8 percent, to 548,000. LG Electronics, Samsung's main rival in Korea, gained 8,000 won, or 8.9 percent, to 98,000, its biggest advance since May 2004.
``In the medium term, we believe this announcement will have a positive impact on handset replacement rates,'' Credit Suisse Group analysts including Michael Ounjian wrote in a report yesterday.
The Kospi index rose 38.48, or 1.9 percent, to 2,054.24 at the close of trading in Seoul, its first advance in four days and the largest fluctuation among markets included in global benchmarks. The Kosdaq index gained 0.8 percent to 800.92. Kospi 200 futures expiring in December climbed 2.4 percent to 260.50, while the underlying index advanced 2.1 percent to 259.24.
Other technology shares also rose. Hynix Semiconductor Inc., the world's second-largest computer memory chipmaker, gained 500 won, or 2.1 percent, to 24,150. LG.Philips LCD Co., the world 's second-largest maker of liquid crystal displays, climbed 4,300 won, or 8.3 percent, to 56,000, while Samsung SDI Co., the world's second-largest maker of plasma display panels, added 3,900 won, or 6.1 percent, to 67,400.
About 308 million shares valued at 7.3 trillion won ($8 billion) changed hands on the Korea stock exchange, 6 percent more than the three-month daily average of 6.9 trillion won.
microcapbooks.com
понедельник, 5 ноября 2007 г.
Hong Kong Stocks Drop Most Since 9/11: World's Biggest Mover
Hong Kong's Hang Seng Index plunged the most since the Sept. 11 terrorist attacks on concern China will delay the ``through train,'' a plan for mainland Chinese individual investors to buy the city's equities directly. China Mobile Ltd. and China Unicom Ltd. led the decline.
``I think the `through train' is hitting the rocks, possibly permanently,'' said Aaron Boesky, who manages $200 million as chief executive officer at Marco Polo Investments Ltd. in Hong Kong. ``I expect a significant correction in the Hong Kong market over the next few weeks.''
The Hang Seng Index plunged 1,526.02, or 5 percent, to close at 28,942.32, its steepest decline since September 2001 and the largest fluctuation among markets included in global benchmarks. The Hang Seng China Enterprises Index, which tracks 43 so-called H shares of Chinese companies listed in Hong Kong, lost 6.4 percent to 18,291.20.
PetroChina Co., the best-performing member of the H-share index in the past month, dropped the most in almost seven years as investors took advantage of recent gains to sell. The Shanghai-listed shares of China's biggest oil producer almost tripled on their trading debut today.
China Mobile, the world's largest mobile-phone operator by users, dropped HK$10.60, or 7 percent, to HK$141.60, its biggest decline since January 2002. China Petroleum & Chemical Corp., the nation's biggest oil refiner, plunged HK$1.26, or 10 percent, to HK$11.04, the biggest drop since its debut in October 2000.
China Unicom Ltd., the smaller of the nation's two mobile- phone companies, slipped HK$1.46, or 8.3 percent, to HK$16.12. Cosco Pacific Ltd., Asia's third-largest container-terminal operator, fell HK$1.85, or 8 percent, to HK$21.15.
pennystockcommunity.com
``I think the `through train' is hitting the rocks, possibly permanently,'' said Aaron Boesky, who manages $200 million as chief executive officer at Marco Polo Investments Ltd. in Hong Kong. ``I expect a significant correction in the Hong Kong market over the next few weeks.''
The Hang Seng Index plunged 1,526.02, or 5 percent, to close at 28,942.32, its steepest decline since September 2001 and the largest fluctuation among markets included in global benchmarks. The Hang Seng China Enterprises Index, which tracks 43 so-called H shares of Chinese companies listed in Hong Kong, lost 6.4 percent to 18,291.20.
PetroChina Co., the best-performing member of the H-share index in the past month, dropped the most in almost seven years as investors took advantage of recent gains to sell. The Shanghai-listed shares of China's biggest oil producer almost tripled on their trading debut today.
China Mobile, the world's largest mobile-phone operator by users, dropped HK$10.60, or 7 percent, to HK$141.60, its biggest decline since January 2002. China Petroleum & Chemical Corp., the nation's biggest oil refiner, plunged HK$1.26, or 10 percent, to HK$11.04, the biggest drop since its debut in October 2000.
China Unicom Ltd., the smaller of the nation's two mobile- phone companies, slipped HK$1.46, or 8.3 percent, to HK$16.12. Cosco Pacific Ltd., Asia's third-largest container-terminal operator, fell HK$1.85, or 8 percent, to HK$21.15.
pennystockcommunity.com
Japanese Stocks Drop on Concern Subprime Losses to Continue
Japanese stocks fell, sending the Nikkei 225 Stock Average to its lowest in seven weeks. Banks such as Mitsubishi UFJ Financial Group Inc. led declines on concern investments related to subprime U.S. mortgages will curb profits.
Mitsubishi UFJ dropped to its lowest since Oct. 17. Deutsche Bank AG said on Nov. 2 Merrill Lynch & Co. may have to write down another $10 billion subprime-linked assets. Citigroup Inc. said it may have to write down as much as $11 billion for losses on such investments.
Stocks also retreated after Ichiro Ozawa, the leader of the opposition Democratic Party of Japan, said he submitted his resignation, increasing the chances of a continued stalemate in Japan's legislature.
``It's become impossible to measure how big the losses will be at these financial institutions, and we could see them drag the economy down,'' said Hiroshi Chano, who helps manage $7.3 billion at Yasuda Asset Management Co. in Tokyo ``The situation is reminiscent of Japanese banks in the 90s.''
Non-performing loans held by banks ballooned in the decade after the collapse of Japan's ``bubble'' economy as growth stagnated and the value of shares, real estate and other assets held as collateral plunged.
The Nikkei 225 lost 248.56, or 1.5 percent, to 16,268.92 at the close in Tokyo, the lowest since Sept. 18. The broader Topix index declined 25.04, or 1.6 percent, to 1,575.13.
Mitsui & Co. led companies reliant on growth in China lower after the nation's Premier Wen Jiabao indicated a plan to allow mainland investors to invest in Hong Kong will be delayed and prices of gold, oil and copper dropped.
pennystockcommunity.com
Mitsubishi UFJ dropped to its lowest since Oct. 17. Deutsche Bank AG said on Nov. 2 Merrill Lynch & Co. may have to write down another $10 billion subprime-linked assets. Citigroup Inc. said it may have to write down as much as $11 billion for losses on such investments.
Stocks also retreated after Ichiro Ozawa, the leader of the opposition Democratic Party of Japan, said he submitted his resignation, increasing the chances of a continued stalemate in Japan's legislature.
``It's become impossible to measure how big the losses will be at these financial institutions, and we could see them drag the economy down,'' said Hiroshi Chano, who helps manage $7.3 billion at Yasuda Asset Management Co. in Tokyo ``The situation is reminiscent of Japanese banks in the 90s.''
Non-performing loans held by banks ballooned in the decade after the collapse of Japan's ``bubble'' economy as growth stagnated and the value of shares, real estate and other assets held as collateral plunged.
The Nikkei 225 lost 248.56, or 1.5 percent, to 16,268.92 at the close in Tokyo, the lowest since Sept. 18. The broader Topix index declined 25.04, or 1.6 percent, to 1,575.13.
Mitsui & Co. led companies reliant on growth in China lower after the nation's Premier Wen Jiabao indicated a plan to allow mainland investors to invest in Hong Kong will be delayed and prices of gold, oil and copper dropped.
pennystockcommunity.com
суббота, 3 ноября 2007 г.
Hong Kong Stocks Drop on U.S. Subprime Concerns; HSBC Slides
Hong Kong's Hang Seng Index fell, eroding the benchmark's eighth straight weekly gain. HSBC Holdings Plc led the decline on speculation Citigroup Inc. may be short of capital, renewing concern that credit-market losses will hurt banks' earnings.
HSBC, which gets almost a third of its sales from North America, slumped the most in two weeks. Cnooc Ltd., China's biggest offshore oil producer, dropped after crude oil prices retreated from a record in New York.
``The subprime woes aren't over yet and we'll probably only see the full impact next year,'' said Christopher Wong, who helps manage $50 billion at Aberdeen Asset Management in Singapore. ``The Hong Kong market, along with other markets, is generally rather expensive and there's been too much risk appetite among investors.''
The Hang Seng Index slid 1,024.54, or 3.3 percent, to close at 30,468.34. The benchmark, which closed at a record 31,638.22 on Oct. 30, gained 0.2 percent this week. The Hang Seng China Enterprises Index, which tracks the so-called H shares of 43 mainland companies, lost 3.1 percent to 19,540.13.
The two gauges are the world's best performers in the past three months among 90 global benchmarks tracked by Bloomberg.
HSBC, Europe's biggest bank, lost HK$3.70, or 2.4 percent, to HK$148.30, its biggest drop since Oct. 22. Its North America earnings in the first-half slumped 35 percent because of loan defaults by subprime borrowers, the lender said in July.
KWG Property Holding, Venture: Asia Ex-Japan Equity Preview
The following stocks may rise or fall in Asian markets, excluding Japan, on Nov. 5. This preview includes news that broke after markets last closed. Prices are from the local market's last close. Stock symbols are in parentheses after company names.
KWG Property Holding Ltd. (1813 HK): The Chinese developer partly owned by a Morgan Stanley affiliate bought three sites in southwestern China for 3.62 billion yuan ($486 million) for residential and office development. KWG Property shares lost 52 cents, or 3.5 percent, to HK$14.30.
Venture Corp. (VMS SP): Singapore's biggest publicly traded electronics maker posted a 29 percent increase in third-quarter profit as customers ordered more medical and testing equipment. Net income climbed to S$76.3 million ($53 million), surpassing the S$71.5 million-median estimate in a Bloomberg survey of five analysts. Venture lost 50 cents, or 3.7 percent, to S$13.20.
пятница, 2 ноября 2007 г.
Indonesia Hires Banks to Arrange $2 Billion Bond Sale
Indonesia's government hired Barclays Capital, HSBC Holdings Plc and Lehman Brothers Holdings Inc. to help sell as much as $2 billion of dollar bonds, according to two people with direct knowledge of the plan.
The banks plan to market the securities early next year, said the people, who declined to be identified because the information isn't public. Indonesia will sell debt maturing in 10 years and 30 years, the people said. It would be the nation's biggest overseas debt sale since March 2006, when it raised $2 billion.
Indonesia, a net exporter of energy, is seeking to sell debt overseas after losses in the U.S. subprime mortgage market prompted investors to demand higher premiums for buying the riskier, high-yield debt. Rising oil prices, a growing economy and shrinking budget deficit would likely support investor demand for the nation's securities.
``There are investors trying to put their money to work after several months of market hiatus since July,'' said Ping Chew, a managing director at Standard & Poor's in Singapore. ``Recent high-yield deals have been reasonably well received, as emerging market debt becomes a respectable asset class.''
Rahmat Waluyanto, director general of the Indonesian finance ministry's debt management unit, didn't answer calls to his mobile phone or reply to a text message.
``Let our team led by Rahmat announce the details,'' Finance Minister Sri Mulyani Indrawati told reporters in Jakarta today.
Spokeswomen at Barclays, Lehman and HSBC in Hong Kong declined to comment.
checkstockpics.com
The banks plan to market the securities early next year, said the people, who declined to be identified because the information isn't public. Indonesia will sell debt maturing in 10 years and 30 years, the people said. It would be the nation's biggest overseas debt sale since March 2006, when it raised $2 billion.
Indonesia, a net exporter of energy, is seeking to sell debt overseas after losses in the U.S. subprime mortgage market prompted investors to demand higher premiums for buying the riskier, high-yield debt. Rising oil prices, a growing economy and shrinking budget deficit would likely support investor demand for the nation's securities.
``There are investors trying to put their money to work after several months of market hiatus since July,'' said Ping Chew, a managing director at Standard & Poor's in Singapore. ``Recent high-yield deals have been reasonably well received, as emerging market debt becomes a respectable asset class.''
Rahmat Waluyanto, director general of the Indonesian finance ministry's debt management unit, didn't answer calls to his mobile phone or reply to a text message.
``Let our team led by Rahmat announce the details,'' Finance Minister Sri Mulyani Indrawati told reporters in Jakarta today.
Spokeswomen at Barclays, Lehman and HSBC in Hong Kong declined to comment.
checkstockpics.com
Japan's 10-Year Bonds Complete Weekly Gain on Slump in Stocks
Japan's 10-year bonds advanced, completing a weekly gain, after a slide in stocks drove demand for the relative safety of government debt.
Benchmark securities followed a rally yesterday in U.S. Treasuries, after analyst downgrades of Citigroup Inc. set off the steepest drop in U.S. financial companies in five years and a decline in Japanese shares. The U.S. economy may worsen, Bank of Japan Governor Toshihiko Fukui told lawmakers today in Tokyo.
``The market is having another bout of worry from the results of banks,'' said Patrice Conxicoeur, who oversees $5 billion in assets in Hong Kong as chief executive officer at Sinopia Asset Management (Asia Pacific) Ltd. There's a ``nice end-of-week correction and flight to quality.''
The yield on the 1.7 percent bond due September 2017 fell 7.5 basis points to 1.59 percent, the biggest decline since Sept. 10, at 4:51 p.m. in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. Benchmark yields have dropped 3.5 basis points from last week.
Yields on five-year notes declined 8 basis points to 1.08 percent today, the largest slide since Aug. 17. A basis point is 0.01 percentage point.
Technical chart traders use to predict yield changes suggested the five-year notes fell too quickly yesterday and were poised to rise. The five-day relative strength index on five-year yields was 70 yesterday, compared with 33 on Oct. 31. A level above 70 suggests a bond's price may reverse direction.
Ten-year bond futures for December delivery rose 0.87 to 136.09 as of the afternoon close on the Tokyo Stock Exchange.
checkstocklist.com
Benchmark securities followed a rally yesterday in U.S. Treasuries, after analyst downgrades of Citigroup Inc. set off the steepest drop in U.S. financial companies in five years and a decline in Japanese shares. The U.S. economy may worsen, Bank of Japan Governor Toshihiko Fukui told lawmakers today in Tokyo.
``The market is having another bout of worry from the results of banks,'' said Patrice Conxicoeur, who oversees $5 billion in assets in Hong Kong as chief executive officer at Sinopia Asset Management (Asia Pacific) Ltd. There's a ``nice end-of-week correction and flight to quality.''
The yield on the 1.7 percent bond due September 2017 fell 7.5 basis points to 1.59 percent, the biggest decline since Sept. 10, at 4:51 p.m. in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. Benchmark yields have dropped 3.5 basis points from last week.
Yields on five-year notes declined 8 basis points to 1.08 percent today, the largest slide since Aug. 17. A basis point is 0.01 percentage point.
Technical chart traders use to predict yield changes suggested the five-year notes fell too quickly yesterday and were poised to rise. The five-day relative strength index on five-year yields was 70 yesterday, compared with 33 on Oct. 31. A level above 70 suggests a bond's price may reverse direction.
Ten-year bond futures for December delivery rose 0.87 to 136.09 as of the afternoon close on the Tokyo Stock Exchange.
checkstocklist.com
Adecco Third-Quarter Net Rises 40 Percent on Europe
Adecco SA, the world's biggest temporary employment company, said third-quarter profit advanced 40 percent, helped by increased hiring in Europe and a change in French social security calculations.
Net income climbed to 230 million euros ($332 million) from 164 million euros a year earlier, the Glattbrugg, Switzerland- based company said today in a statement. The median of eight analyst estimates compiled by Bloomberg and gathered by e-mail was for profit of 188 million euros.
Economic growth has pushed unemployment to a record low in the 13 countries that use the euro, fueling demand for workers and helping offset a slowdown in U.S. hiring. To reduce dependence on economic swings, Adecco has bought six rivals in two years to expand professional staffing, including the 600 million-euro acquisition in June of Germany's Tuja Group.
``We continue to see solid growth rates in the European and Asian staffing markets, while demand in the U.S. remains weak,'' Chief Executive Dieter Scheiff said in the statement.
Sales rose 2.2 percent to 5.44 billion euros. Adecco got a third of its revenue from France last year and has broadened its business in Germany. The company today reiterated its target to increase revenue annually by between 7 percent and 9 percent on average.
Adecco said it will spend as much as 400 million euros buying back shares through the end of next year. The company plans to use the stock to fund acquisitions or to give to holders of convertible bonds who decide to convert their bonds to shares.
ir-process.com
Net income climbed to 230 million euros ($332 million) from 164 million euros a year earlier, the Glattbrugg, Switzerland- based company said today in a statement. The median of eight analyst estimates compiled by Bloomberg and gathered by e-mail was for profit of 188 million euros.
Economic growth has pushed unemployment to a record low in the 13 countries that use the euro, fueling demand for workers and helping offset a slowdown in U.S. hiring. To reduce dependence on economic swings, Adecco has bought six rivals in two years to expand professional staffing, including the 600 million-euro acquisition in June of Germany's Tuja Group.
``We continue to see solid growth rates in the European and Asian staffing markets, while demand in the U.S. remains weak,'' Chief Executive Dieter Scheiff said in the statement.
Sales rose 2.2 percent to 5.44 billion euros. Adecco got a third of its revenue from France last year and has broadened its business in Germany. The company today reiterated its target to increase revenue annually by between 7 percent and 9 percent on average.
Adecco said it will spend as much as 400 million euros buying back shares through the end of next year. The company plans to use the stock to fund acquisitions or to give to holders of convertible bonds who decide to convert their bonds to shares.
ir-process.com
Corporate Bond Risk Rises in Europe, Credit-Default Swaps Show
The risk of owning European corporate bonds rose, according to traders of credit-default swaps.
Contracts on the iTraxx Crossover Series 8 Index of 50 European companies with mostly high-risk, high-yield credit ratings increased 8.5 basis points to 346.5 basis points today, according to Deutsche Bank AG. The index, a benchmark for the cost of protecting bonds against default, rises when perceptions of credit quality worsen.
The iTraxx Europe index of 125 companies with investment- grade ratings rose 1 basis point to 42.5 basis points, Deutsche Bank prices show.
The CDX North America Investment-Grade Index Series 9 increased 6.75 basis points to 67.25 basis points at the close of trading in New York yesterday, according to Deutsche Bank.
A basis point on a credit-default swap contract protecting 10 million euros ($14.5 million) of debt from default for five years is equivalent to 1,000 euros a year.
Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
asr-finance.com
Contracts on the iTraxx Crossover Series 8 Index of 50 European companies with mostly high-risk, high-yield credit ratings increased 8.5 basis points to 346.5 basis points today, according to Deutsche Bank AG. The index, a benchmark for the cost of protecting bonds against default, rises when perceptions of credit quality worsen.
The iTraxx Europe index of 125 companies with investment- grade ratings rose 1 basis point to 42.5 basis points, Deutsche Bank prices show.
The CDX North America Investment-Grade Index Series 9 increased 6.75 basis points to 67.25 basis points at the close of trading in New York yesterday, according to Deutsche Bank.
A basis point on a credit-default swap contract protecting 10 million euros ($14.5 million) of debt from default for five years is equivalent to 1,000 euros a year.
Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
asr-finance.com
U.K. Wage Growth Slows to 13-Month Low, Pay Researcher Reports
U.K. wage negotiators agreed on the smallest salary increases since September 2006 in the quarter through October as employers gave minimum pay raises to their lowest-earning workers, Incomes Data Services said.
The median pay settlement fell to 3.2 percent from 3.4 percent in the three months through September, the researcher said in an e-mailed statement today. The reading is based on 65 settlements covering about 1.5 million workers. About three- quarters of agreements in ``lower-paying'' industries, such as retail and non-profit, were at or below 3 percent.
Salary gains for the lowest-paid slowed after the government ordered a 3.2 percent increase in the national minimum wage, the smallest gain since 2002. Bank of England policy maker David Blanchflower said Oct. 30 wage growth will stay ``muted'' as a record wave of immigration helps curb inflation pressures.
``It's the lowest increase in a long time for the national minimum wage, and it's having an impact on settlements,'' Ken Mulkearn, editor of the London-based IDS's pay report, said in an interview. The last time the minimum increase was lower was in 2002, when the gain was 2.4 percent, he said.
a-stockforum.com
The median pay settlement fell to 3.2 percent from 3.4 percent in the three months through September, the researcher said in an e-mailed statement today. The reading is based on 65 settlements covering about 1.5 million workers. About three- quarters of agreements in ``lower-paying'' industries, such as retail and non-profit, were at or below 3 percent.
Salary gains for the lowest-paid slowed after the government ordered a 3.2 percent increase in the national minimum wage, the smallest gain since 2002. Bank of England policy maker David Blanchflower said Oct. 30 wage growth will stay ``muted'' as a record wave of immigration helps curb inflation pressures.
``It's the lowest increase in a long time for the national minimum wage, and it's having an impact on settlements,'' Ken Mulkearn, editor of the London-based IDS's pay report, said in an interview. The last time the minimum increase was lower was in 2002, when the gain was 2.4 percent, he said.
a-stockforum.com
European Government Bonds Rise; Stock Declines Cut Risk Demand
European government bonds rose for a second day as investors sought the safety of debt amid a slump in stock markets.
The yield on the two-year German note fell 1 basis point to 3.97 percent as of 7:03 a.m. in London. The price of the 4 percent security due September 2009 rose 0.02, or 20 euro cents per 1,000 euro ($1,447) face amount, to 100.05. The yield on the 10-year bund fell 2 basis points to 4.18 percent. Yields move inversely to bond prices.
good-investor-idia.com
The yield on the two-year German note fell 1 basis point to 3.97 percent as of 7:03 a.m. in London. The price of the 4 percent security due September 2009 rose 0.02, or 20 euro cents per 1,000 euro ($1,447) face amount, to 100.05. The yield on the 10-year bund fell 2 basis points to 4.18 percent. Yields move inversely to bond prices.
good-investor-idia.com
House to Vote on $49.5 Billion Hedge-Fund, Buyout-Firm Tax Rise
The U.S. House will take up a measure that would raise taxes on executives of hedge funds and private- equity firms by $49.5 billion over the next decade and prevents a separate tax increase on middle-income families this year.
The tax-writing Ways and Means Committee approved a $77 billion measure yesterday that would block the alternative minimum tax from imposing $50.6 billion in new levies on millions of households this year. The Democratic majority rejected Republican amendments to alleviate the minimum tax without raising taxes elsewhere to make up the lost revenue for the government.
``For those people who have been able to be evading the various taxes and avoiding taxes, we're sorry to have to include you in relief for 23 million people, but we think that's fair,'' said Representative Charles Rangel, the New York Democrat who heads the panel.
The committee's 22-13 vote along party lines marked the first legislative step in a race by lawmakers to forestall a minimum-tax increase by mid-November. The legislation must be approved by the full House, where it is opposed by many Republicans, and by the Senate, where the proposals to raise taxes on hedge-fund and private-equity managers may face resistance from lawmakers of both parties.
financial-stock.com
The tax-writing Ways and Means Committee approved a $77 billion measure yesterday that would block the alternative minimum tax from imposing $50.6 billion in new levies on millions of households this year. The Democratic majority rejected Republican amendments to alleviate the minimum tax without raising taxes elsewhere to make up the lost revenue for the government.
``For those people who have been able to be evading the various taxes and avoiding taxes, we're sorry to have to include you in relief for 23 million people, but we think that's fair,'' said Representative Charles Rangel, the New York Democrat who heads the panel.
The committee's 22-13 vote along party lines marked the first legislative step in a race by lawmakers to forestall a minimum-tax increase by mid-November. The legislation must be approved by the full House, where it is opposed by many Republicans, and by the Senate, where the proposals to raise taxes on hedge-fund and private-equity managers may face resistance from lawmakers of both parties.
financial-stock.com
O'Neal's $161 Million Merrill Payout May Spur `Say-on-Pay' Bill
Senate Banking Committee Chairman Christopher Dodd says Merrill Lynch & Co.'s $161.5 million exit package for former Chairman and Chief Executive Officer Stan O'Neal may revive efforts in Congress to give shareholders more power to curb CEO salaries.
O'Neal shouldn't be rewarded for poor performance, Dodd said in an interview in Washington, adding that his committee may proceed with legislation aimed at capping excessive executive pay.
``There's a lot of controversy, mostly on the other side,'' said Dodd, a Connecticut Democrat, referring to Republicans. ``We'll try to get unanimity where we can. But there's a possibility we'll move on it.''
A bill to give investors a non-binding vote to protest excessive compensation was approved by the House of Representatives in April, almost four months after Home Depot Inc.'s ex-CEO Robert Nardelli got a severance package valued at $210 million. O'Neal left Merrill earlier this week with $161.5 million in securities and retirement funds. Merrill's board refused to give him a severance package following a record $8.4 billion writedown of subprime mortgages.
The U.S. Securities and Exchange Commission, responding to complaints from investors, adopted rules in July 2006 to make executive compensation more transparent to shareholders. In the Senate, Dodd will need to pick up some Republican votes to get the so-called say-on-pay bill moving again.
microcapbooks.com
O'Neal shouldn't be rewarded for poor performance, Dodd said in an interview in Washington, adding that his committee may proceed with legislation aimed at capping excessive executive pay.
``There's a lot of controversy, mostly on the other side,'' said Dodd, a Connecticut Democrat, referring to Republicans. ``We'll try to get unanimity where we can. But there's a possibility we'll move on it.''
A bill to give investors a non-binding vote to protest excessive compensation was approved by the House of Representatives in April, almost four months after Home Depot Inc.'s ex-CEO Robert Nardelli got a severance package valued at $210 million. O'Neal left Merrill earlier this week with $161.5 million in securities and retirement funds. Merrill's board refused to give him a severance package following a record $8.4 billion writedown of subprime mortgages.
The U.S. Securities and Exchange Commission, responding to complaints from investors, adopted rules in July 2006 to make executive compensation more transparent to shareholders. In the Senate, Dodd will need to pick up some Republican votes to get the so-called say-on-pay bill moving again.
microcapbooks.com
U.S. Employment Probably Slowed in October as Housing Slumped
Employment in the U.S. slowed in October as a worsening housing slump led to firings at homebuilders, manufacturers and mortgage lenders, economists said before a report today.
Payrolls grew by 85,000 after a gain of 110,000 in September, according to the median estimate of 86 economists surveyed by Bloomberg News. The jobless rate held at 4.7 percent for a second month, based on the survey.
Wage gains may slow as employment weakens, increasing the burden on consumers already saddled with rising fuel costs and declining home values. The Federal Reserve has lowered the benchmark interest rate twice in as many months to prevent the real-estate recession from dragging down the rest of the economy.
``The next shoe to drop is that the labor market starts to soften,'' said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York. ``There's some tentative evidence of it.''
The Labor Department report is due at 8:30 a.m. in Washington. Projections ranged from increases of 10,000 to 121,000. An October gain as forecast would cap the smallest four-month increase in four years.
Estimates for the jobless rate ranged from 4.6 percent to 4.9 percent. The rate dropped to 4.4 percent in March, matching the October 2006 level as the lowest in five years.
Factories probably cut 15,000 workers from payrolls, based on the Bloomberg survey median. Manufacturing employment has shrunk by 16,000 a month on average this year, while construction companies have reduced staff by about 8,000 a month.
pennystockcommunity.com
Payrolls grew by 85,000 after a gain of 110,000 in September, according to the median estimate of 86 economists surveyed by Bloomberg News. The jobless rate held at 4.7 percent for a second month, based on the survey.
Wage gains may slow as employment weakens, increasing the burden on consumers already saddled with rising fuel costs and declining home values. The Federal Reserve has lowered the benchmark interest rate twice in as many months to prevent the real-estate recession from dragging down the rest of the economy.
``The next shoe to drop is that the labor market starts to soften,'' said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York. ``There's some tentative evidence of it.''
The Labor Department report is due at 8:30 a.m. in Washington. Projections ranged from increases of 10,000 to 121,000. An October gain as forecast would cap the smallest four-month increase in four years.
Estimates for the jobless rate ranged from 4.6 percent to 4.9 percent. The rate dropped to 4.4 percent in March, matching the October 2006 level as the lowest in five years.
Factories probably cut 15,000 workers from payrolls, based on the Bloomberg survey median. Manufacturing employment has shrunk by 16,000 a month on average this year, while construction companies have reduced staff by about 8,000 a month.
pennystockcommunity.com
U.S. Notes Little Changed; Report May Show Job Growth Slowed
U.S. Treasuries were little changed before a government report that economists say will show employment growth slowed as a housing recession led companies to fire workers.
Notes recouped initial losses after traders increased bets the Federal Reserve will cut interest rates next month for a third time this year. Two-year securities yesterday had their second-biggest gain in 2007 as analysts said Citigroup Inc., the largest U.S. bank, may be short of capital to pay dividends and advised investors to sell its shares.
``I'm still bullish on the market,'' said Hiroki Shimazu, a fixed-income economist at Mizuho Securities Co. in Tokyo. ``The U.S. economy is really unstable.''
Two-year yields fell 1 basis point to 3.74 percent as of 6:47 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 5/8 percent notes due in October 2009 rose 1/32, or 31 cents per $1,000 face amount, to 99 25/32. The notes headed for a third weekly gain, with yields falling almost half a percentage point during the period.
Ten-year yields were little changed today at 4.35 percent. A basis point is 0.01 percentage point.
Treasuries rose yesterday when Citigroup slid the most since 2002 after CIBC World Markets said the company may cut its dividend and Credit Suisse Group reduced its rating. Bank of America Corp., the second-largest bank, had its biggest decline in four years.
pennystock-university.com
Notes recouped initial losses after traders increased bets the Federal Reserve will cut interest rates next month for a third time this year. Two-year securities yesterday had their second-biggest gain in 2007 as analysts said Citigroup Inc., the largest U.S. bank, may be short of capital to pay dividends and advised investors to sell its shares.
``I'm still bullish on the market,'' said Hiroki Shimazu, a fixed-income economist at Mizuho Securities Co. in Tokyo. ``The U.S. economy is really unstable.''
Two-year yields fell 1 basis point to 3.74 percent as of 6:47 a.m. in London, according to bond broker Cantor Fitzgerald LP. The price of the 3 5/8 percent notes due in October 2009 rose 1/32, or 31 cents per $1,000 face amount, to 99 25/32. The notes headed for a third weekly gain, with yields falling almost half a percentage point during the period.
Ten-year yields were little changed today at 4.35 percent. A basis point is 0.01 percentage point.
Treasuries rose yesterday when Citigroup slid the most since 2002 after CIBC World Markets said the company may cut its dividend and Credit Suisse Group reduced its rating. Bank of America Corp., the second-largest bank, had its biggest decline in four years.
pennystock-university.com
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